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Author: BentMike Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 138  
Subject: Re: Why is TTMI getting slamed Date: 8/11/2011 12:28 AM
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Compensation BOD of TTMI

I have a hard time understanding compensation information for corporations. Here hoping I am able to make sense of it some day.
But take this under advisment if you read what I report below - I don't really know what I am talking about - go look at the proxy statement yourself if you are going to make investment decisions about TTMI based on what I write.

And if you have any comments about how to evaluate this please chime in.

They have chosen a compensation plan that seeks to emulate compensation of company at the median of companies in the same business as TTMI, a peer to TTMI. From the proxy statement:

"Our compensation philosophy generally targets total compensation at the 50th percentile of comparable companies. We
believe that targeting compensation at or near the median of comparable companies will enable us to remain
competitive in attracting and retaining qualified executive officers while avoiding paying amounts in excess of what
we believe is necessary to attract and retain such executive officers."

"Our board of directors recognizes that stock ownership by directors may strengthen their commitment to
the long-term future of our company and further align their interests with those of our stockholders."

The two emplyees on the BOD - Mr. Alder and Mr. Tang receive no additional compensation beyond their salary,bonuses and retirment funds.

No one on the BOD owns as much as 1% of total TTMI stock.

The non-emplyee BOD members get retainers and stock options. There are additional retainers for c0mmmittee participation.

The numbers look huge in my terms, but I think the compensation is not so great as corporate BOD goes. I see other companies where the directors have a lot more skin in the game percentage wise.

In interesting tidbit:

The two 5% stockholders are Su Sih a holding copany wholly owned by Mr.Tang's father, Mr. Tang Hsiang Chien, who owns 34%, and Blackrock who holds 6.2%. Mr. Tang is on the BOD and director of the East Asia operations.

So the Asian partners have a lot of skin in the game. This sounds very good. The people with Asian connections are going to care a great deal about the success of TTMI.

TTMI has institutionalized compensatory means to limit excessively risky behavior by the BOD:

"Several elements of the programs are also designed to promote the creation of long-term value and thereby discourage behavior that leads to
excessive risk:

* They choose to concentrate on operating income as their main metric. And there is a cap on the bomus compensation:

"the committee attempts to set ranges for this metric that encourages success without encouraging excessive risk taking to achieve short-term results. In addition, the overall annual incentive bonus for each of our executive officers never exceeds 140% of the target amount (230% in the case of our chief executive officer), no matter how much financial performance exceeds the ranges established at the beginning of the year."

* "The use and equal weighting of both revenue and EBITDA performance metrics in our PRU program limits the ability of an executive to be rewarded for taking excessive risk on behalf of our company ..."

* "The measures used to determine vesting of our PRUs granted in 2010 and 2011 are based on rolling three-year performance periods. The committee believes that these three-year performance periods 26 encourage executives to attain sustained performance over several periods,..."

This gets old - there are so many ways they pay out compensation to BOD and executive officers. CEO gets between $1M & $1.5M I think.

I need to get more familiar with all this so I can scan it quicker. Note to self to come back and look at this some more.
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