The Terex Compensation Planning Guideline - 2013
The following represents a detailed explanation of this year’scompensation planning form content. It takes you section by section explaining the purpose and use of each column in that section. All column headings are underlined in this document, both when initially explained and also when they may be referred to in other sections.
Section:Recommended 2013 Salary Adjustment(s)
Current Salary: This is the current salary as reported through TMS or GDF and was subsequently imported into the TTMS for use in this compensation planning process.
Merit Budget: This percent is based on the TM’s Country as reported in TMS or GDF. For details on the recommended merit increase by country for 2013, click on the link at the top of the in your comp planning form “2013 Recommended Merit Increase by Country”
Proposed Merit Adjustment April 1, 2013: The pre-populated amount is a factor of the TM’s merit budget based on their country AND their individual actual performance rating from their 2012 Year End Performance and Development Reviewform. The formulas used by rating are:
- Unrated or 1(Unsatisfactory/Does Not Meet Expectations) – no merit increase is allowed and the form will not allow any amount to be entered.
- Rating 2(Meets Most Expectations) – TheRecommended Merit Increase percentfor that TM (by country) times 33%
- Rating 3 and 4(Meets Expectations) and (Exceeds Most Expectations) – The actual Recommended Merit Increase percent for that TM (by country)
- Rating 5 (Significantly Exceeds Expectations) - The Recommended Merit Increase percent for that TM (by country) times 133%
You may manually adjust the prepopulated percent, however the form will not allow amounts less than 0% or more than 50% to be entered. Changes to this percentage will have a direct impact to the Merit Budget grid in the form. If your TM’s are consistently rated very high (or very low), you could find yourself significantly off your budget. It may be necessary to reduce recommendations for some TM’s in order to meet your budget goal. You are encouraged to document the reason for the adjustment in the Action button notepad to support the change.
Other Increase: This column is not required, however may be used for salary adjustments other than the Proposed Merit Adjustment April 1, 2013. These amounts are not included in your Merit Budget; however, they are subject to a separate, limited budget maintained at the Segment level. Managers should confer with the TM’s local HR managers before making any Other Increase recommendations. You are required to document the reason for all Other Increases in the Action button notepad to support the change.
Date of Other Increase: For any Other Increase input, you must also provide the date this increase is proposed to take effect. Dates must be in 2013.
Section: Total Proposed 2013 Salary
Total Increase: This represents the total amount (currency and percentage) of the Proposed Merit Adjustment April 1, 2013 column and any Other Increase (when an amount is entered).
New Salary: This represents the TM’sCurrent Salary plus the Total Increasefrom the prior column.
Section: Recommended 2013 MIB Percent
Current MIB%: This is the TM’s current MIB percent as reported through TMS or GDF and further confirmed through MIB Plan Document distribution during 2012. Unconfirmed or unapproved MIB percent’s are not reflected.
Proposed MIB%: You may provide a recommendation for increase or decrease to the current 2012 MIB percentage to be effective in the 2013 MIB year. These recommendations must be approved by senior management. You are encouraged to document the reason for the adjustment in the Action button notepad to support the change.
Proposed Effective Date: For any Proposed MIB% adjustment, you must also provide the date this proposedchange is to take effect. Dates must be in 2013.
Section: 2012 Base Salary and MIB Percent used for 2012 MIB Payment (prorated for changes)
Pro-rated Salary: This represents the TM’s prorated salary for 2012 and is used to calculate the TM’s MIB payout for 2012. Salary changes have been tracked through TMS and GDF throughout the year and are the basis for the proration calculation. If you believe this amount to be incorrect, contact Michelle Tomlin at , immediately.
Pro-rated MIB %: This represents the TM’s prorated MIB percent for 2012 and is used to calculate the TM’s MIB payout for 2012. MIB percent changes have been tracked through MIB Plan Document distribution throughout the year and are the basis for the proration calculation. If you believe this amount to be incorrect, contact Michelle Tomlin at , immediately.
Target Payout at 100%: This uses the TM’s pro-rated salary and multiplies it times their pro-rated MIB percent (the two columns preceding). This result is then used in the next form section 2012 MIB Payout Factor Resultsto calculate the TM’s MIB payout, using the MIB weighting as well as the Financial (ROIC) and Individual Performance results.
Section: 2012 MIB Payout Factor Results
TM’s Perf Rating: This is populated directly from the TM’s 2012 Year End Performance and Development Review form. Updating the rating in that form will automatically update the comp planning form. You may have to refresh the comp form using the “Refresh” button at the bottom of the form.
Fin/Indiv Performance Weighting: This is based on the TM’s Band (see last Section: Other Team Member Data, column Band). Bands 3 and above are weighted for MIB payout at 70% for ROIC factor result and 30% for Individual Performance factor result. All other bands are 60%/40% respectively.
Financial (ROIC) %: Once final ROIC results are provided by Terex Finance in February 2013, this will reflect that result and it will be used by the system to calculate the final MIB TM payouts.
Financial (ROIC) Bonus: This will represent the calculated Financial payoutportion (70% or 60% based on the TM’s Band) of the TM’s 2012 MIB payment.
Individual %: This pre-populated percent is directly linked to the TM’s performance rating from their 2012 Year End Performance and Development Review Managementform. The pre-populated recommendations are based on the following:
- Unrated or 1 (Unsatisfactory/Does Not Meet Expectations) – no MIB payment is allowed
- Rating 2 (Meets Most Expectations) – 80%
- Rating 3 and Rating 4 (Meets Expectations) and (Exceeds Most Expectations)– 100%
- Rating 5 (Significantly Exceeds Expectations) –120%
You may manually adjust the prepopulated percent; however the form will not allow amountsless than 0% or more than 120% to be entered. Changes to this percentage will have a direct impact to the Bonus Budget grid in the form. If your TM’s are consistently rated very high (or very low), you could find yourself significantly off your budget. It may be necessary to reduce recommendations for some TM’s in order to meet your budget goal.
Individual Bonus: This represents the calculated Individual Performance payout portion (30% or 40% based on the TM’s Band) of the TM’s 2012 MIB payment.
Section: 2012 Proposed MIB Payout
Calculated Bonus: This is the system calculated Total MIB payment for the TM. It represents the combined Financial and Individual Performance payout amounts.
Proposed Adjustment to Payment: In rare instances, an adjustment to a TM’s calculated MIB may be necessary. When this is needed, you may enter an amount into this column to adjust the calculated payment, thus proposing a new MIB payout. The entered amount can be a negative number to decrease the payout or a positive number to increase it. You are required to document the reason for the adjustment in the Action button notepad to support the change.
Proposed Total Bonus Payment: If an adjustment is made in the column explained above, this column will reflect the new, adjusted MIB payout. Any adjusted MIB payout, must be approved by Senior Management.
Section: Prior Year Information
It is important to note that this information has been retrieved from the prior Comp Planning process done ended in March 2012. Changes/Increases made outside the final completed 2012 Compensation Planning forms are NOT reflected here.
2011 Perf Rating: TM’s rating from their 2011 Year End Performance and Development Review
2011 Currency: The local currency the TM’s was paid in for all amounts shown in this section. In rare instances a TM’s currency may have changed from then until this Compensation Planning process.
April 2012 Merit Increase: The TM’s Compensation Planning approved merit increase effective 1-Apr-2012.
2012 Other Increase: When applicable, the TM’s Compensation Planning approved Other increase
2011 MIB Bonus: The TM’s Compensation Planning approved MIB payout for the 2011 MIB plan Year, paid in March, 2012.
Section: Other Team Member Data
Terex ID: The TM’s ID number assigned in TTMS
Band: The TM’s Job Band level
HR Manager: The TM’s HR manager as reported in TMS or GDF
Country: The TM’s country as reported in TMS or GDF
Business Unit: The TM’s local Business Unit as reporting in TMS or GDF
Section: Action Button
This field is located at either the beginning or end of each TM’s data row. It is highly recommended you use this to communicate the reasons for any requested changes that are outside the standard Comp Planning guidelines. Examples of when to use it are:
- merit increases above guidelines,
- recommendations for “Other Increases”,
- MIB participation percentage changes, and
- adjustments to the calculated MIB bonus payment.
You may enter any verbiage into the note pad and should be sure to include your name as the author of the text. This information will stay with the form and is viewable to anyone who has permissioned access to this TM’s TTMS Compensation Planning data.