comp_philo.htm


     

    

     

     

     

     

    
      COMPENSATION
PHILOSOPHY

       

      


      Flagstone’s
Compensation programs are designed to give employees reasons to
excel.

       

      Through
its performance management and rewards processes and programs, Flagstone
endeavours to create an environment that fosters and rewards:

       

      
        
          	 
      	●	
                  striving
      for and achieving excellence;

                
	 
      	●	
                  engaging
      in responsible relationships with clients, colleagues, and shareholders;
      and

                
	 
      	●	
                  maintaining
      the highest ethical
standards.

                


        

      

      


       

      All
compensation programs are intended to align the interests of employees and
management with shareholders and to foster sustained value creation with
particular emphasis on total compensation management, pay for performance and
the use of Flagstone equity.

       

      The
total compensation concept

       

      At
Flagstone, compensation refers to the combination of base salaries, annual bonus
awards, and equity compensation opportunities as well as deferred compensation
opportunities and benefits, which vary by country.

       

      Upon
joining Flagstone, employees receive a base salary, are eligible for an annual
incentive bonus award based on performance and can participate in certain equity
compensation programs depending on their level of seniority.

       

      Base
salary is used to recognize particularly the experience, skills and knowledge
that individuals bring to their roles. Salary levels are determined primarily
based on functional role, level of responsibility and relevant competitive
practices.

       

      Annual
incentive bonus awards are determined annually on a discretionary basis. They
are strictly and rigorously correlated with performance, and can therefore be
highly variable from year to year.

       

      Pay
for performance

       

      Flagstone
is committed to providing superior compensation in return for superior
performance and to developing the measurement systems and decision processes
necessary to support the best compensation decision making.

       

      Performance
assessments consider the given individual’s scope of responsibility or sphere of
influence.  Performance assessments incorporate quantitative and
qualitative elements include a balanced assessment of financial results,
operational results and leading indicators of future performance, to the extent
feasible.

       

       

       

      
        
          
          

        

        
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      The
role of Flagstone equity

       

      Significant
numbers of Flagstone employees are required to take a portion of their annual
performance-based compensation in the form of Performance Share Units or
Restricted Stock Units (PSU’s or RSU’s).

       

      Flagstone
believes that broad-based employee stock ownership enhances its ability to
deliver superior shareholder returns by increasing the alignment between the
interests of employees and shareholders. The goal of these programs is to engage
all employees as partners in Flagstone’ success and to help the Firm realize the
maximum gain from its strategy.

       

      


       

      


       

      


       

      Approved
15th June, 2006

       

       

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