We will guide, design, and administer compensation at XYZ Properties, LLC with the following principles:
Compensation programs will reflect our beliefs and intentions:
‰ Having the right people is the first and most important step toward
XYZ’s success,
‰ A properly directed, motivated, and effective work force can have a dramatic effect on XYZ’s performance, and
‰ We are compelled to make our people a sustaining competitive advantage.
We believe compensation is a management tool and a communication system designed to support, reinforce, and align us with our philosophy, culture, values, business strategy, operational and financial needs, and our drive for enduring customer satisfaction.
‰ If we clearly understand the way our compensation program works and how the program ties to XYZ’s goals and strategies, then it is key to how effective the program can be. To further our understanding, we will, whenever possible, keep specific compensation plans for each person to a single page.
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We will use compensation to attract and retain top performers, and provide base salary, incentives, and rewards that direct behavior to build and sustain
XYZ’s culture.
‰ Since we pursue XYZ’s goals and strategies in many different ways, all means of compensation program design and distribution may be employed including by teams, by individual persons, for all people, per capita, by spot awards, or by any other means we determine appropriate.
‰ We do not think compensation program design ought to be fixed or frozen.
YXZ will change programs whenever circumstances dictate, and include our
© 2007 Gina Galgano Hoagland. All rights reserved.

people in the process. We want to make this clear to all of our people in the belief that knowing it will allow us to understand what is happening and to help us better adapt to any changes.
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We believe we should compensate our people in ways that inspire and motivate us to execute our vision.
‰ We will target the midpoints of our base salary ranges at no less than mean or median data representing competitive markets for various segments of personnel talent.
‰ Using compensation, or elements of it, we will recognize the different levels of value we place on different performance according to the effects individual jobs and our people have on XYZ’s performance.
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To support our business efforts, in certain circumstances we may set base compensation lower for those of us who are subject to high, upside potential with incentive compensation.
‰ As a general rule, our leaders will be more at risk with potential for higher total compensation rewards.
‰ In most instances, XYZ will make performance goals that produce, or have the potential to produce, the highest levels of economic value eligible for variable rewards with higher upside potential.
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Our compensation program will emphasize what effects we want and need to produce in implementing our strategic plan. We will be perfectly clear about what performance we expect.
‰ Compensation program funding will be a driving force and receive top priority for operational budget planning.
‰ When unfavorable business conditions threaten the financial well-being of
XYZ, we may have to make reductions in compensation program expenses. If that happens, we will do it in such a way that we try to retain our people first with lower compensation as opposed to laying people off and keeping compensation whole for those who remain.
© 2007 Gina Galgano Hoagland. All rights reserved.