|
|
 | | | |
- close
- close
- close
- close
| |||||||||
This excerpt taken from the UPS DEF 14A filed Mar 13, 2009. Long-Term
Incentives
Our long-term incentive programs provide participants with
grants of equity-based incentives that are intended to reward
performance over a period of more than one year. Grants are made
pursuant to the shareowner approved 1999 Plan. We grant
long-term equity awards in the form of stock options, restricted
performance units and restricted stock units that are delivered
in the form of class A shares at vesting. Programs are
based on longer-term operational and financial performance goals
and long-term stock price appreciation. The Compensation
Committee believes equity-based compensation performs an
essential role in retaining and motivating our managers by
providing them incentives which are linked to our long-term
success and maximizing shareowner value.
Target award levels vary based on level of responsibility. At
the Management Committee level, the Compensation Committee has
approved a differential in target long-term incentive award
levels for certain key positions, including chief executive
officer, chief financial officer and chief operating officer, to
acknowledge the additional responsibilities of those positions
and competitive market practice.
Table of Contents
The following table provides an overview of our long-term
incentive award programs. Each award type and program is
described in more detail below.
Table of Contents
This excerpt taken from the UPS DEF 14A filed Mar 17, 2008. Long-Term
Incentives
Our long-term incentive programs provide participants with
grants of equity-based incentives that are intended to reward
performance over a period of more than one year. Grants are made
pursuant to the shareowner approved UPS Incentive Compensation
Plan and delivered in the form of class A shares at
vesting. Awards are based on longer-term operational and
financial performance goals and long-term stock price
appreciation. The Compensation Committee believes equity-based
compensation performs an essential role in retaining and
motivating our executive officers by providing them incentives
which are linked to our long-term success and maximizing
shareowner value.
Target award levels vary based on level of responsibility. At
the Management Committee level, the Compensation Committee has
approved a differential in target long-term incentive award
levels for the chief executive officer to acknowledge the
additional responsibility of the chief executive officer and
competitive market practice.
Table of Contents
The following table provides an overview of our long-term
incentive awards. Each is described in more detail below.
This excerpt taken from the UPS DEF 14A filed Mar 19, 2007. Long-Term
Incentives
Our long-term incentive programs provide participants with
grants of equity-based incentives that are intended to reward
performance over a period of more than one year. Grants are made
pursuant to the UPS Incentive Compensation Plan and delivered in
the form of class A shares at vesting. Awards are based on
longer-term operational performance and long-term stock price
appreciation. The Compensation Committee believes equity-based
compensation performs an essential role in retaining and
motivating our executive officers by providing them incentives
which are linked to our long-term success and maximizing
shareowner value.
The long-term incentive component of our executive compensation
package is delivered in three separate programs under the UPS
Incentive Compensation Plan:
Award values are based on general survey data regarding total
compensation packages and the value of long-term incentive
awards at peer companies. The Compensation Committee also
considers factors such as market conditions, company
performance, employee ownership levels and the dilution level to
shareowners.
Stock options have been a major portion of executive
compensation since 1981. The Compensation Committee believes
that stock option awards provide a significant link to company
performance and maximize shareowner value. Stock options will
have value only if the market value of our common stock
increases above the exercise price of the option and the
option-holder does not terminate employment for reasons other
than retirement, death or disability during the vesting period.
Stock option awards are granted to employees annually, typically
in May of each year. Stock options are issued at fair market
value on the date of grant, vest five years from the date of
grant and expire ten years from the date of grant. Grants do not
include dividend equivalents or any reload grant features.
During 2006, a total of 2,434,629 options (0.22 percent of
common shares outstanding) were issued to 3,333 employees.
Those non-qualified or incentive stock options which vested
prior to December 31, 2004 which remain unexercised and for
which an election was made to defer the gain into the UPS
Deferred Compensation Plan will be deferred into the UPS
Deferred Compensation Plan at the time of exercise. The shares
received upon exercise of these options are deferred into a
rabbi trust. The shares held in this trust are classified as
treasury stock, and the liability to participating employees is
classified as “deferred compensation obligations” in
the shareowners’ equity section of the balance sheet. As a
result of the requirements applicable to non-qualified deferred
compensation arrangements under Section 409A of the
Internal Revenue Code and related guidance, deferral of stock
options is no longer offered under the UPS Deferred Compensation
Plan for options that vest after December 31, 2004.
Beginning in 2003, employees in key leadership positions were
entitled to receive awards of RPUs as part of the LTI program
under the UPS Incentive Compensation Plan. The decision to use
RPUs was based on two goals for the award:
Table of Contents
RPUs are delivered at 100 percent of the value of a UPS
class A share at vesting. The awards are eligible for
dividend equivalents, which are deemed to be automatically
reinvested into additional restricted performance units. In
2006, 990,861 RPUs were granted to 3,333 employees.
At the end of the five-year restriction period, the number of
RPUs granted to each individual can increase by 10 percent
if certain company-wide performance measures are attained. Upon
vesting of RPUs, the individual receives a distribution in the
form of shares of class A common stock, less the required
tax withholding.
As described above, we modified the MIP program in 2005 to
provide that half of the annual award be made in RSUs, with
certain exceptions for first-time MIP recipients. The RSUs
generally vest over a five-year period. RSUs are eligible for
dividend equivalents, which are deemed to be automatically
reinvested into additional RSUs. At the end of each annual
vesting period, the individual receives shares of class A
common stock. During 2006, approximately 3.7 million RSUs
were issued to approximately 32,000 employees.
In 2006, UPS adopted the 2006 LTIP under the UPS Incentive
Compensation Plan. The program has a three year award cycle,
from 2006 through 2008. Under the LTIP, target RSUs were granted
to executive officers, officers and certain other eligible
managers. As mentioned earlier, the Compensation Committee
approved the LTIP in the belief that it would further strengthen
the performance component of our executive compensation package,
and enhance our retention of key talent.
Target RSU grants range from 50 percent to 250 percent of annual
salary. For executive officers, the range is from 225 percent to
250 percent of annual salary. Of the total target award, 90
percent is divided into three substantially equal tranches, one
for each calendar year in the three-year award cycle from 2006
through 2008. The remaining 10 percent of the total target award
is based upon achievement of an adjusted net income target for
2008.
Specific performance measures and targets for each such
tranche are set by the Compensation Committee. The number
of RSUs earned each year will be the target number adjusted for
the percentage achievement of the performance criteria targets
for the year. The Compensation Committee may provide for payment
of a percentage less than or more than 100 percent of target
RSUs for each tranche based on achievement of performance
criteria.
The award, if earned, will vest on January 31, 2009,
provided the participant remains employed as of the vesting
date. Special vesting rules apply to terminations by reason of
death, disability or retirement. A participant’s earned
restricted stock units account will be adjusted quarterly for
dividends paid on class A common stock. The restricted
stock unit awards that vest will be distributed in the form of
class A shares. During 2006, a total of 623 employees
received a target grant of approximately 1.18 million RSUs.
The performance criteria approved by the Compensation Committee
for 2006 were growth in consolidated revenue and consolidated
operating return on invested capital. The goals for these
criteria were based on our confidential business plans and were
consistent with other publicly disclosed financial targets for
2006. At their meeting on February 7, 2007, the
Compensation Committee determined that 85 percent of the
target award for the 2006 tranche was earned.
The Compensation Committee believes that the specific
performance targets for the 2006 period incorporated an
appropriate level of difficulty and expectations for on-going
performance improvements. The goals for 2007 are also being
established with a similar intent.
| EXCERPTS ON THIS PAGE:
RELATED TOPICS for UPS: |
| |||||||
