UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

(Rule 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

 

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Filed by a party other than the Registrant o

 

Check the appropriate box:

 

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material under §240.14a-12

 

WRIGHT EXPRESS CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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o  Fee paid previously with preliminary materials.

 

 

 

 

 

 

 

 

 

 

 

 

April 9, 2009

 

Dear Fellow Stockholders,

 

You are invited to attend our 2009 annual meeting of stockholders. The meeting will be held on Friday, May 15, 2009, at 8:00 a.m., Eastern Time, at the Wright Express Long Creek campus in South Portland, Maine.

 

At the meeting we will:

 

 

Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. As a stockholder of record, you can vote your shares by signing and dating the enclosed proxy card and returning it by mail in the enclosed envelope. If you decide to attend the annual meeting and vote in person, you may then revoke your proxy. If you hold your stock in “street name,” you should follow the instructions provided by your bank, broker or other nominee.

 

On behalf of the Board of Directors and the employees of Wright Express Corporation, we would like to express our appreciation for your continued interest in the Company.

 

Sincerely,

 

Michael E. Dubyak
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

 

 

NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS

 

April 9, 2009

 

The 2009 annual meeting of stockholders of Wright Express Corporation will be held on Friday, May 15, 2009, at 8:00 a.m., Eastern Time, at the Wright Express Corporation Long Creek Campus located at 225 Gorham Road, South Portland, Maine, 04106, to conduct the following items of business:

 

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 15, 2009:

 

The proxy statement and annual report to stockholders are available at http://ir.wrightexpress.com.

 

Stockholders who owned shares of our common stock at the close of business on April 3, 2009 are entitled to attend and vote at the meeting and any adjournment or postponement of the meeting. A complete list of registered stockholders will be available at least 10 days prior to the meeting at our offices located at 225 Gorham Road, South Portland, Maine, 04106.

 

By Order of the Board of Directors,

 

 

Hilary A. Rapkin
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND
CORPORATE SECRETARY

 

 

TABLE OF CONTENTS

 

 

 

This proxy statement describes the proposals on which you may vote as a stockholder of Wright Express Corporation. It contains important information to consider when voting.

 

The Company’s board of directors, or the Board, is sending these proxy materials to you in connection with the Board’s solicitation of proxies. Our annual report to stockholders and our proxy materials were first mailed on or about April 9, 2009.

 

Your vote is important. Please complete, execute and promptly mail your proxy card as soon as possible even if you plan to attend the annual meeting.

 

Stockholders who owned the Company’s common stock at the close of business on April 3, 2009, the record date, may attend and vote at the annual meeting. Each share is entitled to one vote. There were 38,351,018 shares of common stock outstanding on the record date.

 

How do I vote?

 

 

You do this by completing and signing your proxy card and mailing it in the enclosed prepaid and addressed envelope.

 

 

We will pass out ballots to any record holder who wants to vote at the meeting. However, if you hold your shares in street name, you must request a proxy from your stockbroker in order to vote at the meeting. Holding shares in “street name” means you hold them through a brokerage firm, bank or other nominee, and as a result, the shares are not held in your individual name but through someone else.

 

If you hold your shares in “street name,” you should follow the instructions provided by your bank, broker or other nominee, including any instructions provided regarding your ability to vote by telephone or through the Internet.

 

How do I vote my shares held in the Wright Express Corporation Employee Savings Plan?

 

If you participate in our Wright Express Corporation Employee Savings Plan, commonly referred to as the “401(k) Plan,” shares of our common stock equivalent to the value of the common stock interest credited to your account under the plan will be voted automatically by the trustee in accordance with your instruction, if it is received by May 12, 2009. Otherwise, the share equivalents credited to your account will be voted by the trustee in the same proportion that it votes share equivalents for which it receives timely instructions from all plan participants.

 

Please refer to the “Information about Voting Procedures” section.

 

 

Our nominees for director this year are:

 

 

Each nominee is presently a director of the Company and has consented to serve a new three-year term.

 

We recommend a vote FOR these nominees.

 

 

The Audit Committee of the Board has selected Deloitte & Touche LLP, or D&T, as the independent registered public accounting firm for the Company’s fiscal year 2009. Stockholder ratification of the appointment is not required under the laws of the State of Delaware, but the Audit Committee has decided to request that the stockholders ratify the appointment. A representative of D&T will be present at the meeting to answer appropriate questions from stockholders and will have the opportunity to make a statement on behalf of the firm, if he or she so desires.

 

If this proposal is not approved by our stockholders at the 2009 annual meeting, the Audit Committee will reconsider its selection of D&T. Even if the selection is ratified, the Audit Committee may, in its discretion, select a different registered public accounting firm at any point during the year if it determines that making a change would be in the best interests of the Company and our stockholders.

 

We recommend a vote FOR the ratification of Deloitte & Touche LLP as our independent registered public accounting firm.

 

OTHER BUSINESS

 

We know of no other business to be considered at the meeting and the deadline for stockholders to submit proposals or nominations has passed. However, if:

 

 

then Michael E. Dubyak or Melissa D. Smith will vote your shares on those matters according to his or her best judgment.

 

CHAIRMAN

 

Our Board is led by our Chairman, Mr. Dubyak. The Chairman leads all meetings of the Board at which he is present. The Chairman serves on committees as reasonably requested by the Board, sets meeting schedules and agendas and manages information flow to the Board to ensure appropriate understanding and discussion regarding matters of interest or concern to the Board. The Chairman also has such additional powers and performs such additional duties consistent with organizing and leading the actions of the Board as may be prescribed.

 

VICE CHAIRMAN AND LEAD DIRECTOR

 

In addition to our Chairman, the Board has appointed Dr. Moriarty as our Vice Chairman and Lead Director. Dr. Moriarty chairs any meeting of the non-management or independent directors in executive session and chairs any meetings at which the Chairman is not present. In addition, he facilitates communications between other members of the Board and the Chairman. The Lead Director is also authorized to call meetings of the independent directors and is available to consult with any of the Company’s senior executives regarding any concerns an executive may have. Dr. Moriarty also may aid in the preparation of the meeting agendas and is authorized as a representative of the independent directors for any meeting with stockholders.

 

MEMBERS OF THE BOARD OF DIRECTORS

 

 

NUMBER OF DIRECTORS AND TERMS

 

Our certificate of incorporation provides that our Board shall consist of such number of directors as is fixed by our By-Laws. Our By-Laws provide that, by resolution of the Board, we shall have eight directors. Our directors serve staggered terms as follows:

 

 

BOARD AND COMMITTEE MEETINGS

 

The Board held eight meetings in 2008 and each director attended at least 75 percent of all Board and applicable committee meetings. Our non-management directors meet in executive session at each regularly scheduled in-person Board meeting and we have at least one meeting per year of our independent directors. Our Vice Chairman and Lead Director of the Board leads the executive sessions of non-management directors. As provided in our Corporate Governance Guidelines, we expect directors to attend the annual meeting of stockholders. All directors who were serving at that time attended our 2008 annual meeting of stockholders.

Our Board has created the following committees:

 

CORPORATE GOVERNANCE INFORMATION

 

You will find the following documents under the corporate governance tab of the investor relations page of our website at www.wrightexpress.com: our Corporate Governance Guidelines; Code of Business Conduct and Ethics for Directors; Employee Code of Business Conduct and Ethics; Code of Conduct for Senior Financial Officers and the charters for the Audit Committee, Compensation Committee and Corporate Governance Committee. You also may obtain a paper copy of these documents, without charge, by contacting our investor relations department:

 

Investor Relations
Wright Express Corporation
97 Darling Avenue
South Portland, ME 04106
Telephone: (866) 230-1633
Email: investors@wrightexpress.com

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

No member of our Compensation Committee (the members of which are listed in the table in the “Board and Committee Meetings” section) is or was one of our or our subsidiaries’ former officers or employees. During 2008, there were no Compensation Committee interlocks as required to be disclosed under SEC rules.

 

DIRECTOR COMPENSATION

 

In 2006, the compensation committee requested that Mercer (US) Inc. review our director compensation plan and provide the committee with recommendations on any changes to meet the following objectives of the compensation plan:

 

 

The committee reviewed Mercer’s analysis and approved the new Wright Express Corporation Non-Employee Director Compensation Plan which replaced the previous plan adopted when the Company went public. The director plan was effective as of January 1, 2007.

 

The plan splits the director retainer between cash and equity as shown below to meet our objectives of attracting and retaining directors while aligning director compensation with stockholder interests.

 

 

 

The total direct compensation of our outside directors at the time the 2007 plan was adopted represented the 75th percentile of our peer group which the Compensation Committee believes is the appropriate target given the experience our outside directors bring to Wright Express.

 

In recognition of the challenging economic conditions the Company is facing, the Compensation Committee recommended, and the Board approved, a five percent reduction in all cash compensation paid to members of the Board effective in March 2009. The Board agreed to reevaluate this reduction from time-to-time in light of changes in overall business conditions.

 

Non-Employee Directors Deferred Compensation Plan

 

Under our Non-Employee Directors Deferred Compensation Plan (DDCP), our non-employee directors are eligible to receive their cash retainers and equity retainers in the form of deferred stock units, or DSUs. The DSUs issued pursuant to the DDCP are issued under the 2005 Equity and Incentive Plan. On the 200th day after the Director leaves the Board, a one-time distribution equivalent to the units deferred is payable to the Director in shares.

 

Actual director compensation earned or paid in 2008 is shown below.

 

Director Compensation

 

 

 

The following table indicates the full grant date fair value of stock awards made during 2008 to certain directors. A portion of the fair value of the awards was recognized as expense during 2008:

 

Grant Date Fair Values

 

 

 

 

NON-EMPLOYEE DIRECTOR OWNERSHIP GUIDELINES

 

On September 7, 2006, the Committee established and approved equity ownership guidelines for all non-employee directors. “Equity” for the purpose of these guidelines is defined to include shares of the Company’s common stock, vested restricted stock units and deferred stock units. Under the guidelines of the equity ownership program, all directors are expected to own equity equal in value to at least three times each director’s annual director cash retainer. The Compensation Committee assesses progress against the guidelines each year on July 31. Directors have three years from July 31, 2007, or, if later, three years following their appointment to the Board, to achieve this level of ownership. All of our non-executive directors exceed the holdings in the guidelines.

 

This table shows common stock that is beneficially owned by our directors, our chief executive officer, our chief financial officer and our next three most highly compensated executive officers as of December 31, 2008, whom we refer to as our “named executive officers,” and all persons known to us to own 5 percent or more of the outstanding Company common stock, as of March 9, 2009.

 

AMOUNT AND NATURE OF SHARES BENEFICIALLY OWNED

 

 

 

 

 

DIRECTOR INDEPENDENCE

 

We have considered the independence of each member of the Board. To assist us in our determination, we reviewed NYSE requirements and our general guidelines for independence, which are part of our corporate governance guidelines.

 

To be considered independent: (1) a director must be independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) in the Board’s judgment, the director must not have a material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company).

 

The Board has established guidelines to assist it in determining whether a director has a material relationship with the Company. Under these guidelines, a director will not be considered to have a material relationship with the Company if (1) he or she is independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) he or she: (i) serves as an executive officer of another company which is indebted to the Company, or to which the Company is indebted, provided that the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets of the company he or she serves as an executive officer; (ii) serves as an officer, director or trustee of a tax exempt organization, provided that the Company’s discretionary contributions to such organization are less than the greater of $1 million or 2 percent of that organization’s consolidated gross revenues; or (iii) serves as a director of another company with which the Company engages in a business transaction or transactions, provided that the director owns less than 5 percent of the equity interests of such other company and recuses himself or herself from deliberations of the Board with respect to such transactions. In addition, ownership of a significant amount of the Company’s stock, by itself, does not constitute a material relationship. For relationships not covered by the guidelines set forth above, the determination of whether a material relationship exists shall be made by the other members of the Board of Directors who are independent as defined above.

 

Based on our guidelines and NYSE corporate governance standards, we have determined that the following directors are independent: Shikhar Ghosh, Ronald T. Maheu, George L. McTavish, Rowland T. Moriarty, Kirk P. Pond, Regina O. Sommer and Jack VanWoerkom.

 

When considering the independence of the directors listed above, the Board was aware that Mr. VanWoerkom was an executive officer of a company that does business with us in the ordinary course and that such relationship is deemed immaterial under the NYSE bright-line independence tests and our categorical standards. The amounts involved were substantially less than 1 percent of either party’s consolidated gross revenues for 2008.

 

DIRECTOR NOMINATIONS

 

The Corporate Governance Committee is composed entirely of independent directors as determined by the Board in accordance with its independence guidelines and the listing standards of the NYSE. Among the committee’s responsibilities is recommending candidates for nomination to the Board. In that capacity, the Corporate Governance Committee, with Mr. VanWoerkom abstaining, recommended Ms. Sommer and Messrs. VanWoerkom and McTavish for election by our stockholders. Ms. Sommer and Mr. VanWoerkom have served as members of our Board since February 2005. Mr. McTavish has served as a member of our Board since 2007.

 

The Corporate Governance Committee will consider candidates nominated by stockholders for next year’s meeting in the same manner as candidates nominated by the Corporate Governance Committee. If the Board determines to nominate a stockholder-recommended candidate and recommends his or her election, then that nominee’s name will be included in the proxy card for the next annual meeting. Our stockholders also have

the right under our By-Laws to directly nominate director candidates and should follow the procedures outlined in the answer to the question section entitled “How do I submit a stockholder proposal, including suggesting a candidate for nomination as a director to the Corporate Governance Committee, for next year’s annual meeting?”

 

To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and received not earlier than January 15, 2010 nor later than February 14, 2010. However, in the event that the annual meeting is called for a date that is not within twenty-five days before or after May 15, 2010, notice by the stockholder must be received no earlier than 120 days prior to the annual meeting and no later than the later of the 90th day prior to the annual meeting or the tenth day following the day on which notice of the date of the annual meeting is mailed or publicly disclosed.

 

Stockholder nominations must be addressed to:

 

Wright Express Corporation
Attention: Corporate Secretary
97 Darling Avenue
South Portland, ME 04106

 

Director Qualifications

 

The qualifications for directors are described in our Corporate Governance Guidelines and the guidelines for evaluating director nominees are in the Corporate Governance Committee’s charter, each of which is available on our website. In addition, the Corporate Governance Committee believes that a nominee for the position of director must meet the following specific, minimum qualifications:

 

 

Application of Criteria to Existing Directors

 

The re-nomination of existing directors is not viewed as automatic, but is based on continuing qualification under the criteria listed above. In addition, the Corporate Governance Committee considers the existing directors’ performance on the Board and any committee, which shall include consideration of the extent to which the directors undertook continuing director education.

 

The backgrounds and qualifications of the directors considered as a group are to provide a significant breadth of experience, knowledge and abilities in order to assist the Board in fulfilling its responsibilities.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

 

The Board believes that the Chief Executive Officer and his designees speak for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies who are involved with the Company. It is, however, expected that Board members would do so with the knowledge of and, absent unusual circumstances or as contemplated by the committee charters, only at the request of the Company’s senior executives.

 

The Board will give appropriate attention to written communications that are submitted by stockholders and other interested parties, and will respond if and as appropriate. Absent unusual circumstances or as contemplated by the committee charters, the Chairman of the Board shall, subject to advice and assistance from the General Counsel, (1) be primarily responsible for monitoring communications from stockholders and other interested parties, and (2) provide copies or summaries of such communications to the other directors as he considers appropriate.

 

If you wish to communicate with the Board or the non-management members of the Board, you may send your communication in writing to:

 

Non-Management Director Communication
Wright Express Corporation
Attention: Corporate Secretary
97 Darling Avenue
South Portland, ME 04106

 

You should include your name and address in the written communication and indicate whether you are a stockholder.

 

AUDIT COMMITTEE REPORT

 

The board of directors appointed us as an audit committee to monitor the integrity of Wright Express’ consolidated financial statements, its system of internal controls and the independence and performance of its internal auditor and independent registered public accounting firm. As an audit committee, we select the independent registered public accounting firm.

 

We are governed by a written charter adopted by the Audit Committee, which is available through the Investor Relations page of our website at www.wrightexpress.com.

 

Our committee consisted of three non-employee directors at the time that the actions of the committee described in this report were undertaken. Each member of the audit committee is “independent” within the meaning of the New York Stock Exchange rules and the Securities Exchange Act of 1934. Wright Express’ management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. Wright Express’ independent registered public accounting firm is responsible for auditing those financial statements. Our responsibility is to monitor and review these processes. However, we are not professionally engaged in the practice of accounting or auditing. We have relied, without independent verification, on the information provided to us and on the representations made by Wright Express’ management and independent registered public accounting firm.

 

In fulfilling our oversight responsibilities, we discussed with representatives of Deloitte & Touche LLP, the independent registered public accounting firm for fiscal year 2008, the overall scope and plans for their audit of the consolidated financial statements for fiscal year 2008. We met with them, with and without Wright Express management present, to discuss the results of their examinations, their evaluations of the Company’s internal control over financial reporting and the overall quality of Wright Express’ financial reporting. We reviewed and discussed the audited consolidated financial statements for fiscal year 2008 with management and the independent registered public accounting firm.

We also reviewed the report of management contained in the annual report on Form 10-K for the fiscal year ended December 31, 2008, filed with the SEC, as well as the Report of Independent Registered Public Accounting Firm included in the annual report on Form 10-K related to Deloitte’s audit of (i) the consolidated financial statements and (ii) the effectiveness of internal control over financial reporting. We continue to oversee the Company’s efforts related to its internal control over financial reporting and management’s preparations for the evaluation in fiscal 2009.

 

We discussed with the independent registered public accounting firm the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 61, Communication with Audit Committees, as amended by SAS 114, as adopted by the Public Company Accounting Oversight Board, including a discussion of Wright Express’ accounting principles, the application of those principles, and the other matters required to be discussed with audit committees under generally accepted auditing standards.

 

In addition, we received from the independent registered public accounting firm the letter and the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board, and discussed the disclosures with them, as well as other matters relevant to their independence from management and Wright Express. In evaluating the independence of our independent registered public accountant, we considered whether the services they provided beyond their audit and review of the consolidated financial statements were compatible with maintaining their independence. We also considered the amount of fees they received for audit and non-audit services.

 

Based on our review and these meetings, discussions and reports, we recommended to the board of directors that the audited consolidated financial statements for fiscal year 2008 be included in the annual report on Form 10-K.

 

THE AUDIT COMMITTEE

 

Ronald T. Maheu, Chair

Regina O. Sommer

George L. McTavish

 

AUDITOR SELECTION AND FEES

 

Auditor Selection

 

The Audit Committee has selected D&T as the Company’s independent registered public accountant for the 2009 fiscal year. D&T has served as the Company’s independent registered public accountants since our initial public offering.

 

Audit Fees

 

The following is a description of the fees billed to the Corporation by D&T for the years ended December 31, 2007 and 2008:

 

 

 

 

 

Pre-Approval Policies and Procedures

 

The Audit Committee has adopted a policy regarding pre-approval of audit and non-audit services performed by D&T. According to the policy, the Audit Committee shall pre-approve all audit services to be provided to the Company, whether provided by the principal independent registered public accountant or other firms, and all other permitted services (review, attest and non-audit) to be provided to the Company by the independent registered public accountant; provided, however, that de minimis permitted non-audit services may instead be approved in accordance with applicable SEC rules. The independent registered public accountant is not authorized to provide any prohibited non-audit services (as defined in Rule 2-01(c)(4) of Regulation S-X). The Chairman of the Audit Committee has the authority to pre-approve any permitted services on behalf of the Audit Committee and shall notify the full committee of such approval at its next meeting.

 

Since our initial public offering on February 16, 2005, the Audit Committee has pre-approved all of the services performed by D&T.

 

Non-Director Members of the Executive Management Team

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis, or CD&A, describes our compensation objectives and programs for our executive officers. The CD&A also describes the specific decisions, and the process supporting those decisions, which were made with respect to 2008 for the executive officers named in the Summary Compensation Table.

 

The following discussion includes statements regarding performance targets in the limited context of our compensation programs. These targets should not be understood to be statements of management’s expectations of our future results or other guidance. Investors should not apply these targets in any other context.

 

Compensation Philosophy

 

Our compensation programs are designed and administered to balance the achievement of short-term operational results and long-term growth goals with the ultimate objective of increasing long-term stockholder value. We do this by structuring our compensation programs to:

 

 

We are a leading provider of fleet and corporate charge cards, providing payment processing and information management services to the United States commercial and government vehicle fleet industry. We compete for both clients and employees with significantly larger companies. Our primary differentiator in this competitive market is our client-centered partnering approach. Our clients count on this when they outsource their branded business to us. The experience and performance of our associates, including the members of our executive team, are critical to sustaining this level of differentiation. Our Chairman, President and Chief Executive Officer (CEO) has been with the Company for over 20 years and has been instrumental in guiding this approach and in our resulting growth. The other members of our executive team bring significant industry and Company experience which is critical to our continued success. Accordingly, in addition to being designed to support our goals of achieving strong year-over-year and long-term growth and stockholder value, our compensation programs reflect the competitive environment in which we operate and our focus on continued differentiation in the marketplace through continuity of leadership and culture.

Compensation Objectives

 

We recognize the role total compensation plays in achieving our objectives of attracting, retaining and motivating our high-performing associates, including our executives, to achieve these results. The chart below identifies the compensation elements and method of delivery used to support each of our compensation objectives listed above.

 

 

We believe the compensation of our executives should and does reflect the success of our Company. In setting compensation levels for each executive, we evaluate total direct compensation (base salary plus short-term incentive at target plus long-term equity incentive at target) against multiple factors including:

 

 

Annually, we reevaluate each compensation element with a focus on total direct compensation. We also evaluate equity ownership levels for each executive. The purpose of this review is to appropriately reward and motivate our executive team to increase stockholder value with a focus on providing compensation above target levels when Company performance is above target and compensation below target levels when we do not achieve our performance goals. In evaluating the components of compensation and the metrics used to determine individual and Company performance, the committee considers whether these factors drive an appropriate level of risk taking. The committee will continually promote creating ownership for executives and aligning the interests of management with the interests of stockholders, which include avoiding excessive risk taking. The committee believes that the mix and design of the elements of compensation do not incent management to assume excessive risks.

 

Annual Process of the Compensation Committee

 

The compensation committee is responsible for review and oversight of executive compensation. This includes approval of corporate goals and objectives used in the compensation programs for executives as well as setting executive compensation and approving annual incentive plan payouts and long-term incentive stock grants. The committee meets at least once each quarter. In addition to the three independent directors who

serve on the compensation committee, typical attendance at these meetings includes the Senior Vice President, Human Resources, the Director of Compensation and Benefits and the Associate General Counsel and Assistant Corporate Secretary. Mr. Dubyak, our Chairman, President and CEO, generally joins two meetings each year to discuss the mid-year and end-of-year appraisal of his performance with the committee. Otherwise, he generally does not attend committee meetings.

 

In the first quarter of each fiscal year, the committee reviews the Board’s assessment of the CEO’s performance with him and the Company results for the prior year. In addition, the committee approves the following as explained in the Annual Review of Executive Compensation section:

 

 

Agenda items for the second quarter vary each year but this meeting generally focuses on plan benchmarking and assessing how effectively our executive compensation programs are meeting their objectives.

 

The compensation committee generally conducts its annual review of executive compensation in the third quarter of each year. The data reviewed includes target ranges for:

 

 

In the final quarter of each fiscal year, management presents the committee with recommended executive compensation changes for each element of compensation. This includes:

 

 

Role of the Compensation Consultant

 

In 2008, the committee utilized Mercer, reporting directly to the committee, to provide advice regarding the Company’s executive compensation practices. The primary services provided by Mercer were an evaluation of executive officers’ base salaries, short-term incentive targets and long-term incentive targets relative to identified peers and the broader market and a recommendation of compensation ranges for each executive officer. Mercer has also provided advice on the design of the Company’s short-term and long-term incentive plans and evaluated the impact of the Company’s equity programs on the total pool of shares available for grant. During 2008, Mercer also provided services to the Company’s management in the areas of health and

welfare benefits, 401(k) and risk management. The table below shows the total amount Mercer received directly or indirectly as a result of its relationship with the Company.

 

 

Mercer’s existing relationships with Wright Express were discussed by the committee during the compensation consultant selection process. The committee selected Mercer over other compensation consultants reviewed due to its breadth and depth of experience and its familiarity with our business model and Company goals.

 

The committee has taken the following steps to ensure that Mercer’s advice to the committee remains objective and is not influenced by the Company’s management. While the Company’s management team provides certain pieces of information to Mercer that it uses for its analysis, Mercer’s compensation consulting group operates with a direct reporting relationship to the committee. At least annually, the committee consults directly with Mercer without members of management present to evaluate the level to which Mercer is operating without management influence as its compensation consultant. Decisions regarding the amount and form of executive and director compensation are made by the committee alone. These decisions reflect considerations beyond the information and advice provided by Mercer.

 

Role of the Executive Officers

 

In approving 2008 compensation levels, the committee reviewed competitive market data, Company performance and Mr. Dubyak’s recommendations regarding total direct compensation for those executives reporting directly to him. Mr. Dubyak provided the committee with an assessment of each executive officer’s performance to support his recommendations. These assessments included the results of specific operational and strategic goals identified in our STIP as well as progress in the area of succession planning. Mr. Dubyak discussed any retention concerns at that time as well. The committee took into account individual job performance, incumbent experience, retention needs, and an executive’s ability to impact future results for the Company. Mr. Dubyak does not provide recommendations for his own compensation. With the exception of Mr. Cornett, the Senior Vice President, Human Resources, who presents Mr. Dubyak’s recommendations to the committee, the other executives were not involved in the process of recommending specific executive compensation levels. Ms. Smith, in her role as CFO and Executive Vice President, Finance and Operations, recommends performance goals for the upcoming fiscal year.

 

Peer Group

 

Mercer used the following compensation peer group in identifying the recommended compensation ranges for Wright Express executives in 2008. The peer group used by the Company is established based on input from management and a review by the committee. It is reviewed each year and modified as needed to reflect our growth and to account for changes due to market consolidations among peers.

 

The following companies were selected as our compensation peer group based on their comparability to Wright Express in terms of industry, annual revenue and/or market capitalization. The committee believes that understanding compensation practices for these companies is important in determining the appropriate

compensation level for each of our executives. The committee considers these factors because we compete with these companies for executive talent.

 

 

 

 

Removal from the peer group of eFunds and CheckFree did not affect the recommendations of levels of compensation provided to the named executive officers.

 

Annual Review of Executive Compensation

 

Each year, at the request of the committee, Mercer provides recommended ranges of compensation for base salary, total cash and total direct compensation for each executive. This is done after Mercer identifies any recommended changes to the peer group and provides analysis of our performance versus the peer group for the previous year. Mercer collects comparable position survey data on each executive from two sources:

 

 

This data is blended equally for each executive to produce the target ranges which we believe represents a “competitive” compensation range. We believe market survey data at the 50th percentile for companies of comparable revenues is the appropriate target in order to meet our objectives of attracting and retaining talent. Given the average revenue and market capitalization of our identified peer group, we believe the 40th percentile of the companies in our peer group is more appropriate than the 50th percentile in targeting compensation that will both attract and retain the members of our executive team. Mercer used the following surveys in establishing the 50th percentile market survey data for companies of our size for 2008 compensation:

 

 

Data from companies in our revenue category who participated in these surveys was aggregated and incorporated into the target compensation ranges provided to the committee by Mercer. The committee did not receive data for any individual company in these surveys. Mercer provides the committee and the human resources department with the current placement of each executive within the target range. Management uses the Mercer data to provide the committee with recommended base salary changes, short-term incentive targets

and long-term equity targets for each of the executive officers. In addition, management provides the following information to the committee:

 

Pay for Performance

 

 

Retention/Leadership Continuity

 

 

Total compensation tally sheets for each executive officer are reviewed by the committee each year. The purpose of this review is to assess whether the overall compensation package is consistent with individual and Company performance. Annual review of the tally sheets also provides the committee with a view of the impact of historical changes to compensation over time and an opportunity to assess effectiveness in attracting and retaining our executives and driving high performance.

 

Compensation levels for 2008 were based on the committee’s review of tally sheets in September 2007. These tally sheets provided the target value of all components of the executive officers’ proposed 2008 compensation as well as the value of outstanding equity awards, deferred compensation, benefits, perquisites and exit pay in the event of various termination scenarios, including a change of control. The committee considers total cash and equity compensation when setting the compensation of executive officers. The committee looks at the total impact of all year over year changes in executive compensation to decide whether changes are necessary and appropriate. In reviewing total cash and equity compensation, the committee considers the retention value of the long-term equity currently held by the executive and the impact that retirement or voluntary termination would have on the executive. Based on this review, the committee can decide to adjust one or more elements of an executive’s total compensation. The committee aims to provide competitive total direct compensation and assesses an executive’s total compensation package when looking at the executive’s competitive standing relative to the market.

 

Additionally, the committee seeks to provide a competitive compensation mix, with discretion depending on factors deemed relevant to the committee, such as individual performance, internal equity, historical pay practices, and current ownership level. Certain compensation decisions may specifically affect other elements of compensation. For example, because potential bonus payouts and deferred compensation allocations are based on the executive’s base salary, increases in base salary also increase the amount of potential bonus payouts and deferred compensation contributions for which executives are eligible.

 

For 2008, as in previous years, management modeled wealth accumulation for the committee using multiple share price scenarios. These scenarios were modeled in September 2007 for use in determining 2008 compensation. With the level of market volatility experienced at the end of 2008 and continuing into 2009, these models will be reevaluated as the committee conducts its annual review of executive compensation.

 

2008 Executive Compensation Overview

 

Base Salary.  Base salary is provided at a competitive level in order to attract and retain key talent and is reviewed annually. For 2008, the committee established salary targets generally at a blended rate equally weighting the 40th percentile of our peer group and the 50th percentile of Mercer survey data for companies of our revenue size. These target amounts were then adjusted based on individual performance, experience, and the criticality of the individual to overall business strategy. Annual adjustments to base salary are made based on a review of both the individual performance assessed by the CEO and reported to the committee by

management and the location of the executive officer’s current base salary in the target range provided by Mercer.

 

As a result of this analysis, all executive officers received a merit-based salary increase between 3 and 4 percent in March 2008 other than Ms. Smith and Mr. Maxsimic. The base salaries for Ms. Smith and Mr. Maxsimic were previously increased in November of 2007 when each was promoted to Executive Vice President and neither received any additional increases to base salary in 2008. In March, the committee also approved a recommendation from management to increase Ms. Rapkin’s base salary by an additional 5.6 percent beyond her approved merit-based increase. Mr. Dubyak also received an 11.4 percent increase to his compensation upon his appointment as Chairman of the Board of Directors in May.

 

Looking forward to 2009, given current economic conditions, management has postponed merit increases to base salary for all employees, including the named executive officers. The committee will monitor Company performance during the year and may or may not reconsider merit increases later in the year.

 

Annual Incentive Compensation.  The short term incentive compensation program (STIP) is an annual bonus opportunity for associates at all levels of the organization other than those on commission and departmental incentive plans. The actual payouts of the STIP are contingent upon committee-approved financial performance goals. For the executive officers, a performance-based bonus focuses management on our short-term (one fiscal year) financial results in specific targeted areas approved by the committee at the beginning of each year. The STIP also aids in attracting and retaining high-performing associates, at all levels, to drive the achievement of annual operational goals. These goals and milestones, when consistently achieved, support our long-term goal of growth in stockholder value.

 

At the target level of performance, STIP payouts represent the 50th percentile of a market composite which is created by averaging the 40th percentile of our peers and the 50th percentile of market survey data for companies of our revenue size. At the maximum level of performance, which would represent performance that significantly exceeded target goals, STIP payouts would be at or above the 75th percentile of this market composite. If we fail to meet the threshold level goals as defined by the committee, the executive officers receive no payout under STIP. In establishing our targets for STIP we utilize the following principles generally based on historical achievement:

 

Management proposes performance level goals based on estimated achievability and current factors supporting or inhibiting achievement. Financial measures are predominantly used in establishing annual STIP goals. The goals for 2008 were approved by the committee in March 2008 and progress toward these goals was reported by the CEO to the Board of Directors throughout the year. STIP performance objectives and final payout factors used for each of the executive officers are shown below:

 

 

 

 

We have used adjusted net income and PPG adjusted revenue as performance measures in STIP each year. They represent key areas of focus for continued growth and stockholder return. We chose strategic growth revenue achievement as a STIP measure in 2008 to incent participants for achievement of revenue in emerging areas of our business, which while relatively small when compared to our corporate revenue goal, are important to the future growth of our Company. Execution of key 2008 deliverables to drive strategic revenue was included in the STIP in 2008 to drive new processes which were instituted in late 2007 to improve our long term ability to execute key client and technical implementations.

 

Under the terms of the 2008 STIP, each eligible participant, including each of the executive officers, could receive from 0 percent to a maximum of 200 percent of their target STIP award if specified levels of performance were achieved by December 31 of the plan year. At the end of the annual performance period, the committee evaluates potential adjustments to performance as provided in the STIP and has discretion to include all or part of an item of loss or expense or to exclude all or part of an item of gain or income that the committee believes was not attributable to or does not accurately reflect the continuing performance of the Company.

 

The bonus targets for the named executives employed on December 31, 2008, ranged from 45 percent to 100 percent of base salary and were not increased over the 2007 targets. Our executives’ STIP targets are set

based primarily on information provided by Mercer. Their current STIP percentages represent what we believe are appropriate targets based on their experience, performance and role in the Company. Mr. Dubyak’s STIP target of 100 percent is larger than those of our other executives due primarily to two factors:

 

 

In 2008, the Company was required to achieve threshold results for adjusted net income in order for any portion of the STIP to be paid to any employees, including the executive officers. Because we did not achieve threshold adjusted net income, the committee did not make STIP awards to any of the named executive officers as shown below:

 

 

 

 

As part of the 2008 STIP, Mr. Maxsimic had an additional sales incentive opportunity which provided the potential to earn from $0 to $200,000 for the achievement of PPG adjusted revenue above the corporate target. The objective of Mr. Maxsimic’s sales incentive opportunity is to incent him to increase PPG adjusted revenue beyond the Company’s annual target and as a motivating factor for rewarding Mr. Maxsimic given his responsibility for driving our revenue growth. If results exceeded a specified maximum identified in this special incentive, Mr. Dubyak could have recommended a higher payout for approval by the committee. This additional award was only to be paid if revenue achieved was above the corporate target. In 2008, PPG adjusted revenue was below the corporate target; as a result, Mr. Maxsimic did not receive any payout under this additional incentive opportunity.

 

2008 Special Bonus.  As with many other companies in 2008, our net income was impacted by the deteriorating economy. In December, the Committee recommended that management investigate the impact of granting a special bonus for all eligible employees including executive officers. The purpose of this bonus was to reward employees at all levels for significant efforts in 2008 and to retain employees at the management level and above. For non-management employees, a cash bonus was approved in December of 2008. For management employees and above, including executive officers, an option award was granted in February 2009. The options vest equally over two years. The number of shares available to purchase pursuant to the option was based on the approved dollar amount to be awarded, divided by the value of one option, which we determined to be the Black-Scholes value on the grant date. The exercise price of these stock options was based on fair market value on the date of grant, which the committee determined to be the closing price on the date of grant.

The following was awarded to each named executive officer with a strike price of $13.51 per share:

 

 

Long Term Incentive Compensation.  The Company provides long-term equity-based incentives through the Wright Express Corporation Long Term Incentive Program, or LTIP, to retain our executives and reward them for performance aligned with stockholder interests.

 

Grants under the LTIP have generally been provided as a mix of performance-based restricted stock units, or PSUs, which vest based on the achievement of metrics and restricted stock units, or RSUs, which vest based on the passage of time. The metric used to determine the vesting of PSUs has generally been the achievement of adjusted net income and PPG revenue targets set by the committee. The time-based RSUs generally vest over a four year period of employment. RSUs facilitate retention by providing guaranteed value and alignment with shareholders through stock ownership as the RSUs vest. At the higher levels in the Company, the percentage of an executive’s overall compensation is weighted more heavily toward equity than cash as compared to non-executive employees.

 

The LTIP is implemented under our 2005 Equity and Incentive Plan which allows us to grant employees and directors stock options, stock awards (including restricted stock), stock appreciation rights, performance-contingent awards and other awards. Eligible participants include executive officers and other selected employees in the Company. Each of the executive officers received a grant in 2008 through the LTIP.

 

The committee grants stock awards at fair market value and uses a grant price that represents the closing price of Wright Express Corporation stock on the last day the stock is traded prior to the grant award date when granting RSUs and PSUs exclusively and the closing price on the grant award date when granting stock options or RSUs and stock options together. In determining the size of equity grants to executive officers, the committee considers similar awards to individuals holding comparable positions in our identified peer group. The committee also reviews potential equity ownership as a percentage of shares outstanding for each executive versus comparable positions within the peer group. Management does not grant awards without committee approval.

 

2008 Annual Grant.  In March 2008, executive LTIP award targets for the annual grant were set at a blended rate equally weighting the 50th percentile of market survey data and the 40th percentile of our peer group for each executive and their resulting grants, approved by the committee, fell within a range of fifteen percent of this blended rate. Mr. Dubyak’s equity grant value is larger than the other named executive officers due to the scope of his role as Chairman, President and CEO and our intent to provide more of Mr. Dubyak’s total direct compensation in the form of performance-based compensation. The committee considered the following additional criteria in approving 2008 executive grants:

 

 

For the 2008 annual LTIP grant, Mr. Dubyak, Ms. Smith, and Mr. Maxsimic were allocated 100 percent of the target grant value in PSUs. This was done in order to align their equity compensation with the interests of our stockholders and because of their ability to drive corporate results. Ms. Rapkin and Mr. Cornett were allocated 70 percent of their target grant value in PSUs and 30 percent was allocated in RSUs. Prior to 2008,

all of the executive officers besides Mr. Dubyak, whose annual grant was also at 100 percent PSUs since 2007, were allocated equal weighting between PSUs (50 percent) and RSUs (50 percent). The committee approved the change in order to strengthen the link between pay and Company performance and to align the executives with the interests of stockholders.

 

For 2008, the performance metric identified for the annual grant of PSUs was 2008 adjusted net income as defined in the STIP. Adjusted net income was chosen over other metrics as the performance metric for the annual grant for PSUs because we believe that this is a focus of our stockholders. It has historically served as the most appropriate reward metric for our associates whether their focus is primarily to increase revenue or the achievement of key operational goals. Both of these drive adjusted net income. To the extent that the final adjusted net income performance result differed from the target objective, the value of the PSU portion of the grant could have ranged from 0 percent to 200 percent of the target amount determined at the time of the grant. The chart below shows the 2008 performance goals:

 

 

In 2008, grants under the 2008 Annual Grant to the named executive officers at target totaled 74,759 units, including 3,834 units granted as RSUs and not subject to adjustment. The amount granted to named executive officers represented approximately 48 percent of the total amount granted to all associates. At the end of 2008, adjusted net income performance was below threshold, which is the minimum performance necessary for any PSU to convert to an RSU. The individual grants for each of the named executive officers are shown in the Grants of Plan Based Awards table. The chart below summarizes the difference between the initial grant at target and the actual number of units converted for vesting for each of the named executive officers.

 

 

 

 

2007 Long Term Growth Grant.  On September 7, 2007, the committee granted a special performance-based equity grant. The grant was requested by management and was targeted to support the Company’s strategic plan and aggressive long-term growth goals beyond our historical growth rates. As of December 31, 2008, we estimate the probability for achieving the required targets is below the threshold required for expensing the grant in our financial statements and reflect no expense for this grant. When and if it is determined that the achievement of the performance conditions of the grant is probable, we will incur an expense representing the value of the award from the date of grant. The long term growth grant is a performance-based grant, entirely PSU based, with an award to each executive officer as well as additional employees identified by management as critical to the achievement of our strategic initiatives. The approved

grant is an aggregate of 112,821 PSUs at target and provides for full vesting on March 30, 2011 based on the achievement of aggressive 2010 revenue and adjusted net income margin goals. At target, the total number of units that could be potentially awarded are as follows: Mr. Dubyak, 21,156; Ms. Smith, 7,757; Mr. Maxsimic, 9,167; Ms. Rapkin, 4,231; and, Mr. Cornett, 4,231.

 

International Incentive Grant.  In November 2008, Ms. Rapkin was granted 3,477 PSUs at target performance under the International Incentive Grant for her significant contributions to our acquisition of New Zealand-based Financial Automation Limited. The award vests at a rate of 50 percent on the first anniversary of the grant date, and 50 percent on the second anniversary of the grant date, assuming the achievement of certain performance metrics. The first half of the award vests based on the achievement of execution of new international business opportunities and their impact on the Company’s adjusted net income in the performance period. The second half of the award will vest based on achievement of specific goals related to our international operations which will be set by December 31, 2009.

 

Tax Deductibility of Compensation.  Section 162(m) of the Internal Revenue Code generally places a limit of $1 million on the amount of compensation that Wright Express may deduct in any one year with respect to its CEO and the three other officers (other than the Chief Financial Officer) whose compensation is required to be reported to our stockholders pursuant to the Exchange Act by reason of being among the most highly paid executive officers, other than our CFO. Wright Express receives no federal income tax deduction for any compensation that is (a) over $1 million and (b) is not performance-based as defined under Section 162(m). The STIP and the PSU component of our LTIP are both intended to provide fully tax-deductible compensation. The time-based RSU component of our LTIP is not considered performance-based under Section 162(m). The committee has the authority to adjust payments under the STIP and LTIP up or down at its discretion with the exception of any adjustments which may increase or accelerate payment to any participant who is impacted by Section 162(m). We review the impact of Section 162(m) annually. The results of this analysis are considered in the committee’s decisions each year regarding executive compensation. The committee may approve compensation that is not considered performance-based under Section 162(m) when it believes that such compensation is appropriate and consistent with our goal of building long-term stockholder value.

 

In September 2008, the committee requested that Mr. Dubyak defer receipt of a portion of his October 2005 special equity grant which vested in October 2008. This request from the committee was made to address potential tax liability under Section 162(m) unanticipated at the time the units were granted shortly after our initial public offering. The primary reason for the potential liabilities was that the value of our stock had increased more than 40 percent from $21.36 per share at the time these units were granted to over $30 per share at the time the committee analyzed the impact of Section 162(m). Mr. Dubyak voluntarily deferred receipt of 21,886 shares of common stock of his October 2005 special equity grant to January 16, 2009. The deferral was executed in compliance with Internal Revenue Code Section 409A. The vested units were delivered on January 16, 2009.

 

Executive Officer Equity Ownership Guidelines.  We believe executive ownership of Company securities demonstrates a commitment to continued success and aligns the efforts of our executives with stockholders. The committee established equity ownership guidelines for all executive officers in October of 2005. “Equity,” for the purposes of executive officer ownership guidelines, includes shares of our common stock and ownership interests in the Wright Express Common Stock Fund held in the Company’s 401(k) Plan. It does not include any RSUs or PSUs prior to their vesting and conversion to shares of stock.

 

Under these guidelines, the President and Chief Executive Officer is required to hold securities equal in value to at least three times his annual base salary and all other executive officers are required to hold securities equal in value to at least one times their annual base salaries. The committee monitors progress annually and executive officers have four years from the later of (i) October 2005, or (ii) their promotion to executive officer, to achieve the level of ownership described above. The annual measurement date under the guidelines is July 31st of each year. As of July 31, 2008, all named executive officers exceeded the level of ownership required under the guidelines.

Employment Agreements.  In October 2005, the compensation committee reviewed and approved employment agreements for our named executive officers. The Company believes that employment agreements, including severance and change of control benefits, play an important role in attracting and retaining key executive officers. The Company also believes that in the event, or threat, of a change of control transaction, these agreements reduce uncertainty and provide compensation for the significant levels of executive engagement and support required during an ownership transition that results in the termination of their employment. In addition, our employment agreements contain non-compete, non-solicitation, non-disparagement and non-disclosure provisions which protect the Company in the event that the executive terminates their employment. These employment agreements represent competitive severance and change of control benefits based on analysis conducted by our previous compensation consultant and reviewed by the committee. In 2007, Mercer reviewed the core provisions of our employment agreements and confirmed they remain competitive. The committee reviews these agreements each year to assess whether the total value to an executive provided by the agreement remains at the level needed to attract and retain executives without being considered excessive in the opinion of the committee. The specific material provisions of these contracts are discussed in the “Employment Agreements, Severance and Change of Control Benefits” section of this proxy.

 

Benefits and Perquisites.  We provide competitive benefits to attract and retain high performing associates at all levels. This includes a health and welfare benefits package and a 401(k) plan available to associates at all levels. We offer a modest perquisites package to executives representing the benefits we have identified as most critical in attracting and retaining executives to our Company.

 

Nonqualified Deferred Compensation.  The Company administers an Executive Deferred Compensation Plan, or EDCP, that provides each of the executive officers with the opportunity to defer up to 80 percent of base salary and/or up to 98 percent of annual short-term incentive compensation. The Company provides a match of up to 6 percent of the participant’s annual bonus deferred into the EDCP. Investment income on contributions and Company match is accrued for participants to reflect performance of investment funds identified by each participant during their annual election period. The investment funds and their performance used to calculate earnings in the EDCP generally mirror those used in the 401(k) Plan.

 

Each of the named executive officers serving in their role at the time of election chose to defer a portion of their bonus into the EDCP in 2008. Due to the fact that the Company did not pay bonus under the STIP in 2008, no executives deferred 2008 bonus into the EDCP. Mr. Maxsimic deferred a portion of his base salary into the EDCP during 2008. His base salary deferral is included in the Executive Contributions column of the Nonqualified Deferred Compensation Table.

 

Prior to our initial public offering, we offered the Wright Express Corporation Supplemental Investment & Savings Plan, or SERP, which allowed participants to defer compensation. The SERP was frozen to new contributions on December 31, 2004. Mr. Dubyak and Ms. Smith have balances in this plan, which continue to earn investment returns based on the funds they selected. These investment returns are market competitive for the type of funds offered; there is no preferential interest earned in either the EDCP or SERP accounts. SERP balances as of December 31, 2008 for Mr. Dubyak and Ms. Smith are shown below. None of the other executive officers participated in the SERP when it was an active plan.

 

 

Financial Planning.  The Company provided personal financial advisory services to executive officers. This service includes tax preparation and estate planning services. We value this benefit based on the actual charge for the services which included travel and expense reimbursement for the financial advisor.

Company-sponsored Automobile.  A Company-leased automobile was made available to all executive officers for personal and business use. For total compensation purposes in this proxy, the value of a Company automobile for executive officers was based on the cost of the annual lease and maintenance costs which are paid on behalf of the executive by the Company.

 

Memberships.  The Company maintains a limited number of country club memberships for business use. In the event the facilities were used for personal reasons, the executive officers reimbursed Wright Express for the expenses incurred but not for any portion of the membership expense.

 

The aggregate value of all perquisites received by each of the executive officers exceeded $10,000 in 2008 and is detailed in the footnotes to the Summary Compensation Table.

 

In 2008, the cost of the financial planning and automobile benefits was imputed as income and grossed up for all taxes. In 2009, the Company will begin phasing out the tax gross up on these benefits.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

 

The compensation committee is comprised entirely of independent directors as determined by the Board of Directors in accordance with its independence guidelines and the listing standards of the New York Stock Exchange.

 

The compensation committee is responsible for review and oversight of executive compensation. This includes approval of corporate goals and objectives used in the compensation programs for executives as well as setting executive compensation and approving annual incentive plan payouts and long-term incentive stock grants. In connection with that responsibility, the compensation committee reports to the Board on the Company’s activities at each meeting of the Board. The compensation committee charter, which describes in detail the purpose, structure, membership, authority, responsibilities, procedures and administration of the compensation committee is available on the Company’s website.

 

The compensation committee reviewed and discussed the Compensation Discussion and Analysis with members of senior management and, based on this review and discussion, the committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s annual report on Form 10-K and proxy statement on Schedule 14A.

 

THE COMPENSATION COMMITTEE

 

Kirk P. Pond, Chair

Shikhar Ghosh

Regina O. Sommer

 

The Compensation Committee believes that the compensation provided to the named executive officers in 2008 is in alignment with the Company’s financial performance for 2008 and the individual performance of each of the named executive officers. The Compensation Committee also believes that the total compensation paid to the executive officers collectively in 2008 was an appropriate reward for their efforts in driving stockholder value during the period. Total compensation for the named executive officers is shown in the Summary Compensation Table below.

 

 

 

 

 

 

 

 

 

 

The following table represents all plan-based awards granted to the named executive officers in 2008.

 

 

 

 

The following table represents stock options exercised and stock vested in 2008 by each of the named executive officers. All stock options were awarded when Wright Express was a subsidiary of Cendant Corporation and were converted to Wright Express options at the time of our initial public offering.

 

 

 

 

The following table represents stock options and unvested stock units held by each of the named executive officers as of December 31, 2008. The stock options and stock units granted prior to February 2005 were granted when Wright Express was a subsidiary of Cendant Corporation and were converted to Wright Express Corporation options and stock units at the time of the initial public offering.