Directors who are employees of the Company receive no additional compensation for serving on the Board or its Committees. Mr. Harold McGraw III received compensation in 2015 for his services as Non-Executive Chairman.
The Company provides annual compensation to non-employee Directors as follows:
Cash Compensation in 2016
- annual cash retainer of $70,000;
- $1,500 for each Board meeting attended;
- $1,500 for each Committee meeting attended;
- annual cash retainer of $15,000 to the Chairs of Committees of the Board; and
- annual cash retainer of $150,000 to the Chairman of the Board.
Compensation of the Non-Executive Chairman
Mr. Harold McGraw III served as our Non-Executive Chairman for the period from April 30, 2014 through April 29, 2015. In consideration of his services, the Nominating and Corporate Governance Committee recommended, and the Board approved, based on a recommendation by Pay Governance LLC, a Non-Executive Chairman retainer at the annual rate of $400,000 for Mr. McGraw, payable in monthly installments in cash. This retainer was in lieu of all other cash retainers, meeting fees and share compensation that were paid to our other non-employee Directors. This annual retainer was prorated based on his retirement date. During the period of January 1, 2015 through April 29, 2015, prior to Mr. McGraw's retirement from the Board, the Board also agreed to provide Mr. McGraw with appropriate office accommodations and support staff consistent with his responsibilities as Chairman of the Board as well as a car and driver for travel within the New York metropolitan area. In connection with Mr. McGraw's retirement from the Board, the Board also agreed to provide Mr. McGraw with the arrangements described in the Transactions With Related Persons section on page 32 of the 2016 Proxy Statement.
Each non-employee Director, other than Mr. Harold McGraw III, receives an annual deferred share credit of $115,000 pursuant to the Director Deferred Stock Ownership Plan. The earned deferred share credit of $115,000 in 2014 was paid in 2015 under this Plan. This $115,000 was credited as 1,320.47 deferred shares based on the closing price of the Company's common stock on January 5, 2015 of $87.09.
These deferred share credits are payable in shares of the Company's common stock following a Director's termination of Board membership. This Plan also permits Directors to elect to receive all or part of their annual cash retainer and Board and Committee fees in deferred shares of common stock in lieu of these cash payments. For 2016, the Company has written agreements with Ms. Ochoa-Brillembourg and Messrs. Haldeman, Sir Michael Rake, Rust, Schmoke and Thornburgh to receive all or part of these cash payments as deferred shares. The awards outstanding under this Plan as of December 31, 2015, which is further described on page 88 of the 2016 Proxy Statement, are as follows:
|Name||Number of Shares|
|Sir Winfried Bischoff||32,404|
|William D. Green||6,497|
|Charles E. Haldeman, Jr.||6,912|
|Robert P. McGraw||34,720|
|Sir Michael Rake||18,185|
|Edward B. Rust, Jr.||63,149|
|Kurt L. Schmoke||37,217|
|Richard E. Thornburgh||4,475|
Other Director Plans
Directors may also elect to defer all or part of their annual cash retainer and Board and Committee fees under the Director Deferred Compensation Plan. For 2016, the Company has written agreements to defer cash payments under this Plan with Messrs. Green and Schmoke. Interest is payable on the deferred cash amount at 120% of the applicable Federal Long-Term Rate as prescribed by the Internal Revenue Service in December of the year prior to the year in which the Director compensation is credited.
Director Stock Ownership Guidelines
Under the Company's By-Laws, each Director is required to own or acquire 400 shares of the Company's common stock within 90 days of his or her election to the Board and to hold such shares through his or her tenure as a Director. Additionally, under the Company's Non-Employee Director Stock Ownership Guidelines, each non-employee Director is required to own or acquire, within five years of election to the Company's Board of Directors, shares of common stock of the Company (including deferred share units held under the Director Deferred Stock Ownership Plan) having a market value of at least five times the annual cash retainer for serving as a Director of the Company. Based on the holdings of shares and deferred share units under the Director Deferred Stock Ownership Plan, as of February 25, 2016, each Director was in compliance with the minimum holding requirement under the Company's Non-Employee Director Stock Ownership Guidelines (taking into account the applicable five-year transition period).
Source: Proxy Statement, filed March 14, 2016