UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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HERTZ GLOBAL HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notice of
Annual Meeting
of Stockholders
and Proxy
Statement
October 15, 2015

 

 

 

 

Hertz Global Holdings, Inc.
999 Vanderbilt Beach Road
Naples, FL 34108

 

August 24, 2015

 

Dear Stockholder:

 

You are cordially invited to attend our annual meeting of stockholders to be held at 10:00 a.m. (local time) on October 15, 2015, at the Hyatt Regency Coconut Point Resort and Spa, 5001 Coconut Road, Bonita Springs, Florida, 34134.

 

We will be using the “Notice and Access” method of providing proxy materials to you via the Internet at www.proxyvote.com, instead of by mail. On or about September 1, 2015, we will mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and annual report to stockholders for 2014 and how to vote. The Notice also contains instructions on how to receive a paper copy of your proxy materials.

 

Your vote is important. Please vote as promptly as possible. Whether you plan to attend the annual meeting or not, you may vote by following the instructions set forth in the Notice, this proxy statement or as set forth in the proxy card. If you attend the annual meeting, you may vote in person.

 

Registration and seating will begin at 9:30 a.m. (local time). In order to be admitted to the annual meeting, a stockholder must present proof of stock ownership as of the close of business on the record date, August 24, 2015, which can be the Notice, a proxy card or a brokerage statement reflecting stock ownership as of August 24, 2015. Stockholders will be asked to sign an admittance card and must also present a form of photo identification such as a driver’s license. Cameras and recording devices will not be permitted at the annual meeting.

 

	Sincerely,
	/s/ Linda Fayne Levinson
	Linda Fayne Levinson
	Independent Non-Executive Chair

 

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF HERTZ GLOBAL HOLDINGS, INC.
Time and Date:	10:00 a.m. (local time), October 15, 2015.
Place:	Hyatt Regency Coconut Point Resort and Spa, 5001 Coconut Road, Bonita Springs, Florida, 34134.
Proposals:	1.	Election of the five nominees identified in the accompanying proxy statement to serve as directors until the next annual meeting of stockholders;
	2.	Approval, by a non binding advisory vote, of the named executive officers’ compensation;
	3.	Re-approval of the material terms of the performance objectives under the Company’s 2008 Omnibus Plan;
	4.	Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year 2015;
	5.	To consider a shareholder proposal on a policy regarding accelerated vesting of equity awards of senior executives upon a change in control, if presented at the meeting; and
	6.	Transaction of any other business that may properly be brought before the annual meeting.

 

The Board of Directors of the Company recommends a vote FOR each of Proposals 1-4 and recommends
a vote AGAINST Proposal 5. 

Who Can Vote:	Only holders of record of the Company’s common shares at the close of business on August 24, 2015 will be entitled to vote at the meeting. You may vote with respect to the matters described in the proxy statement by following the instructions set forth in the Notice of Internet Availability of Proxy Materials (the “Notice”).
Date of Mailing:	This proxy statement and accompanying materials were filed with the Securities and Exchange Commission on August 24, 2015, and we expect to first send the Notice to stockholders on or about September 1, 2015.

 

	/s/ Thomas J. Sabatino, Jr.
	Thomas J. Sabatino, Jr.
	Senior Executive Vice President, Chief Administrative Officer
	and General Counsel

 

Naples, Florida
August 24, 2015

 

 

 

 

Table of Contents

 

Section/Proposal		Page
Proxy Procedures and Information about the Annual Meeting
Important Information about Annual Meeting and Proxy Procedures		1
Corporate Governance
Corporate Governance and General Information Concerning the Board and Its Committees		4
Director Compensation
Director Compensation		10
2014 Non-Employee Director Compensation Table		11
Election of Directors
Proposal 1: Election of Directors		12
Continuing Directors		17
Compensation Discussion and Analysis
Executive Summary		21
Compensation Discussion and Analysis		24
Compensation Committee Report		43
Summary Compensation Table and Executive Compensation
2014 Summary Compensation Table		44
Annual Meeting Proposals:
Proposal 2: Approval, By a Non-Binding Advisory Vote, of the Named Executive Officers’ Compensation		70
Proposal 3: Re-Approval of the Material Terms of the Performance Objectives Under the Company’s 2008 Omnibus Plan		71
Proposal 4: Ratification of the Selection of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the Year 2015		78
Auditor Information
Independent Registered Public Accounting Firm Fees		79
Audit Committee Report		80
Shareholder Proposal
Proposal 5: Shareholder Proposal on a Policy Regarding Accelerated Vesting of Equity Awards of Senior Executives upon a Change in Control		81
Other Matters
Security Ownership of Certain Beneficial Owners, Directors and Officers		84
Compensation Committee Interlocks and Insider Participation		86
Section 16(a) Beneficial Ownership Reporting Compliance		86
Certain Relationships and Related Party Transactions		86
Other Business		89

 

 

PROXY PROCEDURES AND INFORMATION ABOUT THE ANNUAL MEETING

 

IMPORTANT INFORMATION ABOUT ANNUAL
MEETING AND PROXY PROCEDURES

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

1

 

 

PROXY PROCEDURES AND INFORMATION ABOUT THE ANNUAL MEETING

 

Voting Options; Quorum

 

The Board recommends a vote “for” proposals 1-4 below and “against” proposal 5. Below is a summary of the vote required for adoption of each proposal and the respective effect of abstentions and broker non-votes. For more detailed information, see each respective proposal.

						Effect of
				Effect of		Broker
Proposal		Vote Required for Adoption		Abstentions		Non-Votes
Election of directors		Majority of shares cast		No effect		No effect
Advisory vote on executive		Majority of shares present		Vote “against”		No effect
compensation
Re-approval of the		Majority of shares present		Vote “against”		No effect
2008 Omnibus Plan
Ratification of		Majority of shares present		Vote “against”		No effect
PricewaterhouseCoopers LLP
Shareholder proposal		Majority of shares present		Vote “against”		No effect

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

  

PROXY PROCEDURES AND INFORMATION ABOUT THE ANNUAL MEETING

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

3

  

  

CORPORATE GOVERNANCE

 

CORPORATE GOVERNANCE AND GENERAL INFORMATION CONCERNING
THE BOARD AND ITS COMMITTEES

 

4

Hertz Global Holdings, Inc. 2015 Proxy Statement

  

CORPORATE GOVERNANCE

 

Each committee has a written charter and each charter is available without charge on the “Investor Relations—Committee Charters” portion of our website, www.hertz.com. Each member of the Audit Committee, Compensation Committee, Nominating and Governance Committee and Financing Committee meets the independence and eligibility standards necessary for service on such committee pursuant to relevant securities laws, NYSE rules, our Corporate Governance Guidelines and the respective charter of each committee. Our Board has designated Messrs. Berquist, Durham, Intrieri and Koehler as “audit committee financial experts”.

 

Membership, Meetings and Roles and Responsibilities of the Board Committees

Audit Committee
Members				Roles and Responsibilities of the Audit Committee
Berquist (Chair) Durham				•	Oversees our accounting, financial and external reporting policies and practices as well as the integrity of our financial statements.
Intrieri Kelly-Ennis Koehler				• •	Monitors the independence, qualifications and performance of our independent registered public accounting firm. Oversees the performance of our internal audit function, the management information system and operational policies and practices that affect our internal controls.
				•	Monitors our compliance with legal and regulatory requirements.
	Number of 2014 Meetings			•	Reviews our guidelines and policies and the commitment of internal audit resources, in each case as they relate to risk management and the preparation of our Audit Committee’s report included in our proxy statements.
	11
Compensation Committee
Members				Roles and Responsibilities of the Compensation Committee
Fayne Levinson				•	Oversees our compensation and benefit policies generally.
(Chair) Durham				•	Evaluates the performance of our CEO as related to all elements of compensation, as well as the performance of our senior executives.
Everson Ninivaggi				• •	Approves and recommends to our Board all compensation plans for our senior executives. Approves the short-term compensation and grants to our senior executives under our incentive plans (both subject, in the case of our CEO, if so directed by the Board, to the final approval of a majority of independent directors of our Board).
	Number of 2014 Meetings			• •	Prepares reports on executive compensation required for inclusion in our proxy statements. Reviews our management succession plan.
8

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

5

 

  

CORPORATE GOVERNANCE

 

Nominating and Governance Committee

Members				Roles and Responsibilities of the Nominating and Governance Committee
Koehler (Chair) Everson				•	Assists our Board in determining the skills, qualities and eligibility of individuals recommended for membership on our Board.
Fayne Levinson Kelly-Ennis				•	Reviews the composition of our Board and its committees to determine whether it may be appropriate to add or remove individuals.
Merksamer				•	Reviews and evaluates directors for re-nomination and re-appointment to committees.
				•	Reviews and assesses the adequacy of our Corporate Governance Guidelines, Standards of Business Conduct and Directors’ Code of Conduct.
	Number of 2014 Meetings			•	Reviews and recommends to the Board the form and amount of compensation paid to directors.
4

Financing Committee
Members				Roles and Responsibilities of the Financing Committee
Durham (Chair) Berquist Intrieri Merksamer				• •	Reviews and makes recommendations to the Board (or if approval authority is delegated, approves) the Company’s and its subsidiaries capital markets and financing plans and the material terms and conditions of our debt and equity financings. Reviews the Company’s dividend policy and make recommendations to the Board regarding the amount and frequency of dividends.
	Number of 2014 Meetings
3

 

6

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

CORPORATE GOVERNANCE

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

7

 

 

CORPORATE GOVERNANCE

 

8

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

CORPORATE GOVERNANCE

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

9

 

 

DIRECTOR COMPENSATION

 

Director Compensation

 

The Board believes that a significant portion of non-employee director compensation should align director interests with the interests of Hertz Holdings’ stockholders. As a result, Hertz Holdings’ Board has approved the Hertz Global Holdings, Inc. Directors Compensation Policy (the “Director Compensation Policy”), pursuant to which our non-employee directors were entitled to the following compensation: 

Board/Committee		2014 Non-Employee Director Compensation
Board		•	Annual Cash Retainer:		$85,000		•	Restricted Stock Unit Grant:		$125,000
Audit		•	Annual Chair Fee:		$35,000		•	Annual Member Fee:		$17,500
Compensation		•	Annual Chair Fee:		$30,000		•	Annual Member Fee:		$15,000
Nominating and Governance		•	Annual Chair Fee:		$25,000		•	Annual Member Fee:		$12,500
Executive and Finance(1)		•	Annual Chair Fee:		$17,500		•	Annual Member Fee:		$17,500

(1)	The Executive and Finance Committee was dissolved in connection with Hertz Holdings’ entry into the Nomination and Standstill Agreement on September 15, 2014. The Board established the Financing Committee on October 16, 2014. Directors are not compensated for serving as members of the Financing Committee.
•	Under the Director Compensation Policy, the Lead Director is entitled to receive a $100,000 annual cash retainer. However, our Board has determined that in light of Ms. Fayne Levinson’s increased responsibilities as Independent Non-Executive Chair, she instead shall receive an annual fee of $350,000, payable in the form of shares of common stock of Hertz Holdings, except that if Hertz Holdings is unable to issue registered shares under an effective Form S-8 at the time quarterly cash payments are to be made, any amount otherwise payable in shares is paid in cash for purposes of the relevant quarter. Hertz Holdings does not pay additional fees to directors for attending Board or committee meetings.
•	Cash fees for Board and committee service are payable quarterly in arrears. A director may elect, annually in advance, to receive shares of Hertz Holdings’ common stock having the same fair market value in lieu of such cash fees. A director may elect to receive shares of phantom stock rather than receiving cash fees if the requirements for such deferral are satisfied under applicable tax law. Any director electing to receive phantom shares will receive actual shares of Hertz Holdings’ common stock on the earlier of when the director no longer serves on our Board or a change in control of Hertz Holdings. Any fee that a director elected to defer is credited to the director’s stock account and is deemed to be invested in a number of phantom shares equal to the number of shares of common stock that would otherwise have been delivered.
•	The restricted stock units are granted to directors after Hertz Holdings’ annual stockholder meeting and have an equivalent fair market value to such dollar amount on the date of grant. Provided the director is still serving on our Board, these restricted stock units vest on the business day immediately preceding Hertz Holdings’ next annual meeting of stockholders.
•	We also reimburse our directors for reasonable and necessary expenses they incur in performing their duties as directors, and our directors are entitled to free worldwide car rentals. Any non-employee director who serves for at least five years will, after retirement from such service as a director, be eligible for Hertz #1 Club Platinum Card status and free worldwide car rentals up to a maximum of 90 days each year for fifteen years after his or her retirement.

  

10

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

DIRECTOR COMPENSATION

 

For services rendered during the year ended December 31, 2014, our non-employee directors received the following compensation:

 

2014 Non-Employee Director Compensation Table 

Name		Fees Earned or Paid in Cash(1) ($)			Stock Awards(2)(3) ($)			All other compensation(4) ($)			Total ($)
Barry H. Beracha			110,417			125,004			—			235,421
Carl T. Berquist(5)			135,000			125,004			—			260,004
Michael J. Durham			115,000			125,004			—			240,004
Carolyn N. Everson(5)			103,125			125,004			—			228,129
Debra J. Kelly-Ennis(5)			97,500			125,004			—			222,504
Vincent J. Intrieri			17,118			—			—			17,118
Michael F. Koehler			115,000			125,004			—			240,004
Philippe P. Laffont(5)			85,417			125,004			—			210,421
Linda Fayne Levinson			195,699			125,004			—			320,703
Samuel Merksamer			16,283			—			—			16,283
Daniel A. Ninivaggi			16,700			—			—			16,700
George W. Tamke(6)			163,125			—			13,026			176,151
Henry C. Wolf			100,000			125,004			—			225,004

(1)	All compensation is for services rendered as directors, including annual retainer fees and committee and chair fees as set forth above. For those directors who joined our Board or resigned from our Board in 2014, the cash retainer fees were pro-rated for their service.
(2)	The value disclosed is the aggregate grant date fair value of 4,351 restricted stock units granted to each director, except for Messrs. Intrieri, Merksamer and Ninivaggi, based on a grant date of May 14, 2014 and computed pursuant to FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the Note on Stock-Based Compensation to the Notes to our consolidated financial statements included in the 2014 Annual Report. Due to his resignation from our Board in 2014, Mr. Tamke forfeited his grant of restricted stock units made in 2014. The grants of restricted stock units to Messrs. Laffont, Beracha and Wolf vested upon their resignation.
(3)	In addition to the restricted stock units reported above in footnote 2, Messrs. Berquist and Durham each own 23,350 options. As of December 31, 2014, Mr. Berquist owned 54,696 phantom shares, Ms. Everson owned 6,033 phantom shares, Ms. Kelly-Ennis owned 5,742 phantom shares, Mr. Intrieri owned 789 phantom shares and Mr. Laffont owned 2,738 phantom shares.
(4)	Perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is less than $10,000.
(5)	Elected to receive fees that would otherwise be payable in cash in the form of phantom shares.
(6)	Elected to receive fees that would otherwise be payable in cash in the form of shares of common stock.

  

Hertz Global Holdings, Inc. 2015 Proxy Statement

11

 

 

ELECTION OF DIRECTORS

 

PROPOSAL 1: ELECTION OF DIRECTORS

 

Board Structure

 

The Company currently has ten directors divided into three classes: three in Class I, two in Class II and five in Class III. The terms of office of the five Class III directors expire at the 2015 annual meeting of stockholders. The directors whose terms will continue after the 2015 annual meeting and will expire at the 2016 annual meeting (Class I) and 2017 annual meeting (Class II) are listed after the Class III directors. Ms. Kelly-Ennis has decided not to stand for re-election after the end of her current term. Her experience in the automotive industry and managing international operations as well as her extensive board experience have been valuable to the Company. She is a talented business leader and board member and the Board truly wishes to thank her for her service.

 

Class III Election

 

The five nominees for election as Class III directors are listed below. If elected, the nominees for election as Class III directors will serve until the next annual meeting and until their successors are elected and qualify. If for any reason any nominee cannot or will not serve as a director, proxies may be voted for the election of a substitute nominee designated by our Board. The Class III Nominees are as follows: 

Carl T. Berquist (Class III)		Mr. Berquist has served as a director of the Company and Hertz since November 2006. Mr. Berquist is 64 years old.
Business Experience		Mr. Berquist joined Marriott International, Inc. (“Marriott”) in December 2002 as Executive Vice President, Financial Information and Enterprise Risk Management and served as Chief Accounting Officer of Marriott. In 2009, Mr. Berquist became Executive Vice President and Chief Financial Officer of Marriott. Prior to joining Marriott, Mr. Berquist was a partner at Arthur Andersen LLP. During his 28-year career with Arthur Andersen LLP, Mr. Berquist held numerous leadership positions, including managing partner of the worldwide real estate and hospitality practice. His last position was managing partner of the mid-Atlantic region which included five offices from Philadelphia, Pennsylvania to Richmond, Virginia.
Directorships and Other Experience		Mr. Berquist is a member of the Board of Advisors of both the Business School and the School of Hospitality Management at Penn State University. He is also a member of the Board of Advisors of Eberle Communications, a private direct mail company.
Financial Oversight and Risk Management Experience		Mr. Berquist’s years of leadership in management and operational positions as a chief financial officer, enterprise risk management executive and major audit company partner provides our Board with in-depth knowledge in financial, accounting and risk management issues.
Travel Industry Knowledge		Mr. Berquist’s knowledge of the travel industry gained while at Marriott also makes him an important asset to the Board in recognizing hospitality and overseeing strategic trends.
International Financial Expertise		Mr. Berquist’s experiences in managing the worldwide expansion of one of the most recognized hotel brands offers our Board specialized expertise in a variety of areas.

  

12

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

ELECTION OF DIRECTORS

Henry R. Keizer (Class III)		Mr. Keizer is a nominee to serve as a director of the Company and Hertz. Mr. Keizer is 58 years old.
Business Experience		Mr. Keizer formerly served as Deputy Chairman and Chief Operating Officer of KPMG, the U.S.-based and largest individual member firm of KPMG International (“KPMGI”), a role from which he retired in December 2012. KPMGI is a professional services organization which provides audit, tax and advisory services in 152 countries. Prior to serving as Deputy Chairman and Chief Operating Officer of KPMG, Mr. Keizer held a number of key leadership positions throughout his 35 years at KPMGI, including Global Head of Audit, KPMGI from 2006 to 2010 and U.S. Vice Chairman of Audit, KPMG from 2005 to 2010.
Directorships and Other Experience		Mr. Keizer is also a director of MUFG Americas Holdings Corporation, a financial and bank holding company with assets of $115 billion, of WABCO, a $3 billion global innovator and manufacturer of technologies that improve the safety and efficiency of commercial vehicles, and of Park Indemnity Limited, a Bermuda captive insurer affiliated with KPMGI. He previously served as a director of Montpelier Re Holdings, Ltd., a global property and casualty reinsurance company until it merged with Endurance Specialty Holdings Ltd. in July 2015 and was a director on the Board of the American Institute of Certified Public Accountants.
Executive Officer Experience		Mr. Keizer has significant management, operating and leadership skills gained as Deputy Chairman and Chief Operating Officer of KPMG.
Financial Reporting and General Industry Experience		Mr. Keizer has extensive knowledge and understanding of financial accounting, reporting and auditing standards from his 35 years of experience and key leadership positions he held with KPMGI. Mr. Keizer also has over three decades of diverse industry perspective gained through advising clients engaged in manufacturing, banking, insurance, consumer products, retail, technology and energy, providing him with perspective on the issues facing major companies and the evolving business environment.
Risk Management Expertise		Mr. Keizer’s leadership experience at KPMG provides the Board with expertise in risk management and oversight over our domestic and international operations.

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

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ELECTION OF DIRECTORS

Michael F. Koehler (Class III)		Mr. Koehler has served as a director of the Company and Hertz since March 2012. Mr. Koehler is 62 years old.
Business Experience		Mr. Koehler is Chief Executive Officer and a member of the Board of Directors of Teradata Corporation (“Teradata”), a publicly-traded provider of enterprise data warehousing and integrated marketing software, where he also serves on the Executive Committee. Prior to the separation of Teradata from NCR Corporation (“NCR”), Mr. Koehler served as Senior Vice President of the Teradata Division of NCR from 2003 to 2007. From September 2002 to March 2003, he was the Interim Leader of the Teradata Division. From 1999 to 2002, Mr. Koehler was Vice President, Global Field Operations of the Teradata Division and he held management positions of increasingly greater responsibility at NCR prior to that time.
Directorships and Other Experience		Mr. Koehler is a director at Teradata.
Executive Officer Experience		Mr. Koehler has significant management and leadership skills gained as Chief Executive Officer of Teradata, a global information technology provider.
International Oversight Expertise		Mr. Koehler’s role as Chief Executive Officer of a information technology provider with global operations provides the Board with critical experience regarding our domestic and international operations.
Strategy and Technology Experience		Mr. Koehler brings to our Board a deep knowledge of strategic operations and business development as well as valuable insights on how to incorporate technology into our ongoing operations.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

ELECTION OF DIRECTORS

Linda Fayne Levinson (Class III)		Ms. Fayne Levinson has served as a director of the Company and Hertz since March 2012. Ms. Fayne Levinson is 73 years old. She has served as Lead Independent Director since August 14, 2014 and Independent Non-Executive Chair since September 7, 2014.
Business Experience		Ms. Fayne Levinson was a partner at GRP Partners, a venture capital investment fund investing in start-up and early-stage retail and electronic commerce companies, from 1997 to December 2004. Prior to that, she was a partner in Wings Partners, a private equity firm that took Northwest Airlines private, an executive at American Express running its leisure travel and tour business and a partner at McKinsey & Co.
Directorships and Other Experience		Ms. Fayne Levinson is also a director of Jacobs Engineering Group Inc., Ingram Micro Inc., The Western Union Company and NCR, where she has served as a director since 1997 and Lead Independent Director from 2007 to 2013. Ms. Fayne Levinson was formerly a director at DemandTec, Inc. from 2005 to 2012 until IBM acquired that company. Ms. Levinson has extensive corporate governance and executive compensation experience having chaired multiple Compensation and Nominating and Governance Committees.
Risk Management and Oversight		Ms. Fayne Levinson has demonstrated her expertise in risk management and oversight as a director of several public companies, including her experience as Lead Independent Director of NCR.
Travel Industry Knowledge		Ms. Fayne Levinson’s experience at Wings Partners and American Express provide her with extensive knowledge about the operating and financial issues that face the travel and transportation industry.
Leadership and Operating Experience		Ms. Fayne Levinson gained general management experience at American Express, strategic experience at McKinsey & Co. and investment experience at GRP Partners and Wings Partners. In addition, the Board believes that Ms. Fayne Levinson’s extensive management and leadership experience, her in-depth knowledge of corporate governance issues and her diversity of perspective provide us with valuable insight with regard to our global operations.

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

15

 

 

ELECTION OF DIRECTORS

John P. Tague (Class III)		Mr. Tague has served as the Chief Executive Officer and director of the Company and Hertz since November 21, 2014. Mr. Tague is 53 years old. Mr. Tague’s employment agreement provides that he will serve as a member of the Board.
Business Experience		Mr. Tague has served as the President and Chief Executive Officer and a member of the Boards of Directors of Hertz Holdings and Hertz since November 2014. Mr. Tague previously spent eight years at United Airlines, Inc. and UAL Corporation, where he served in a number of leadership roles, including President and Chief Operating Officer. Mr. Tague joined United Airlines and UAL Corporation in 2003 as Executive Vice President of Customers. He served as President from 2009 until 2010; Executive Vice President and Chief Operating Officer from 2008 to 2009; Executive Vice President and Chief Revenue Officer from 2006 to 2008; and Executive Vice President of Marketing, Sales, and Revenue from 2004 to 2006. Just prior to joining Hertz, Mr. Tague served as Chairman and Chief Executive Officer of Cardinal Logistics Holdings. Cardinal Logistics Holdings was created by the merger between Cardinal Logistics Management, Inc. and Greatwide Logistics Services, LLC, where Mr. Tague had served as Chief Executive Officer since 2011.
Directorships and Other Experience		Mr. Tague serves as a director of Choice Hotels International, Inc., one of the world’s largest hotel franchisors, where he serves on the Compensation Committee. Mr. Tague previously served on the Board of Directors for Reddy Ice Inc., Pacer International, Inc., Orbitz, ATA and United Airlines.
Extensive Knowledge of the Travel Industry		As the former President of United Airlines, Mr. Tague has specialized knowledge and experience in the travel industry.
Leadership and Management Experience		Mr. Tague, through his experiences as our CEO and as a former lead executive of large companies, as well as through his other directorships, has demonstrated excellent leadership abilities, financial and operational expertise, commitment, good judgment and management skills.
Executive Officer Experience		Mr. Tague’s experience as a President of United Airlines, as well as our CEO, allows him to add strategic value to the Board.

 

The Board recommends a vote FOR
all of the Class III nominees

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

CONTINUING DIRECTORS

 

Continuing Directors 

Carolyn N. Everson (Class I)		Ms. Everson has served as a director of the Company and Hertz since May 2013. Ms. Everson is 43 years old.
Business Experience		Ms. Everson serves as Vice President of Global Marketing Solutions for Facebook, Inc. (“Facebook”), where she manages the global marketing solutions team focused on expanding advertising revenue and managing significant, strategic accounts. Before Facebook, Ms. Everson served as Corporate Vice President of Global Ad Sales and Strategy of Microsoft Corporation (“Microsoft”) from 2010 to 2011. Previous to Microsoft, Ms. Everson held various advertising management positions at MTV Networks Company (“MTV”) from 2004 to 2010, including serving as Executive Vice President and Chief Operating Officer of Ad Sales from 2008 to 2010. Prior to MTV, she served in roles of increasing responsibility with respect to business development and advertising at Primedia, Inc., Zagat Surveys LLC and Walt Disney Imagineering.
Marketing and Strategy Experience		Ms. Everson provides the Board with extensive experience and understanding of marketing and innovation strategies in her roles at Microsoft and Facebook, which are key areas for our Company’s growth.
Media and Technology Expertise		Ms. Everson brings her special expertise in media and technology developed from her roles at two of the world’s largest technology companies to support our continued efforts to develop and communicate our brand and product offerings.
International Business and Leadership Experience		Ms. Everson’s experience in managing global advertising efforts for technology companies and her leadership experience provide our Board with specialized perspective and knowledge.
Samuel Merksamer (Class I)		Mr. Merksamer has served as a director of the Company and Hertz since September 2014. Mr. Merksamer is 35 years old. Mr. Merksamer is a director designated by Carl C. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Party Transactions—Agreements with Carl C. Icahn.”
Business Experience		Mr. Merksamer is a Managing Director of Icahn Capital LP, a subsidiary of Icahn Enterprises L.P. (a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, gaming, railcar, food packaging, metals, real estate and home fashion), where he has been employed since May 2008. Mr. Merksamer is responsible for identifying, analyzing and monitoring investment opportunities and portfolio companies for Icahn Capital. From 2003 until 2008, Mr. Merksamer was an analyst at Airlie Opportunity Capital Management, a hedge fund management company, where he focused on high yield and distressed investments. Mr. Merksamer received an A.B. in Economics from Cornell University in 2002.
Directorships and Other Experience		Mr. Merksamer has been a director of: Cheniere Energy, Inc., a liquefied natural gas company, since August 2015; Transocean Partners LLC, a holding company with subsidiaries that own and operate ultra-deepwater drilling rigs, since November 2014; Hologic, Inc., a supplier of diagnostic, medical imaging and surgical products, since December 2013; Transocean Ltd., a provider of offshore contract drilling services for oil and gas wells, since May 2013; Navistar International Corporation, a truck and engine manufacturer, since December 2012; and Ferrous Resources Limited, an iron ore mining company with operations in Brazil, since November 2012. Mr. Merksamer was previously a director of: Talisman Energy Inc., an independent oil and gas exploration and production company, from December 2013 to May 2015; CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, from May 2012 to September 2014; CVR Refining, LP, an independent downstream energy limited partnership, from September 2012 to May 2014; Federal-Mogul Corporation, a supplier of automotive powertrain and safety components, from September 2010 to January 2014; American Railcar Industries, Inc., a railcar manufacturing company, from June 2011 to June 2013; Viskase Companies, Inc., a food packaging company, from January 2010 to April 2013; PSC Metals Inc., a metal recycling company, from March 2009 to October 2012; and Dynegy Inc., a company primarily engaged in the production and sale of electric energy, capacity and ancillary services, from March 2011 to September 2012. CVR Refining, CVR Energy, Federal-Mogul, American Railcar Industries, Viskase Companies and PSC Metals are each indirectly controlled by Carl C. Icahn. Mr. Icahn also has or previously had non-controlling interests in Hertz Holdings, Talisman, Transocean, Navistar, Ferrous Resources and Dynegy Inc. through the ownership of securities.

  

Hertz Global Holdings, Inc. 2015 Proxy Statement

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CONTINUING DIRECTORS

Finance and Strategic Experience		Mr. Merksamer provides our board with significant financial and strategic experience gained through his multiple directorships.
Operating and Corporate Governance Experience		Mr. Merksamer’s service in other director roles provides our Board extensive operating and governance experience as well as providing perspectives on strategy and direction of our Company.
Capital Markets Experience		Mr. Merksamer’s experience at the Icahn entities and as a former analyst provide our Board with important expertise in capital markets and finance matters.
Daniel A. Ninivaggi (Class I)		Mr. Ninivaggi has served as a director of the Company and Hertz since September 2014. Mr. Ninivaggi is 51 years old. Mr. Ninivaggi is a director designated by Carl C. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Party Transactions—Agreements with Carl C. Icahn.”
Business Experience		Mr. Ninivaggi has served as a director of Federal-Mogul Holdings Corporation (“Federal-Mogul Holdings”) and, prior to its holding company reorganization, Federal-Mogul Corporation since March 2010 and as Co-Chief Executive Officer of Federal-Mogul Holdings and Chief Executive Officer of Federal-Mogul Motorparts since February 2014. Mr. Ninivaggi has also served as Co-Chairman of Federal-Mogul Holdings since May 2015. Mr. Ninivaggi was President of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, gaming, railcar, food packaging, metals, real estate and home fashion, from April 2010 to February 2014 and its Chief Executive Officer from August 2010 to February 2014. From January 2011 to May 2012, Mr. Ninivaggi served as the Interim President and Interim Chief Executive Officer of Tropicana Entertainment Inc., a company that is primarily engaged in the business of owning and operating casinos and resorts. From 2003 until July 2009, Mr. Ninivaggi served in a variety of executive positions at Lear Corporation, a global supplier of automotive seating and electrical power management systems and components, most recently as Executive Vice President and Chief Administrative Officer from 2006 to 2009. Lear Corporation filed for bankruptcy in July 2009 and emerged in November 2009. Mr. Ninivaggi served as Of Counsel to the law firm of Winston & Strawn LLP from July 2009 to March 2010.
Directorships and Other Experience		In addition to serving as a director of Federal-Mogul Holdings, Mr. Ninivaggi has been a director of: Icahn Enterprises, from March 2012 through May 2015; and Tropicana Entertainment Inc., since January 2011. Mr. Ninivaggi was previously a director of: CVR Refining, LP, an independent downstream energy limited partnership, from January 2013 to September 2014; American Railcar Industries, Inc., a railcar manufacturing company, from June 2013 to February 2014; CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, from May 2012 to February 2014; CVR Partners LP, a nitrogen fertilizer company, from May 2012 to February 2014; PSC Metals Inc., a metal recycling company, from April 2012 to February 2014; WestPoint Home LLC, a home textiles manufacturer, from February 2012 to February 2014; Viskase Companies, Inc., a food packaging company, from June 2011 to February 2014; XO Holdings, a competitive provider of telecom services, from August 2010 to February 2014; Motorola Mobility Holdings, Inc., a provider of mobile communication devices, video and data delivery solutions, from December 2010 to May 2012; and CIT Group, Inc., a bank holding company, from December 2009 to May 2011. Mr. Ninivaggi received a B.A. in History from Columbia University in 1986, a Masters of Business Administration from the University of Chicago in 1988 and a J.D. from Stanford Law School in 1991.
Executive Officer and Leadership Experience		Mr. Ninivaggi provides the Board with leadership skills, significant management, strategic and operational experience through his roles of Co-Chief Executive Officer and Co-Chairman of Federal Mogul Holdings and as a director and officer of multiple public and private companies.
Strategic and Risk Management Knowledge		Mr. Ninivaggi provides the Board significant experience in the evaluation of strategic opportunities and offers our Board perspectives on risk management with respect to our operations.
Extensive Knowledge of the Company’s Business and Industry		Mr. Ninivaggi provides the Board with specialized expertise on matters related to the automotive industry through his role at Federal-Mogul Holdings, Lear Corporation and other directorships.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

CONTINUING DIRECTORS

Michael J. Durham (Class II)		Mr. Durham has served as a director of the Company and Hertz since November 2006. Mr. Durham is 64 years old.
Business Experience		Mr. Durham served as Director, President and Chief Executive Officer of Sabre, Inc. (“Sabre”), then a NYSE-listed company providing information technology services to the travel industry, from October 1996, the date of Sabre’s initial public offering, to October 1999. From March 1995 to July 1996, when Sabre was a subsidiary of AMR Corporation, he served as Sabre’s President. Prior to joining Sabre, Mr. Durham spent 16 years with American Airlines, serving as the Senior Vice President and Treasurer of AMR Corporation and Senior Vice President of Finance and Chief Financial Officer of American Airlines from October 1989 until he assumed the position of President of Sabre in March 1995.
Directorships and Other Experience		Mr. Durham also serves as a member of the Boards of Directors of Travelport Worldwide Ltd. and Cambridge Capital Acquisition Corp. During the preceding five years, Mr. Durham has served on the Boards of Directors of Asbury Automotive Group, Inc., Acxiom Corporation, both publicly listed companies, and Travora Media and Culligan International, both privately held companies.
Broad Industry Experience		Mr. Durham has extensive business experience in the automotive, travel and transportation industries, which provides our Board with leadership skills and a breadth of knowledge about the challenges and issues facing companies such as ours.
Public Company and Executive Officer Experience		Mr. Durham’s tenure both as Chief Executive Officer and Chief Financial Officer of large, multinational public companies allows him to add strategic value and management experience to the Board.
Corporate Governance and Financial Expertise		Mr. Durham’s experience as a director, and frequently a member of the audit committee, on a number of different company boards also gives him a valuable perspective to share with the Company.

  

Hertz Global Holdings, Inc. 2015 Proxy Statement

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CONTINUING DIRECTORS

Vincent J. Intrieri (Class II)		Mr. Intrieri has served as a director of the Company and Hertz since September 2014. Mr. Intrieri is 58 years old. Mr. Intrieri is a director designated by Carl C. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Party Transactions—Agreements with Carl C. Icahn.”
Business Experience		Mr. Intrieri has been employed by Icahn related entities since October 1998 in various investment related capacities. Since January 2008, Mr. Intrieri has served as Senior Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages private investment funds. In addition, since November 2004, Mr. Intrieri has been a Senior Managing Director of Icahn Onshore LP, the general partner of Icahn Partners LP, and Icahn Offshore LP, the general partner of Icahn Partners Master Fund LP, entities through which Mr. Icahn invests in securities.
Directorships and Other Experience		Mr. Intrieri has been a director of: Transocean Ltd., a provider of offshore contract drilling services for oil and gas wells, since May 2014; Navistar International Corporation, a truck and engine manufacturer, since October 2012; and Chesapeake Energy Corporation, an oil and gas exploration and production company, since June 2012. Mr. Intrieri was previously: a director of CVR Refining, LP, an independent downstream energy limited partnership, from September 2012 to September 2014; a director of Forest Laboratories, Inc., a supplier of pharmaceutical products, from June 2013 to June 2014; a director of CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, from May 2012 to May 2014; a director of Federal-Mogul Corporation, a supplier of automotive powertrain and safety components, from December 2007 to June 2013; a director of Icahn Enterprises L.P. (a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, gaming, railcar, food packaging, metals, real estate and home fashion) from July 2006 to September 2012, and was Senior Vice President of Icahn Enterprises L.P. from October 2011 to September 2012; a director of Dynegy Inc., a company primarily engaged in the production and sale of electric energy, capacity and ancillary services, from March 2011 to September 2012; chairman of the board and a director of PSC Metals Inc., a metal recycling company, from December 2007 to April 2012; a director of Motorola Solutions, Inc., a provider of communication products and services, from January 2011 to March 2012; a director of XO Holdings, a competitive provider of telecom services, from February 2006 to August 2011; a director of National Energy Group, Inc., a company that was engaged in the business of managing the exploration, production and operations of natural gas and oil properties, from December 2006 to June 2011; a director of American Railcar Industries, Inc., a railcar manufacturing company, from August 2005 until March 2011, and was a Senior Vice President, the Treasurer and the Secretary of American Railcar Industries from March 2005 to December 2005; a director of WestPoint Home LLC, a home textiles manufacturer, from November 2005 to March 2011; chairman of the board and a director of Viskase Companies, Inc., a food packaging company, from April 2003 to March 2011; and a director of WCI Communities, Inc., a homebuilding company, from August 2008 to September 2009. CVR Refining, CVR Energy, Federal-Mogul, Icahn Enterprises, PSC Metals, XO Holdings, National Energy Group, American Railcar Industries, WestPoint Home and Viskase Companies each are or previously were indirectly controlled by Carl C. Icahn. Mr. Icahn also has or previously had a non-controlling interest in Hertz Holdings, Transocean, Forest Laboratories, Navistar, Chesapeake Energy, Dynegy, Motorola Solutions and WCI Communities. Mr. Intrieri graduated in 1984, with Distinction, from The Pennsylvania State University (Erie Campus) with a B.S. in Accounting. Mr. Intrieri was a certified public accountant.
Accounting and Finance Experience		Mr. Intrieri’s significant financial and accounting experience through his directorships and employment with the Icahn entities makes him an important advisor to our Board.
Corporate Governance Experience		Mr. Intrieri’s multiple directorships gives Mr. Intrieri a deep understanding of our Board responsibilities and provides our Board with strategic oversight capabilities.
Strategic and Risk Management Knowledge		Mr. Intrieri’s experience at the Icahn Entities and his multiple directorships provide our Board important strategic experience and knowledge of appropriate risks to execute our business strategies.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

COMPENSATION DISCUSSION AND ANALYSIS: EXECUTIVE SUMMARY

 

Compensation Discussion and Analysis  

 

	Executive Summary
	Our Company’s financial and operating performance during 2014 was very disappointing. With respect to all of the financial measures used to measure success under our Company’s annual and long-term incentive plans, results were below target expectations and, in four out of five cases, below threshold. In addition, a review of our Company’s accounting controls resulted in the conclusion that there were accounting misstatements, which required the restatement of financial results for 2011 through 2013 and delayed filing the financial statements for 2014. The Explanatory Note to the Company’s 2014 Annual Report and Note 2, “Restatement” to the Notes to our consolidated financial statements under the caption Item 8, “Financial Statements and Supplementary Data” to the Company’s 2014 Annual Report provide further details about these events. These events were reflected in Hertz Holdings’ stock price, which declined 13% from January 1, 2014 to December 31, 2014.
	These poor results had major consequences on our executive compensation program.

 

	Payments under the executive compensation program
	The three main elements of compensation we pay to our NEOs are salary, an annual cash bonus under Hertz Holdings’ Senior Executive Bonus Plan and equity awards based on the performance of our Company.
		•	Salaries Remained the Same as in 2013 or Were Only Modestly Increased: We either did not increase salaries (including the salaries for our former CEO, Mark Frissora and our current CFO, Thomas Kennedy (who was hired in December 2013), and our former Group President, Rent-A-Car Americas, Scott Sider), or provided modest, market-based increases (ranging from 2% to 3%) for our other NEOs.
		•	Annual Cash Bonus Earned Significantly Below Target: Due to our operating and financial performance in 2014 being well below established targets, the annual cash bonuses were a very small percentage of target- the highest percentage was approximately 11% of target for the NEOs, with the exceptions (described below) of Messrs. Tague and MacDonald, who had contractually negotiated higher amounts, and our CFO, Mr. Kennedy whose higher bonus reflected his extraordinary efforts in reviewing and evaluating the financial statements and internal audit function of the Company.
		•	Long-Term Incentives
			•	2014-2015 Corporate EBITDA Performance Stock Units (“PSUs”) Were Not Earned: Because our Corporate EBITDA (as defined in “Non-GAAP Measures” below) did not exceed the threshold performance level necessary to earn PSUs for 2014, our NEOs earned none of the PSUs based on Corporate EBITDA granted in 2014. While PSUs can potentially be earned based on 2014-2015 performance, it is also expected that 2014-2015 performance will not result in any PSUs being earned.
			•	2014 Corporate EBITDA Margin PSUs Were Not Earned: Because our 2014 Corporate EBITDA margin (as defined and calculated in “Non-GAAP Measures” below) was below the established Corporate EBITDA margin target, our NEOs earned none of the 2014 Corporate EBITDA margin PSUs.

 

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COMPENSATION DISCUSSION AND ANALYSIS: EXECUTIVE SUMMARY

 

	•	2012-2013 and 2013-2014 Corporate EBITDA PSUs Were Adjusted Downward Based on Restated Financials. As a result of our restated 2012 and 2013 financials, the Compensation Committee reduced the number of PSUs which were eligible to vest to correspond with actual Corporate EBITDA performance in 2012 and 2013. Restated 2012-2013 Corporate EBITDA performance reduced the number of PSUs earned from 98.4% to 82.8% of target and restated Corporate EBITDA performance for 2013 and 2013-2014 reduced the number of PSUs earned from 66.0% to 60.0% of target.

 

	Changes in Our Executive Team
	We made very extensive changes to our senior management team in 2014 and 2015, and we believe these changes have better positioned our Company for future success. Among our NEOs these changes involved the departure of our Chief Executive Officer, our Chief Executive Officer of Hertz Equipment Rental Corporation, our Group President, Rent-A-Car Americas, our Executive Vice President, General Counsel and Secretary, and our Executive Vice President Corporate Affairs and Communications. These changes occurred under circumstances that entitled the departing executives to benefits under their employment agreements or Hertz Holdings’ Severance Plan for Senior Executives.

 

	Changes in the 2015 Compensation Program
	The Compensation Committee, in consultation with its new independent compensation consultant Frederic W. Cook & Co., Inc. (“Frederic Cook”), and with input from new management, engaged in a complete review of our Company’s executive compensation program and overall compensation philosophy. Based on this review, the Compensation Committee has made and is continuing to make major changes to the overall structure of our 2015 compensation program and believes these changes will be beneficial to our continued efforts to recruit and retain the individuals who will drive the future of our Company.
		•	Changes to our annual cash compensation program
			•	Use of adjusted pre-tax income as the main performance modifier: Instead of the three financial metrics (adjusted pre-tax income (“API”), return on total capital, and revenue) used in 2014 to measure corporate financial performance under Hertz Holdings’ Senior Executive Bonus Plan, the 2015 plan will use just one metric-API. While the other metrics continue to be important, the Compensation Committee believes that API is the most important metric at this time and using one metric best focuses our NEOs on this critical component of financial success. Consistent with the emphasis on simplification and growing API, the Compensation Committee modified the component of the award based on business unit performance by removing multiple performance and operating goals for business unit performance. Instead, API measured at the business unit level will be a portion of the award for certain business unit executives.
			•	Effective cap on overall payouts: Instead of potential payouts that could equal 300% of target for specified levels of high performance under the 2014 plan and in certain circumstances be even higher, maximum payouts under Hertz Holdings’ Senior Executive Bonus Plan have been generally reduced to 160% of target for participants.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

COMPENSATION DISCUSSION AND ANALYSIS: EXECUTIVE SUMMARY

 

	•	Changes to our long-term incentive plan
		•	Corporate EBITDA PSUs based on three-year rather than two-year performance period: PSUs based on Corporate EBITDA will comprise 50% (instead of the previous 70%) of each NEO’s long-term equity award. The Corporate EBITDA targets that have been established for 2015, 2016, and 2017 are significantly higher than 2014 Corporate EBITDA and increase each year. 1/3 of the PSUs will be earned each year, depending on whether that year’s target is met and, if not met, no PSUs will be earned for that year. Earned PSUs will vest as a single tranche at the end of three years after the certification of results for the last performance period covered by the award.
		•	Elimination of Corporate EBITDA margin awards: PSUs based on Corporate EBITDA margin, which were earned if Corporate EBITDA margin equaled 75% of the prior year’s margin, have been eliminated.
		•	Use of stock options: 50% of each NEO’s long-term equity incentive award will consist of stock options, reflecting the Compensation Committee’s view that shareholder interests are best advanced at this time with a stock incentive that only provides value when the price of Hertz Holdings’ common stock increases.
		•	Focused CEO compensation arrangements: Pursuant to Mr. Tague’s employment agreement (as will be further described below), while the CEO’s long-term incentives have also been awarded in the form of PSUs and stock options, (1) 50% of his options vest based on his meeting goals with respect to developing a business plan and assembling a management team, and (2) the remaining awards vest based on our Company achieving certain revenue efficiency measures for the 2015-2017 time period.

 

We believe our compensation decisions are consistent with our continuing commitment to best practices in corporate governance and executive compensation design, which can be summarized as follows:

 

	What We Do and What We Don’t Do
		We pay for our Company’s financial and operating performance			We don’t have a high percentage of fixed compensation
		We evaluate risk in light of our compensation programs			We don’t exclusively grant time-vested awards
		We cap the amount of our annual cash bonuses at reasonable levels			We don’t allow our officers and directors to hedge or pledge our stock
		We use double-trigger provisions for our change in control agreements			We don’t use the same performance metrics for short-term and long-term compensation
		We use an independent compensation consultant			We don’t use a peer group composed of companies significantly larger than ours
		We have a robust stock ownership policy			We don’t re-price underwater options
		We maintain clawback policies			We don’t use short-term vesting for stock awards
		We revised our change in control agreement to eliminate tax gross-ups for new hires			We don’t provide for automatic salary increases

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Discussion and Analysis

 

Named Executive Officers

 

We refer to the following individuals as our “named executive officers” (or “NEOs”):

	•	John P. Tague, who became our Chief Executive Officer on November 21, 2014;
	•	Thomas C. Kennedy, our Chief Financial Officer and Senior Executive Vice President;
	•	Brian P. MacDonald, who became Chief Executive Officer of Hertz Equipment Rental Corporation (“HERC”) on June 2, 2014 and served in that role until his resignation on May 20, 2015, and served as our interim CEO from September 7, 2014 to November 20, 2014;
	•	Michel Taride, who is our Group President, Rent-A-Car International;
	•	Robert J. Stuart, who is our Executive Vice President, Sales and Marketing;
	•	Richard D. Broome, who served as our Executive Vice President, Corporate Affairs and Communications until his resignation on July 1, 2015;
	•	Mark P. Frissora, who served as our CEO until his resignation on September 7, 2014;
	•	Scott P. Sider, who served as Group President, Rent-A-Car Americas until his retirement on August 18, 2014; and
	•	J. Jeffrey Zimmerman, who served as Executive Vice President, General Counsel and Secretary until his resignation on December 1, 2014.

 

Determining What We Pay - Compensation Philosophy and the Role of the Compensation Committee

 

The Compensation Committee reviews and establishes the compensation program for our NEOs. Our Compensation Committee is committed to creating incentives for our NEOs that reward them for the performance of our Company. Our Compensation Committee’s philosophies include an emphasis on the following:

	•	Our compensation program’s structure should be aligned with the price and market performance of Hertz Holdings’ common stock: Our Compensation Committee believes that creating goals which are more directly focused on the price and performance of Hertz Holdings’ common stock will further align the interests of Hertz Holdings’ stockholders and our NEOs.
	•	Our compensation design should be simple, transparent and clearly articulated to our participants and stockholders: Our Compensation Committee is committed to simplifying our short-term cash compensation program and long-term equity compensation program to focus our NEOs’ attention on business goals and the price and performance of Hertz Holdings’ common stock.
	•	Our compensation program should provide short- and long-term components to drive performance over the long run: Long-term results are important to Hertz Holdings’ stockholders and our Compensation Committee believes that a compensation program that rewards results both annually and on a year-over-year basis provides the framework for superior long-term performance.
	•	Our compensation should be competitive and market-based to attract and retain our executive officers: Our Compensation Committee believes our compensation program should provide a combination of incentives that will allow us to hire, retain and reward talented individuals at every position.
	•	Our compensation program should responsibly balance incentives with prudent risk management: Our Compensation Committee believes that responsible use of different types of incentives will create and foster a culture of growth that is sustainable and appropriate for our Company.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Determining What We Pay - Role of Compensation Consultants

 

The Compensation Committee has the authority to retain outside advisors as it deems appropriate. From July 2008 to November 2014, the Compensation Committee engaged Semler Brossy Consulting Group LLC (“Semler Brossy”) as its compensation consultant to provide advice and information. In November 2014, the Compensation Committee, after review of the services provided by Semler Brossy and relevant independence considerations, transitioned from Semler Brossy and engaged Frederic Cook as its compensation consultant. Frederic Cook’s responsibilities include:

	•	reviewing and advising on total executive compensation, including salaries, short- and long-term incentive programs and relevant performance goals;
	•	advising on industry trends, important legislation and best practices in executive compensation;
	•	advising on how to best align pay with performance and with our business needs; and
	•	assisting the Compensation Committee with any other matters related to executive compensation arrangements, including senior executive employment agreements.

 

The Compensation Committee reviews our compensation programs in light of Frederic Cook’s recommendations and adjusts compensation as the Compensation Committee sees fit. However, the decisions made by the Compensation Committee are the responsibility of the Compensation Committee, and may reflect factors other than the recommendations and information provided by Frederic Cook. Frederic Cook does not perform any services for the Company other than its role as advisor to the Compensation Committee. Before engaging any compensation consultant, it is the Compensation Committee’s practice to determine the compensation consultant’s independence and whether any conflicts of interest would be raised by the engagement of the compensation consultant. The Compensation Committee believes that the work of the compensation consultants did not raise any conflicts of interest and the compensation consultants engaged by the Compensation Committee are independent.

 

Determining What We Pay - Role of the CEO

 

In determining the appropriate levels of our compensation programs, our CEO traditionally provides his input to the Compensation Committee on topics that he believes are important. As part of this process, our CEO obtains data from and has discussions with our Chief Human Resources Officer or other appropriate executives. Our CEO’s reviews and observations regarding performance provide additional data for the Compensation Committee to consider regarding our overall compensation program. In addition, the Independent Non-Executive Chair, who is the Chair of the Compensation Committee, has an integral role in the determination of our CEO’s compensation through her independent review and discussions with various parties. Because our Independent Non-Executive Chair is the Chair of the Compensation Committee, the Board believes that this provides the requisite focus on evaluating the CEO and setting his compensation relative to his performance. Although our Compensation Committee may give weight to our CEO’s input, in all cases, the final determinations over compensation reside with the Compensation Committee or, if directed by the Board, in the case of our CEO, with the independent members of our Board.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Determining What We Pay - Elements of our Compensation Programs

Element		Type		How and Why We Pay It
Salary		Fixed Cash		•	Paid throughout the year to attract and retain senior executives
				•	Sets the baseline for bonus and retirement programs
Annual Cash Bonus(1)		Performance-Based Cash		•	Paid annually in cash to reward performance of the Company, business unit and individual
				•	Aligns senior executives’ interests with Hertz Holdings’ stockholders’ interests, reinforces key strategic initiatives and encourages superior individual performance
Long-Term Equity		Long-Term Equity		•	Granted annually, with vesting occurring in subsequent years based on satisfying performance conditions
				•	Aligns senior executives’ interests with Hertz Holdings’ stockholders’ interests and drives key performance goals
Retirement Benefits and Perquisites		Variable Other		•	Paid at retirement based on senior executives’ salary, bonus and years of service to the Company
				•	Limited perquisites for business purposes, including relocation expenses generally designed to attract and retain talent

(1)	We also occasionally provide non-recurring cash bonuses to reflect superior individual performance, new responsibilities or to compensate new hires for amounts forfeited from their previous employer.

 

Determining What We Pay - Survey Group

 

As part of determining our compensation programs, we compared the compensation for our NEOs to the compensation of comparable positions at a group of companies (the “Survey Group”). The Compensation Committee selected the Survey Group in late 2013 in consultation with Semler Brossy. Because the number of our direct industry competitors in the global market is limited, we did not limit the Survey Group to our direct competitors, but also included similarly-sized companies that are in the consumer discretionary (excluding media companies), consumer staples and industrials (excluding capital goods companies) sectors. These industries were selected because successful companies within these industries frequently bear substantial similarities to the Company’s business model, insofar as they (i) are asset-intensive, (ii) require frequent customer contact at multiple locations and (iii) involve the need to maintain favorable brand recognition. The companies in the Survey Group had annual revenues of approximately $5 to $22 billion, as compared to the Company’s 2014 revenue of $11 billion. We included a relatively large number (49) of companies in the Survey Group, in part because we believe that doing so helps to reduce the influence of outliers. Of the 49 companies in the Survey Group, 37 were in the prior Survey Group.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

The following are the companies that comprised our Survey Group in 2014:

Advance Auto Parts Inc.	General Mills, Inc.	R.R. Donnelley & Sons Co.
Avis Budget Group, Inc.	Hershey Co.	Ralph Lauren Corp.
Avon Products Inc.	Hormel Foods Corp.	Ross Stores Inc.
Big Lots, Inc.	J.C. Penney Company, Inc.	Ryder System, Inc.
BorgWarner Inc.	J. M. Smucker Co.	Southwest Airlines Co.
CarMax Inc.	Kellogg Co.	Starbucks Corp.
Carnival Corp.	Kelly Services, Inc.	Starwood Hotels & Resorts Worldwide, Inc.
Coach Inc.	Kohl’s Corp.	SUPERVALU Inc.
Colgate-Palmolive Co.	L Brands, Inc.	TRW Automotive Holdings Corp.
ConAgra Foods, Inc.	Marriott International, Inc.	V. F. Corp.
CSX Corp.	Mattel, Inc.	Visteon Corp.
Darden Restaurants, Inc.	Newell Rubbermaid Inc.	Waste Management, Inc.
Dean Foods Co.	Nordstrom, Inc.	Whirlpool Corp.
Dr. Pepper Snapple Group Inc.	Norfolk Southern Corp.	Whole Foods Market, Inc.
Estee Lauder Companies Inc.	Office Depot, Inc.	YUM! Brands, Inc.
Federal-Mogul Corp.	Penske Automotive Group Inc.
Gap Inc.	PVH Corp.

 

When making compensation decisions for our senior executives, our management and our Compensation Committee considered the compensation levels of the Survey Group, as well as industry factors, general business developments, corporate, business unit and individual performance and our overall compensation philosophy. Our Compensation Committee does not apply Survey Group data in a formulaic manner to determine the compensation of our NEOs. Rather, the Survey Group data represented one of several factors that our Compensation Committee considered in a holistic assessment of compensation decisions. We typically review the salaries, annual bonus levels and long-term equity awards of our NEOs every 12 months, and we periodically (but not on a set schedule) review the other elements of their compensation.

 

Determining What We Pay - Response to Advisory Vote on Executive Compensation

 

In 2014, Hertz Holdings’ advisory vote on executive compensation was approved by the following vote:

For	Against	Abstain	Broker Non-Votes
342,971,299	10,216,316	2,049,239	37,536,408

 

This represented a 96% level of approval. Although the effect of the advisory vote on executive compensation is non-binding, the Board and Compensation Committee considered the results of the 2014 vote and will continue to consider the results of future votes in determining the compensation of our NEOs and our compensation programs generally. Hertz Holdings values the opinions of its stockholders and is committed to considering their opinions in making compensation decisions.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Annual Cash Compensation

 

Salary

 

For the NEOs, the Compensation Committee determines salary and any increases after reviewing individual performance, conducting internal compensation comparisons and reviewing compensation in the Survey Group. We also take into account other factors such as an individual’s prior experience, total mix of job responsibilities versus market comparables and internal equity. The Compensation Committee consults with our CEO (except as to his own compensation) regarding salary decisions for NEOs. We review salaries upon promotion or other changes in job responsibility.

 

As the result of our regular, cyclical review of salaries, the annual base salaries for our NEOs were established for 2014 as set forth below. The 2014 increases for NEOs who were employed throughout 2013 ranged from 0% to approximately 3%, and averaged approximately 1%.

		2014 Salary		2013 Salary
Name		($)		($)		What We Took Into Consideration in Setting 2014 Salaries
Mr. Tague(1)		1,450,000		N/A		•	Offering a competitive salary in connection with Mr. Tague’s appointment as Chief Executive Officer of our Company in November 2014
Mr. Kennedy		660,000		660,000		•	Offering a competitive salary in connection with Mr. Kennedy’s appointment as Chief Financial Officer in December 2013
Mr. MacDonald(1)		1,100,000		N/A		•	Offering a competitive salary in connection with Mr. MacDonald’s appointment as Chief Executive Officer of HERC in June 2014(2)
Mr. Taride(3)		637,897		624,166		•	The overall performance of our Rent-A-Car International business unit in 2013
						•	Mr. Taride’s performance in managing our worldwide expansion of our new and existing brands
Mr. Stuart		505,000		495,000		•	Mr. Stuart’s performance in managing and expanding our marketing efforts for all of our brands
						•	Mr. Stuart’s role in preserving and expanding our relationships with key customers
Mr. Broome		394,500		383,000		•	Mr. Broome’s performance in managing our corporate communications strategies and stockholder outreach
Mr. Frissora		1,450,000		1,450,000		•	Mr. Frissora’s performance in managing our Company’s operations in 2013
Mr. Sider		660,000		660,000		•	The overall performance and growth of our Rent-A-Car Americas business unit in 2013
Mr. Zimmerman		536,000		520,000		•	Mr. Zimmerman’s leadership in expanding and managing our legal department in 2013
						•	Mr. Zimmerman’s performance in handling special legal projects related to our Company and HERC

(1)	The base salaries actually paid to Messrs. Tague and MacDonald were pro-rated to their respective start dates of November 21, 2014 and June 21, 2014.
(2)	Mr. MacDonald served as Chief Executive Officer of HERC from June 2014 through May 2015.
(3)	For Mr. Taride, these amounts have been converted to U.S. dollars from pounds sterling at the 12-month average rate of 1.64739.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Senior Executive Bonus Plan

 

Our NEOs’ compensation includes an annual cash bonus computed pursuant to the terms of the Executive Incentive Compensation Plan (“EICP”), which will be described in the next section. In order that bonus payments qualify as deductible under Section 162(m) of the Internal Revenue Code (the “Code”), the actual payments are made through the Hertz Global Holdings, Inc. Senior Executive Bonus Plan (“Senior Executive Bonus Plan”), which was approved by Hertz Holdings’ stockholders at its 2010 annual meeting. Payments under the Senior Executive Bonus Plan are intended to qualify as performance-based compensation under Section 162(m) of the Code. Under the terms of the Senior Executive Bonus Plan, the maximum amount of a payment (1) to our CEO is limited to 1% of our EBITDA, as defined in “Non-GAAP Measures” below, for a performance period and (2) to our other participants is limited to 0.5% of our EBITDA for a performance period. If our EBITDA is greater than $0, our NEOs will become eligible for an award under the EICP, the subplan under which our Compensation Committee exercises its discretion to reduce the size of the awards payable under the Senior Executive Bonus Plan. Although our Compensation Committee exercises discretion to reduce annual incentives under the Senior Executive Bonus Plan, it may not increase the payments.

 

As will be described below, different cash bonus arrangements applied to Messrs. Tague and MacDonald because they were hired in 2014 after the performance period was well under way. See “Cash Bonus for John P. Tague” and “Cash Payments to Brian P. MacDonald” for descriptions of their arrangements.

 

Annual Cash Incentive Program (EICP)

 

How We Determined the 2014 EICP Awards

 

To determine the EICP awards, our Compensation Committee reviewed our performance against the established performance criteria, reviewed individual performance and approved the EICP award payments for the NEOs. To arrive at the annual award, the NEO’s salary was multiplied by a specified target (the “Target Award”), which was further multiplied by modifiers noted in the table below:

 

		Corporate		Business Unit		Individual		Annual Incentive
Target Award	X	Performance	X	Modifier(2)	X	Performance	=	Payout
		Modifier(1)				Modifier(3)
				(75% to 125%)		(0% to 150%)		(EICP Award)

 

(1)	The Corporate Performance Modifier is designed to reward our Company’s overall financial performance and is based on the weighted average of our Company’s API, return on total capital and revenue.
(2)	The Business Unit Modifier is designed to reward the performance of individual business units and, for corporate employees, the weighted average of each individual business unit’s performance.
(3)	The Individual Performance Modifier is designed to reward the individual performance of our NEOs.

 

Target Awards for 2014

 

The Target Award for 2014 was a percentage of the NEO’s 2014 base salary. In general, the Compensation Committee considered the experience, responsibilities, title and historical performance of each particular NEO when determining Target Awards.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Each NEO’s 2014 Target Award as a percentage of base salary as of December 31, 2014 was as follows: 

		Target Award as a				Salary as of
		% of Salary				December 31, 2014				Target Award
Named Executive Officer		(%)				($)				($)
Mr. Kennedy			85				660,000				561,000
Mr. Taride(1)			85				637,897				542,213
Mr. Stuart			75				505,000				378,750
Mr. Broome			70				394,500				276,150
Mr. Frissora			170				1,450,000				2,465,000
Mr. Sider			85				660,000				561,000
Mr. Zimmerman			80				536,000				428,800

 

(1)	For Mr. Taride, these amounts have been converted to U.S. dollars from pounds sterling at the 12-month average rate of 1.64739.

 

Corporate Performance Modifier for 2014

 

The chart below summarizes the financial performance elements of the 2014 Corporate Performance Modifier. In early 2014, the Compensation Committee reviewed each element of the 2014 Corporate Performance Modifier. From this review, the Compensation Committee elected to continue using API and revenue as Corporate Performance Modifiers and replaced economic value added, or EVA^® (a registered trademark of Stern Stewart and Co.) with return on total capital. Like EVA^®, return on total capital provides a relative measure of our profitability compared to our invested capital, however we believe that return on total capital is the measure more commonly used by analysts who follow Hertz Holdings. The financial performance elements contained the same weights as those used in the 2013 Corporate Performance Modifier, with the exception of return on total capital, which entirely replaced the 40%-weighted EVA^® metric.

 

Corporate Performance Modifier-Financial Performance Element Summary
			U.S.
Criteria	Weight		GAAP?	What It Is	Why We Use It
Adjusted Pre-Tax Income (“API”)	40%		No	Equal to our income before acquisition accounting charges, non-cash interest items, income taxes, minority interest, restructuring expenses, significant one-time items and non-cash “mark-to-market” income and expense	API allows management to assess the operational performance of our business, exclusive of the items previously mentioned that do not reflect our operating performance
Return on Total Capital	40%		No	Equal to API plus our gross interest expense and the expense for equity awards divided by the average total capital balance for each of the four relevant quarters. Total capital balance is defined as average assets, including goodwill, other intangibles and other acquisition accounting related balances, minus average non-interest bearing liabilities	Return on total capital measures our profitability relative to our capital structure
Revenue	20%		Yes	Our Company’s revenue	Revenue is a strong indicator of how our Company is performing overall

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

The Compensation Committee set goals for each of API, return on total capital and revenue. The Compensation Committee then measured our performance against each of the goals to determine a modifier for each financial performance element and an overall Corporate Performance Modifier. The target level for each of API, revenue and return on total capital was based upon our business plan.

 

Calculation of the Corporate Performance Modifier-Targets and Results

 

The following were the fiscal 2014 financial performance criteria targets set by the Compensation Committee and our actual performance as compared to such targets (dollars in millions): 

2014 Corporate Performance Modifier
										Return on
		API				Revenue				Total Capital
		(40% Weight)				(20% Weight)				(40% Weight)
Threshold(1)		$	1,196.3			$	10,971.6				12.11	%
Target = 100% Multiplier		$	1,329.2			$	11,549.1				13.46	%
High Performance Level(2)		$	1,528.6			$	12,415.3				15.48	%
Actual Results		$	417.9			$	11,017.6				5.99	%
Payout Factor			0.0	%			63.2	%			0.0	%
Corporate Performance Modifier							12.6	%

 

(1)	Any API, revenue or return on total capital results that equal the threshold receive a 60% multiplier. Any API, revenue or return on total capital results that are below the threshold receive a 0% multiplier.
(2)	Any API, revenue or return on total capital results that equal the high performance level receive a 160% multiplier.

 

For financial performance criteria, linear interpolation was used to determine the multiplier for results that were between the threshold and target and target and high performance level.

 

We disclosed our actual API, as well as detailed reconciliations of this Non-GAAP measure, in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s 2014 Annual Report under the caption “Footnotes to the Results of Operations and Selected Operating Data by Segment Tables.”

 

We calculate return on total capital as (1) net operating profit before taxes divided by (2) total capital. We calculate net operating profit before taxes as API plus our gross interest expense and the expense for equity awards. Total capital for any particular quarter is calculated as average assets, including goodwill, other intangibles and other acquisition accounting related balances, minus average non-interest bearing liabilities. In order to determine an annual amount for total capital, we take the sum of the total capital balance for each of the four relevant quarters and divide by 4.

 

Business Unit Modifier for 2014

 

Based upon management’s recommendation, our Compensation Committee determined that it was important to provide incentives to our NEOs to achieve strategic initiatives for our Hertz Rent-A-Car Americas, Hertz Rent-A-Car International and Hertz Equipment Rental business units for 2014. The business units used in the EICP differ slightly from the reporting segments the Company uses for its financial statements because the Compensation Committee desires to use business units which reflect the overall geographic and functional roles for which the relevant executive officers are responsible, notwithstanding the accounting guidance used for segment reporting purposes. NEOs responsible for to a specific business unit are eligible to have their EICP awards adjusted by the Business Unit Modifier relating to that business unit. NEOs in our corporate centers had

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

their EICP awards adjusted by weighting Hertz Rent-A-Car Americas: 50%, Hertz Rent-A-Car International 25%, and Hertz Equipment Rental 25%. For 2014, the Compensation Committee determined a target for each strategic objective and then measured the 2014 results against the target to determine an overall performance figure. The Business Unit Modifier can range from 75% to 125%.

 

For the Hertz Rent-A-Car Americas business unit, the strategic goal approved by our Compensation Committee was achievement of a specified level of cost synergies, weighted at 100% of the overall score. Since the result was less than 75% of the target, the total Business Unit Modifier was set at the minimum, 75%. 

Hertz Rent-A-Car Americas
	Target	Result	Total Modifier
Strategic Goal	($ in millions)	($ in millions)	(%)
Cost Synergies	249	37.3	75.0

 

For the Hertz Rent-A-Car International business unit, the strategic goals approved by our Compensation Committee were: spread value per unit, net promoter score and cost synergies. Each strategic goal was weighted at 33⅓% of the overall score. 

Hertz Rent-A-Car International
			Total Modifier
Strategic Goal	Target	Result	(%)
Spread Value Per Unit(1)	$766.8	$767.60	103.1
Net Promoter Score(2)	52.0%	50.4%	75.0
Cost Synergies	$100 million	$83.7 million	83.7
Total Modifier			87.3

  

(1)	Spread value per unit was measured as revenue per unit less vehicle depreciation per unit.
(2)	Net Promoter Score is a customer satisfaction metric.

 

For the Hertz Equipment Rental business unit, the strategic goals approved by our Compensation Committee were: dollar utilization, fleet efficiencies and employee satisfaction. Each strategic goal was weighted at 33⅓% of the overall score. For 2014, the Compensation Committee determined that the Business Unit Modifier for Hertz Equipment Rental was as follows: 

Hertz Equipment Rental
	Target		Result		Modifier
Strategic Goal	(%)		(%)		(%)
Dollar Utilization(1)	37.8		36.17		75.0
Fleet Efficiencies(2)	5.0		2.8		78.0
Employee Satisfaction(3)	+0.00		+0.04		108.0
Total Modifier					87.0

 

(1)	Dollar utilization was measured as our annualized rental revenue divided by the original equipment cost of our equipment rental fleet relative to our business plan.
(2)	Fleet efficiencies was measured as the improvement in fleet unavailable for rent, which is determined by comparing the fleet that cannot be rented due to factors under our general control to our total equipment fleet. This metric is improved by reducing the amount of time that our fleet is unavailable for rent.
(3)	Employee satisfaction was measured through an employee pulse survey score.

  

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COMPENSATION DISCUSSION AND ANALYSIS

 

The Corporate-weighted Business Unit Modifier used for our NEOs who do not report to a specific business unit was determined using the weighting described above, and equaled 81.1%.

 

Below is a chart that indicates, for each NEO listed, (i) the specific business unit to which each NEO reports, or in the case of the corporate center executives, the Corporate weighted-average of all of the business units, and (ii) the Business Unit Modifier for the business unit or Corporate-weighted average as set forth above. 

		Business
		Unit Modifier
Named Executive Officer	Business Unit	(%)
Mr. Kennedy	Corporate-weighted average of business units	81.1
Mr. Taride	Hertz Rent-A-Car International	87.3
Mr. Stuart	Corporate-weighted average of business units	81.1
Mr. Broome	Corporate-weighted average of business units	81.1
Mr. Frissora	Corporate-weighted average of business units	81.1
Mr. Sider	Hertz Rent-A-Car Americas	75.0
Mr. Zimmerman	Corporate-weighted average of business units	81.1

 

Individual Performance Modifier for 2014

 

Annually, our CEO assesses the individual performance of the NEOs (excluding himself), taking into account multiple factors beyond the specific metrics outlined above. In early 2015, after taking into consideration Mr. Tague’s recommendations, the Compensation Committee set the Individual Performance Modifier at 100% for Messrs. Taride, Stuart and Broome. Each of Messrs. Frissora, Sider and Zimmerman received an Individual Performance Modifier of 100% based on the terms of their respective separation agreement.

 

2014 Senior Executive Bonus Plan Payouts

 

The chart below shows how each NEO’s 2014 Senior Executive Bonus Plan award was calculated under the EICP: 

				Corporate				Individual
				Performance		Business Unit		Performance
		Target Award		Modifier		Modifier		Modifier		Payout
Named Executive Officer		($)	X	(%)	X	(%)	X	(%)	=	($)
Mr. Kennedy(1)		561,000		12.6		81.1		100		280,500
Mr. Taride(2)		542,213		12.6		87.3		100		59,638
Mr. Stuart		378,750		12.6		81.1		100		38,703
Mr. Broome		276,150		12.6		81.1		100		28,219
Mr. Frissora(3)		2,465,000		12.6		81.1		100		178,047
Mr. Sider(3)		561,000		12.6		75.0		100		33,406
Mr. Zimmerman(3)		428,800		12.6		81.1		100		40,696

 

(1)	For Mr. Kennedy, the Compensation Committee took into account Mr. Kennedy’s performance in managing the Company’s accounting functions in 2014 in light of (i) the ongoing restatement of periods before Mr. Kennedy joined the Company and (ii) Mr. Kennedy’s extraordinary efforts in reviewing and evaluating the financial statements and internal audit function of the Company, and used its discretion to award Mr. Kennedy 50% of his target award ($280,500) instead of the $57,326 payout contemplated by the terms of the EICP.

 

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COMPENSATION DISCUSSION AND ANALYSIS

  

(2)	For Mr. Taride, these amounts have been converted to U.S. dollars from pounds sterling at the 12-month average rate of 1.64739.
(3)	For Messrs. Frissora, Sider and Zimmerman, these amounts were pro-rated pursuant to each executive’s separation agreement, which provided for Mr. Frissora to receive 71%, Mr. Sider to receive 63% and Mr. Zimmerman to receive 93% of the EICP bonus earned by each respective executive for 2014.

 

Cash Bonus for John P. Tague

 

In connection with the hiring of John P. Tague as CEO, Hertz Holdings entered into a term sheet and later an employment agreement with Mr. Tague setting forth his annual bonus for 2014. Pursuant to his term sheet and employment agreement, Mr. Tague received a guaranteed bonus of $108,750. Mr. Tague’s bonus was calculated as follows: 

		Target Award as a		Salary as of		Minimum Factor		Pro-rated for
		% of Salary		December 31, 2014		Per Term Sheet		2014 Year
Named Executive Officer		(%)	X	($)	X	(%)	X	Service	=	Bonus Award($)
Mr. Tague		150%		1,450,000		60		1/12		108,750

 

Mr. Tague did not participate in the Senior Executive Bonus Plan in 2014, but will be a participant in 2015.

 

Cash Payments to Brian P. MacDonald

 

In connection with the hiring of Mr. MacDonald in June 2014, Hertz Holdings entered into an employment agreement with Mr. MacDonald. The terms of the employment agreement provided that Mr. MacDonald would be entitled, at minimum, to his target award (target was 130% of base salary) as pro-rated for his June 2, 2014 start date. In light of the performance of the Company under the Senior Executive Bonus Plan and the EICP, Mr. MacDonald was awarded a total of $834,493, the minimum amount as set forth under his employment agreement.

 

The Board elected to pay Mr. MacDonald an additional cash bonus, retroactive to the date Mr. MacDonald was appointed as interim CEO of our Company, equal to a proportionate amount of a $500,000 annual bonus, in recognition of his increased responsibilities as interim CEO, which amount was in addition to any amounts he would be entitled to receive under the Senior Executive Bonus Plan or his employment agreement. The amount of that bonus paid to Mr. MacDonald for his service as interim CEO during 2014 was $125,000.

 

Cash Bonus for Thomas C. Kennedy

 

In March 2014, the Compensation Committee, upon recommendation of our former CEO, Mr. Frissora, elected to pay Mr. Kennedy an additional cash bonus of $251,835 in recognition of his superior performance. The bonus was a one-time bonus and did not recur during the first quarter of 2015. Mr. Kennedy was also paid a sign-on bonus of $75,000 in 2014 in connection with his hire in December of 2013.

 

Special Award Agreement with Robert J. Stuart

 

As discussed under “Determining What We Pay - Compensation Philosophy and the Role of the Compensation Committee” above, our Compensation Committee wants to ensure we retain key individuals. Accordingly, on July 1, 2014, we entered into an agreement with Mr. Stuart to retain him and reward him for his valuable services to our Company. Mr. Stuart was eligible for, and was paid, $500,000 if he remained an employee of our Company on July 1, 2015. Mr. Stuart is eligible for an additional payment of $500,000 if he remains an employee of our Company on July 1, 2016. In the event Mr. Stuart is terminated without cause before July 1, 2016, Mr. Stuart will

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

be eligible to be paid $500,000. In the event of Mr. Stuart’s death or disability before July 1, 2016, Mr. Stuart will be eligible to receive a pro-rated amount of his award based on the number of months he served as an employee before his death or disability. If Mr. Stuart’s employment is terminated for any other reason before July 1, 2016, he will be ineligible for any bonuses remaining under the agreement.

 

Modification of EICP for 2015

 

During late 2014 and early 2015 the Compensation Committee did an intensive review of the EICP and decided to simplify its structure to focus participants on one performance metric that is clear, understandable and drives overall business results. While a number of metrics were considered, the Compensation Committee chose the earnings metric of API to be used at both the corporate and business unit level. API is familiar to participants, it is easily understandable and it aligns incentives for all participants.

 

Accordingly, for 2015 API will be the primary driver of annual cash bonuses. For corporate center participants and participants who are business unit leaders at Hertz-Rent-A-Car Americas or Hertz Rent-A-Car International their annual cash bonuses will be based solely on the API of our Company. For leaders at other business units, the API of their respective business unit will be weighted at either 50% or 75% of the API metric in addition to our Company’s API performance. The maximum payout for financial performance will generally be 160% of target and, while the Individual Performance Modifier has been retained, it cannot result in payouts higher than 160%, subject to an exception for one executive officer hired in 2015 whose maximum for 2015 is 200% of target.

 

The Compensation Committee believes that API is the right structure for 2015. It considers 2015 a transition year and the Compensation Committee, along with management, will be doing a thorough review to evaluate what the longer term structure of EICP and the overall plan should be.

 

Mr. Tague’s employment agreement provides that his bonus for 2015 shall be no less than 60% of target.

 

Long-Term Equity Incentives

 

Long-term equity incentive compensation comprises a significant portion of the total compensation paid to our NEOs and in 2014 was awarded under the 2008 Omnibus Plan. Under the 2008 Omnibus Plan, the Compensation Committee has the flexibility to make equity awards based on the common stock of Hertz Holdings, including time- and performance-based awards of stock options, stock appreciation rights, restricted stock, restricted stock units, PSUs and deferred stock units.

 

Summary of 2014 Award Structure

 

The Compensation Committee continued its approach with respect to the structure and use of equity consistent with the approach used by the Company during 2013. In March 2014, PSUs were granted to certain of our NEOs as part of their annual long-term equity incentive award. PSUs represent the right to receive a share of Hertz Holdings’ common stock if certain performance goals are achieved and time periods have passed. The Compensation Committee determined that awarding long-term equity incentive awards comprised of 70% PSUs based on Corporate EBITDA and 30% based on Corporate EBITDA margin was appropriate because PSUs directly encourage our NEOs to improve and enhance our financial performance, while helping retain their services through the vesting period. In general, earning PSUs requires continued employment.

 

Messrs. Tague and McDonald were both hired during 2014 after the 2014 performance period was well under way and the terms of their employment arrangements provided for different long-term incentives, which will be described below under “Award Structure for John P. Tague” and “Award Structure for Brian P. McDonald.”

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Corporate EBITDA PSUs

 

Performance Goal

 

The Compensation Committee selected Corporate EBITDA as the performance goal for 70% of the PSUs granted in 2014. The Compensation Committee chose Corporate EBITDA as a performance metric because it is one of the primary metrics we use to facilitate our analysis of investment decisions, profitability and performance trends. Corporate EBITDA means “EBITDA” as that term is defined under our senior credit facilities and is further defined and reconciled to its most comparable U.S. GAAP measure in “Non-GAAP Measures” below.

 

Corporate EBITDA PSUs

 

In 2014, the Compensation Committee reaffirmed its long-term equity incentive award design by continuing to use performance goals based on Corporate EBITDA over a multi-year period. For purposes of the PSUs, management recommended, and the Compensation Committee approved, two goals. The first goal has baseline business targets for 2014 and combined 2014-2015 (the “Strategic Plan”). The second goal is a stretch plan with more difficult business targets for 2014 and combined 2014-2015 (the “Stretch Plan”) to drive increased performance with a corresponding higher payout factor.

 

2014 Performance Period-Heightened Goals with Lock-In Feature: To earn target (100%) or higher awards for 2014 (the maximum award was 150% of target), corporate performance had to meet Corporate EBITDA targets that exceeded the 2014 Strategic Plan. Achieving 100% of the Strategic Plan would only result in an 80% payout. Based on 2014 results, the NEOs could earn, or “lock-in” the 2014 payout factor, but would have a chance to improve upon their payout factor through meeting 2014-2015 Corporate EBITDA performance goals.

 

2014-2015 Performance Period-Driving Two-Year Performance: To account for the heightened difficulty in achieving the 2014 targets, the plan uses combined 2014-2015 Corporate EBITDA goals to encourage our NEOs to increase our financial performance. For 2014-2015, to earn target (100%) awards, corporate performance must achieve 100% of the Corporate EBITDA target in the combined 2014-2015 Strategic Plan. To earn the maximum awards, the NEOs must achieve 100% of the Corporate EBITDA target in the combined 2014-2015 Stretch Plan.

 

The amount of PSUs eligible to vest varies based upon actual performance as follows: 

Performance vs. Payout Matrix-PSUs
	2014	2014-2015
	Corporate EBITDA	Corporate EBITDA	Payout
	($ in millions)	($ in millions)	(%)
Threshold	2,037.0	4,335.6	50% payout
			(no payout below threshold)
Intermediate	2,263.3	4,624.6	80% payout
Target	2,379.5	4,817.3	100% payout
Maximum	2,829.1	5,064.6	150% payout

 

Straight line interpolation was used to determine the payout for Corporate EBITDA results that were between the various levels.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Actual Corporate EBITDA for 2014 was $1,331 million. This amount was below the threshold, resulting in the NEOs earning none of the PSUs eligible to be earned for 2014. While the NEOs can potentially earn PSUs in 2015 for combined 2014-2015 Corporate EBITDA performance, it is not expected that Corporate EBITDA performance in combined 2014-2015 will exceed the threshold performance level of $4,335.6 million, so the NEOs will likely earn none of the PSUs granted in 2014. If earned for the 2014-2015 combined performance period, the PSUs would vest 66⅔% in 2016 and 33⅓% in 2017.

 

Corporate EBITDA Margin PSUs

 

Performance Goal

 

In 2014, the Compensation Committee continued its practice of granting 30% of the total PSUs with Corporate EBITDA margin as the performance metric. The Compensation Committee believed that (i) awarding 30% of the total PSUs based on Corporate EBITDA margin provided appropriate incentives to promote our Company’s performance and enhance retention of our NEOs and (ii) the use of Corporate EBITDA margin would motivate our NEOs to increase our Company’s Corporate EBITDA (which forms the other 70% portion of our Company’s equity awards) in a responsible and sustainable way.

 

To earn Corporate EBITDA margin PSUs, the NEOs needed to achieve a Corporate EBITDA margin level of at least 75% of the Corporate EBITDA margin level in 2013 of 19.0%, or 14.25%. The Compensation Committee selected this goal in order to preserve a minimum level of financial performance while encouraging the overall increase in Corporate EBITDA. If the Corporate EBITDA margin for 2014 equaled or exceeded 14.25%, then the NEOs were eligible to earn the entire award. If the Corporate EBITDA margin for 2014 did not equal or exceed 14.25%, then the NEOs would not earn any of the award. The Compensation Committee believed that this “all or nothing” framework reinforced our compensation philosophy and provided appropriate incentives in light of the form and amount of the other equity awards granted in 2014.

 

In March of 2014, the Compensation Committee granted Corporate EBITDA margin PSUs. The performance conditions and vesting schedule is further summarized in the table below. 

Corporate EBITDA Margin PSU Payout Matrix-3-Year Awards
Corporate EBITDA Margin	Percentage of Award Earned	Vesting Schedule
14.25% or More	100% of Award	33⅓% in 2015, 2016 and 2017
Less than 14.25%	0% of Award	N/A

 

Corporate EBITDA Margin Results

 

Actual Corporate EBITDA margin for 2014 was 12%, resulting in the NEOs forfeiting the entire amount of Corporate EBITDA margin PSUs.

 

Award Structure for John P. Tague

 

In accordance with the terms of Mr. Tague’s employment agreement, as supplemented by a letter agreement dated March 31, 2015 and a letter agreement dated June 30, 2015, he did not receive PSUs based on Corporate EBITDA or Corporate EBITDA margin, as discussed in detail under “Employment Agreements, Change in Control Agreements and Separation Agreements-Employment Agreement with John P. Tague” below. Instead, it was agreed that he would be granted a combination of (1) stock options and (2) performance stock options and PSUs measured by a different metric, payable in Hertz Holdings common stock.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Mr. Tague was awarded 1,000,000 stock option awards on November 21, 2014. The stock options awards consisted of 500,000 Transition Options and 500,000 Performance Options, with the following features: 

	•	Transition Options: 500,000 options will vest on December 31, 2015 if Mr. Tague has (i) developed and presented to the Board a business plan by December 31, 2015, that is subsequently approved by the Board and (ii) assembled a management team that is reasonably acceptable to the Board by June 30, 2015. The Transition Options shall expire December 31, 2019 or, in the event of termination prior to that date, on such earlier date as applies under Hertz Holdings’ standard form of option agreement, provided that, if Mr. Tague remains employed through December 31, 2017, any vested options shall remain outstanding through December 31, 2019 unless Mr. Tague is terminated for cause.
	•	Performance Options: Up to 500,000 options will vest on December 31, 2017 subject to the achievement of certain revenue efficiency measures for the 2015-2017 period, measured by revenue per available car day. The Performance Options shall expire June 30, 2020, or, in the event of termination prior to that date, on such earlier date as applies under Hertz Holdings’ standard form of option agreement, provided that, if Mr. Tague remains employed through December 31, 2017, any vested options shall remain outstanding through June 30, 2020, unless Mr. Tague is terminated for cause. The targets for the vesting of the Performance Options is as follows:
	*	If the 2015-2017 revenue efficiency measure is achieved at less than 85% of target, then no options will vest;
	*	If the 2015-2017 revenue efficiency measure is achieved at 85% of target, then 50% of the options will vest;
	*	If the 2015-2017 revenue efficiency measure is achieved at 100% of target or above, then 100% of the options will vest; or
	*	Any results between 85% and 100% of the target will result in straight line interpolation between 50% and 100%.

 

The Compensation Committee has concluded that disclosure of the specific revenue efficiency target numbers at this time would result in competitive harm to our Company. The Compensation Committee believes that the targets are challenging and will require significant performance improvement over previous levels. The Compensation Committee approved the revenue efficiency metrics in early 2015.

 

We also agreed to award Mr. Tague 350,000 PSUs, which we expect to issue prior to December 31, 2015. The performance measures for the PSUs will be the same as the Performance Options, except that if the goal is satisfied over target, then up to an additional 50% of the target number of awards shall vest based on straight line interpolation between 100% and 115% of target.

 

Based on applicable SEC and accounting rules, the 500,000 Transition Options were recognized as granted in 2014. However, the Performance Options and PSUs were not recognized as granted in 2014 because our Compensation Committee did not establish revenue efficiency targets for the awards until 2015. As a result, only the Transition Options will be reported in Mr. Tague’s compensation in 2014. The Board and the Compensation Committee do not intend to grant Mr. Tague any additional equity awards for 2015. For more information about Mr. Tague’s equity awards and the compensation we reported for such equity awards see “2014 Summary Compensation Table” and “2014 Grants of Plan Based Awards” below.

 

Award Structure for Brian P. MacDonald

 

Pursuant to the terms of Mr. MacDonald’s employment arrangements, he did not receive the PSUs described above. As detailed below, under “Employment Agreements, Change-in-Control Agreements and Separation Agreements - Other Named Executive Officers - Employment Arrangements with Brian P. MacDonald,” we agreed to issue Mr. MacDonald PSUs based on different EBITDA metrics (including the EBITDA of HERC), as well as certain additional equity awards if HERC became a separate publicly traded company. Mr. MacDonald separated from employment prior to vesting in any of his awards and accordingly, they were all forfeited, with a cash payment made to Mr. MacDonald in lieu of such awards pursuant to his letter agreement.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Structure of 2015 Long-Term Equity Incentives

 

Changes to our Long-Term Incentive Plan

 

During late 2014 and early 2015 the Compensation Committee reviewed the structure of the long-term incentive plan and concluded that significant changes to the plan were needed to create the right incentives and strongly align employee and Hertz Holdings’ stockholder interests. The following changes were implemented in 2015:

 

Corporate EBITDA PSUs will now be paid out based on a three-year (instead of the current two-year) performance period and will comprise 50% (instead of the previous 70%) of each NEO’s long-term equity award. EBITDA targets have been established for 2015, 2016, and 2017, and these targets are both significantly higher than 2014 EBITDA and increase each year (the 2016 target is 11% higher than 2015 and the 2017 target is 10% higher than 2016). 1/3 of the PSUs will be earned each year on an all-or-nothing basis, depending on whether that year’s target is met. Assuming continued employment, earned PSUs will vest as a single tranche at the end of three years after the certification of results for the last performance period covered by the award. The PSUs were generally granted in April 2015, except, due to SEC rules, PSUs will not be granted to executive officers, including the NEOs, until Hertz Holdings files an effective registration statement on Form S-8. Hertz Holdings expects to grant such awards prior to December 31, 2015.

 

Corporate EBITDA Margin PSUs have been eliminated.

 

Stock options were issued in February of 2015 in an amount equal to the other 50% of each NEO’s intended equity award. Options vest 25% each year on the anniversary of grant and expire five years after the date of grant. The use of stock options reflects the Compensation Committee’s view that stockholder interests are best advanced at this time with a stock incentive that only provides value when the price of Hertz Holdings’ common stock increases and, because the stock options expire after five years, requires that price improvement occur in the short- to medium- time frame.

 

Corporate EBITDA PSUs Granted in 2012 and 2013

 

We granted Corporate EBITDA PSUs in both 2012 and 2013, which had the same structure as the 2014 Corporate EBITDA PSUs. PSUs could be earned by the greater of (i) Corporate EBITDA performance in the first year or (ii) Corporate EDITBA performance for the combined first two years. In the spring of 2014, the Compensation Committee certified actual Corporate EBITDA for 2012-2013 of $3,670.2 million, resulting in the NEOs earning 98.4% of the target amount of 2012 PSUs. In the spring of 2014, the Compensation Committee certified actual Corporate EBITDA for 2013 of $2,043.7 million, resulting in the NEOs earning 66.0% of the target amount of 2013 PSUs eligible to be earned for 2013.

 

Two of the three tranches of the 2012 PSUs have vested based on 98.4% performance, but the vesting of the third tranche, which would normally have been paid in early 2015 to participants who satisfied the service requirement, was delayed pending restatement of the Company’s financials. The first tranche of the 2013 PSUs vested based on 66.0% performance in 2014, but the payment of the second tranche, which would normally have been paid in early 2015 to participants who satisfied the service requirement, was also delayed pending restatement of the Company’s financials.

 

In 2015, after taking into account the change in our Corporate EBITDA for 2012 and 2013 as a result of restated financials, the Compensation Committee certified that the correct payout percentage for the 2012 grant was 82.8%, not 98.4%. This payout percentage was based on the Compensation Committee’s determination that actual Corporate EBITDA for 2012, as restated, was $1,554 million, and that actual Corporate EBITDA for

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

2013, as restated, was $2,001 million, which resulted in 2012-2013 EBITDA of $3,555 million. These restated performance figures resulted in a payout percentage for 2012 performance of 78.9% and a payout percentage for combined 2012-2013 performance of 82.8%.

 

In 2015, after taking into account the change in our Corporate EBITDA for 2013 as a result of restated financials, and our 2014 Corporate EBITDA, the Compensation Committee certified that the correct payout percentage for the 2013 grant was 60.0%, not 66.0%. This payout percentage was based on the Compensation Committee’s determination that actual Corporate EBITDA for 2013, as restated, was $2,001 million and that Corporate EBITDA for 2014 was $1,331 million, which resulted in 2013-2014 Corporate EBITDA of $3,332 million. These performance figures resulted in a payout percentage for 2013 performance of 60.0% and no change to the payout percentage for combined 2013-2014 performance.

 

The Compensation Committee reviewed the Company’s alternatives and, after receiving legal advice and extensive input from senior management, determined that, for all recipients of 2012 and 2013 PSUs, including all the NEOs, any remaining payouts due under the 2012 and 2013 PSUs would be reduced to reflect the restated financials. Accordingly, the final payout under the 2012-2013 PSUs and the second payout under the 2013-2014 PSUs will be reduced in an amount that results in senior executives receiving total payouts based on the restated numbers. Specifically, (1) the third tranche of the 2012 PSUs will be reduced to 51.6% of target, so that combined payouts equal 82.8% of target, and (2) the second tranche of the 2013 PSUs will be reduced to 54.0% and the third tranche will be 60.0%, resulting in an aggregate payout of 60.0%.

 

Policies on Timing of Equity Awards

 

It is Hertz Holdings’ general practice not to issue equity awards with a grant date that occurs during regularly scheduled blackout periods. It is also Hertz Holdings’ policy not to determine the exercise price or the number of equity awards to be granted based on market conditions prior to the date on which such equity awards were granted.

 

Other Compensation Elements

 

Retirement Benefits

 

In 2014, we made significant changes to the retirement and savings plans for our employees. Historically, we maintained three non-qualified, unfunded pension plans for certain of our U.S.-based senior executives, including our NEOs. These three plans were The Hertz Corporation Supplemental Retirement and Savings Plan, or “SERP” (in which no NEO participated), The Hertz Corporation Benefit Equalization Plan, or “BEP,” and The Hertz Corporation Supplemental Executive Retirement Plan, or “SERP II.” Effective December 31, 2014, the Company permanently discontinued future benefit accruals participation under the BEP and SERP II. Service will continue to be recognized for vesting and retirement eligibility. The material terms of these plans are summarized below under “- Pension Benefits.”

 

We also maintain a post-retirement assigned car benefit plan under which we provide certain senior executives who, at the time of retirement, are at least 58 years old and have been an employee of the Company for at least 20 years, with a car from our fleet and insurance on the car for the participant’s benefit. The assigned car benefit is available for 15 years post-retirement or until the participant reaches the age of 80, whichever occurs last. As of June 30, 2015, Mr. Taride has satisfied both the minimum service and the minimum age requirement and Messrs. Tague, Kennedy and Stuart had satisfied neither the minimum service nor the minimum age requirement. Messrs. Broome, Frissora, MacDonald, Sider, and Zimmerman did not qualify for this benefit at the time of their respective separation.

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

  

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Perquisite Policy

 

We provide perquisites and other personal benefits to our NEOs that we and our Compensation Committee believe are reasonable and consistent with our overall compensation program to better enable us to attract and retain superior employees for key positions. The NEOs are generally provided use of company cars, financial planning and tax preparation assistance and annual physicals. In addition, our CEO uses corporate aircraft for personal and business related air travel. Attributed costs of these personal benefits for the NEOs for the fiscal year ended December 31, 2014 are included in the “All Other Compensation” column of the Summary Compensation Table. The Compensation Committee periodically reviews our perquisite policies as required.

 

We also maintain a relocation policy that provides for the payment of relocation expenses in certain instances, including the relocation of our new hires and senior executives to our corporate headquarters in Florida.

 

We use corporate aircraft for the purpose of encouraging and facilitating business travel by our senior executives (primarily our CEO) and directors, generally for travel in the United States and, less frequently, internationally. Our Compensation Committee regularly reviews aircraft usage by the NEOs and the expenses associated with such usage.

 

Employment and Severance Arrangements

 

Hertz Holdings has entered into change in control agreements (“Change in Control Agreements”) covering all NEOs and a severance plan (the “Severance Plan for Senior Executives”) covering all of our NEOs who are currently employed by us, other than Mr. Tague, whose employment arrangement covers severance outside of a change in control. In adopting these arrangements, it was the intention of Hertz Holdings to provide our senior executives with severance arrangements that they would view as appropriate in light of their existing arrangements, while at the same time considering the terms of arrangements provided by our peer companies.

 

The purpose of the individual Change in Control Agreements is to provide payments and benefits to the covered executives in the event of certain qualifying terminations of their employment following a change in control of Hertz Holdings, and the purpose of the Severance Plan for Senior Executives is to provide payments and benefits to the covered executives in the event of certain other qualifying terminations of their employment. The terms of the Change in Control Agreements and Severance Plan for Senior Executives are described in “Employment Agreements, Change in Control Agreements and Separation Agreements.”

 

Five of our NEOs (Messrs. Sider, Frissora, Zimmerman, MacDonald and Broome) separated from service during 2014 or during 2015. In each case the circumstances of the separation qualified them for severance benefits, either under the terms of their employment agreements (Messrs. Frissora and MacDonald) or the Severance Plan for Senior Executives. Payments under each of their Separation Agreements are described below under “Employment Agreements, Change in Control Agreements and Separation Agreements.”

 

Our Policy and Practices for Recovering Bonuses in the Event of a Restatement

 

Hertz Holdings maintains a clawback policy to promote responsible risk management and to help ensure that the incentives of our management are aligned with those of Hertz Holdings’ stockholders. The clawback policy applies to all of our employees who are at the director level and above, including our NEOs, and covers:

	•	All annual incentives (including awards under the Senior Executive Bonus Plan),
	•	Long-term incentives,

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

	•	Equity-based awards (including awards granted under the 2008 Omnibus Plan), and
	•	Other performance-based compensation arrangements.

 

The policy provides that a repayment obligation is triggered if the Compensation Committee determines that the employee’s gross negligence, fraud or willful misconduct caused or contributed to the need for a restatement of Hertz Holdings’ financial statements within three years of the issuance of such financial statements.

 

In addition, Hertz Holdings adopted new forms of equity award agreements in 2015 with enhanced clawback provisions. Hertz Holdings’ clawback policy and any related plans or award agreements will be further revised, to the extent necessary, to comply with any rules promulgated by the SEC pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Stock Ownership Guidelines and Hedging Policy

 

Stock Ownership Guidelines

 

Hertz Holdings has stock ownership guidelines for our senior executives and non-employee directors. The guidelines establish the following target ownership levels: 

	•	Equity equal to five times base salary for our CEO;
	•	Equity equal to three times base salary for our CFO and business unit heads;
	•	Equity equal to one times base salary for our other senior executives; and
	•	Equity equal to three times annual cash retainer for non-employee directors.

 

Senior executives and non-employee directors have five years to reach the target ownership levels. Senior executives subject to the guidelines are permitted to count towards the target ownership levels shares owned outright or in trust, shares owned through Hertz Holdings’ Employee Stock Purchase Plan, the approximate after-tax value of unvested restricted stock units (i.e., 50% of unvested restricted stock units) and the approximate after-tax value of PSUs if the performance criteria has been met, even if the service requirement has not been met (i.e., 50% of PSUs if performance criteria is met). Non-employee directors subject to the guidelines are permitted to count towards the target ownership levels shares owned outright or in trust and the approximate after-tax value of phantom shares (i.e., 50% of phantom shares).

 

Pledging and Hedging Policy

 

In February of 2013, Hertz Holdings’ modified its policy regarding trading in Hertz Holdings’ securities to prohibit employees and directors from entering into any type of arrangement, contract or transaction which has the effect of pledging shares or hedging the value of Hertz Holdings’ common stock.

 

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COMPENSATION DISCUSSION AND ANALYSIS AND COMPENSATION COMMITTEE REPORT

 

Tax and Accounting Considerations

 

Section 162(m) of the Code operates to disallow public companies from taking a federal tax deduction for compensation in excess of $1 million paid to certain of its executive officers, excluding performance-based compensation that meets requirements mandated by the statute. As part of its role, our Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Code. Hertz Holdings’ stockholders approved the 2008 Omnibus Plan so that awards granted under the plan may qualify as performance-based compensation. In addition, EICP payments for 2014 were generally paid to executive officers under the Senior Executive Bonus Plan, which was approved by Hertz Holdings’ stockholders at its 2010 annual meeting and is designed to qualify as tax-deductible under Section 162(m) of the Code. When appropriate, our Compensation Committee intends to preserve deductibility under Section 162(m) of the Code of compensation paid to our NEOs. However, changes in tax laws (and interpretations of those laws), as well as other factors beyond our control, may affect the deductibility of executive compensation. Further, in certain situations, our Compensation Committee may approve compensation that will not meet these requirements in order to ensure the total compensation for our NEOs is consistent with the policies described above.

 

COMPENSATION COMMITTEE REPORT

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with members of management. Based on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. 

	THE COMPENSATION COMMITTEE
	Linda Fayne Levinson, Chair
	Michael J. Durham
	Carolyn N. Everson
	Daniel A. Ninivaggi

 

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SUMMARY COMPENSATION TABLE

 

2014 SUMMARY COMPENSATION TABLE

 

The following table, or the “Summary Compensation Table,” summarizes the compensation earned in each of the fiscal years noted by our NEOs. 

Name and Principal Position		Year		Salary ($)			Bonus ($)			Stock Awards(1) ($)			Option Awards(1) ($)			Non-Equity Incentive Plan Compensation(2) ($)			Change in Pension Value(3) ($)			All Other Compensation(4) ($)			Total ($)
John P. Tague		2014			145,000			108,750			—			3,571,000			—			—			51,764			3,876,514
Chief Executive Officer
Thomas C. Kennedy		2014			660,000			326,835			1,607,239			—			280,500			—			537,226			3,411,800
Chief Financial Officer		2013			38,077			—			341,576			—			48,165			—			—			427,818
Brian P. MacDonald		2014			634,616			125,000			3,015,370	(5)		—			834,493			—			157,154			4,766,633
Interim Chief Executive Officer
and Former CEO, HERC
Michel Taride(6)		2014			633,322			—			1,315,004			—			59,638			663,898			68,809			2,740,671
Group President,		2013			587,735			—			1,266,586			—			498,200			210,381			89,940			2,652,842
Rent-A-Car International		2012			579,431			—			1,058,954			—			498,873			323,591			360,253			2,821,102
Robert J. Stuart		2014			502,308			—			1,168,887			—			38,703			267,200			41,683			2,018,781
Executive VP,
Sales and Marketing
Richard D. Broome		2014			391,404			—			535,738			—			28,219			164,100			73,181			1,192,642
Former Executive VP,
Corporate Affairs and
Communications
Mark P. Frissora		2014			1,037,308			—			6,769,870			—			178,047			52,700			10,815,109			18,853,034
Former Chief Executive Officer		2013			1,423,750			—			8,174,233			—			2,748,734			2,835,800			1,156,042			16,338,559
		2012			1,308,750			—			6,452,426			—			4,211,096			1,952,200			592,796			14,517,268
Scott P. Sider		2014			431,539			—			3,250,070	(7)		—			33,406			37,800			2,785,116			6,537,931
Former Group President,		2013			645,000			—			2,200,844			—			437,861			1,414,200			184,373			4,882,278
Rent-A-Car Americas		2012			587,500			—			1,576,449			—			775,609			1,754,900			24,904			4,719,362
J. Jeffrey Zimmerman		2014			511,077			—			2,253,006	(7)		—			40,696			181,000			1,732,759			4,718,538
Former General Counsel		2013			515,000			—			1,308,461			—			462,072			314,500			611,632			3,211,665
and Secretary		2012			487,625			—			939,158			—			643,096			359,600			22,486			2,451,965

  

(1)	The value for each of the years in this Summary Compensation Table reflects the full grant date fair value. These amounts were computed pursuant to FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the note entitled “Stock-Based Compensation” in the notes to our Company’s consolidated financial statements in our 2014 Annual Report. Vesting of the Corporate EBITDA PSUs granted in 2014 were subject to our achievement of certain pre-determined financial performance goals during 2014 and subject to upward adjustment based on financial performance goals for combined 2014-2015. The “Stock Awards” column above reflects the grant date fair values of the target number of PSUs that were eligible to vest based on our financial performance goals for 2014, which for accounting purposes is the probable outcome (determined as of the grant date) of the performance-based condition applicable to the grant. This column also reflects the grant date fair value of the Corporate EBITDA margin-based PSUs also granted in 2014. The following table below presents the aggregate grant date fair value of the Corporate EBITDA PSUs grants assuming that (i) the actual outcome occurred, a 0% payout, and the awards were not subject to increase based on combined 2014-2015 financial performance and (ii) the highest level of performance condition would be achieved, resulting in a 150% payout.

 

		2014 Performance Stock Unit Awards Based on Corporate EBITDA
Name		Aggregate Grant Date Fair Value (Based on Actual Outcome) ($)			Aggregate Grant Date Fair Value (Based on Maximum Performance) ($)
Kennedy		—				1,687,621
Taride		—				1,380,766
Stuart		—				1,227,339
Broome		—				562,540
Frissora		—				7,108,348
Sider		—				1,717,253
Zimmerman		—				1,304,053

 

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Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

SUMMARY COMPENSATION TABLE

  

(2)	2014 amounts reflect amounts under the Senior Executive Bonus Plan for 2014 performance that were paid in 2015.
(3)	Amounts include annual changes in the actuarial present value of accumulated pension benefits. The present value was determined using the same assumptions applicable for valuing pension benefits for purposes of our Company’s financial statements. See the note entitled “Employee Retirement Benefits” in the notes to our consolidated financial statements in our 2014 Annual Report.
(4)	Includes the following for 2014:

Name		Personal Use of Aircraft (a)		Personal Use of Car and Driver (b)		Financial Planning Assistance		Housing and Other		Perquisites Subtotal		Life Insurance Premiums		Company Match on 401(k) Plan		Relocation (c)		Tax Assistance (d)		Severance and Other (e)		Total Perquisites and Other Compensation
Tague		31,450		—		—		—		31,450		—		—		11,975		8,339		—		51,764
Kennedy		—		10,988		—		—		10,988		428		—		305,233		220,577		—		537,226
MacDonald		—		7,478		—		—		7,478		303		—		87,641		61,732		—		157,154
Taride(f)		—		5,291		11,728		—		17,019		5,468		—		—		—		46,322		68,809
Stuart		—		12,526		3,250		—		15,776		880		7,800		10,000		7,227		—		41,683
Broome		—		20,909		4,000		—		24,909		1,190		7,800		22,803		16,479		—		73,181
Frissora		109,911		73,897		—		2,917		186,725		3,118		7,800		—		—		10,617,466		10,815,109
Sider		—		10,600		2,725		—		13,325		734		7,650		10,000		7,227		2,746,180		2,785,116
Zimmerman		—		12,802		1,300		—		14,102		1,335		7,800		10,000		7,227		1,692,295		1,732,759

	(a)	Based on the direct costs of aircraft for each hour of personal use, which is based on the incremental cost of fuel, crew expenses, on-board catering and other, small variable costs. We exclude fixed costs which do not change based on usage from this calculation.
	(b)	For Mr. Frissora, this amount includes the incremental cost of the driver’s time and costs related to Company-provided cars. For other executives, none of whom is provided with a driver, this amount reflects the cost of depreciation and interest, if applicable.
	(c)	Amount represents the incremental costs to the Company for relocation assistance.
	(d)	Amount represents tax assistance for relocation assistance.
	(e)	For Messrs. Frissora, Sider and Zimmerman, this amount is the amount accrued or paid for severance arrangements pursuant to their respective Separation Agreement. For Mr. Taride, this represents medical expenses and other miscellaneous expenses.
	(f)	Amounts for Mr. Taride have been translated from pounds sterling to U.S. dollars at the 12-month average rate of 1.64739.
(5)	The amount shown for Mr. MacDonald includes the grant date fair value of the PSUs calculated under FASB ASC Topic 718. Although the PSUs were not issued to Mr. MacDonald because Hertz Holdings did not have an effective Form S-8 registration statement on file at the date of grant, for compensation disclosure and accounting purposes they were considered granted because Hertz Holdings and Mr. MacDonald had a mutual understanding as to the key terms and conditions of the PSUs. These awards were forfeited when Mr. MacDonald separated from our Company in 2015.
(6)	Amounts for Mr. Taride have been translated from pounds sterling to U.S. dollars at the 12-month average rate of 1.64739 for 2014, 1.56323 for 2013 and 1.58942 for 2012.
(7)	The amounts shown for Messrs. Sider and Zimmerman reflect the incremental increase in the fair value of outstanding awards as calculated under FASB ASC Topic 718 due to additional vesting of outstanding equity awards pursuant to each NEO’s respective separation agreement. In addition to the grant date fair value of awards shown in “2014 Grant of Plan-Based Awards” below, Mr. Sider’s amount reflects an increase of $1,614,587 and Mr. Zimmerman’s reflects an increase of $1,011,047. For more information about Mr. Sider’s separation agreement, see “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Separation Agreement with Scott P. Sider” and for more information about Mr. Zimmerman’s separation agreement, see “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Separation Agreement with J. Jeffrey Zimmerman” below.

  

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EXECUTIVE COMPENSATION

 

2014 Grants of Plan-Based Awards

 

The following table sets forth, for each NEO, possible payouts under all non-equity incentive plan awards granted in 2014, all grants of PSUs and stock options in 2014 and the grant date fair value of all such awards. 

		Estimated future payouts under non-equity incentive plan awards(1)								Estimated future payouts under equity incentive plan awards
Name		Grant Date		Threshold ($)		Target ($)		Max ($)		Threshold (#)		Target (#)		Max (#)		All Other Stock Awards (#)		All Other Option Awards (#)		Exercise Price of Option Awards ($/Sh.)		Grant Date Fair Value of Stock Awards(2) ($)
John P. Tague(3)
Stock Options(4)		11/21/2014		—		—		—		—		—		—		—		500,000		22.75		3,571,000
Thomas C. Kennedy				—		561,000		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		21,471		42,942		64,413		—		—		—		1,125,080
PSUs(6)		3/25/2014		—		—		—		—		18,403		18,403		—		—		—		482,159
Brian P. MacDonald(7)				834,493		834,493		—		—		—		—		—		—		—		—
PSUs		11/10/2014		—		—		—		—		—		—		114,000		—		—		2,509,140
PSUs		11/10/2014		—		—		—		—		—		—		23,000		—		—		506,230
Michel Taride				—		542,213		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		17,567		35,134		52,701		—		—		—		920,511
PSUs(6)		3/25/2014		—		—		—		—		15,057		15,057		—		—		—		394,493
Robert J. Stuart				—		378,750		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		15,615		31,230		46,845		—		—		—		818,226
PSUs(6)		3/25/2014		—		—		—		—		13,384		13,384		—		—		—		350,661
Richard D. Broome				—		276,150		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		7,157		14,314		21,471		—		—		—		375,027
PSUs(6)		3/25/2014		—		—		—		—		6,134		6,134		—		—		—		160,711
Mark P. Frissora				—		2,465,000		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		90,437		180,874		271,311		—		—		—		4,738,899
PSUs(6)		3/25/2014		—		—		—		—		77,518		77,518		—		—		—		2,030,972
Scott P. Sider				—		561,000		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		21,848		43,696		65,544		—		—		—		1,144,835
PSUs(6)		3/25/2014		—		—		—		—		18,727		18,727		—		—		—		490,647
J. Jeffrey Zimmerman				—		428,800		—		—		—		—		—		—		—		—
PSUs(5)		3/25/2014		—		—		—		16,591		33,182		49,773		—		—		—		869,368
PSUs(6)		3/25/2014		—		—		—		—		14,221		14,221		—		—		—		372,590

(1)	The amounts in these columns include the “Target” amount for each NEO eligible to receive an award under the EICP at 100% of the target award. The EICP payments are based on adjusted pre-tax income, revenue and total return on total capital goals for the Company. The Senior Executive Bonus Plan, under which EICP payments are made, limits the maximum cash incentive bonus payout for our CEO and other participants. The limit is 1% of our EBITDA for a performance period for our CEO and 0.5% of our EBITDA for a performance period for other participants. For 2014, 1% of our EBITDA was $40.4 million and 0.5% of our EBITDA was $20.2 million. The Compensation Committee uses its negative discretion to make actual EICP awards using the performance metrics more specifically described in our Compensation Discussion and Analysis as a guide. Actual amounts were determined and paid in 2015 and are included in the Summary Compensation Table above. We discuss these awards under the heading “Compensation Discussion and Analysis-Annual Cash Compensation-Annual Cash Incentive Program (EICP).”
(2)	Represents the aggregate grant date fair value, computed pursuant to FASB ASC Topic 718. Please see the note entitled “Stock-Based Compensation” in the notes to the Company’s consolidated financial statements in our 2014 Annual Report for a discussion of the assumptions underlying these calculations.
(3)	Pursuant to the terms of Mr. Tague’s employment agreement, he did not receive an award under the Senior Executive Bonus Plan or grants of PSUs based on Corporate EBITDA or Corporate EDITDA margin in 2014. As described in “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Employment Agreement with John P. Tague” below, the performance goals for the Performance Options and PSUs to be awarded under his employment agreement were not finalized until 2015. As a result, such awards are not reported in this table.
(4)	Options were granted to Mr. Tague under Hertz Holdings’ 2008 Omnibus Plan. As described in the “Compensation Discussion and Analysis” above, these options will vest based on Mr. Tague’s performance in meeting specified business goals during 2015.

 

46

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

EXECUTIVE COMPENSATION

  

(5)	Corporate EBITDA PSUs were granted to each NEO (other than Messrs. Tague and MacDonald) under Hertz Holdings’ 2008 Omnibus Plan. As described in the “Compensation Discussion and Analysis” above, the amount of PSUs eligible for vesting is subject in part to our achievement of financial performance goals during 2014 and/or combined 2014-2015. Based on 2014 Corporate EBITDA performance, none of the PSUs were earned. However, as set forth in “Compensation Discussion and Analysis-Long Term Equity Incentives-Corporate EBITDA PSUs” above, if combined 2014-2015 Corporate EBITDA performance exceeds at least the threshold level of Corporate EBITDA performance, then PSUs will be earned and vest in 2016 and 2017 to reflect the achievement of such performance.
(6)	Corporate EBITDA margin PSUs were granted to each NEO (other than Messrs. Tague and MacDonald) under Hertz Holdings’ 2008 Omnibus Plan. As described in the “Compensation Discussion and Analysis” above, the amount of PSUs eligible for vesting is subject in part to our achievement of Corporate EBITDA margin during 2014. Because the 2014 Corporate EBITDA margin target was not achieved, the entire award was forfeited.
(7)	Pursuant to the terms of Mr. MacDonald’s employment agreement, he was eligible to participate in the Senior Executive Bonus Plan for 2014. The terms of the employment agreement provided that Mr. MacDonald would be entitled, at minimum, to his target award as pro-rated for his June 2, 2014 start date. As described in “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Employment Arrangements with Brian P. MacDonald” below, Mr. MacDonald was awarded, but not issued, PSUs in 2014 that could be earned based on the performance of HERC and the Company. Although the PSUs were not issued to Mr. MacDonald because Hertz Holdings did not have an effective Form S-8 registration statement on file at the date of grant, for compensation disclosure and accounting purposes they were considered granted because Hertz Holdings and Mr. MacDonald had a mutual understanding as to the key terms and conditions of the PSUs. These awards were forfeited when Mr. MacDonald separated from our Company in 2015.

  

Hertz Global Holdings, Inc. 2015 Proxy Statement

47

 

 

EXECUTIVE COMPENSATION

 

2014 Outstanding Equity Awards at Year-End

 

The following table sets forth, for each NEO, details of all equity awards outstanding on December 31, 2014.

		Option Awards									Stock Awards
Name		Number of securities underlying unexercised options Exercisable (#)		Number of securities underlying unexercised options Unexercisable (#)			Option exercise price ($)		Option expiration date		Number of shares or units of stock that have not vested (#)			Market value of shares or units of stock that have not vested(1) ($)		Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)			Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(1) ($)
John P. Tague(2)		—		500,000	(3)		22.75		12/31/2019		—			—		—			—
Thomas C. Kennedy		—		—			—		—		13,740	(4)		342,676		—			—
		—		—			—		—		—			—		61,345	(5)		1,529,944
Brian P. MacDonald		—		—			—		—		—			—		137,000	(6)		3,416,780
Michel Taride		200,000		—			4.56		2/28/2018		—			—		—			—
		31,766		—			9.7		3/4/2020		—			—		—			—
		21,558		21,559	(7)		14.6		3/1/2021		—			—		—			—
		—		—			—		—		15,060	(8)		375,596		—			—
		—		—			—		—		19,556	(9)		487,726		—			—
		—		—			—		—		12,698	(10)		316,688		—			—
		—		—			—		—		—			—		90,605	(11)		2,259,689
Robert J. Stuart		16,654		—			9.7		3/4/2020		—			—		—			—
		11,570		11,571	(7)		14.6		3/1/2021		—			—		—			—
		—		—			—		—		11,381	(8)		283,842		—			—
		—		—			—		—		14,220	(9)		354,647		—			—
		—		—			—		—		9,235	(10)		230,321		—			—
		—		—			—		—		—			—		75,153	(11)		1,874,316
Richard D. Broome		89,552		—			12.97		2/28/2018		—			—		—			—
		30,513		—			9.7		3/4/2020		—			—		—			—
		27,888		9,296	(7)		14.6		3/1/2021		—			—		—			—
		—		—			—		—		6,405	(8)		159,729		—			—
		—		—			—		—		7,918	(9)		197,475		—			—
		—		—			—		—		5,143	(10)		128,266		—			—
		—		—			—		—		1,584	(12)		39,505		—			—
		—		—			—		—		—			—		37,638	(11)		938,692
Mark P. Frissora		400,000		—			9.56		8/15/2016		—			—		—			—
		400,000		—			14.56		8/15/2016		—			—		—			—
		200,000		—			6.56		8/15/2016		—			—		—			—
		600,000		—			6.56		8/15/2016		—			—		—			—
		400,000		—			23.06		8/14/2017		—			—		—			—
		827,985		—			12.97		2/28/2018		—			—		—			—
		740,174		—			9.7		3/4/2020		—			—		—			—
		373,813		—			14.6		3/1/2021		—			—		—			—
Scott P. Sider		78,362		—			9.7		8/18/2016		—			—		—			—
		110,759		—			14.6		8/18/2016		—			—		—			—
		—		—			—		—		22,420	(8)		559,167		—			—
		—		—			—		—		15,959	(13)		398,017		—			—
		—		—			—		—		10,363	(14)		258,453		—			—
		—		—			—		—		3,345	(15)		83,424		—			—
		—		—			—		—		—			—		30,081	(16)		750,220
		—		—			—		—		—			—		20,807	(17)		518,927
J. Jeffrey Zimmerman		60,000		—			12.74		2/25/2018		—			—		—			—
		149,254		—			12.97		2/28/2018		—			—		—			—
		117,441		—			9.7		3/4/2020		—			—		—			—
		56,961		18,988	(7)		14.6		3/1/2021		—			—		—			—
		—		—			—		—		13,357	(8)		333,123		—			—
		—		—			—		—		8,686	(13)		216,629		—			—
		—		—			—		—		5,640	(14)		140,662		—			—
		—		—			—		—		4,591	(15)		114,500		—			—
		—		—			—		—		—			—		17,921	(16)		446,950
		—		—			—		—		—			—		15,801	(17)		394,077

 

48

Hertz Global Holdings, Inc. 2015 Proxy Statement

  

 

EXECUTIVE COMPENSATION

 

(1)

Based on the closing market price of Hertz Holdings’ common stock on December 31, 2014 of $24.94.

 

(2)

The Performance Options and PSUs provided under Mr. Tague’s employment agreement were not granted as of December 31, 2014 and are not reported in this table.

 

(3)

These options represent the Transition Options granted to Mr. Tague as detailed in “Compensation Discussion and Analysis” above.

 

(4)

This award granted to Mr. Kennedy in connection with his hire as our Chief Financial Officer in December 2013 will vest on December 9, 2016 if Mr. Kennedy continues to remain employed with us and retains at least 41,000 shares of our common stock through such date.

 

(5)

The awards reported include the (i) grants of PSUs based on Corporate EBITDA made in 2014 and (ii) grants of PSUs based on Corporate EBITDA margin made in 2014. All grants are reported at target.

 

(6)

The awards reported include the awards made to Mr. MacDonald in 2014 as described under “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Employment Arrangements with Brian P. MacDonald” below.

 

(7)

The unvested options vested on March 1, 2015.

 

(8)

These PSUs were granted in 2012. The first tranche of the PSUs awarded (33⅓% of the total award) vested on March 6, 2013 based on Corporate EBITDA performance of 95.1% of target for 2012. The second tranche of the PSUs awarded (33⅓% of the total award) vested on March 6, 2014 based on Corporate EBITDA performance of 98.4% of target for combined 2012-2013. The third tranche of the PSUs awarded, which would normally have been paid in early 2015, was delayed pending restatement of the Company’s financials. In 2015, after taking into account the change in our Corporate EBITDA for 2012 and 2013, the correct payout was certified as 82.8% of target. The third tranche above is reported at 98.4% of target, but was paid out in July 2015 at 51.6% of target so that the total payout of the PSUs awarded in 2012 is 82.8% of target. For more information about the adjustments our Compensation Committee made to outstanding PSUs, see “Compensation Discussion and Analysis-Long-Term Equity Incentives-Corporate EBITDA PSUs Granted in 2012 and 2013” above.

 

(9)

These PSUs were granted in 2013. The first tranche of the PSUs awarded (33⅓% of the total award) vested on March 25, 2014 based on Corporate EBITDA performance of 66.0% of target for 2013. As described in “Compensation Discussion and Analysis-Long-Term Equity Incentives-Corporate EBITDA PSUs Granted in 2012 and 2013”, to the extent that 2013-2014 Corporate EBITDA performance exceeded 2013 Corporate EBITDA performance, additional PSUs could have been earned. However, 2013-2014 Corporate EBITDA performance did not exceed 2013 Corporate EBITDA performance, so no additional PSUs were earned. In addition, the second tranche of the PSUs awarded (33⅓% of the total award), which would normally have been paid in early 2015, was delayed pending restatement of the Company’s financials. In 2015, after taking into account the change in our Corporate EBITDA for 2013 and performance during 2014, the correct payout was certified as 60.0% of target. The combined second tranche and third tranche (scheduled to vest in 2016) above is reported at 66.0% of target. The second tranche was paid out in July 2015 at 54.0% of target so that the total payout of the PSUs awarded in 2013 is 60.0% of target. For more information about the adjustments our Compensation Committee made to outstanding PSUs, see “Compensation Discussion and Analysis-Long-Term Equity Incentives-Corporate EBITDA PSUs Granted in 2012 and 2013” above.

 

(10)

The unvested PSUs were granted in 2013 and earned based on 2013 Corporate EBITDA margin. The first tranche (33⅓%) of the award vested on March 25, 2014. The second tranche (33⅓%) vested on February 28, 2015 and the third tranche (33⅓%) will vest on February 28, 2016 contingent on the recipient’s continued employment.

 

(11)

The awards reported include the (i) price-vested stock units granted in 2012, (ii) grants of PSUs based on Corporate EBITDA made in 2014 and (iii) grants of PSUs based on Corporate EBITDA margin made in 2014. All grants are reported at target.

 

(12)

The unvested PSUs were granted in 2013 and earned based on 2013 Corporate EBITDA margin. The first tranche (50%) of the award vested on March 25, 2014. The remaining tranche (50%) vested on February 28, 2015.

 

(13)

The awards reported in this row consist of PSUs granted in 2013 to Messrs. Sider and Zimmerman that were based on Corporate EBITDA for the 2013 and 2013-2014 combined performance period. As of December 31, 2014, this award represents the second tranche of PSUs scheduled to vest in 2015 based on Corporate EBITDA performance of 66.0%. Under the terms of the separation agreements of Messrs. Sider and Zimmerman, they are entitled to the PSUs granted in 2013 that would have otherwise vested by March 31, 2015 and such PSUs reported in this row were subject to additional vesting based on combined 2013-2014 Corporate EBITDA performance. No additional PSUs were earned for combined 2013-2014 performance. The PSUs are reported above at 66.0% of target, but were earned at 51.6% of target due to the restatement of our financial results for 2013 and performance in 2014. The third tranche of the PSUs scheduled to vest in 2016 were forfeited.

 

(14)

The awards reported in this row consist of PSUs granted in 2013 to Messrs. Sider and Zimmerman that were based on Corporate EBITDA margin for 2013. As of December 31, 2014, this award represents the second tranche of PSUs scheduled to vest in 2015. Under the terms of the separation agreements of Messrs. Sider and Zimmerman, they are entitled to the PSUs granted in 2013 that would have otherwise vested by March 31, 2015. The third tranche of the PSUs scheduled to vest in 2016 were forfeited.

 

(15)

The awards reported in this row consist of PSUs granted in 2013 to Messrs. Sider and Zimmerman that were based on Corporate EBITDA margin for 2013. As of December 31, 2014, this award represents the second tranche of PSUs scheduled to vest in 2015. Under the terms of the separation agreements of Messrs. Sider and Zimmerman, they are entitled to the PSUs granted in 2013 that would have otherwise vested by March 31, 2015.

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

49

 

 

EXECUTIVE COMPENSATION

 

(16)

The awards reported in this row consist of price-vested stock units granted in 2012 to Messrs. Sider and Zimmerman. The number of PSUs earned was based on the performance of our common stock in 2015. Under the terms of the Separation agreements of Messrs. Sider and Zimmerman, they are entitled to the price-vested stock units that would have otherwise vested by March 31, 2015. As a result, the awards reported in this row consist of the target award granted in 2012. The price-vested stock units granted in 2012 which are to be earned based on the trading price of our common stock in 2016 were forfeited.

 

(17)

The awards reported in this row consist of PSUs granted in 2014 to Messrs. Sider and Zimmerman that were based on Corporate EBITDA for the 2014 and 2014-2015 combined performance period and the PSUs based on 2014 Corporate EBITDA margin, subject to the terms of the separation agreements, which provides that they are entitled to the PSUs that would have otherwise vested by March 31, 2015. As a result, the awards reported in this row consist of the first tranche of each of the awards reported above in “2014 Grants of Plan-Based Awards” at target.

 

50

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

EXECUTIVE COMPENSATION

 

2014 Option Exercises and Stock Vested

 

The following table sets forth, for each NEO, details of any awarded stock options that were exercised and any stock awards that were vested in 2014.

		Option Awards						Stock Awards
Name		Number of shares acquired on exercise (#)			Value realized on exercise ($)			Number of shares acquired on vesting (#)			Value realized on vesting ($)
John P. Tague		—			—			—			—
Thomas C. Kennedy		—			—			—			—
Brian P. MacDonald		—			—			—			—
Michel Taride		100,000			2,315,140			9,777	(1)		256,157	(2)
		100,000			2,315,140			6,348	(1)		166,318	(2)
		200,000			3,630,280			15,565	(1)		407,803	(2)
		—			—			24,434	(3)		684,396	(4)
Robert J. Stuart		26,901			437,860			7,110	(1)		186,282	(2)
		70,896			1,137,647			4,617	(1)		120,965	(2)
		49,962			965,101			11,762	(1)		308,164	(2)
		23,141			333,617			13,114	(3)		367,323	(4)
		35,499			572,073			—			—
Richard D. Broome		—			—			3,959	(1)		103,726	(2)
		—			—			2,570	(1)		67,334	(2)
		—			—			1,584	(1)		41,501	(2)
		—			—			6,621	(1)		173,470	(2)
		—			—			10,536	(3)		295,113	(4)
Mark P. Frissora		—			—			54,404	(1)		1,425,385	(2)
		—			—			35,327	(1)		925,567	(2)
		—			—			28,228	(1)		739,574	(2)
		—			—			94,839	(1)		2,484,782	(2)
		—			—			141,221	(1)		3,955,600	(2)
		—			—			193,798	(3)		5,428,282	(4)
Scott P. Sider		—			—			3,345	(1)		87,639	(2)
		—			—			15,958	(1)		418,100	(2)
		—			—			10,362	(1)		271,484	(2)
		—			—			23,171	(1)		607,080	(2)
		—			—			31,383	(3)		879,038	(4)
J. Jeffrey Zimmerman		—			—			8,686	(1)		227,573	(2)
		—			—			5,640	(1)		147,768	(2)
		—			—			4,591	(1)		120,284	(2)
		—			—			13,804	(1)		361,665	(2)
		—			—			21,520	(3)		602,775	(4)

 

(1)

Represents the number of shares of common stock received upon vesting of PSUs that had previously been granted. The PSUs vested on March 25, 2014.

 

Hertz Global Holdings, Inc. 2015 Proxy Statement

51

 

 

EXECUTIVE COMPENSATION

 

(2)

Value realized upon vesting based on $26.20 per share, the closing price of Hertz Holdings’ common stock on March 25, 2014.

 

(3)

Represents the number of shares of common stock received upon vesting of PSUs that had been previously granted. The PSUs vested on March 1, 2014.

 

(4)

Value realized upon vesting based on $28.01 per share, the closing price of Hertz Holdings’ common stock on March 1, 2014.

 

2014 Pension Plan Table

 

The following table sets forth, for each NEO, the plans in which he participated in 2014, the number of years of credited service in each such plan he had at December 31, 2014, the present value of the accumulated benefit in each such plan at December 31, 2014 and the payments received from such plan during 2014:

Name		Plan name		Number of years credited service (#)			Present value of accumulated benefit(1) ($)		Payments during last fiscal year ($)
John P. Tague		The Hertz Corporation Account Balance Defined Benefit Pension Plan (the “Hertz Retirement Plan”)		N/A			N/A		—
		The Hertz Corporation Benefit Equalization Plan (the “BEP”)		N/A			N/A		—
		The Hertz Corporation Supplemental Executive Retirement Plan (the “SERP II”)		N/A			N/A		—
Thomas C. Kennedy		Hertz Retirement Plan		N/A			N/A		—
		BEP		N/A			N/A		—
		SERP II		N/A			N/A		—
Brian P. MacDonald		Hertz Retirement Plan		N/A			N/A		—
		BEP		N/A			N/A		—
		SERP II		N/A			N/A		—
Michel Taride(2)		Hertz UK Pension Plan		11			1,871,435		—
		Hertz UK Supplemental Plan		11			2,726,430		—
Robert J. Stuart		Hertz Retirement Plan		7			58,000		—
		BEP		7			129,600		—
		SERP II		7			997,400		—
Richard D. Broome		Hertz Retirement Plan		14			182,000		—
		BEP		14			219,100		—
		SERP II		14			1,800,000		—
Mark P. Frissora		Hertz Retirement Plan		8			—		—
		BEP		8			1,069,700		—
		SERP II		8			6,859,800		—
Scott P. Sider		Hertz Retirement Plan		27			409,200		—
		BEP		19			409,300		—
		SERP II		27			4,627,900		—
J. Jeffrey Zimmerman		Hertz Retirement Plan		7			59,900		—
		BEP		7			149,200		—
		SERP II		7			1,115,100		—

 

52

Hertz Global Holdings, Inc. 2015 Proxy Statement

 

 

EXECUTIVE COMPENSATION

 

(1)	The present value calculations use the same assumptions (except for retirement and pre-retirement decrements) used for financial reporting purposes and reflect current compensation levels. The assumptions used in the calculations are as follows:
	•	Discount Rates—
		•	For The Hertz Retirement Plan: 3.9% as of December 31. 2014, 4.8% as of December 31, 2013 and 4.0% as of December 31, 2012.
		•	For the BEP and SERP II: 3.6% as of December 31, 2014, 4.4% as of December 31, 2013 and 3.5% as of December 31, 2012.
		•	For the Hertz UK Pension Plan and Hertz UK Supplemental Plan: 3.7% as of December 31, 2014, 4.6% as of December 31, 2013 and 4.5% as of December 31, 2012.
	•	Mortality Table = RP2014 Mortality Table projection using scale MP2014.
	•	Retirement Age = 60 or current age if older (earliest unreduced retirement age).
	•	Pre-retirement Decrements = None assumed.
	•	Payment Form = Five year certain and life annuity.
		Please see the note “Employee Retirement Benefits” in the notes to the Company’s consolidated financial statements in our 2014 Annual Report for a discussion of these assumptions.
(2)	Amounts for Mr. Taride have been translated from pounds sterling to U.S. dollars at the 12-month average rate of 1.64739. Mr. Taride’s number of actual years of service with us is 28.

 

Pension Benefits 

 

In 2014, we modified the overall structure of, and participation in, our various retirement plans. As previously announced on October 22, 2014, effective as of December 31, 2014, we are no longer providing future benefit accruals under the following plans (the “Previous Plans”) for the NEOs:  

	•	The Hertz Corporation Account Balance Defined Benefit Pension Plan;
	•	The BEP; and
	•	The SERP II.

  

To replace the Previous Plans, we offered to our employees, including the NEOs (other than Mr. Taride), participation in a revised defined contribution plan. Beginning January 1, 2015 the Company increased employer contributions under the Company’s qualified 401(k) savings plan (the “401(k) Plan”), to provide that eligible participants under the 401(k) Plan are eligible to receive a matching employer contribution to their 401(k) Plan account equal to (i) 100% of the first 3% of employee contributions made by such participant and (ii) 50% of the next 2% of employee contributions, with the total amount of such matching employer contribution to be completely vested, subject to applicable limits under the Code. Certain eligible participants under the 401(k) Plan received additional employer contribution amounts to their 401(k) Plan account depending on their years of service and age.

 

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EXECUTIVE COMPENSATION

 

In connection with the replacement of the Previous Plans and the adoption of the 401(k) Plan, we adopted a deferred compensation plan to provide for eligible employees, including the NEOs, to defer part of their compensation, effective for 2015. The Hertz Corporation Supplemental Income Savings Plan is a deferred compensation plan that provides benefits that cannot be provided in The Hertz Corporation Income Savings Plan due to Code limitations on compensation.

 

Background on Previous Plans

  

The Hertz Corporation Account Balance Defined Benefit Pension Plan is a tax-qualified pension plan for which we paid the entire cost. The benefit an employee receives is based on a combination of final average compensation, years of credits service up to July 1, 1987 and an accrued cash account after July 1, 1987.

 

The BEP provides equalization benefits due to limitations on tax-qualified retirement plans imposed by the Code. Messrs. Broome, Frissora, Sider, Stuart, and Zimmerman participate or participated in the BEP. Benefits under the BEP are fully vested after the earlier of three years of vesting service or at age 65. 

 

The SERP II provides additional equalization benefits to supplement the tax-qualified and non-qualified plans. Messrs. Broome, Frissora, Sider, Stuart and Zimmerman participate or participated in the SERP II. Benefits under the SERP II are generally payable only to participants who, upon the termination of their employment, have been credited with five vesting years of service under the pension plan and whose employment terminates due to death or disability or after attainment of age 55. Those benefits are also payable to participants who have not attained age 55 if their employment is terminated (other than voluntarily or for cause) with respect to certain changes in control of Hertz or its subsidiaries.

 

Mr. Taride participates in two retirement plans--the Hertz UK 1972 Pension Plan and the Hertz UK Supplementary Unapproved Pension Scheme, or the “Hertz UK Supplementary Plan.” These two plans provide for, in the case of Mr. Taride, 1/30 of his final salary for each year of service in the plans subject to a maximum of two-thirds of his final salary at the time of his retirement. Under these plans, Mr. Taride has a right to retire at age 60. Due to a transition to a U.K. defined contribution plan in 2011, Mr. Taride is still entitled to his accrued benefits under the plans, but we are no longer providing future benefit accruals.

  

Employment Agreements, Change in Control Agreements and Separation Agreements 

 

Hertz Holdings and its subsidiaries have entered into employment agreements and Change in Control Agreements with certain key employees, including certain of the NEOs, to promote stability and continuity of senior management. Information about such agreements and the separation agreements with the five NEOs who separated during 2014 or in 2015 is set forth below. All of the agreements referred to below are listed in the Exhibit Index to the Company’s 2014 Annual Report.

 

Employment Agreement with John P. Tague 

 

On November 20, 2014, Mr. Tague signed a term sheet outlining the employment terms between him and Hertz Holdings, which was memorialized in Mr. Tague’s employment agreement executed on December 16, 2014. Under the employment agreement, Mr. Tague will serve as CEO of Hertz Holdings and Hertz from November 21, 2014, through December 31, 2017, unless terminated earlier. Mr. Tague is entitled to an annual base salary of $1,450,000, received a guaranteed bonus of $108,750 for 2014 and is eligible to receive a target bonus for 2015 and beyond of 150% of his annual base salary, though for 2015, the annual bonus shall be no less than 60% of his target bonus. Mr. Tague is generally entitled to receive the benefits and perquisites we provide to our senior executives.

 

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Mr. Tague’s employment agreement, as modified by a letter agreement dated March 31, 2015 and a letter agreement dated June 30, 2015, also awarded Mr. Tague 1,000,000 stock options, 500,000 of which will vest on December 31, 2015 if Mr. Tague presents a business plan that is approved by the Board by December 31, 2015 and a management team is in place by June 30, 2015 that is reasonably acceptable to the Board. The remaining 500,000 options shall vest based on the achievement of revenue efficiency metrics. In addition, we agreed to award Mr. Tague 350,000 PSUs, on substantially the same terms as the Performance Options listed in the preceding sentence, to be issued when Hertz Holdings becomes current in its Exchange Act reporting requirements. The stock options and PSUs contemplated by Mr. Tague’s employment agreement are intended to cover a multiple year period from November 20, 2014 to December 31, 2017. Based on applicable SEC and accounting rules, the 500,000 Transition Options were recognized as granted in 2014. However, the Performance Options and PSUs were not recognized as granted in 2014 because our Compensation Committee did not establish revenue efficiency targets for the awards until 2015. As a result, only the Transition Options will be reported in Mr. Tague’s compensation in 2014. The Board and Compensation Committee do not intend to grant Mr. Tague any other equity awards for 2015. For additional description of Mr. Tague’s equity awards, see “Long-Term Equity Incentives-Award Structure for John P. Tague” above.

 

The employment agreement also provides that if Mr. Tague’s employment is terminated other than for “Cause”, by Mr. Tague for “Good Reason” or due to death or “Disability” (all as defined in the employment agreement), Mr. Tague shall be entitled to: (i) a cash payment consisting of Mr. Tague’s unpaid base salary through the date of termination, earned but unpaid bonus for any completed fiscal year and accrued and unused vacation pay, (ii) prorated vesting of the stock option grants and the PSU grants, with performance metrics deemed satisfied at target levels and (iii) eligibility of certain expenses for relocation back to Texas. If Mr. Tague terminated employment for any other reason, then he will only be entitled to unpaid base salary through date of termination and accrued and unused vacation pay.

 

Mr. Tague’s term sheet is filed as exhibit 10.1 to the Form 8-K the Company filed on November 25, 2014, Mr. Tague’s employment agreement is filed as exhibit 10.1 to the Form 8-K/A the Company filed on December 22, 2014, Mr. Tague’s letter agreement dated March 31, 2015 is filed as exhibit 10.1 to the Form 8-K the Company filed on April 3, 2015 and Mr. Tague’s letter agreement dated June 30, 2015 is filed as exhibit 10.41 to the Company’s 2014 Annual Report.

  

Other Named Executive Officers 

 

Employment Arrangements with Thomas C. Kennedy 

 

On January 20, 2015 Hertz Holdings and Mr. Kennedy entered into an arrangement whereby we agreed that Mr. Kennedy’s base salary would be set at $700,000 for 2015, he would receive a 2015 equity award with a value of $4 million, no equity award in 2016, and subsequent equity awards with a $2 million target value.

  

Mr. Kennedy’s letter agreement is filed as exhibit 10.42 to the Company’s 2014 Annual Report. 

 

Employment Arrangements with Brian P. MacDonald

  

On June 2, 2014, Hertz Holdings entered into an employment agreement with Mr. MacDonald to serve as the CEO of HERC, which was subsequently modified by a letter agreement with Hertz Holdings dated November 8, 2014, which outlined additional compensation and benefits for serving as interim CEO of our Company in 2014. Mr. MacDonald’s employment agreement provided that he would receive an annual base salary of no less than $1,100,000 and a target annual bonus of no less than 130% of base salary. For 2014, Mr. MacDonald was eligible for, and was awarded, his target bonus, as pro-rated to his date of hire.

 

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EXECUTIVE COMPENSATION

 

Mr. MacDonald was also eligible under the employment agreement to receive an equity award valued at $2,500,000 to be issued when Hertz Holdings was current in its Exchange Act reporting requirements (the letter agreement converted this obligation into eligibility to receive 114,000 PSUs). The performance measures for the PSUs consisted of HERC and its consolidated subsidiaries exceeding $350,000,000 of Corporate EBITDA for a specified 12-month period. In the event that HERC’s equipment rental business became a separate publicly-traded company, Mr. MacDonald was scheduled to receive an equity grant in the amount of $4,000,000 and was eligible for a matching equity grant equal to 1/3 of the stock he purchased (up to a $1,500,000 maximum match) within 60 days of the separation. The awards were scheduled to be issued when Hertz Holdings is current in its Exchange Act reporting requirements (pursuant to accounting and SEC rules, however, the value of the 114,000 PSUs is reflected in the 2014 Summary Compensation Table and 2014 Grants of Plan-Based Awards Table above).

  

Under this letter agreement, Mr. MacDonald received additional compensation, on an annualized basis, retroactive to the date Mr. MacDonald was appointed as interim CEO of Hertz Holdings, of $500,000 in recognition of his increased responsibilities as interim CEO in addition to the amounts he would receive under the Senior Executive Bonus Plan for his service as CEO of HERC. In addition, Mr. MacDonald received an award of an additional 23,000 PSUs under the 2008 Omnibus Plan. This award was scheduled to vest subject to achievement of a performance goal based on EBITDA of Hertz Holdings and its consolidated subsidiaries exceeding $20,000,000 during a specified one-year period. The awards were scheduled to be issued when Hertz Holdings is current in its Exchange Act reporting requirements (pursuant to accounting and SEC rules, however, the value of the 23,000 PSUs is reflected in the 2014 Summary Compensation Table and 2014 Grants of Plan-Based Awards Table above).

  

Mr. MacDonald resigned as CEO of HERC effective May 20, 2015 under circumstances that entitled him to the severance benefits provided under the employment agreement and the letter agreement in the case of a termination without cause. In connection with his separation, he entered into a Separation Agreement and General Release dated May 26, 2015. As required by the employment and letter agreements, Mr. MacDonald (1) was paid the product of (a) 2 times (b) the sum of his base salary and his target 2014 bonus, for a total of $5,060,000, on the 30th day following his date of termination; (2) was paid $3,000,000 on the 30th day following his date of termination (this separation payment represented compensation for the lost opportunity to earn the equity awards provided for by his employment agreement and the letter agreement); (3) is eligible to be paid a pro rata portion of his 2015 bonus, based on actual performance and with the individual modifier treated as satisfied at target; and (4) he will be provided continued health and other certain benefits under Hertz’s benefits plans for the same cost 24 months after his separation. In exchange, Mr. MacDonald agreed to a waiver and release of claims against us, to cooperate with us for a period of three years with respect to activities that occurred during his tenure at the Company and not to disparage us. In addition, Mr. MacDonald reaffirmed his commitment to be bound by the restrictive covenants concerning noncompetition and nonsolicitation of employees and clients contained in his employment agreement. Mr. MacDonald also made certain representations within his Separation Agreement and General Release stating that he did not: (i) engage in any conduct that constituted willful gross neglect or willful gross misconduct with respect to his employment duties which resulted or will result in material economic harm to Hertz Holdings; (ii) knowingly violate Hertz Holdings’ Standards of Business Conduct or similar policy; (iii) facilitate or engage in, and has no knowledge of, any financial or accounting improprieties or irregularities; and (iv) knowingly make any incorrect or false statements in any of his certifications relating to filings required under applicable securities laws or management representation letters, and has no knowledge of any incorrect or false statements in any filings required under applicable securities laws.

  

Mr. MacDonald’s letter agreement is filed as exhibit 10.1 to the Form 8-K the Company filed on November 14, 2014, and Mr. MacDonald’s separation agreement is filed as exhibit 10.38 to the Company’s 2014 Annual Report.

 

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EXECUTIVE COMPENSATION

 

Special Award Agreement with Robert J. Stuart

  

As discussed under “Determining What We Pay - Compensation Philosophy and the Role of the Compensation Committee” above, our Compensation Committee wants to ensure we retain key individuals. Accordingly, on July 1, 2014, Hertz Holdings entered into an agreement with Mr. Stuart to retain him and reward him for his valuable services to our Company. Mr. Stuart was eligible for, and was paid, $500,000 if he remained an employee of Hertz Holdings on July 1, 2015. Mr. Stuart is eligible for an additional payment of $500,000 if he remains an employee of Hertz Holdings on July 1, 2016. In the event Mr. Stuart is terminated without cause before July 1, 2016, Mr. Stuart will be eligible to be paid $500,000. In the event of Mr. Stuart’s death or disability before July 1, 2016, Mr. Stuart will be eligible to receive a pro-rated amount of his award based on the number of months he served as an employee before his death or disability. If Mr. Stuart’s employment is terminated for any other reason before July 1, 2016, he will be ineligible for any bonuses remaining under the agreement.

  

Mr. Stuart’s award agreement is filed as exhibit 10.39 to the Company’s 2014 Annual Report. 

 

Separation Agreement with Mark P. Frissora 

 

Mr. Frissora resigned as CEO of Hertz Holdings and Hertz on September 7, 2014 under circumstances that entitled him to the benefits provided by his employment agreement in the case of a termination without cause. In connection with his separation, he entered into a Separation Agreement and General Release dated September 15, 2014. Under the termination provisions of his employment agreement, (1) Mr. Frissora was paid the product of (a) 2.5 times (b) the sum of his base salary and his 2013 bonus, for a total of $10,496,835; (2) he was also eligible to be paid a pro rata portion of his EICP bonus as calculated in accordance with the process outlined in “Compensation Discussion and Analysis-Annual Cash Compensation-Annual Cash Incentive Program (EICP)” above; and (3) he became eligible for continued health and other certain benefits under Hertz’s benefits plans for the same cost for 24 months after his separation. In addition, under the terms of Mr. Frissora’s Separation Agreement and General Release Mr. Frissora will be provided car privileges through September 15, 2016 and eligibility to participate in the Company’s Retiree Car Plan. All equity awards that were not vested as of September 15, 2014 were terminated as of that date. In recognition of the fact that an effective registration statement with respect to options could not be filed until Hertz Holdings had complied with certain reporting obligations, Mr. Frissora was provided a period of 90 days to exercise any vested options once the reporting obligations had been met. In exchange, Mr. Frissora agreed to a waiver and release of claims against us, to cooperate with us for a period of 3 years with respect to activities that occurred during his tenure as CEO and not to disparage us. In addition, Mr. Frissora reaffirmed his commitment to be bound by the restrictive covenants concerning noncompetition and nonsolicitation of employees and clients contained in his employment agreement. Mr. Frissora also made certain representations within his Separation Agreement and General Release stating that he did not (i) engage in any conduct that constituted willful gross neglect or willful gross misconduct with respect to his employment duties which resulted or will result in material economic harm to the Company; (ii) knowingly violate Hertz Holdings’ Standards of Business Conduct or Directors’ Code of Business Conduct and Ethics; (iii) facilitate or engage in, and possess any knowledge of, any financial or accounting improprieties or irregularities; and (iv) knowingly make any incorrect or false statements in any of his certifications relating to filings required under applicable securities laws or management representation letters, and have any knowledge of any incorrect or false statements in any filings required under applicable securities laws.

 

Mr. Frissora’s employment agreement is filed as exhibit 10.28 to the Annual Report on Form 10-K the Company filed on March 3, 2009 and Mr. Frissora’s separation agreement is filed as exhibit 10.1 to the Form 8-K the Company filed on September 19, 2014.

 

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EXECUTIVE COMPENSATION

 

Separation Agreement with Scott P. Sider 

 

Mr. Sider retired as Group President, Hertz-Rent-A-Car Americas, from our Company on August 18, 2014, under circumstances that entitled him to the benefits payable under the Severance Plan for Senior Executives in the event of a termination without cause. 

 

Consistent with the terms of the Severance Plan for Senior Executives, (1) Mr. Sider was paid the product of (a) 2 times (b) the sum of his base salary and his average bonus for the prior three years, for a total of $2,656,954, with such amount to be paid over an 18-month period; (2) he became eligible to be paid a prorated EICP bonus as calculated in accordance with the process outlined in “Compensation Discussion and Analysis-Annual Cash Compensation-Annual Cash Incentive Program (EICP)” above; (3) he became eligible for continued health and other certain benefits under Hertz’s benefits plans for the same cost for 24 months after his separation; and (4) he received $25,000 in lieu of outplacement services (the Severance Plan for Senior Executives provides up to $25,000 of outplacement services). In addition to the benefits provided for under the Severance Plan for Senior Executives, Mr. Sider’s Separation Agreement and General Release provided for the following additional benefits, including (1) for vesting of Mr. Sider’s outstanding stock options that would have vested on or before March 31, 2015 if Mr. Sider had remained employed through that date vested; (2) that vested options could be exercised, if not expired, through August 18, 2016, (3) Mr. Sider’s PSUs and price-vested stock units which would have otherwise vested by March 31, 2015 had Mr. Sider remained employed, vested on the date when the Compensation Committee certified the performance criteria for the vesting of such PSUs; (4) Mr. Sider will be provided car privileges through August 18, 2016 and (5) full vesting in his SERP II benefits. In exchange, Mr. Sider agreed to a waiver and release of claims against us, not to compete against us or solicit any Hertz employees for 18 months after his retirement and not to disparage us.

  

Mr. Sider’s separation agreement is filed as exhibit 10.1 to the Form 8-K the Company filed on August 19, 2014.

  

Separation Agreement with J. Jeffrey Zimmerman 

 

Mr. Zimmerman resigned as Executive Vice President, General Counsel and Secretary of Hertz Holdings and Hertz effective December 5, 2014, under circumstances that entitled him to the benefits payable under the Severance Plan for Senior Executives in the event of a termination without cause.

 

Consistent with the terms of the Severance Plan for Senior Executives, Mr. Zimmerman (1) was paid the product of (a) 1.5 times (b) the sum of his base salary and his average bonus for the prior three years, for a total of $1,627,603 with such amount to be paid over an 18-month period; (2) became eligible to be paid a prorated EICP bonus as calculated in accordance with the process outlined in “Compensation Discussion and Analysis-Annual Cash Compensation-Annual Cash Incentive Program (EICP)” above; (3) became eligible for continued health and other certain benefits under Hertz’s benefits plans for the same cost for 18 months after his separation; and (4) he received $25,000 in lieu of outplacement services (the Severance Plan for Senior Executives provides up to $25,000 of outplacement services). In addition to the benefits provided for under the Severance Plan for Senior Executives, Mr. Zimmerman’s Separation Agreement and General Release provided for the following additional benefits, including (1) for vesting of Mr. Zimmerman’s outstanding stock options and performance shares that would have vested through March 31, 2015 if Mr. Zimmerman had remained employed through that date (2) the tolling of post-termination exercise periods until Hertz Holdings’ filing of all SEC-required reports.

   

In addition, under the Separation Agreement and General Release Mr. Zimmerman agreed to provide through June 30, 2015 general consulting services as requested by the Company and outside counsel. In exchange, Mr. Zimmerman agreed to a waiver and release of claims against us, to cooperate with us for a period of three years with respect to activities that occurred during his tenure at Hertz and not to disparage us. Mr. Zimmerman made

 

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EXECUTIVE COMPENSATION

 

certain representations within his Separation Agreement and General Release stating that he did not: (i) engage in any conduct that constituted willful gross neglect or willful gross misconduct with respect to his employment duties which resulted or will result in material economic harm to the Company; (ii) knowingly violate Hertz Holdings’ Standards of Business Conduct; (iii) facilitate or engage in, and has no knowledge of, any financial or accounting improprieties or irregularities; and (iv) knowingly make any incorrect or false statements in any of his certifications relating to filings required under applicable securities laws or management representation letters, and has no knowledge of any incorrect or false statements in any filings required under applicable securities laws.

 

Mr. Zimmerman’s separation agreement is filed as exhibit 10.2 to the Form 8-K the Company filed on December 5, 2014.

  

Separation Agreement with Richard D. Broome

  

Mr. Broome resigned as Executive Vice President, Corporate Affairs and Communications of Hertz Holdings and Hertz effective July 1, 2015, under circumstances that entitled him to the benefits payable under the Severance Plan for Senior Executives in the event of a termination without cause.

 

Consistent with the terms of the Severance Plan for Senior Executives, Mr. Broome (1) was paid the product of (a) 1.5 times (b) the sum of his base salary and his average bonus for the prior three years, for a total of $924,800 with such amount to be paid over an 18-month period; (2) is eligible to be paid a pro rata portion of his 2015 bonus, based on actual performance and with the individual modifier treated as satisfied at target; (3) became eligible for continued health and other certain benefits under Hertz’s benefits plans for the same cost for 18 months after his separation; and (4) received $25,000 in lieu of outplacement services (the Severance Plan for Senior Executives provides up to $25,000 of outplacement services). In addition to the benefits provided for under the Severance Plan for Senior Executives, Mr. Broome’s Separation Agreement and General Release provided for the following additional benefits, including (1) for vesting of Mr. Broome’s outstanding performance shares that would have vested in 2015 if Mr. Broome had remained employed through the applicable date of Compensation Committee certification and (2) the tolling of post-termination exercise periods until Hertz Holdings’ filing of all SEC-required reports.

  

Mr. Broome’s separation agreement is filed as exhibit 10.40 to the 2014 Annual Report.

  

Change in Control Agreements

  

The NEOs, other than Mr. Frissora, have entered into Change in Control Agreements. The Change in Control Agreements will continue to automatically renew for one-year extensions unless we give 15-months’ notice. In the event of a change in control during the term of the Change in Control Agreements, the agreement will remain in effect for two years following the change in control.

 

The Change in Control Agreements are “double trigger” agreements, meaning that any payments and benefits are paid only if (i) there is a change in control of Hertz Holdings and (ii) the covered executive is terminated by us without “cause” or by the covered executive with “good reason”, in either case within two years following the change in control. If this occurs the covered executive will be entitled to the following payments and benefits:  

	•	a lump sum cash payment reflecting accrued but unpaid compensation equal to the sum of (i) the executive’s annual base salary earned but not paid through the date of termination, (ii) one-twelfth of the target annual bonus payable to the executive, multiplied by the number of full and partial months from the beginning of the calendar year during which the termination occurs, and (iii) all other amounts to which the executive is entitled under any compensation plan applicable to the executive, payable within 30 days of the executive’s termination;

 

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	•	a lump sum cash payment equal to a multiple (the “severance multiple”) of the sum of the executive’s annual base salary in effect immediately prior to the termination and the average actual bonuses paid to the covered executive for the three years prior to the year in which the termination occurs, or, for executives without a three-year bonus history, by reference to target levels. The severance multiples are: for Messrs. Tague, MacDonald, and Taride, 2.5, for Messrs. Kennedy and Sider, 2.0 and for Messrs. Broome, Stuart and Zimmerman, 1.5;

	•	credit of an additional number of years equal to the severance multiple to the executive’s years of age and “Years of Service” for all purposes under our SERP II (described at “Pension Benefits”) and, to the extent such covered executive does not have at least 5 “years of service”, the covered executive shall be fully vested in the benefit under our SERP II as increased pursuant to the credit referred to above;
	•	continuation of all life, medical, dental and other welfare benefit plans (other than disability plans) until the earlier of the end of a number of years following the executive’s termination of employment equal to the severance multiple and the date on which the executive becomes eligible to participate in welfare plans of another employer;
	•	within the period of time from the date of the executive’s termination through the end of the year following the date of termination, outplacement assistance up to a maximum of $25,000; and
	•	with respect to Mr. Taride, eligibility to immediately participate in the retiree car plan (described at “Retiree Car Benefit”).

  

The foregoing are intended to be in lieu of any other payments and benefits to be made in connection with a covered executive’s termination of employment while the agreements are in effect. Covered executives must execute a general release of claims to receive the foregoing severance payments and benefits. After a change in control, in the event the covered executive’s employment is terminated by reason of death, “Disability,” or “Retirement” (as those terms are defined in the Change in Control Agreement) then the executive will be entitled to his or her benefits in accordance with the retirement or benefit plans of the Company in effect. After a change in control, in the event the covered executive’s employment is terminated by reason of “Cause” or by the executive without “Good Reason” (as those terms are defined in the Change in Control Agreement) then the Company shall pay the executive his or her full base salary at the rate in effect at the time notice of termination was given and shall pay any other amounts according to any other compensation plans or programs in effect.

 

In 2010, we revised our Change in Control Agreement to remove tax gross-up provisions. Messrs. Tague, MacDonald and Kennedy entered into this revised form of the Change in Control Agreement that does not provide for tax gross-ups on any golden parachute excise tax. Mr. Sider was party to this revised form of Change in Control Agreement at the time of his separation. 

 

For executive officers who joined our Company before 2010, their Change in Control Agreements contain a tax-gross up provision. In the event that compensation provided for in the agreement or in any other plan or arrangement covering the NEO is subject to the golden parachute excise tax, Mr. Stuart will be entitled to receive a gross-up payment in an amount such that after payment by the executive of all taxes on the gross-up payment, the executive shall retain a portion of the gross-up payment equal to the excise tax. However, to the extent compensation paid to the executive in connection with the change in control does not exceed 110% of the specified statutory threshold amount giving rise to excise tax, then no additional payment will be paid and the compensation will be reduced below such statutory threshold. Messrs. Broome and Zimmerman were party to this previous form of Change in Control Agreement at the time of their respective separations. 

 

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The agreement also contains a confidentiality covenant that extends indefinitely following the executive’s termination of employment and non-competition and non-solicitation covenants that extend for 12 months following the executive’s termination of employment. In the event that the executive breaches these covenants, the Company is entitled to stop making payments to the executive and seek injunctive relief in certain circumstances.

 

In addition, Hertz Europe Limited and Mr. Taride have entered into a non-compete agreement which provides that for the 12 months after the termination of his employment with us, Mr. Taride will not (i) compete with us in the countries in which we operated or actively made arrangements to plan to operate during the 12 months preceding such termination of employment or (ii) solicit or entice away any key employees from us. Hertz Europe Limited would be required to give Mr. Taride 12-months’ notice to terminate his employment for any reason other than misconduct.

  

Severance Plan for Senior Executives

  

The Severance Plan for Senior Executives provides benefits to senior executives whose employment is terminated other than terminations of employment that qualify for benefits under the Change in Control Agreements. Messrs. Broome, Kennedy, Sider, Stuart, Taride and Zimmerman were designated as participants in the Severance Plan for Senior Executives. If any covered executive is terminated for death, “Cause,” “Permanent Disability” or “Retirement” (as those terms are defined in the Severance Plan for Senior Executives) the executive will not be entitled to any benefits under the Severance Plan for Senior Executives. However, if the covered executive is terminated for any other reason (other than described in the preceding sentence), the executive will be or was entitled to the following payments and benefits:

	•	a pro rata portion of the annual bonus that would have been payable to the participant, payable at the same time bonuses are paid to other executives;

	•	cash payments in the aggregate equal to a multiple (the “severance multiple”), based on the executive’s position, of the executive’s annual base salary in effect immediately prior to the date of termination and the average of the annual bonuses payable to the executive, with respect to the three calendar years  preceding the year in which the termination occurs; or, for executives without a three-year bonus history, by reference to target levels; or, if an executive has not had an opportunity to earn or be awarded one  full year’s bonus as of his or her termination of employment, the executive’s target bonus for the year  of termination, payable in equal installments over a period of whole and/or partial years equal to the  severance multiple. The severance multiples are: for Messrs. Sider and Taride, 2.0 and Messrs. Broome, Kennedy, Stuart and Zimmerman 1.5;
	•	continuation of all medical, dental and other welfare benefit plans (other than disability plans) until the earlier of the end of a number of years following the executive’s termination of employment equal to the severance multiple and the date on which the executive becomes eligible to participate in welfare plans of another employer; and
	•	within the period of time from the date of executive’s termination through the end of the year following the date of termination, outplacement assistance up to a maximum of $25,000.

  

Executives must execute a general release of claims to receive the foregoing severance payments and benefits. The Severance Plan for Senior Executives also contains a confidentiality covenant that extends for 24 months following the executive’s termination of employment and non-competition and non-solicitation covenants that extend for a period of years following the executive’s termination of employment equal to the severance multiple.

 

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If an executive is entitled to severance payments and benefits under the Severance Plan for Senior Executives and a Change in Control Agreement, payments and benefits will be made under the Change in Control Agreement rather than the Severance Plan for Senior Executives.

  

Treatment of EICP Payments and Equity Compensation upon a Termination or a Change in Control

  

The following chart generally summarizes the treatment of EICP payments and equity compensation for each of our NEOs under the Senior Executive Bonus Plan, the Hertz Global Holdings Stock Incentive Plan (“SIP”) and the 2008 Omnibus Plan.  

Award

Death/Disability

Voluntary

Retirement

With  Cause

Without Cause

Change In Control If Not Assumed/ Substituted(1)

EICP

Forfeit(2)

Forfeit(2)

Forfeit(2)

Forfeit(2)

Pro-rata(3)

Pro-rata

SIP Options(4)

N/A

N/A

N/A

Forfeit all

N/A

Vested cashed out

Omnibus Plan Options

Unvested vest

Forfeit unvested

Forfeit unvested

Forfeit all

Forfeit unvested

Unvested vest

PSUs(5)

Pro-rata

Forfeit unvested

Forfeit unvested

Forfeit all

Forfeit unvested

Unvested vest

PVSUs(6)

Pro-rata

Forfeit unvested

Forfeit unvested

Forfeit all

Forfeit unvested

Unvested vest

Other Outstanding Awards

Pro-rata

Forfeit  unvested

Forfeit unvested

Forfeit all

Forfeit unvested

Unvested vest

 

(1)	The terms of the 2008 Omnibus Plan contain “double-trigger” provisions in the event of a change in control.  If the options or units are exchanged for or replaced by a substitute award, then the awards will not automatically vest upon a change in control.  However, if a change in control occurs and the awards are not exchanged or replaced, all options shall immediately become exercisable, the restriction period on all  restricted stock units shall lapse immediately prior to such change in control, and outstanding PSUs issued to our NEOs generally vest.
(2)	Assumes that employment ends prior to the end of the fiscal year of the Company (a “Performance Period”) under the Senior Executive Bonus Plan.
(3)	Amount is payable under the Severance Plan for Senior Executives.
(4)	All options held by the NEOs are currently vested under the SIP.
(5)	In 2012, 2013 and 2014, we made PSUs grants to the NEOs pursuant to Hertz Holdings’ 2008 Omnibus Plan which were based on the achievement of Corporate EBITDA and, in the case of 2013 and 2014, Corporate EBITDA margin. With respect to such PSUs, if the employment of any of our NEOs is terminated by reason of death or disability on or prior to the first anniversary of the date PSUs were awarded, the officer will retain a pro rata portion of the PSUs, based on the number of days elapsed since the date of grant, and the remaining PSUs will be forfeited. The retained PSUs will be eligible to vest if the performance goal is achieved for the first performance year and will be forfeited if the performance goal is not achieved. If the employment of a NEO is terminated by reason of death or disability after the first anniversary of the date that the PSUs were awarded, then, based on the applicable achievement of the performance goals in the first year and the cumulative two-year period, a pro rata portion of the PSUs will vest, based on the number of days elapsed since the first anniversary of the grant date. If the employment of a NEO is terminated by reason of death or disability after the second anniversary of the date that the PSUs were awarded, then, based on the applicable

 

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	achievement of the performance goals in the first year and the cumulative two-year period, a pro rata portion of the PSUs will vest, based on the number of days elapsed since the second anniversary of the grant date. If a NEO’s employment is terminated for any other reason, PSUs will be forfeited.
(6)	In March 2012, we made price-vested stock units grants to the NEOs pursuant to Hertz Holdings’ 2008 Omnibus Plan. With respect to such price-vested stock units, if the employment of any of our NEOs is terminated by reason of death or disability on or prior to the third or fourth anniversary of the grant date, as applicable, the officer will retain 50% of the price-vested stock units granted multiplied by a fraction, which is the number of months which have elapsed since the grant date of the price-vested stock units divided by 36 or 48, as applicable, and the remaining PSUs will be forfeited. If a NEO’s employment is terminated for any other reason, price-vested stock units will be forfeited.

  

Supplemental Retirement Benefits upon a Termination and Change in Control 

 

Messrs. Stuart and Broome (who separated from our Company in 2015) participated in the SERP II in 2014. The SERP II is described above under “Pension Benefits.” Under the SERP II, in connection with a change in control, if any of these executives’ employment is terminated other than for cause or a voluntary resignation, then the executive will become immediately vested in the entire benefit accumulated under the SERP II even if he or she has not attained age 55 at the time of termination. 

 

Retiree Car Benefit 

 

As described at “Compensation Discussion and Analysis-Other Compensation Elements-Retirement Benefits,” we also maintain a post-retirement assigned car benefit plan under which we provide certain executives who, at the time of retirement, are at least 58 years old and have been an employee of the Company for at least 20 years, with a car from our fleet and insurance on the car for the participant’s benefit. In the event of a termination following a change in control as described in “Change in Control Agreements”, Mr. Taride will be entitled to the retiree car benefit as set forth above.

 

Payments upon Termination or Change in Control 

 

The following tables outline the value of payments and benefits that each NEO, other than Messrs. Frissora, Sider and Zimmerman, who were awarded severance payments as set forth under “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers” above, would receive under the various termination scenarios described above based on if (i) the termination occurred on December 31, 2014, (ii) all stock awards were paid out at $24.94, the closing price of Hertz Holdings’ common stock on December 31, 2014, (iii) for the applicable change in control, the termination occurred following the change in control (“double trigger”), (iv) no replacement awards were granted by our Compensation Committee and (v) the Compensation Committee took no further actions for any given award except as set forth under the applicable plan. In addition, the value of pension benefits that are reported under the 2014 Pension Benefits table and the participant’s 401(k) Plan amounts are excluded from the below tables, except to the extent that there are any enhancements as a result of the applicable termination event.

 

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John P. Tague

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			—			—			—			9,062,500
Bonus			—			108,750	(1)		—			108,750	(1)		108,750
Excise tax gross up			—			—			—			—			N/A
Outplacement			—			—			—			—			25,000
Life Insurance Payment			—			—			—			1,450,000	(2)		—
Payment for Awarded PSUs			—			—			—			—			—
Payment for Awarded Options			—			79,040	(3)		—			79,040	(3)		2,190,000
Total			—			187,790			—			1,637,790			11,386,250

(1)	Reported as actual bonus paid for 2014.
(2)	Life insurance payment only payable upon death.
(3)	Represents the incremental vesting value of outstanding awards which vest in the event of the specified termination event.

 

Thomas C. Kennedy

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			1,831,500			—			—			2,442,000
Pro rata bonus			—			280,500	(1)		—			—			561,000
Continued benefits			—			10,707			—			—			15,604	(2)
Outplacement			—			25,000			—			—			25,000
Life Insurance Payment			—			—			—			660,000	(3)		—
Payment for Outstanding PSUs			—			—			—			126,635	(4)		1,872,620
Total			—			2,147,707			—			786,635			4,916,224

(1)	Reported as actual bonus paid for 2014.
(2)	Includes life insurance benefits in addition to healthcare benefits for covered period.
(3)	Life insurance payment only payable upon death.
(4)	Represents the incremental vesting value of outstanding awards which vest in the event of death or disability.

 

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Brian P. MacDonald(1)

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			5,060,000			—			—			6,325,000
Pro rata bonus			—			834,493	(2)		—			—			1,430,000
Cash to Replace Equity Award(3)			—			3,000,000			—			—			3,000,000
Continued healthcare benefits			—			16,444			—			—			23,323
Outplacement			—			—			—			—			25,000
Life Insurance Payment			—			—			—			1,100,000	(4)		—
Total			—			8,910,937			—			1,100,000			10,803,323

(1)	Mr. MacDonald resigned effective May 20, 2015. For a description of his separation agreement, see “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Employment Arrangements with Brian P. MacDonald.”
(2)	Pro-rata bonus reported as actual bonus paid for 2014 year pursuant to Mr. MacDonald’s employment agreement.
(3)	The amounts payable are pursuant to Mr. MacDonald’s letter agreement.
(4)	Life insurance payment only payable upon death.

 

Michel Taride

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			2,355,506			—			—			2,944,382
Pro rata bonus			—			59,638	(1)		—			—			500,811
Continued benefits			—			54,020			—			—			80,150	(2)
Outplacement			—			25,000			—			—			25,000
Life Insurance Payment			—			—			—			2,356,756	(3)		—
Payment for Outstanding PSUs			—			—			—			1,222,061	(4)		3,816,528
Payment for Outstanding Options			—			—			—			222,920	(4)		222,920
Retiree Car Benefit			—			301,000			301,000			301,000	(5)		301,000
Total(6)			—			2,795,164			301,000			4,102,737			7,890,791

 

(1)	Reported as actual bonus paid for 2014.
(2)	Includes life insurance benefits in addition to healthcare benefits for covered period.
(3)	Life insurance payment only payable upon death.
(4)	Represents the incremental vesting value of outstanding awards which vest in the event of death or disability.
(5)	Value represents maximum amount of retiree car benefits in the event of disability. In the event of death, Mr. Taride’s spouse would be eligible for car privileges at an amount below the maximum amount.
(6)	Amounts for Mr. Taride have been translated from pounds sterling to U.S. dollars at the spot exchange rate of 1.5216.

 

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EXECUTIVE COMPENSATION

 

Robert J. Stuart

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			1,445,007			—			—			1,445,007
Pro rata bonus			—			38,703	(1)		—			—			378,750
Special Award Bonuses			—			1,000,000			—			250,000			1,000,000
Continued benefits			—			10,257			—			—			11,614	(2)
SERP II Increase			—			—			—			—			98,900
Outplacement			—			25,000			—			—			25,000
Excise tax gross up			—			—			—			—			2,170,498
Life Insurance Payment			—			—			—			505,000	(3)		—
Payment for Outstanding PSUs			—			—			—			914,086	(4)		3,017,211
Payment for Outstanding Options			—			—			—			119,644	(4)		119,644
Total			—			2,518,967			—			1,788,730			8,266,624

 

(1)	Reported as actual bonus paid for 2014.
(2)	Includes life insurance benefits in addition to healthcare benewfits for covered period.
(3)	Life insurance payment only payable upon death.
(4)	Represents the incremental vesting value of outstanding awards which vest in the event of death or disability.

 

Richard D. Broome(1)

Benefit		Termination For Cause ($)			Termination Without Cause/with Good Reason ($)			Termination by reason of Retirement ($)			Termination by reason of Death, Disability ($)			Termination following a Change in Control ($)
Severance payment			—			1,128,883			—			—			1,128,883
Pro rata bonus			—			28,219	(2)		—			—			276,150
Continued benefits			—			10,932			—			—			12,772	(3)
SERP II Increase			—			—			—			—			291,800
Outplacement			—			25,000			—			—			25,000
Excise tax gross up			—			—			—			—			—
Life Insurance Payment			—			—			—			394,500	(4)		—
Payment for Outstanding PSUs			—			—			—			545,558	(5)		1,616,310
Payment for Outstanding Options			—			—			—			96,121	(5)		96,121
Total			—			1,193,034			—			1,036,179			3,447,036

(1)	Mr. Broome resigned effective July 1, 2015. For a description of his separation agreement, see “Employment Agreements, Change in Control Agreements and Separation Agreements-Other Named Executive Officers-Separation Agreement with Richard D. Broome.”
(2)	Reported as actual bonus paid for 2014.
(3)	Includes life insurance benefits in addition to healthcare benefits for covered period.
(4)	Life insurance payment only payable upon death.
(5)	Represents the incremental vesting value of outstanding awards which vest in the event of death or disability.

 

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NON-GAAP MEASURES

 

EBITDA is defined as net income before net interest expense, income taxes and depreciation (which includes revenue earning equipment lease charges) and amortization. Corporate EBITDA, as presented herein, represents EBITDA as adjusted for car rental fleet interest, car rental fleet depreciation and certain other items, as described in more detail in the accompanying tables. Each of the measured presented herein reflects the financial results of Hertz Holdings.

 

Management uses EBITDA and Corporate EBITDA as operating performance and liquidity metrics for internal monitoring and planning purposes, including the preparation of our annual operating budget and monthly operating reviews, as well as to facilitate analysis of investment decisions, profitability and performance trends. Further, EBITDA enables management and investors to isolate the effects on profitability of operating metrics such as revenue, operating expenses and selling, general and administrative expenses, which enables management and investors to evaluate our business segments that are financed differently and have different depreciation characteristics and compare our performance against companies with different capital structures and depreciation policies. We also present Corporate EBITDA as a supplemental measure because such information is utilized in the calculation of financial covenants under Hertz’s senior credit facilities and in the determination of certain executive compensation.

 

Corporate EBITDA Margin is calculated as the ratio of Corporate EBITDA to total revenues and is used by the Compensation Committee to determine certain executive compensation, primarily in the form of PSUs.

 

EBITDA, Corporate EBITDA and Corporate EBITDA Margin are not recognized measurements under U.S. GAAP. When evaluating our operating performance or liquidity, investors should not consider EBITDA and Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance and liquidity as determined in accordance with U.S. GAAP, such as net income, operating income or net cash provided by operating activities.

 

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EXECUTIVE COMPENSATION

 

The following tables reconcile income (loss) before income taxes, the most comparable U.S. GAAP measure, to EBITDA and Corporate EBITDA and presents the calculation of Corporate EBITDA Margin utilizing the U.S. GAAP measure total revenues, in each case of Hertz Holdings.

		Year Ended December 31,
(In millions)		2014				2013 (As Restated)(a)				2012 (As Restated)(a)
Income (loss) before income taxes		$	(23	)		$	603			$	365
Depreciation and amortization			3,400				2,872				2,389
Interest, net of interest income			648				707				647
EBITDA		$	4,025			$	4,182			$	3,401
Car rental fleet depreciation			(2,705	)			(2,234	)			(1,857	)
Car rental fleet interest			(277	)			(302	)			(297	)
Car rental fleet debt - related charges(b)			31				32				37
Non-cash stock-based employee compensation charges(c)			10				35				30
Restructuring and restructuring related charges(d)			165				99				49
Acquisition related costs and charges(e)			10				19				147
Integration expenses(f)			9				43				—
Equipment Rental spin-off costs(g)			39				—				—
Relocation costs(h)			9				7				—
Premiums paid on debt(i)			—				29				—
Loss on extinguishment of debt(j)			1				35				—
Impairment charges and asset write-downs(k)			34				40				—
Other extraordinary, unusual or non-recurring items(l)			(20	)			16				44
Corporate EBITDA		$	1,331			$	2,001			$	1,554
Total Revenues			11,046				10,775				9,013
Corporate EBITDA Margin			12	%			19	%			17	%

(a)	For further details regarding the restatement see Note 2, “Restatement” to the Notes to our consolidated financial statements included in the 2014 Annual Report under the caption Item 8, “Financial Statements and Supplementary Data.”
(b)	Represents non-cash charges relating to the amortization of deferred debt financing costs and debt discounts.
(c)	For twelve months ended December 31, 2014, excludes $6 million of stock-based compensation forfeitures included in restructuring and restructuring related charges.
(d)	Represents expenses incurred under restructuring actions as defined in U.S. GAAP. For further information on restructuring costs, see Note 15 “Restructuring,” to the Notes to our consolidated financial statements included in the 2014 Annual Report under the caption Item 8, “Financial Statements and Supplementary Data”  and incremental costs incurred directly supporting our business transformation initiatives. Such costs include  transition costs incurred in connection with our business process outsourcing arrangements and incremental  costs incurred to facilitate business process re-engineering initiatives that involve significant organization  redesign and extensive operational process changes. Amount in 2014 also includes consulting costs and  legal fees related to the accounting review and investigation, one-time costs to terminate certain marketing  and co-branding agreements, and costs associated with the separation of certain executives during the year.

  

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(e)	In 2012, primarily represents Dollar Thrifty acquisition related expenses, change in control expenses, ‘Day-1’ compensation expenses and other adjustments related to the Dollar Thrifty acquisition, loss on the Advantage  divestiture, expenses related to additional required divestitures and costs associated with the Dollar Thrifty  acquisition and a gain on the investment in Dollar Thrifty stock.
(f)	Primarily represents Dollar Thrifty integration related expenses.
(g)	Represents expense associated with the anticipated HERC spin-off transaction of which $28 million were  incurred by HERC and $11 million were incurred by Corporate.
(h)	Represents non-recurring costs incurred in connection with the relocation of our corporate headquarters to  Estero, Florida that were not included in restructuring expenses. Such expenses primarily include duplicate  facility rent, certain moving expenses, and other costs that are direct and incremental due to the relocation.
(i)	In 2013, represents premiums paid to redeem our 8.50% European Fleet Notes.
(j)	In 2013, represents extinguishment of debt for Senior Convertible Notes.
(k)	In 2014, primarily comprised of impairments related to our former corporate headquarters building in New Jersey and HERC revenue earning equipment held for sale. Additionally, 2014 includes write-downs of assets associated with a terminated business relationship. In 2013, primarily related to a change in the carrying value of the vehicles subleased to FSNA and its subsidiary, Simply Wheelz.
(l)	In 2013, primarily represents cash premiums of $12 million associated with the conversion of the Senior  Convertible Notes. In 2012, primarily represents expenses related to the withdrawal from a multiemployer  pension plan, litigation accrual and expenses associated with the impact of Hurricane Sandy.

 

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ANNUAL MEETING PROPOSALS: SAY ON PAY

 

PROPOSAL 2: APPROVAL, BY A NON-BINDING ADVISORY VOTE,
OF THE NAMED EXECUTIVE OFFICERS’ COMPENSATION

 

We are offering you a non-binding, advisory vote to approve the compensation of our NEOs, as disclosed in the Compensation Discussion and Analysis and the related narrative and tabular disclosures, also known as a “Say on Pay” vote.

 

As detailed in the Compensation Discussion and Analysis, we have designed our compensation programs, among other things, to: (i) properly incentivize our NEOs to accomplish our short- and long-term objectives, (ii) be in line with similar pay practices and overall compensation levels at other, similarly-situated companies, (iii) reward our NEOs for not only their individual performance, but the performance of their business unit and the Company overall and (iv) hire and retain our NEOs. In addition, as further detailed in the Compensation Discussion and Analysis, we continually revise our pay practices to be in line with market practices and compensation norms.

 

Accordingly, you may cast an advisory vote on the following resolution at the 2015 annual meeting:

 

“RESOLVED, that the compensation awarded to the named executive officers as disclosed in the Compensation Discussion and Analysis, Summary Compensation Table and related tabular and narrative disclosures in this proxy statement is hereby APPROVED.”

 

Effect of Proposal

 

The effect of the Say on Pay vote is advisory only and non-binding. However, the Board and Compensation Committee will consider the results of the vote in determining the compensation of our NEOs and our compensation programs generally. The Board values the opinions of our stockholders and is committed to considering their opinions in making decisions. If any stockholder wishes to communicate with the Board regarding executive compensation, the Board can be contacted using the procedures outlined in “Stockholder Communications with the Board” set forth in this proxy statement.

 

Required Vote to Approve the Proposal

 

A majority of shares present and entitled to vote is required to approve the proposal. Under applicable Delaware law, abstentions are counted as shares entitled to vote at the annual meeting and therefore will have the same effect as a vote “against” this proposal. Broker non-votes will have no effect in determining the outcome of this proposal.

 

The Board recommends a vote FOR approval, by a non-binding advisory
vote, of the named executive officers’ compensation.

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

PROPOSAL 3: RE-APPROVAL OF THE MATERIAL TERMS OF THE
PERFORMANCE OBJECTIVES UNDER THE COMPANY’S 2008
OMNIBUS PLAN

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

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ANNUAL MEETING PROPOSALS: RE-APPROVAL OF 2008 OMNIBUS PLAN GOALS

 

The Board recommends a vote FOR the re-approval of the material terms of the performance objectives under the Company’s 2008 Omnibus Plan.

 

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ANNUAL MEETING PROPOSALS: AUDITOR APPROVAL

 

PROPOSAL 4: RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2015

 

Our Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the Company for 2015. Our Audit Committee believes that PricewaterhouseCoopers LLP is well-qualified.

 

PricewaterhouseCoopers LLP has served as the independent registered public accounting firm for the Company since 2005 and for Hertz since 1987. We are not required to have our stockholders ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm, but we are doing so because we believe it is a good corporate practice. The Audit Committee will consider, but is not obligated to abide by, the outcome of this vote in determining whether to engage PricewaterhouseCoopers LLP in 2016 or another independent registered public accounting firm without submitting the matter to our stockholders. A representative of PricewaterhouseCoopers LLP will be present at the annual meeting with the opportunity to make a statement if he or she so desires and to respond to appropriate questions.

 

Required Vote to Approve the Proposal

 

A majority of shares present and entitled to vote is required to approve the proposal. Under applicable Delaware law, abstentions are counted as shares entitled to vote at the annual meeting and therefore will have the same effect as a vote “against” this proposal. Broker non-votes will have no effect in determining the outcome of this proposal.

 

The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers LLP as the Company’s independent registered
public accounting firm for the year 2015.

  

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AUDITOR INFORMATION

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

 

The Company’s fees for services performed by its principal accounting firm, PricewaterhouseCoopers LLP, during fiscal years 2014 and 2013 were as follows:

(in millions)		2014			2013
Audit fees(1)		$	14		$	10
Audit-related fees(2)			—			1
Tax fees(3)			1			1
All other fees			—			—
Total		$	15		$	12

 

(1)

Audit fees were for services rendered in connection with the audit of the financial statements included in the Annual Reports of the Company and Hertz on Form 10-K, reviews of the financial statements included in the Company’s and Hertz’s Quarterly Reports on Form 10-Q, attestation of the effectiveness of our internal controls over financial reporting, statutory audits, and providing comfort letters in connection with our financing transactions.

 

(2)	Audit-related fees were for services rendered in connection with due diligence, assurance services, and employee benefit plan audits.

 

(3)	Tax fees related to our Like Kind Exchange Program and tax audit assistance.

 

Our Audit Committee’s charter requires the Audit Committee to pre-approve all audit and permitted non-audit services to be performed by our independent registered public accounting firm; however, the Audit Committee is permitted to delegate pre-approval authority to the Chair of the Audit Committee, who must then provide a report to the full Audit Committee at its next scheduled meeting. All audit and non-audit fees were pre-approved by the Audit Committee in 2014. In May of 2015, the Audit Committee adopted a revised pre-approval policy setting forth the types of services and amounts subject to pre-approval for the 2015 fiscal year.

 

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AUDIT COMMITTEE REPORT

 

AUDIT COMMITTEE REPORT

 

The Audit Committee has reviewed and discussed with management of the Company and PricewaterhouseCoopers LLP, the independent registered public accounting firm for the Company, the audited financial statements of the Company for the fiscal year ended December 31, 2014 (the “Audited Financial Statements”).

 

The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended, as in effect on the date of this proxy statement.

 

The Audit Committee has: (i) considered whether non-audit services provided by PricewaterhouseCoopers LLP are compatible with its independence; (ii) received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence; and (iii) discussed with PricewaterhouseCoopers LLP its independence.

 

Based on the reviews and discussions described above, the Audit Committee recommended to the Board of Directors of the Company that the Audited Financial Statements be included in the 2014 Annual Report on Form 10-K for the fiscal year ended December 31, 2014 for filing with the SEC.

	THE AUDIT COMMITTEE
	Carl T. Berquist, Chair
	Michael J. Durham
	Vincent J. Intrieri
	Debra J. Kelly-Ennis
	Michael F. Koehler

 

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SHAREHOLDER PROPOSAL

 

PROPOSAL 5: SHAREHOLDER PROPOSAL ON A POLICY REGARDING ACCELERATED VESTING OF
EQUITY AWARDS OF SENIOR EXECUTIVES UPON A CHANGE IN CONTROL

 

 

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SHAREHOLDER PROPOSAL

 

 

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SHAREHOLDER PROPOSAL

 

 

The Board recommends a vote AGAINST approval of the shareholder
proposal on a policy regarding accelerated vesting of equity awards of
senior executives upon a change in control.

 

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BENEFICIAL OWNERSHIP

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, DIRECTORS AND OFFICERS

 

 

Except as otherwise indicated in the footnotes to this table, each of the beneficial owners listed has, to the knowledge of Hertz Holdings, sole voting and investment power with respect to the indicated shares of common stock. Unless otherwise indicated, the address for each individual listed below is c/o Hertz Global Holdings, Inc., 999 Vanderbilt Beach Road, Naples, FL 34108.

		Shares Beneficially Owned
Name and Address of Beneficial Owner		Number		Percent %
Carl C. Icahn(1)		51,922,405		11.31
JANA Partners LLC(2)		41,781,473		9.10
The Vanguard Group(3)		26,906,672		5.86
Directors and Executive Officers(4)
Samuel Merksamer		0		**
Carl T. Berquist(5)(6)		133,962		**
Michael J. Durham(6)		97,429		**
Carolyn N. Everson(5)		13,642		**
Henry R. Keizer		1,500		**
Debra J. Kelly-Ennis(5)		13,411		**
Michael F. Koehler		23,583		**
Vincent J. Intrieri(5)		3,213		**
Linda Fayne Levinson		21,583		**
Daniel A. Ninivaggi		0		**
John P. Tague		84,200		**
Thomas C. Kennedy		41,000		**
Michel Taride(7)		448,723		**
Robert J. Stuart(8)		90,805		**
All directors and executive officers as a group		926,963		**
Richard D. Broome(9)(10)		205,748		**
Mark P. Frissora(9)(11)		6,127,610		1.33
Brian P. MacDonald(9)		0		**
Scott P. Sider(9)(12)		302,938		**
J. Jeffrey Zimmerman(9)(13)		488,005		**

**

Less than 1%

 

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BENEFICIAL OWNERSHIP AND OTHER MATTERS

 

(1)

Represents shares held by the following group of entities associated with Mr. Carl C. Icahn: High River Limited Partnership (“High River”), Hopper Investments LLC (“Hopper”), Barberry Corp. (“Barberry”), Icahn Partners Master Fund LP (“Icahn Master”), Icahn Offshore LP (“Icahn Offshore”), Icahn Partners LP (“Icahn Partners”), Icahn Onshore LP (“Icahn Onshore”), Icahn Capital LP (“Icahn Capital”), IPH GP LLC (“IPH”), Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”), Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”) and Beckton Corp. (“Beckton”). The principal business address of each of (i) High River, Hopper, Barberry, Icahn Offshore, Icahn Partners, Icahn Master, Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP and Beckton is White Plains Plaza, 445 Hamilton Avenue - Suite 1210, White Plains, NY 10601, and (ii) Mr. Icahn is c/o Icahn Associates Holding LLC, 767 Fifth Avenue, 47th Floor, New York, NY 10153.

 

Each of Hopper, Barberry and Mr. Icahn, by virtue of their relationships to High River, may be deemed to indirectly beneficially own the shares which High River directly beneficially owns. Each of Hopper, Barberry and Mr. Icahn disclaims beneficial ownership of such shares for all other purposes. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn, by virtue of their relationships to Icahn Master, may be deemed to indirectly beneficially own the shares which Icahn Master directly beneficially owns. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such shares for all other purposes. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn, by virtue of their relationships to Icahn Partners, may be deemed to indirectly beneficially own the Shares which Icahn Partners directly beneficially owns. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such shares for all other purposes.

 

The immediately preceding information in this footnote is based solely on the Schedule 13D/A filed with the SEC on December 17, 2014 by Mr. Icahn and entities associated with Mr. Icahn.

 

(2)

Represents shares held by JANA Partners LLC (“JANA”). The principal business address of JANA is 767 Fifth Avenue, 8th Floor, New York, New York 10153. The immediately preceding information in this footnote is based solely on the Form 13F filed with the SEC on May 15, 2015 by JANA.

 

(3)

A report on Schedule 13F, filed August 13, 2015, disclosed that The Vanguard Group, an investment adviser, was the beneficial owner of 26,906,672 shares of common stock as of June 30, 2015. All information regarding The Vanguard Group is based on that entity’s report on Schedule 13F.

 

(4)

Includes employee and/or director stock options held directly by the beneficial owner which are currently exercisable or which will become exercisable within sixty days; restricted stock units reported as owned outright or which will vest within sixty days; phantom shares issued under the Director Compensation Policy; and any shares that were purchased pursuant to Hertz Holdings’ employee stock purchase plan.

 

(5)

Includes the following phantom shares issued under the Director Compensation Policy: (i) 57,533 for Mr. Berquist, (ii) 8,692 for Ms. Everson, (iii) 3,213 for Mr. Intrieri and (iv) 8,461 for Ms. Kelly-Ennis.

 

(6)

Includes director stock options which are currently exercisable. Messrs. Berquist and Durham each hold currently exercisable director stock options to purchase 23,350 shares.

 

(7)

The number of options which Mr. Taride can exercise within 60 days is 253,324.

 

(8)

The number of options which Mr. Stuart can exercise within 60 days is 39,795.

 

(9)

The beneficial ownership amounts for each Messrs. Broome, Frissora, MacDonald, Sider and Zimmerman are as the last date of employment of each such person.

 

(10)

The number of options which Mr. Broome can exercise within 60 days is 157,249.

 

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BENEFICIAL OWNERSHIP AND OTHER MATTERS

 

(11)

The number of options which Mr. Frissora can exercise within 60 days is 3,568,159.

 

(12)

The number of options which Mr. Sider can exercise within 60 days is 161,431.

 

(13)

The number of options which Mr. Zimmerman can exercise within 60 days is 383,656.

 

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

 

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Based on a review of reports filed by the Company’s directors, executive officers and beneficial holders of 10% or more of our outstanding shares, and upon representations from those persons, all reports required to be filed by the Company’s reporting persons during 2014 were filed on time, except that due to administrative error, Robin Kramer filed a late Form 3.

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

 

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BENEFICIAL OWNERSHIP AND OTHER MATTERS

 

 

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BENEFICIAL OWNERSHIP AND OTHER MATTERS

 

 

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OTHER MATTERS

 

OTHER BUSINESS

 

Our Board is not aware of any other matters to be presented at the annual meeting. If any other matter proper for action at the meeting is properly presented, the holders of the accompanying proxy will have discretion to vote the shares represented by the proxy on such matter in accordance with their best judgment. If any matter not proper for action at the meeting should be presented, the holders of the proxy will vote against consideration of the matter or the proposed action.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING

 

We have sent or are sending the Notice, which indicates that that our proxy materials and annual report to stockholders for 2014 will be made available on the Internet at www.proxyvote.com. If you wish to receive paper or e-mail copies of any of these materials, please follow the instructions on your Notice.

 

PROPOSALS FOR 2016

 

The Company anticipates that it will hold its next annual meeting of stockholders in May of 2016. Should the Company hold its annual meeting of stockholders in May of 2016, then the dates below will be determined in accordance with Rule 14a-8 of the Exchange Act and under the advance notice provisions of our By-laws. The Company is providing the information below in accordance with SEC reporting rules based on the applicable dates provided in this proxy statement. As discussed below, our By-laws provide that if the 2016 annual meeting of stockholders is held before September 15, 2016, advance notice of any business must be delivered at the address below no earlier than 120 days prior to the date of such annual meeting and not later than the close of business on the later of (i) the ninetieth day prior to the date of such annual meeting or (ii) the tenth day following the day on which a public announcement of the date of such annual meeting is first made.

 

Except as otherwise required by Rule 14a-8 of the Exchange Act, the Company will review for inclusion in next year’s proxy statement stockholder proposals received by May 4, 2016. Proposals should be sent to Thomas J. Sabatino, Jr., Senior Executive Vice President, Chief Administrative Officer and General Counsel of the Company at 999 Vanderbilt Beach Road, Naples, FL 34108.

 

Stockholder proposals, including nominations for directors, not included in next year’s proxy statement may be brought before the 2016 annual meeting of stockholders by a stockholder of the Company who is entitled to vote at the meeting, who has given a written notice to the Senior Executive Vice President, Chief Administrative Officer and General Counsel of the Company containing certain information specified in the By-laws and who was a stockholder of record at the time such notice was given. Such notice must be delivered to or mailed and received at the address in the preceding paragraph no earlier than June 17, 2016 and no later than July 17, 2016, except that if the 2016 annual meeting of stockholders is held before September 15, 2016 or after December 24, 2016, such notice must be delivered at the address in the preceding paragraph no earlier than 120 days prior to the date of such annual meeting and not later than the close of business on the later of (i) the ninetieth day prior to the date of such annual meeting or (ii) the tenth day following the day on which a public announcement of the date of such annual meeting is first made.

 

Our By-laws require that stockholder recommendations for nominees to the Board must include the name of the nominee or nominees, information regarding the nominee or nominees that would be required to be included in a proxy statement for the election of directors and a consent signed by the nominee or nominees evidencing consent to be named in the proxy statement and willingness to serve on the Board of Directors, if elected.

 

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OTHER MATTERS

 

ANNUAL REPORT FOR 2014

 

The Company’s annual report to stockholders for the year 2014 is being made available on or about September 1, 2015 to persons who were stockholders of record as of August 24, 2015, the record date for the annual meeting. These materials do not form part of the material for the solicitation of proxies.

 

	By order of the Board of Directors,
	/s/ Thomas J. Sabatino, Jr.
	Thomas J. Sabatino, Jr.
	Senior Executive Vice President,
	Chief Administrative Officer and General Counsel

 

Naples, Florida

August 24, 2015

  

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Annex A

 

HERTZ GLOBAL HOLDINGS, INC.
2008 OMNIBUS INCENTIVE PLAN

 

(as amended and restated effective as of March 4, 2010 and
conformed through Amendment No. 1 on May 12, 2014)

 

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