The Board of Directors' Committee on Compensation and Executive Development is responsible for the Corporation's executive compensation program. Program goals are to support recruitment and retention and to align management and shareowner interests by emphasizing long term, at risk and variable compensation. The Committee uses benchmark information from a compensation peer group consisting of 18 Dow Jones 30 Industrial and 18 other relevant comparison companies. The value of the program, including for the Named Executive Officers, is targeted at approximately the median of the compensation peer group.
Actual value varies with individual and corporate performance.
Bonuses are based on performance against annual objectives for the Corporation and the business units and on assessments of individual performance. Award amounts for these entities reflect formula calculations, modified in some instances for unusual or unanticipated circumstances. Subject to these limits, the Committee determines the actual amount of each award. Stock options are priced at market on the date of grant, vest after three years, and remain exercisable for seven years thereafter. DE's are the right to receive payments equal to the common stock dividend for up to seven years, or until the associated stock option is exercised.