To print this page, click here. To return to the regular view of this page, click here.
What are Keywords?
Print
Text Size
NormalMediumLarge
My Shortcuts  What is this?
Add | View

Rewarding Results

Barbara Jane Irwin

Philosophy, Reward Structure and Oversight

Our executive compensation policies are designed to achieve our objective of attracting and keeping world-class talent that drives our business forward and maximizes shareholder value. Our underlying principle is "pay for performance". Therefore, most compensation is variable, fluctuating based on individual and corporate performance.

Four primary elements comprise executive compensation, as explained in the detail below: base salary, short-term incentives, performance units under a Medium-Term Incentive Plan (MTIP) and performance stock options issued as long-term incentives. Medium- and long-term variable components like MTIP and performance stock options comprise about 60 percent of the total compensation package, while short-term incentives account for about 15 percent. Base salary makes up the remaining 25 percent.

The compensation committee of the Board of Directors oversees our executive compensation program and, among other responsibilities, carefully monitors the proportion of remuneration that is performance-related on a short-, medium- and long-term basis.

We do not have any non-qualified deferred compensation arrangements in place for management. Additionally, performance stock options are awarded once per year, following shareholder approval of the plan and with an exercise price no lower than the closing market price of our shares on the day before the options are granted.

Table Icon Performance Options Align Executive Compensation, Shareholder Interests
Compensation Element Form Eligibility Performance Period Determination
Base salary Cash All salaried employees Annual
  • For executive officers, targets are set to the median of comparable companies, adjusted to reflect individual and corporate performance.
Short-term incentives Cash All executives and most salaried staff and union and non-union employees 1 year
  • Based on achieving predetermined goals for corporate performance or a combination of corporate and operating group performance.
  • Can be adjusted (± 20%) to recognize individual performance.
  • Beginning January 1, 2008, this annual cash bonus plan was extended to all Canadian and US hourly employees (union and non-union), providing a strong incentive for them to focus on achieving operational and corporate goals.
Medium-term incentives Performance share units All executives and senior management (67 people) 3 years
  • Units issued at our average share price on award date.
  • Units vest and are paid out at the end of the three-year performance period, calculated whereby half the units vest in accordance with specific total shareholder return (TSR)1 targets and half vest in accordance with our TSR relative to a selected peer group's TSR.
  • Payout value is based on the number of vested units multiplied by our 30-day average share price at the end of the performance period (subject to a maximum of three times the initial unit price).
Long-term incentives Performance options All executives, senior management and other select management (241 people) 3 years (vesting)

10 years (option term)
  • Performance options incorporate a performance-based vesting schedule measuring the three-year average excess of cash flow return over our weighted average cost of capital.
  • Vested share value is based on our share price appreciation within the option term.
1 TSR is the total shareholder return on an investment in PotashCorp stock from the time the investment is made.
TSR has two components: (1) growth in share price and (2) related dividend income on the shares.

Top