Page 36 - EndoProxy2012

endo

|

100 Endo Boulevard

|

Chadds Ford, Pennsylvania 19317

30

Individual Compensation Determination

Under our compensation structure, the mix of base salary, cash IC and equity-based LTI compensation varies depending

on each named executive officer’s level. Although the Company has no pre-established policy or target for the allocation

between either cash and non-cash or short-term and long-term incentive compensation, the following summarizes the in-

centive compensation decisions for the current named executive officers based on 2011 performance:

Each named executive officer’s target percentage and actual number of stock options, PSUs, and RSUs granted in 2012

based on 2011 performance were as follows:

Name

Base

Salary as of

December 31,

2011 2011 IC Target

2011 IC Actual

2011 Long-Term

Equity Incentive

Compensation

Target

2011 Long-Term

Equity Incentive

Compensation

Actual

David P. Holveck

$ 1,100,000 $ 1,320,000 $ 1,869,120 $ 4,400,000 $ 5,500,000

Alan G. Levin

$

643,000 $

353,650 $

563,364 $ 1,286,000 $ 1,736,100

Julie H. McHugh

$

560,000 $

336,000 $

475,776 $ 1,400,000 $ 1,680,000

Ivan P. Gergel, M.D.

$

636,000 $

349,800 $

412,764 $ 1,272,000 $ 1,399,200

Caroline B. Manogue

$

540,000 $

297,000 $

438,075 $ 1,080,000 $ 1,350,000

Name

LTI Target % of

Base Salary

Options Actually

Granted

PSUs Actually

Granted

RSUs Actually

Granted

David P. Holveck

400%

173,940

52,834

Alan G. Levin

200%

54,905

16,677

Julie H. McHugh

250%

53,131

16,138

Ivan P. Gergel, M.D.

200%

44,250

13,441

Caroline B. Manogue

200%

42,694

12,968

David P. Holveck

President and Chief Executive Officer

To provide further assurance of independence, the com-

pensation recommendation for the President and Chief Ex-

ecutive Officer is developed by Hay Group, the Committee’s

independent consultant. Hay Group prepares analyses

showing competitive Chief Executive Officer compensation

among the Data Point Companies for the individual ele-

ments of compensation and total direct compensation. The

consultant develops a range of recommendations, based on

various company and individual performance assumptions,

for any change in the President and Chief Executive Offi-

cer’s base salary, annual cash incentive, equity grant value,

and equity mix. The recommendations take into account

the competitive Data Point Company pay analysis, expect-

ed future pay trends, and the position of the President and

Chief Executive Officer in relation to other senior company

executives and proposed pay actions for all key employees

of the Company. The range allows the Committee to exer-

cise its discretion based on the President and Chief Execu-

tive Officer’s individual performance and other factors. The

results of this analysis are shared with the Committee, dur-

ing which time the Company’s performance, and the per-

formance of the President and Chief Executive Officer are

evaluated, and compensation decisions determined. The

President and Chief Executive Officer has no prior knowl-

edge of the recommendations, and only participates in the

process during the stage when he reviews his evaluation of

Company performance and his personal performance with

the Committee. The President and Chief Executive Officer

takes no part in the recommendations, Committee discus-

sions, or decisions, other than what is described above. The

Board’s assessment of Mr. Holveck’s performance is based

primarily on the development and execution of a long-term

vision for the Company and the evaluation of company op-

erating and financial performance as summarized on pages

24-26.

Based on the Company’s strong overall results, an evalu-

ation of Mr. Holveck’s individual performance, and an

analysis of the competitiveness of his pay related to the

Company’s Data Point Companies conducted by the

Compensation Committee’s consultant, Hay Group, Mr.

Holveck’s base compensation was increased to $1,155,000

effective March 1, 2012. Further, Mr. Holveck was awarded

an annual performance-based bonus equal to 141.6% of his

target amount and an equity award equal to 125% of his

target.

Alan G. Levin

Executive Vice President & Chief Financial Officer

Mr. Levin serves as Chief Financial Officer, and is also re-

sponsible for investor relations and business development.

Mr. Levin exhibited strong financial leadership in 2011, as

evidenced by the Company exceeding key financial targets,

including revenue and EPS, while managing operating in-

come, cash flows and debt obligations. Among his many

accomplishments in 2011, Mr. Levin led the execution of

the Company’s business development and capital mar-

kets strategies resulting in three key acquisitions in 2011,

including AMS, Intuitive Medical Software, LLC and me-

ridianEMR, Inc. Mr. Levin also played a critical role in the

integration of the acquired companies into Endo which in-

volved the planning and executing the financial structure of

the combined company, while identifying enterprise-wide

savings opportunity in the general and administrative func-

tions. Based on Mr. Levin’s leadership of critical business

functions and his contributions to the Company’s accom-

Page 36 - EndoProxy2012_final