Slide 1: Curtiss-Wright Proxy Update Presentation April 2013
Curtiss - Wright Proxy Update Presentation April 2013
Slide 2: Recap of the First Two Years of Say on Pay
Recap of the First Two Years of Say on Pay • In April 2011, ISS and Glass - Lewis recommended an “Against” vote for Curtiss Wright’s “Say on Pay” proposal and the Shareholders voiced their concerns by voting similarly to ISS and GL • In 2011 & 2012, Management, the Executive Compensation Committee,
Slide 3: Changes and Favorable SOP in 2012
Changes and Favorable SOP in 2012 3 Past Compensation Practices Changes in 2012 • Target pay at 75th %ile • Target pay shift to 50th %ile for similar sized peers – NEOs STI/LTI targets reduced and adjusted over 3 years to meet 50th %ile • NEO Individual weighting 40% of STI goal • NEO Individual wei
Slide 4: New Developments
New Developments • Compensation Committee: Two new members have joined the Executive Compensation Committee • Compensation Consultant: The Compensation Committee had replaced Pay Governance LLC with Farient Advisors LLC • Management: – David Adams has been named President and Chief Operating Officer
Slide 5: Practical Issues with Relative Financial Goals
Practical Issues with Relative Financial Goals • Relative TSR measure works well • But relative financial performance benchmarks in Short - and Long - term plans have created issues – Does not encourage senior managers to drive business unit strategic plans through established goals and objectives –
Slide 6: Modifications for 2013
Modifications for 2013 6 2012 Compensation Practices Changes for 2013 • Target pay shift to 50th %ile for similar sized peers – NEOs STI/LTI targets reduced and adjusted over 3 years to meet 50th %ile • No change from 2012 • NEO Individual weighting 20% of STI goal • No change from 2012 • Annual Inc
Slide 7: Robust Goal-Setting in Relative Context
Robust Goal - Setting in Relative Context 7 Company Historical Performance Company Annual Budget Historical Total Shareholder Return Prospective Total Shareholder Return Industry Index (if available) Peer Historical Performance Cost of Capital Analyst Views: Industry Company Peers Shareholder Value
Slide 8: Short-Term MICP: Funded Primarily by Financial Success
Short - Term MICP: Funded Primarily by Financial Success 8 (1) Interpolate for performance between discrete points 2013 Short - Term MICP Weighting CW Business Unit Individual Award as a % of Target (1) Operating Income Operating Cash Flow Operating Income Operating Cash Flow Individual Performance
Slide 9: Long-Term Incentive Plan (LTIP): Balance of Measures
Long - Term Incentive Plan (LTIP): Balance of Measures 9 2013 - 2015 PSU 2013 - 2015 Cash - Based PU Plan CW Level CW Level Business Unit TSR vs. Peers Payout % of RONA (2) Sales Growth RONA (2) Sales Growth Payout % of (%ile) Target (1) (%) (CAGR %) (%) (CAGR %) Target (1) Weighting Corporate Execu
Slide 10: NEOs Moving Closer to P50 Targets
NEOs Moving Closer to P50 Targets 10 Short - Term MICP Target % Long - Term LTI Target % Position 2011 2012 2013 2011 2012 2013 Chairman & CEO 105% 105% 105% 375% 285% 270% President & COO 90% 85% 85% 260% 240% 240% President, Flow Control 90% 85% 75% 260% 240% 175% V.P. - Finance (CFO) 80% 75% 75%
Slide 11: Pay for Performance: Continued Priority
Pay for Performance: Continued Priority • Compensation philosophy targeted at P50 for similarly - size peers • NEOs’ incentive targets to P50 over 3 years • Balanced use of performance measures that drive TSR • Heavier weighting on PSU Plan, driven by relative TSR • Absolute STI and LTI incentive go