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Table of Contents
Section 1 Section 2 Section 3 Section 4 Section 5 Big Picture Summary Governance & Regulatory Update Pay Trends 2012 Form 4 Analysis: A Look at This Years LTI Awards Question and Answer
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Note: Prevalence totals will not equal 100% due to multiple responses.
1Source:
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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1Source:
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Pay Trends
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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61%
50 % 75%
22%
10 0 %
Similar to 2011
No Merit
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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50% 56%
At or Above Target
At or Above Target
FY 2010
FY 2011
FY 2010
FY 2011
In previous years, organizations were making annual incentive design changes in response to economic uncertainty. In 2011 and looking forward, modifications to annual incentive plans will be focused on better alignment between performance and pay. Most recent trend in modifications of annual incentive design include adjusting maximum payouts up and minimum payouts down increasing an executive's upside for outstanding performance, while decreasing payouts for threshold level performance
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Revenue Growth Operating Income / EBIT Earnings Per Share Net Income Free Cash Flow Reurn Measures EBITDA Operating Expense Working Capital Operating / Gross Margin
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
Long-Term Incentive Actions Change mix (weighting) of LTI delivery by using existing vehicles or in conjunction with introducing/eliminating vehicles
Prevalence 63%
46%
17% 8% 4% 3% 1%
34%
25% 13% 14% 3% 2%
These results support the expectations that organizations will be continuously working to enhance Pay-for-Performance alignment
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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66%
50 % 75%
22%
10 0 %
Grant less
Grant similar
Grant more
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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117%
100% 80% 98% 111% 104% 106%
86%
LTI Values Stock Price
60% Early 2008 Early 2009 Early 2010 Early 2011 Early 2012
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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GICS Industry Classification1 Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Utilities
1
Count 21 6 20 30 14 25 14 10 9
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Questions
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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Contacts
For questions or comments about this presentation, or to continue the conversation, please contact: Chuck Essick
Partner chuck.essick@aonhewitt.com
Scott Landis
Partner, Southwest Region Practice Leader scott.landis@aonhewitt.com
Henry Noey
Partner, Market Leader henry.noey@aonhewitt.com
Consulting | Talent & Rewards Proprietary & Confidential | EC Trends & Topics.PPT/WDL-03788 07/2012
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