Issue link: http://catalog.e-digitaleditions.com/i/480568
Table of Contents 22 elements. The accounting treatments considered include any that may apply to amounts awarded or paid to our NEOs. The tax considerations include Sections 162(m) and 409A of the Internal Revenue Code. Deductibility of Executive Compensation: In evaluating the compensation programs covering our NEOs and making decisions related to payments, the Compensation Committee considers the potential impact on the Company of Section 162(m) of the Internal Revenue Code. Section 162(m) generally eliminates the deductibility of compensation over $1 million paid to NEOs, other than the principal financial officer, excluding "performance-based compensation" meeting certain requirements. The Compensation Committee generally intends to maximize deductibility of compensation under Section 162(m) of the Internal Revenue Code to the extent consistent with our overall compensation program objectives, while also maintaining maximum flexibility in the design and administration of our compensation programs and in making appropriate payments to executives. Accordingly, the Compensation Committee may choose to authorize compensation that does not meet the requirements of Section 162(m) if it determines such payments are appropriate, and it has done so in the past. Share-Based Compensation: We account for compensation expense from our stock awards in accordance with the Compensation — Stock Compensation Topic of the Financial Accounting Standards Board Accounting Standards Codification ("FASB Codification") that requires companies to measure the cost of employee stock awards based on the grant-date fair value and recognize that cost over the period during which a recipient is required to provide services in exchange for the stock awards, typically the vesting period. We consider the impact on the Company's compensation expense when determining and making stock awards. 2015 Compensation Decisions The table below summarizes the 2015 compensation decisions for the 2014 NEOs. These decisions will be more fully discussed in the proxy statement for our 2016 annual meeting. Name Annualized Base Salary ($) Target Bonus ($) (1) Number of Stock Options (#) (2) Number of Performance Stock Units at Target (#) (3) Kevin A. Lobo 1,100,000 1,540,000 156,890 39,222 William R. Jellison 554,000 387,800 26,865 6,716 Timothy J. Scannell 587,000 469,600 56,955 14,238 Ramesh Subrahmanian 529,000 396,750 36,535 9,134 David K. Floyd 550,000 440,000 41,910 10,478 ____________ (1) Each NEO bonus plan for 2015 includes an opportunity to earn an overachievement bonus of up to an additional 100% of target bonus based on sales and earnings metrics. (2) Stock options to purchase shares of the Company's Common Stock were granted at an exercise price of $93.06 per share (the closing price as reported by the NYSE Composite Transactions on February 10, 2015, the last trading day before the grant date). (3) Key design features for the 2015 performance stock units include the following: • In order to earn any shares, a pre-established threshold level of three-year average adjusted diluted net earnings per share growth must be achieved, with the actual number of shares earned based on actual average adjusted diluted net earnings per share growth and sales growth relative to a comparison group of companies over the three-year performance period; • Payout range of 0% to 200% of the target award; and • Settled in Common Stock in early 2018 following the completion of the three-year performance period.