WBS » Topics » Objectives of Compensation Program

This excerpt taken from the WBS DEF 14A filed Mar 20, 2009.

Objectives of Compensation Program

Webster’s compensation program for its named executive officers is designed to accomplish three principal objectives. Webster believes these objectives provide a strong link between each named executive officer’s total earnings opportunity and Webster’s short and long-term performance. These objectives include:

 

   

Total compensation opportunities must be competitive.    All elements of compensation are reviewed, both separately and in aggregate, by the Compensation Committee to ensure that the total amount of compensation is within appropriate competitive parameters based on data from independent sources. The program is intended to provide named executive officers with a targeted compensation opportunity commensurate with persons with similar duties and responsibilities at Webster’s peer companies. Target compensation includes base salary, target annual cash incentive and target long-term equity incentive. In determining levels of named executive officers’ overall compensation, the Compensation Committee also considers the qualifications and experience of the respective officer, Webster’s size and complexity of operations and, to a certain extent, the compensation paid to other persons employed by us.

 

   

Variable compensation should primarily serve to reward superior performance.    A large portion of the named executive officers’ compensation is tied to Webster’s performance. As such, a large portion of variable pay is significantly at risk when Webster does not meet its objectives. Webster believes variable pay helps drive business and financial performance and that linking a significant portion of compensation to short-term and long-term results creates shareholder value. When Webster performs well, based on the financial and non-financial measures discussed below, the named executive officers will receive greater incentive compensation. When Webster does not meet its objectives, incentive rewards will be reduced or forfeited.

 

   

Compensation should align the named executive officers’ interests with the long-term interests of the shareholders.    Webster believes that a substantial portion of the named executive officers’ total compensation opportunity should be equity-based. This objective aligns named executive officer and shareholder interests and provides motivation for enhancing shareholder value. In 2008, approximately 31% to 47% of the named executive officers’ total targeted compensation package was comprised of equity based awards tied to increased shareholder value.

 

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This excerpt taken from the WBS DEF 14A filed Mar 7, 2008.

Objectives of Compensation Program

Webster’s compensation program for its named executive officers is designed to accomplish three principal objectives. Webster believes these objectives provide a strong link between the named executive officer’s total earnings opportunity and Webster’s short and long-term performance. These objectives include:

 

   

Total compensation opportunities must be competitive.    All elements of compensation are reviewed, both separately and in aggregate, by the Compensation Committee to ensure that the total amount of compensation is within appropriate competitive parameters based on data from independent sources. The program is intended to provide named executive officers with a targeted compensation opportunity commensurate with persons with similar duties and responsibilities at Webster’s peer companies. Target compensation includes base salary, target annual cash incentive and target long-term equity incentive. In determining levels of named executive officers' overall compensation, the Compensation Committee also considers the qualifications and experience of the respective officer, Webster’s size and complexity of operations and, to a certain extent, the compensation paid to other persons employed by us.

 

   

Variable compensation should primarily serve to reward superior performance.    A large portion of the named executive officers’ compensation is tied to Webster’s performance. As such, a large portion of variable pay is significantly at risk when Webster does not meet its objectives. Webster believes variable pay helps drive business and financial performance and that linking a significant portion of compensation to short-term and long-term results creates shareholder value. When Webster performs well, based on the financial and non-financial measures discussed below, the named executive officers will receive greater incentive compensation. When Webster does not meet its objectives, incentive rewards will be reduced or forfeited. Webster believes that named executive officers with sustained high performance should be rewarded more than those in similar positions with lesser performance.

 

   

Compensation should align the named executive officers’ interests with the long-term interests of the shareholders.    Webster believes that a substantial portion of the named executive officers’ total compensation opportunity should be equity-based. This objective aligns named executive officer and shareholder interests and provides motivation for enhancing shareholder value. In 2007, approximately 31% to 47% of the named executive officers’ total targeted compensation package was comprised of equity based awards tied to increased shareholder value.

This excerpt taken from the WBS DEF 14A filed Mar 9, 2007.
Objectives of Compensation Program
 
Webster’s compensation program for its named executive officers is designed to accomplish three principal objectives. Webster believes these objectives provide a strong link between the named executive officer’s total earnings opportunity and the Corporation’s short and long-term performance. Webster’s principal compensation objectives consist of the following:
 
  •     Total compensation opportunities must be competitive.  All elements of compensation are reviewed, both separately and in aggregate, to ensure that the total amount of compensation is within appropriate competitive parameters. As discussed below, Webster’s Compensation Committee reviews compensation survey data from independent sources to ensure the total compensation program is competitive and that the named executive officers have a targeted compensation opportunity commensurate with persons with similar duties and responsibilities at Webster’s peer companies. In determining levels of executive officers’ overall compensation, the Compensation Committee also considers the qualifications and experience of the respective officer, Webster’s size and complexity of operations, its overall financial condition and, to a certain extent, the compensation paid to other persons employed by Webster.
 
  •     Variable compensation should primarily serve to reward superior performance.  Webster targets a total pay mix for the named executive officers that places a greater emphasis on variable pay tied to performance versus fixed pay. For 2006, performance-based variable pay, consisting of an annual cash bonus incentive and long-term performance-based restricted stock, constituted 58% to 73% of the named executive officers’ total compensation. Webster believes this compensation objective reinforces the Corporation’s business and financial performance. Webster also believes that directly linking a significant portion of compensation to accomplishing specific short-term and long-term results serves to create shareholder value. When Webster performs well, based on the financial and non-financial measures discussed below, the named executive officers will receive greater incentive compensation. When Webster does not meet its objectives, incentive rewards will be reduced or forfeited. Webster believes that named executive officers with sustained high performance should be rewarded more than those in similar positions with lesser performance.
 
  •     Compensation should align the named executive officers’ interests with the long-term interests of the shareholders.  Webster believes that a substantial portion of the named executive officers’ total compensation opportunity should be equity-based, serving to align named executive officer and shareholder interests and provide proper motivation for enhancing shareholder value. As an example, the CEO receives a long-term equity grant with a targeted value representing 175% of base salary, or nearly 47% of total direct compensation. Half of this equity grant is in the form of stock options, which are inherently performance-based, meaning they increase in value only to the extent the Corporation’s stock price increases. The other half of this equity grant is in the form of performance- based restricted shares that are tied to total shareholder return over a three-year period against a published financial services index and forfeitable in their entirety if Webster fails to meet a threshold return. Thus, nearly half of Mr. Smith’s targeted compensation is tied to the performance of Webster’s Common Stock. In


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  2006, approximately 31% to 47% of the named executive officers’ total targeted compensation package comprises equity based awards.
 
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