STARWOOD HOTELS & RESORTS WORLDWIDE, INC. CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Transcription

1 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS The Board of Directors (the Board ) of Starwood Hotels & Resorts Worldwide, Inc., ( Starwood ) has established a Compensation Committee (the Committee ) to discharge the Board s responsibilities relating to the compensation of Starwood s Chief Executive Officer (the CEO ) and other executive officers 1 (collectively, including the CEO, the Executive Officers ). To define the responsibilities and operations of the Committee, the Board has unanimously adopted this Charter ( Charter ), which sets forth the purposes, composition and responsibilities and duties of the Committee. The purposes and procedures outlined in this Charter are meant to serve as guidelines rather than inflexible rules, and the Committee is encouraged to adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities. Nothing herein is intended to expand applicable standards of liability under state or federal law for directors of corporations. Purpose The primary purpose of the Committee is to: assist/advise the Board on compensation matters pertaining to the Company; review and approve corporate goals and objectives relevant to the compensation of the CEO and other Executive Officers, evaluate the performance of the CEO and other Executive Officers in light of those goals and objectives, and either as a committee or together with the other independent directors (as directed by the Board), determine and approve the compensation level of the CEO and other Executive Officers based on this evaluation; approve and oversee (or provide for the oversight of) compensation programs that are designed to (i) attract and retain executives that are consistent with (a) Starwood s overall business strategies, values, performance and financial condition and (b) the achievement of individual performance goals; and (ii) align financial interests of executives with those of the stockholders of Starwood; and produce a report on executive compensation as required by the Securities and Exchange Commission ( SEC ) for inclusion in Starwood s Annual Report on Form 10-K and proxy statement. 1 This group shall include all of Starwood s Executive Vice Presidents and, to the extent different, all those officers of Starwood who are subject to Section 16 of the Securities Exchange Act of 1934, as amended.

2 The Committee shall perform such activities in a manner consistent with this Charter, Starwood s articles of incorporation and bylaws, governing law and the rules of any national securities exchange on which Starwood s securities are listed. In discharging its role, the Committee is empowered to inquire into any matter that it considers appropriate to carry out its responsibilities, with access to all Starwood s books, records, facilities and personnel. The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser to assist it in carrying out its activities. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, independent legal counsel or other adviser retained by the Committee, including the sole authority to retain and terminate such advisers. Starwood must provide adequate resources to support the Committee s activities, including appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, independent legal counsel or any other adviser retained by the Committee. The Compensation Consultant, independent legal counsel and any other adviser retained by the Committee shall be ultimately accountable to the Committee. The Committee may select a compensation consultant, legal counsel or other adviser to the Committee or receive advice from a compensation consultant, legal counsel or other adviser (other than in-house legal counsel or any compensation consultant, legal counsel or other adviser whose role is limited to the following activities for which no disclosure would be required under Item 407(e)(3)(iii) of Regulation S-K: consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of Starwood, and that is available generally to all salaried employees; or providing information that either is not customized for a particular company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) only after taking into consideration all factors relevant to that person s independence from management, including the following: (1) the provision of other services to Starwood by the person that employs the compensation consultant, legal counsel or other adviser; (2) the amount of fees received from Starwood by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser; (3) the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest; (4) any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee; (5) any Starwood stock owned by the compensation consultant, legal counsel or other adviser; and (6) any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of Starwood.

3 Composition The Committee shall be comprised of not less than three directors as determined by the Board. Each member of the Committee shall meet the independence requirements of The New York Stock Exchange, Inc. ( NYSE ) and any other securities exchange on which Starwood s securities are traded. In determining whether a director is eligible to serve on the Committee, the Board must also consider all factors specifically relevant to determining whether the director has a relationship to Starwood that is material to the director s ability to be independent from management in connection with the duties of a Committee member or that would impair the director s ability to make independent judgments about Starwood s executive compensation. These factors must include but are not limited to (1) the source of compensation of the director, including any consulting, advisory or other compensatory fee paid by Starwood to the director and (2) whether the director is affiliated with Starwood, a Starwood subsidiary or an affiliate of a Starwood subsidiary. In addition, each member of the Committee shall (i) be a Non-Employee Director for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) satisfy the requirements of an outside director for purposes of Section 162(m) of the Internal Revenue Code. The members of the Committee shall be elected by the Board on the recommendation of the Nominating & Governance Committee at its annual organizational meeting and shall serve on the Committee until the next annual organizational meeting or until their successors shall be duly elected and qualified, or their earlier death, disability, resignation, or removal by the Board at any time, with or without cause. If not designated by the Board, the members of the Committee shall designate a Chairman by majority vote of the full Committee membership. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board, provided that, in all cases, the Committee shall act only on the affirmative vote of at least two-thirds of its members. The Committee is authorized to adopt its own rules of procedure not inconsistent with (a) any provision of this Charter, (b) any provision of the bylaws of Starwood, (c) the laws of the State of Maryland, and (d) applicable law and exchange rules. Meetings The Committee shall meet at least three times annually and more frequently as the Committee or its chair deems advisable. The Committee Chairman shall preside at each meeting. In the absence of the Committee Chairman at a duly convened meeting, the Committee shall designate an acting chair of such meeting from among its members. The Secretary of Starwood or another person designated by the Committee shall take minutes at each meeting of the Committee. The minutes shall be included in the permanent minute books of Starwood.

4 The Committee shall meet at least annually with the CEO and any other corporate officers that the Board and/or the Committee deem appropriate to discuss and review the performance criteria and compensation levels of key executives. Key Responsibilities, Duties and Delegation The following responsibilities are set forth as a guide for fulfilling the Committee s purpose, with the understanding that the Committee s activities may diverge as appropriate given the circumstances. The Committee is authorized to carry out these activities and other actions reasonably related to the Committee s purposes or assigned by the Board from time to time. The Committee may, by resolution approved by a majority of the Committee, delegate to management or a subcommittee the administration of Starwood s incentive compensation and equity-based compensation plans, as may be permitted by such plans and subject to such rules, policies and guidelines (including limits on the aggregate awards that may be made pursuant to such delegation) as the Committee shall approve, provided that, the Committee shall determine and approve the awards made under such plan to any Executive Officer and any other member of senior management as the Committee shall designate and shall at least annually review the awards made to such other members of senior management as the Committee shall designate. The Committee may revoke any delegation previously granted at any time, in its sole and absolute discretion. To fulfill its purposes, the Committee shall have the following responsibilities and duties: 1. Establish and review Starwood s overall management compensation philosophy and policies; 2. Review and approve any peer group(s) used for benchmarking compensation levels and design practices, if applicable. To the extent utilized by Starwood, the Committee will also review and approve any peer group(s) for any relative incentive programs or awards; 3. Ensure that Starwood s executive compensation programs (i) support overall business strategy and objectives; (ii) attract and retain executives; (iii) align compensation with business objectives and organizational performance; and (iv) provide competitive compensation opportunities; 4. Review from time to time and approve Starwood s compensation strategy to ensure that executives are rewarded appropriately for their contributions to Starwood s growth and profitability and that the executive compensation strategy supports organization objectives and stockholder interests; 5. Assure that Starwood s executive compensation programs, including Starwood s equity-based plans, are administered in a manner consistent with

5 Starwood s compensation strategy as to participation, target annual incentive awards, corporate financial goals, actual awards paid and total funds reserved for payment under the compensation plans, and make recommendations to the Board with respect to incentive-compensation and equity-based plans that are subject to Board approval; 6. Review and authorize any employment, compensation, benefit, change-incontrol, or severance provision or agreement with any Executive Officer or individuals who formerly served as Executive Officers, including supplemental retirement benefits and the perquisites provided to them during and after employment; 7. Review and approve corporate goals and objectives relevant to the compensation of Starwood s Executive Officers, including annual and longterm performance goals and objectives; 8. Evaluate at least annually the performance of Starwood s Executive Officers (including the CEO) against corporate goals and objectives, including the annual performance objectives and, based on this evaluation, determine and approve the compensation level (including any awards under any equity-based compensation or non-equity-based incentive compensation plan and any material perquisites) for the Executive Officers, reviewing as appropriate, any agreement or understanding relating to each Executive Officer s employment, incentive compensation, or other benefits based on this evaluation; 9. Determine and approve the compensation level (including any awards under any equity-based compensation or non-equity-based incentive compensation plan and any material perquisites) for other members of senior management of Starwood as the Committee or the Board may from time to time determine to be appropriate; 10. In determining the long-term incentive component of the compensation of the CEO and other Executive Officers, the Committee should consider a number of factors, including, but not limited to, Starwood s performance and relative shareholder return, the value of similar incentive awards to chief executive officers and other executive officers at comparable companies, and the awards given to the CEO and other Executive Officers of Starwood in past years; 11. Act on behalf of the Board in administering (or providing for the administration of) compensation plans approved by the Board or stockholders in a manner consistent with the terms of such plans, including authorizing all awards pursuant to such plans; 12. Review and discuss the Compensation Discussion and Analysis ("CD&A") required to be included in the Company s proxy statement and Annual Report on Form 10-K by the rules and regulations of the SEC with management, and,

6 based on such review and discussion, determine whether or not to recommend to the Board that the CD&A be so included; 13. Prepare the report of the Committee required to be included in Starwood s proxy statement, in accordance with applicable rules and regulations of the SEC; 14. Provide recommendations to the Board on compensation-related proposals to be considered at Starwood s annual meeting of stockholders, including any advisory vote on executive compensation ( say-on-pay ) and the frequency with which Starwood should submit to stockholders an advisory vote on sayon-pay; 15. Review and consider the results of the Company s most recent stockholder advisory vote on named executive officer compensation and other feedback garnered through the Company's ongoing stockholder outreach that may be in effect from time to time. 16. Review Starwood s incentive compensation arrangements to determine whether they encourage excessive risk-taking, to review and discuss at least annually the relationship between risk management policies and practices and compensation, and to evaluate compensation policies and practices that could mitigate any such risk; 17. Review the outside directors compensation program annually and recommend changes as appropriate to the Board; 18. Monitor compliance by Starwood s directors and Executive Officers with Starwood s Share Ownership Guidelines, including those set forth in Starwood s Corporate Governance Guidelines; 19. Review and make recommendations to the Board regarding administration of the Recoupment of Incentive Compensation Policy; 20. Oversee the development of new compensation plans and the revision of old plans and Starwood s compliance with the requirement under NYSE rules that, with limited exceptions, stockholders approve equity compensation plans; 21. Report regularly to the Board with respect to any matters that are relevant to the Committee s discharge of its responsibilities, including, when appropriate, discussing the CEO s compensation with the Board generally; 22. Conduct an annual self-assessment and performance evaluation of the Committee;

7 23. At least annually, the Committee shall review the services provided by any compensation consultant who has performed services for the Committee to determine whether the provision of such services has given rise to an actual conflict of interest taking into account such factors as required by the Securities and Exchange Commission and applicable law and such other factors as the Committee determines are relevant; and 24. Review this Charter annually and recommend changes to this Charter to the Board, as appropriate. Subject to applicable law and the terms of any Starwood equity plan, the CEO of Starwood is given full authority, which may be delegated, to establish the total compensation, including base pay, annual incentive, long term incentive and other compensation components as deemed appropriate for all other employees of Starwood whose salaries are not subject to approval by the Committee. Approved: May 27, 2015