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This excerpt taken from the UPS DEF 14A filed Mar 17, 2008. Elements
of UPS Compensation
The components of the compensation program for our Management
Committee are:
Table of Contents
Each of these components is discussed below.
Base
Salary
The Compensation Committee considers a number of factors in
determining annual base salary increases of Management Committee
members. While performance is the most important factor,
leadership, internal equity
comparisons and market data are all considered by the
Compensation Committee when determining annual salary
adjustments for Management Committee members.
The following table shows annual base salaries as set for the
NEOs in 2006 and 2007 and the overall percentage increase.
The Compensation Committee generally makes annual salary
determinations at its first meeting of the year, and the new
salaries are effective as of March 1 of that year. In 2007, UPS
approved an average base salary increase of 3.5% for all
management employees other than members of the Management
Committee. The Compensation Committee considered this increase,
as well as performance, leadership and peer group data that
showed that the NEOs were generally well below the median with
respect to base salary levels at other companies.
Based on these considerations, the Compensation Committee
approved base salary increases effective March 1, 2007 for
Mike Eskew, Jim Winestock and John McDevitt of between 3.5% and
3.6%, which was consistent with the average base salary increase
for all management employees. For Scott Davis, the Compensation
Committee considered the additional responsibilities assumed by
him as vice chairman in awarding him an increase of 19.0%. For
David Abney, the Compensation Committee also considered the
additional responsibilities assumed by him as chief operating
officer, and his base salary increase was 9.0%, effective as of
January 1, 2007.
As described in more detail below, annual and long-term
incentive compensation is structured similarly across much of
our management group. The target award levels are generally
structured as a multiple of annual or monthly base salary, with
the applicable multiple reflecting the job responsibility of the
participant. This structure generally has been in place for a
number of years and reflects our historical practices.
Table of Contents
Annual
Incentives
The following table provides an overview of our annual incentive
awards. Each is described in more detail below.
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