Members of the Compensation Committee for 2009
John W. Estey (Chair)
Wade Fetzer III (until his retirement on May 7, 2009)
Keith G. Martell
Jeffrey M. McCaig
Mary Mogford (from her appointment on May 7, 2009)
Paul J. Schoenhals
Role of the Compensation Committee
The role of the Compensation Committee is to formulate and make recommendations to the Board in respect of compensation issues relating to the Corporation’s directors and senior officers. The Compensation Committee makes recommendations regarding the Corporation’s stock option plans and administers the Short- and Medium-Term Incentive Plans, and the Performance Option Plans, each in accordance with its terms. The Compensation Committee reviews and makes recommendations regarding the general merit increase budget for salaried and non-bargaining hourly employees and has general oversight of employee benefit programs. In addition, the Compensation Committee, in consultation with the Chief Executive Officer, considers and reports to the Board regarding employee or executive succession matters. See Report of the Compensation Committee and Compensation Committee Responsibilities and Procedures for more details.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee serves, or has at any time served, as an officer or employee of the Corporation or any of its subsidiaries. None of the Corporation’s executive officers has served as a member of a compensation committee of any other entity, one of whose executive officers served as a member of the Compensation Committee. See Compensation Committee Interlocks and Insider Participation for more details.
Compensation Discussion and Analysis
The Corporation’s executive compensation consists of six main elements: base salary, short-term incentives, performance units, performance stock options, retirement benefits and severance benefits. The Corporation designs executive compensation policies to attract, motivate and retain qualified executives. To emphasize performance-based compensation, the Corporation benchmarks total cash compensation levels to the median of a peer group of companies and provides the opportunity to earn total compensation above the median through medium-term and long-term incentive plans.
The Corporation believes that the most effective compensation program is one that is competitive within the marketplace, rewards the achievement of specific annual, long-term and strategic goals and aligns the interests of executives with shareholders by rewarding performance above established goals with the ultimate objective of increasing shareholder value. To accomplish these objectives, most compensation is variable and fluctuates based on individual and corporate performance. See Compensation Discussion and Analysis for details.
Share Ownership Guidelines
The Corporation strongly supports Share ownership by its executive officers. Each of its executive officers is required to hold Shares with a value of between one and five times the executive officer’s base salary, depending on the executive officer’s position. The share ownership guidelines reflect the value of Shares held by executive officers and can be met through direct or beneficial ownership of Shares. See Executive Share Ownership Guidelines for details.
Chief Executive Officer Compensation
The Board considered certain goals and achievements in making decisions related to the 2009 and 2010 compensation of the Chief Executive Officer of the Corporation. See Chief Executive Officer Compensation for details.