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ISS Proxy Analysis & Benchmark Policy Voting Recommendations

WABCO Holdings Inc.

ISS QuickScore
GOVERNANCE

Key Takeaways

Based on a review and evaluation of company disclosures and practices at


this time, a vote for all agenda items is warranted.

Scores indicate decile


rank relative to index or
region. A decile score of
1 indicates lower
governance risk, while a
10 indicates higher
governance risk.

Meeting Type: Annual


Meeting Date: 26 May 2016
Record Date: 31 March 2016
Meeting ID: 1054295
New York Stock Exchange: WBC
Index: Russell 3000
Sector: Construction Machinery &
Heavy Trucks
GICS: 20106010
Primary Contact
Marc Goldstein, JD
Marc.H.Goldstein@issgovernance.com

Policy: United States

Agenda & Recommendations

Incorporated: Delaware, USA

Item

Code

Proposal

Board Rec.

ISS Rec.

MANAGEMENT PROPOSALS
1.1

M0201

Elect Director Jacques Esculier

FOR

FOR

1.2

M0201

Elect Director Henry R. Keizer

FOR

FOR

1.3

M0201

Elect Director Thomas S. Gross

FOR

FOR

M0101

Ratify Ernst & Young Bedrijfsrevisoren BCVBA/Reviseurs d'Entreprises SCCRL


Belgium as Auditors

FOR

FOR

M0550

Advisory Vote to Ratify Named Executive Officers' Compensation

FOR

FOR

Shading indicates that ISS recommendation differs from Board recommendation


Items deserving attention due to contentious issues or controversy

Report Contents
Financial Highlights
Corporate Governance Profile
Board Profile
Compensation Profile
Governance QuickScore

3
4
5
6
8

Vote Results
Meeting Agenda and Proposals
Equity Ownership Profile
Additional Information

8
9
16
16

2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be reproduced or
disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Material Company Updates


Item

Summary

Board and Executive Updates

On May 21, 2015, Nikhil Varty, vice president of Mergers & Acquisitions, relinquished
the role of president of the company's Americas business. The leadership of the
Americas business was subsequently transitioned to Jon Morrison. On Feb. 28, 2016,
Nikhil Varty ceased serving as vice president of Mergers & Acquisitions.
On June 1, 2015, the board appointed Sean Deason as vice president, controller, and
assistant secretary. Robert W. Farrell's interim appointment as controller expired
following Deason's appointment.
Henry Keizer was appointed to the board on July 20, 2015. On Oct. 1, 2015, Kenneth
Martin retired from the board.
On March 22, 2016, Donald Stebbins resigned from the board. Thomas Gross was
appointed to replace Stebbins.

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 2

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Financial Highlights
Company Description: WABCO Holdings Inc., together with its subsidiaries, provides electronic, mechanical, electro-mechanical, and
aerodynamic products for commercial truck, bus, trailer, and passenger car manufacturers worldwide.
STOCK PRICE PERFORMANCE

TOTAL SHAREHOLDER RETURNS

150%
100%

1 Yr

3 Yr

5 Yr

Company TSR (%)

-2.41

16.19

10.91

GICS 2010 TSR (%)

-11.85

8.68

7.79

0.48

14.74

12.18

Russell 3000 TSR (%)

Source: Compustat. As of last day of company FY end month: 12/31/2015

50%

COMPANY SNAPSHOT
0%
-50%
-100%
Jan-11

Market Cap (M)

6,073.6

Closing Price

106.92

Annual Dividend
Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

WABCO Holdings Inc.


MSCI ACWI: Machinery (GICS: 201060)
Russell 3000

0.00

52-Week High

133.31

52-Week Low

81.66

Shares Outstanding (M)

56.81

Average daily trading volume (prior mo)*

471.01

As of March 31, 2016 (All currency in USD)


* Trading Volume in thousands of shares

FINANCIAL & OPERATIONAL PERFORMANCE


Historical Performance (FY ending)
All currency in USD

12/2011

12/2012

12/2013

12/2014

Compared to Peers (Compustat FY*) 2015


12/2015

Earnings

Revenue (M)
Net Income (M)
EBITDA (M)
EPS (USD)
EPS Y/Y Growth (%)
Profitability
Pretax Net Margin (%)
EBITDA Margin (%)
Return on Equity (%)
Return on Assets (%)
ROIC (%)
Leverage
Debt/Assets
Debt/Equity
Cash Flows
Operating (M)
Investing (M)
Financing (M)
Net Change (M)
Valuation & Performance

FLS

DCI

WAB

Flowserve
Corporation

ALSN
Allison
Transmission
Holdings, Inc.

GNTX
Gentex
Corporation

Donaldson
Company, Inc.

Westinghouse
Air Brake
Technologies
Corporation

2,794

2,477

2,721

2,851

2,628

4,561

1,986

1,544

2,371

3,308

357

302

653

292

275

268

182

318

208

399

456

413

440

470

443

751

710

539

379

672

5.35

4.73

10.46

4.87

4.76

2.01

1.03

1.09

1.51

4.14

N/A

-12

121

-53

-2

-47

-19

10

-16

13

15

14

24

13

11

15

30

12

18

16

17

16

17

17

17

36

35

16

20

61

45

57

35

35

16

15

19

27

24

22

17

27

12

11

15

12

12

52

41

53

24

21

16

18

17

13

19

32

54

11

32

21

13

11

38

64

98

200

14

75

41

332

358

666

314

395

417

580

352

213

448

-105

-106

-177

-211

-202

-525

-60

-90

-112

-380

-184

-183

-193

-121

-49

61

-529

-208

-179

-249

35

73

298

-61

104

-84

-11

54

-107

-200

8.10
13.80
8.90
21.50
21.50
20.90
25.10
14.70
22.30
17.20
Price/Earnings
-28.77
50.21
43.29
12.17
-2.41
-28.59
-22.07
-9.60
-11.86
-17.90
Annual TSR (%)
Source: Compustat. *Note: Compustat standardizes financial data and fiscal year designations to allow for meaningful comparison across companies. Compustat
data may differ from companies' disclosed financials and does not incorporate non-trading equity units. Peers shown here represent closest industry peers drawn
from those peers used in ISS pay-for-performance analysis. See www.issgovernance.com/policy-gateway/company-financials-faq/ for more information.

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 3

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Corporate Governance Profile


BOARD & COMMITTEE SUMMARY

SHAREHOLDER RIGHTS SUMMARY

Independence

Members

Meetings

Full Board

89%

Audit

100%

Compensation

100%

Nominating

100%

Chairman classification
Separate chair/CEO
Independent lead director
Voting standard
Plurality carveout for contested elections
Resignation policy
Total director ownership (000 shares)
Total director ownership (%)
Percentage of directors owning stock
Number of directors attending < 75% of
meetings
Number of directors on excessive number
of outside boards
Average director age
Average director tenure
Percentage of women on board

Insider
No
Yes
Plurality
N/A
Yes
378
<1
100%
0

Controlled company
Classified board
Dual-class stock
Vote standard for mergers/acquisitions
Vote standard for charter/bylaw
amendment
Shareholder right to call special
meetings
Material restrictions on right to call
special meetings
Shareholder right to act by written
consent
Cumulative voting
Board authorized to issue blank-check
preferred stock
Poison pill
Proxy Access

No
Yes
No
Majority
65%
No
N/A
No
No
Yes
Yes
No

0
64 years
5 years
11%

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 4

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Board Profile (after upcoming meeting)


Director Independence & Affiliations
EXECUTIVE DIRECTORS
On Name
Ballot

Jacques Esculier

Affiliation

CEO/Chair

Independence
Classification
Company
ISS
NonIndependent

Insider

Attend Gen- Age Tenure Term


<75% der
Ends

Outside
Boards

56

2019

CEO

Key Committees
Audit Comp Nom Gov

NON-EXECUTIVE DIRECTORS
On Name
Ballot

Affiliation

Independence
Classification
Company
ISS

Attend Gen- Age Tenure Term


<75% der
Ends

Outside
Boards

CEO

Key Committees
Audit Comp Nom Gov

Independent

Independent
Outsider

72

2018

G. Peter D'Aloia

Independent

Independent
Outsider

71

2017

Juergen Gromer

Independent

Independent
Outsider

71

2017

Thomas Gross

Independent

Independent
Outsider

61

0*

2019

Henry Keizer

Independent

Independent
Outsider

59

0*

2019

CF

Jean-Paul
Montupet

Independent

Independent
Outsider

68

2018

Mary Petrovich

Independent

Independent
Outsider

53

David Reilly

Independent

Independent
Outsider

66

Michael Smith

Lead Director

*Indicates director not previously submitted to shareholders for election.

2017

2018

M = Member | C = Chair | F = Financial Expert

Director Notes
G. Peter D'Aloia

The company spun off from Trane Inc. (formerly known as American Standard Companies Inc.) on July 31, 2007. G.
Peter D'Aloia served as senior vice president and CFO of that firm until 2008. (Source: DEF14A, 4/15/16, pp. 1, 7;
10-K, 2/11/16, p. 52.)

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 5

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Director Employment, Compensation & Ownership


Name

Primary Employment

Outside Boards

Total
Compensation*

Shares
Held

60-day
Options

Total

**

232,656

82,394

315,050

Voting
Power
(%)
<1

Jacques Esculier

Pentair plc

Michael Smith

CEO, Chairman WABCO Holdings Inc.


Prof Director

FLIR Systems, Inc.,


Teledyne Technologies
Incorporated, Zero
Gravity Solutions, Inc.
FMC Corporation, ITT
Corporation
TE Connectivity Ltd.,
Marvell Technology
Group Ltd.
RPM International Inc.

192,250

12,750

689

13,439

<1

G. Peter D'Aloia

Other

178,250

23,403

3,765

27,168

<1

Juergen Gromer

Prof Director

179,000

10,750

689

11,439

<1

Thomas Gross

Prof Director

474

474

<1

Henry Keizer

Prof Director

Hertz Global Holdings,


Inc.
Lexmark International,
Inc., Assurant, Inc., IHS
Inc.
Woodward, Inc.

91,500

400

405

805

<1

Jean-Paul
Montupet

Prof Director

187,250

1,877

2,257

4,134

<1

Mary Petrovich

Other

175,250

3,614

689

4,303

<1

David Reilly

Other

173,750

476

689

1,165

<1

*Local market currency


**For executive director data, please refer to Executive Pay Overview.

Compensation Profile
EXECUTIVE PAY OVERVIEW
Executive

Title

J. Esculier

Chairman and Chief Executive


Officer
President Truck, Bus & CAR OEMs

L. Liu
P. Mahendra-Rajah
D. Sebillaut
N. Rens
Median CEO Pay

Chief Financial Officer


Chief Supply Chain Officer
President Trailer Systems,
Aftermarket and Off-Highway

ISS Selected Peer Group


Company Defined Peers

Base Salary

Bonus &
Non-equity
Incentives

Restricted
Stock

Option
Grant

Total

1,110

Change in
Pension,
Deferred Comp,
All Other Comp
545

2,945

2,213

6,813

456
450
370
347

308
421
142
114

679
602
580
520

543
463
463
423

0
0
0
0

1,987
1,937
1,555
1,403

900
993

206
352

1,112
1,595

2,227
2,983

339
327

5,871
7,008

Source: ISS. Pay in $thousands. Total pay is sum of all reported pay elements, using ISS' Black-Scholes estimate for option grant-date values. Note: Median total pay
will not equal sum of pay elements medians. Company Defined Peers are as disclosed. More information on ISS peer group methodology at
www.issgovernance.com/policy-gateway/us-compensation-policy-guidance/.

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 6

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

OPTION VALUATION ASSUMPTIONS


For CEO's last FY Grant
Volatility (%)*
Dividend Yield (%)*
Term (yrs)*
Risk-free Rate (%)*
Grant date fair value per option*
Grant Date Fair Value ($ in 000)**

CEO PAY MULTIPLES


Company
N/A
N/A
N/A
N/A
N/A
N/A

ISS
N/A
N/A
N/A
N/A
N/A
N/A

Compared to
2nd highest active executive
Average active NEO
ISS peer median
Company peer median

Multiple
3.43
3.96
1.16
0.97

Source: ISS

*CEO did not receive stock options in 2015.

CEO TALLY SHEET


CEO
CEO tenure at FYE:
Present value of all accumulated pension:
Value of CEO stock owned (excluding options):

J. Esculier
8.5 years
N/A
$24,875,579

Potential Termination Payments


Involuntary termination without cause:

$5,072,068

Termination after a change in control:

$17,378,004

Source: DEF14A

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 7

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Dilution & Burn Rate


DILUTION

BURN RATE

WABCO Holdings Inc.


Peer group median
Peer group weighted average
Peer group 75th percentile

Dilution (%)
7.45
8.75
6.76
12.62

Dilution is the sum of the total amount of shares available for grant and
outstanding under options and other equity awards (vested and unvested)
expressed as a percentage of total basic common shares outstanding as of the
record date. The dilution figure typically excludes employee stock purchase plans
(ESPPs) and 401(k) shares. The underlying information for the company is based
on the company's equity compensation table in the most recent proxy statement
or 10-K.

Non-Adjusted (%)
0.15
0.17

1-year
3-year average

Adjusted (%)
0.44
0.51

Burn rate equals the number of shares granted in each fiscal year, including stock
options, restricted stock (units), actual performance shares delivered under the
long-term incentive plan or earned deferred shares, to employees and directors
divided by weighted average common shares outstanding. The adjusted burn rate
places a premium on grants of full-value awards using a multiplier based on the
company's annual volatility.

ISS Governance QuickScore


A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.
Scores indicate decile rank relative to index or region.

ISS Governance QuickScore Pillars

Scores as of: May 11, 2016 | Last Data Profile Update: May 11, 2016

Board Structure

Shareholder Rights

10

Compensation

Audit & Risk Oversight

ISS Governance QuickScore is derived from publicly disclosed data on a company's governance practices. Scores indicate decile rank among relative index or region.
Scores are calculated at each pillar by summing the factor scores in that pillar. Not all factors and not all subcategories have equal weight. For more information on
ISS Governance QuickScore, visit www.issgovernance.com/QuickScore. For questions, please contact: Quickscore@issgovernance.com.

Vote Results
ANNUAL MEETING 21 MAY 2015
Proposal

1.1 Elect Director Michael T. Smith


1.2 Elect Director Jean-Paul L. Montupet
1.3 Elect Director David N. ('Nick') Reilly
2 Ratify Ernst &Young Belgium as Auditors
3 Advisory Vote to Ratify Named Executive Officers'
Compensation

Board Rec

ISS Rec

Disclosed
Result

Support Including
1
Abstains (%)

For
For
For
For
For

For
For
For
For
For

Majority
Majority
Majority
Pass
Pass

98.9
95.0
99.1
99.5
98.4

Support
Excluding
Abstains
2
(%)
98.9
95.0
99.1
99.8
98.7

Shaded results reflect a majority of votes cast FOR shareholder proposal or AGAINST management proposal or director election
1
Support Including Abstains is defined as %FOR/(For + Against + Abstain), as expressed as a percentage.
2
Support Excluding Abstains is defined as %FOR/(For + Against), as expressed as a percentage, provided if different from For + Against + Abstain.

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 8

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Meeting Agenda & Proposals


Items 1.1-1.3. Elect Directors

FOR

VOTE RECOMMENDATION
A vote FOR the director nominees is warranted.
BACKGROUND INFORMATION
Policies: Board Accountability | Board Responsiveness | Director Competence | Director Independence | Election
of Directors | ISS Categorization of Directors | Vote No campaigns
Vote Requirement: The company has a plurality vote standard for the election of directors, and has a director

resignation policy in its bylaws/charter

Discussion
Please see the Board Profile section above for more information on director nominees. No significant issues are
highlighted at this time.

Item 2. Ratify Ernst & Young Bedrijfsrevisoren BCVBA/Reviseurs


d'Entreprises SCCRL Belgium as Auditors

FOR

VOTE RECOMMENDATION
A vote FOR this proposal to ratify the auditor is warranted.
BACKGROUND INFORMATION
Policies: Auditor Ratification
Vote Requirement: Majority of votes cast (abstentions count against)

Discussion
The board recommends that Ernst & Young Belgium be approved as the company's independent accounting firm
for the coming year. Although the company is incorporated in Delaware and listed on the New York Stock
Exchange, its operational headquarters are in Brussels.
Accountants
Auditor Tenure
Audit Fees
Audit-Related Fees
Tax Compliance/Preparation*
All Other
Percentage of total fees attributable to All Other fees

Ernst & Young Belgium


Not Disclosed
$2,417,000
$86,000
$0
$463,000
15.61%

*Only includes tax compliance/tax return preparation fees. If the proxy disclosure does not indicate the nature of the tax services and provides
the fees associated with tax compliance/preparation, those fees will be included in "All Other."

The auditor's report contained in the annual report is unqualified, meaning that in the opinion of the auditor, the
company's financial statements are fairly presented in accordance with generally accepted accounting principles.
Publication Date: 11 May 2016

Page 9

Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein
may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Analysis
This request to ratify the auditor does not raise any exceptional issues, as the auditor is independent, non-audit
fees are reasonable relative to audit and audit-related fees, and there is no reason to believe the auditor has
rendered an inaccurate opinion or engaged in poor accounting practices.

Item 3. Advisory Vote to Ratify Named Executive Officers'


Compensation

FOR

VOTE RECOMMENDATION
A vote FOR this proposal is warranted, as pay and performance are reasonably aligned for the period under
review.
BACKGROUND INFORMATION
Policies: Advisory Votes on Executive Compensation
Vote Requirement: Majority of votes cast (abstentions count against; broker non-votes not counted)

Executive Compensation Analysis


COMPONENTS OF PAY
($ in thousands)
J. Esculier
Base salary
Deferred comp & pension
All other comp
Bonus

CEO Peer
Median

CEO

Other
NEOS

J. Esculier

J. Esculier

2015 Change

2014

2013

2015

2015

1,110

1,083

1,053

900

1,623

577

614

130

985

2.5%

0
545

-5.6%

Non-equity incentives

2,945

38.9%

2,120

3,073

771

2,382

Restricted stock

2,213

3.4%

2,141

2,081

2,227

1,892

339

5,921

6,821

5,871

6,883

Option grant
Total

0
6,813

15.1%

% of Net Income

2.5%

2.5%

% of Revenue

0.3%

0.3%

Blank

Non-Performance-Based Pay Elements (CEO)


Key perquisites ($)

Auto: 34,069; Life & Disability Insurance: 125,118; Housing & Utilities:
143,998

Key tax gross-ups on perks ($)

None

Value of accumulated NQDC* ($)

560,538

Present value of all pensions ($)

N/A

Years of actual plan service

N/A

Additional years credited service

N/A

*Non-qualified Deferred Compensation

Publication Date: 11 May 2016

Page 10

Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein
may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Disclosed Benchmarking Targets


Base salary

50th Percentile

Target short-term incentive

50th Percentile

Target long-term incentive (equity)

50th Percentile

Target total compensation

50th Percentile

Blank

Severance/Change-in-Control Arrangements (CEO unless noted)


Contractual severance arrangement

Individual Contract

Non-CIC estimated severance ($)

5,072,068

Change-in-Control Severance Arrangement


Cash severance trigger*

Double trigger

Cash severance multiple

3 times

Cash severance basis

Base Salary + Target Bonus

Treatment of equity

Vest only upon employment termination

Excise tax gross-up*

No

Estimated CIC severance($)

17,378,004

*All NEOs considered

Compensation Committee Communication & Responsiveness


Disclosure of Metrics/Goals
Annual incentives

Yes

Long-term incentives

Partial

Pay Riskiness Discussion


Process discussed?

Yes

Material risks found?

No

Risk Mitigators
Clawback policy*

Yes

CEO stock ownership guideline

6X

Stock holding period requirements

Stock options: Until stock ownership guidelines are met


Restricted Stock: 6 months

*Must apply to cash incentives and at least all NEOs.

Pledging/Hedging of Shares
Anti-hedging policy

Company has a robust policy

Anti-pledging policy

Company has a robust policy

Compensation Committee Responsiveness


MSOP vote results (F/F+A)

2015: 98.7%; 2014: 97.4%; 2013: 99.2%

Frequency approved by shareholders

Annual with 94.8% support

Frequency adopted by company

Annual (year of adoption: 2011)

Publication Date: 11 May 2016

Page 11

Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein
may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Repricing History
Repriced/exchanged underwater
options last FY?

No

Blank

Pay for Performance Evaluation


RELATIVE ALIGNMENT

ABSOLUTE ALIGNMENT

The chart plots percentiles of the annualized 3-year performance and


pay rankings for the company () and ISS' derived peers (). The gray
bar indicates pay and performance alignment.

CEO granted pay trends versus value of a $100 investment made


on the first day of the five-year period.

$15,000

100%

Pay

2.0000

TSR

1.5000

CEO Pay, 000

Performance

$10,000

1.0000

$5,000

50%

0.5000
0.0000

$-

2011 2012 2013 2014 2015


2011

0%

Pay($000)

0%

50%

100%

Indexed TSR

Pay

CEO

PAY MAGNITUDE

2013

2014

2015

12,623

7,239

6,821

5,921

6,813

71.23

106.99

153.31

171.97

167.83

Esculier

Esculier

Esculier

Esculier

Esculier

PAY-FOR-PERFORMANCE QUANTITATIVE SCREEN

Pay in $thousands. The gray band represents 25th to 75th percentile of


CEO pay of ISS' selected peer group, and the blue line represents the
50thpercentile.
The company's total CEO pay is 1.16 times the median of
its peers.

2012

5,000

Publication Date: 11 May 2016

10,000

15,000

Measure
Relative degree of
alignment
Multiple of peer
group median
Absolute alignment

Result
-15

Initial Quantitative
Screen

Low
Concern

1.16
29

Level
Better than 35% of
Companies*
Better than 39% of
Companies
Better than 92% of
Companies

*Constituents of Russell 3000 Index.


For more information on ISS' quantitative pay-for-performance
measures, visit http://issgovernance.com/policy/USCompensation

Page 12

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may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

PEER GROUP SIZE ANALYSIS

Peer Groups
ISS AND COMPANY DISCLOSED PEER GROUPS

Shared
Peers (9)

CompanyDisclosed
Peers (8)

Size (by revenue) of the ISS, company and


overlap peer groups. Gray indicates 0.4- 2.5
times the company's revenue.

Dana Holding Corporation


Flowserve Corporation
Harsco Corporation
Oshkosh Corporation
The Manitowoc Company,
Inc.
Tower International, Inc.
Wabash National
Corporation

American Axle &


Manufacturing Holdings, Inc.
ITT Corporation
Meritor, Inc.
Snap-on Incorporated

Size as multiple of target

ISSSelected
Peers (14)

Cooper-Standard Holdings
Inc.
Drew Industries
Incorporated
Gentex Corporation
Joy Global Inc.
The Greenbrier Companies,
Inc.
The Timken Company
Trinity Industries, Inc.
Allison Transmission
Holdings, Inc.
Donaldson Company, Inc.
Kennametal Inc.
Modine Manufacturing
Company
Westinghouse Air Brake
Technologies Corporation
Autoliv, Inc.
Cooper Tire & Rubber
Company
Pall Corporation
Tenneco Inc.

6
5
4
3
2
1
0

BorgWarner Inc.
Harman International
Industries, Incorporated
Polaris Industries Inc.
Valeo

WABCO Holdings Inc.


ISS Only
Shared

The shaded area represents the overlap group of companies that are in both ISS
comparison group and the company's disclosed CEO compensation benchmarking peer
group. Excludes company peers for which financial data is not available. For more
information on the ISS peer group methodology, visit
www.issgovernance.com/policy/USCompensation

Company Only

Short-Term Cash Incentives


Short-term Incentives

FY 2015 (J. Esculier)

CEO STI Opportunities

FY 2014 (J. Esculier)

Target

Maximum

Target

Maximum

1,100,000

3,500,000

1,100,000

3,500,000

STI targets (calculated)

99% of base salary

315% of base salary

102% of base salary

323% of base salary

STI targets (as disclosed)

100% of base salary

318% of base salary

100% of base salary

318% of base salary

ISS peer median

110% of base salary

Company peer median

125% of base salary

STI targets ($)

Blank

FY 2015 (J. Esculier)

Actual Payouts ($)

FY 2014 (J. Esculier)

Amount

% of base salary

Amount

% of base salary

Non-equity incentive

1,485,000

134

1,375,000

127

Total Bonus + Non-equity

1,485,000

134

1,375,000

127

Bonus

Blank1
Performance Provisions

Publication Date: 11 May 2016

Page 13

Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein
may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295
Metric

Form

Weight

Threshold

Target

Maximum

Actual

Free cash
flow

Absolute

20%

70%
conversion

80%
conversion

90%
conversion

99.4%

Gross profit
margin

Absolute

20%

30.5%

32.0%

33.5%

31.65%

Performance
net income

Absolute

20%

Sales growth

Absolute

20%

$2,445
million

$2,700
million

$2,955
million

$2,730
million

Quality parts
per million

Absolute

10%

60

40

20

27

Gross
material
productivity

Absolute

10%

4.8%

5.4%

6.0%

5.5%

STI performance
metrics/goals

$322 million $338 million $354 million $335 million

Blank7
Blank8
Blank space

Other Short-Term Incentive Factors


Discretionary bonus?*

No

Future performance metrics

Free cash flow, Gross material productivity, Gross profit margin, Performance
earnings before taxes, Sales growth, Technical quality ppm

*Based on the Bonus column in the SCT; per SEC rules, amounts disclosed in this column were not based on pre-set goals.
Blank

Long-Term Incentives
CEO's last FY LTI target (%)

300 of base salary

NEOs last FY award type(s)

Performance-based cash award, Performance-based stock, Time-based stock

Most recent performance


metrics/goals (cash and equity)

Metric

Threshold

Target

Maximum

Sales growth

ND

ND

ND

Performance EPS

ND

ND

ND

ROIC

ND

ND

ND

3-yr Cumulative EPS*

ND

ND

ND

*PSU metric; all other metrics are for the cash LTIP
*Includes
S&P 500 is FALSE

Long-Term Cash Performance Awards


CEO Cash Award
Opportunities

FY 2015

FY 2014

Threshold

Target

Maximum

Threshold

Target

Maximum

1,100,000

2,200,000

1,094,332

2,188,664

Long-term cash ($)

LTI cash paid in last fiscal year ($)

Publication Date: 11 May 2016

1,459,508 for performance period FY2013 FY2015

Page 14

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may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Long-Term Equity Grants


FY 2015

CEO Equity Awards

FY 2014

Shares (#)

% shares*

Value ($)*

% value

Shares (#)

% shares*

9,452

50

1,100,024

50

10,745

50

Time-based shares

Value($)* % value
1,066,011

50

Performance shares

9,452

50

1,113,162

50

10,745

50

1,075,360

50

Performance Options

Standard options

Total Equity

18,904

2,213,186

Time-based equity vesting

Options: N/A
RSUs: One-third per year

Perf. measurement period

Three years (FY2015-FY2017)

21,490

2,141,371

CEO equity pay mix (by value)* Performance-conditioned: 50.3%; Time-based: 49.7%
*Performance shares, if any, are counted and valued at target.
S&P 500 is FALSE

Executive Summary
Evaluation Component

Level of Concern

Non-Performance-Based Pay Elements

Low

Peer Group Benchmarking

Low

Severance/CIC Arrangements

Low

Comp Committee Communication/Responsiveness

Low

Pay for Performance Evaluation

Low

ISS Recommendation: FOR

Analysis
Large perquisites. The company provides sizable perquisites to the CEO, in the form of life and long-term disability
insurance totaling $125,118 (the company does not provide the breakdown between life and disability), payments
for housing and utilities totaling $143,998, as well as payments related to a company car ($34,069) and school fees
for his children ($33,215). Other NEOs also received significant perks in the form of housing payments, school fees,
and in one case a cost-of-living allowance. Two NEOs relocated from the US to Belgium in 2015, while the other
NEOs already resided in Belgium and France. The company states that its expatriate policy and "business manager
agreements" for NEOs based outside the US "provide for reimbursement of certain costs and expenses associated
with the NEO relocating to, and living in, another country," but that it does not provide any special benefits to its
NEOs that other expatriate employees are not also eligible to receive.

Conclusion
Support for this proposal is warranted as pay and performance are reasonably aligned for the period under review.

Publication Date: 11 May 2016

Page 15

Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein
may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

Equity Ownership Profile


Type
Common Stock

Votes per share


1.00

Ownership - Common Stock


The Vanguard Group, Inc.
Berkshire Hathaway, Inc. (Investment Management)
EdgePoint Investment Group, Inc.
Fidelity Management & Research Co.
Wellington Management Co. LLP
FPR Partners LLC
BlackRock Fund Advisors
Artisan Partners LP
American Century Investment Management, Inc.
T. Rowe Price Associates, Inc.
Findlay Park Partners LLP
Grantham, Mayo, Van Otterloo & Co. LLC
Pennant Capital Management LLC
Stockbridge Partners LLC
TimesSquare Capital Management LLC
Southpoint Capital Advisors LP
SSgA Funds Management, Inc.
Norges Bank Investment Management
JPMorgan Investment Management, Inc.
Victory Capital Management, Inc.

Number of Shares
3,731,395
3,331,215
2,728,589
2,518,160
2,345,425
2,304,015
1,916,247
1,811,942
1,787,799
1,539,487
1,502,933
1,476,452
1,335,073
1,282,167
1,153,900
1,000,000
907,594
836,168
793,064
791,688

Issued
56,249,224
% of Class
6.57
5.86
4.80
4.43
4.13
4.06
3.37
3.19
3.15
2.71
2.65
2.60
2.35
2.26
2.03
1.76
1.60
1.47
1.40
1.39

2016 Factset Research Systems, Inc. All Rights Reserved. As of: Dec. 31, 2015

Additional Information
Meeting Location

Meeting Time
Shareholder Proposal Deadline
Security IDs

McDermott Will & Emery


340 Madison Avenue
New York, NY 10173-1922
10:00 a.m.
December 16, 2016
92927K102(CUSIP)

Publication Date: 11 May 2016


Copyright 2016 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be
reproduced or disseminated in whole or in part without prior written permission from ISS.

Page 16

WABCO Holdings Inc. (WBC)


POLICY: United States

Meeting Date: 26 May 2016


Meeting ID: 1054295

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Publication Date: 11 May 2016

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reproduced or disseminated in whole or in part without prior written permission from ISS.