Wyndham Worldwide (WYN)

 

We operate in a highly competitive recruiting environment for senior executives where a limited pool of qualified individuals is targeted by a large number of companies. In order to attract and retain the most qualified and talented executives in our industry, the Board believes that our executive compensation program should offer contractual agreements that provide competitive severance benefits. This decision to offer severance benefits has been made within the context of the prevailing competitive marketplace for executive talent and after careful consideration and review of many factors (see Compensation Discussion and Analysis — 2008 Executive Compensation Elements and Decisions — Severance Arrangements). The Board believes that it is in the best interests of all shareholders for us to have the ability to attract highly-qualified and experienced executives.

 

The Board, unlike the proponent, does not believe that it is practicable for us to enter into severance arrangements subject to future shareholder approval. We would be unable to assure a potential senior executive that the agreement would be approved or ratified. Outstanding candidates would be unlikely to leave their current employment to join us if the terms of their employment with us were contingent on obtaining shareholder approval. This uncertainty would make our offer less valuable than those provided by other companies whose arrangements are not subject to shareholder approval. This would put us at a disadvantage to other companies with which we compete for executive talent and would create delay and uncertainty in the recruitment of senior executives. Our offer of employment under these circumstances could also require the premature public disclosure of confidential employment negotiations, which would again negatively impact the value of our offer when compared to a similar offer by one of our competitors. Therefore, the Board believes that, this proposal would increase the likelihood of losing talented executive candidates which is not in our best interests or the best interests of our shareholders.