Executive Compensation After “TARP” Right Management Workshop June 2, 2009 Right Management Workshop June 2, 2009

2 Executive Compensation In the News  The U.S. Department of the Treasury today issued interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the Troubled Asset Relief Program's (TARP) Capital Purchase Program (CPP). U.S. Department of Treasury January 16, 2009  “ We all need to take responsibility," he said while announcing the new compensation rules with Treasury Secretary Tim Geithner. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses.“ President Obama February 4, 2009  On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the "Act"), Title VII of which imposes new and more stringent limits on executive compensation for participants in the United Stated Department of Treasury ("Treasury") Troubled Assets Relief Program ("TARP") under the Emergency Economic Stabilization Act of 2008 (the "EESA").  “Where we’re hearing the most broadly talked about change that’s coming is that the TARP (Troubled Assets Relief Program) recipients will now include ‘say-on-pay’ advisory votes on their proxy statements,”. “This is something that the socially responsible investing industry has been pushing for a very long time.” Joanne Dowdell, Senior Vice President and Director of Corporate Responsibility at Sentinel InvestmentsTARPSentinel Investments  The U.S. Department of the Treasury today issued interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the Troubled Asset Relief Program's (TARP) Capital Purchase Program (CPP). U.S. Department of Treasury January 16, 2009  “ We all need to take responsibility," he said while announcing the new compensation rules with Treasury Secretary Tim Geithner. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses.“ President Obama February 4, 2009  On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the "Act"), Title VII of which imposes new and more stringent limits on executive compensation for participants in the United Stated Department of Treasury ("Treasury") Troubled Assets Relief Program ("TARP") under the Emergency Economic Stabilization Act of 2008 (the "EESA").  “Where we’re hearing the most broadly talked about change that’s coming is that the TARP (Troubled Assets Relief Program) recipients will now include ‘say-on-pay’ advisory votes on their proxy statements,”. “This is something that the socially responsible investing industry has been pushing for a very long time.” Joanne Dowdell, Senior Vice President and Director of Corporate Responsibility at Sentinel InvestmentsTARPSentinel Investments

3 When Do the American Recovery and Reinvestment Act “ARRA” Executive Compensation Restrictions Apply?  The new ARRA restrictions apply during the entire period in which any obligation arising from financial assistance provided under the TARP remains outstanding (the TARP period). However, the TARP period does not include any period when the federal government holds only warrants to purchase the TARP recipient’s common stock.  The restrictions on compensation under the ARRA focus largely on senior executive officers (SEOs). The new ARRA rules expand coverage for certain purposes to as many as the next 20 most highly compensated employees. SEOs are defined as the executives whose compensation must be disclosed in a public company’s annual filing under the Securities Exchange Act of  Restrictions under the ARRA may be classified according to the following broad categories:  prohibitions on certain types of compensation,  plan design qualitative considerations,  compensation clawbacks,  income tax deductions, and  corporate governance  The new ARRA restrictions apply during the entire period in which any obligation arising from financial assistance provided under the TARP remains outstanding (the TARP period). However, the TARP period does not include any period when the federal government holds only warrants to purchase the TARP recipient’s common stock.  The restrictions on compensation under the ARRA focus largely on senior executive officers (SEOs). The new ARRA rules expand coverage for certain purposes to as many as the next 20 most highly compensated employees. SEOs are defined as the executives whose compensation must be disclosed in a public company’s annual filing under the Securities Exchange Act of  Restrictions under the ARRA may be classified according to the following broad categories:  prohibitions on certain types of compensation,  plan design qualitative considerations,  compensation clawbacks,  income tax deductions, and  corporate governance

4 The Why of Executive Compensation  Attraction & Retention  Competitive landscape  Company practice  “I had it before” syndrome  Drive business success  Improve shareholder return (?)  Attraction & Retention  Competitive landscape  Company practice  “I had it before” syndrome  Drive business success  Improve shareholder return (?)

5 The What of Executive Compensation  Base pay  Cash incentives  Stock incentives  Deferred compensation  Retention awards  Perks  Employment contracts  Severance arrangements  Change-in-control agreements  Base pay  Cash incentives  Stock incentives  Deferred compensation  Retention awards  Perks  Employment contracts  Severance arrangements  Change-in-control agreements

6 The How of Executive Compensation  Compensation philosophy  Mix of compensation  Annual bonus plan  Long-term bonus plan  Legal, tax and financial implications  Board accountability  Compensation philosophy  Mix of compensation  Annual bonus plan  Long-term bonus plan  Legal, tax and financial implications  Board accountability

7 What's in Store for 2009 in Executive Compensation The Future State To get a sense of likely 2009 trends in executive compensation, Towers Perrin examined the Compensation Discussion and Analysis disclosures filed by the compensation committees of 135 Fortune 500 companies. For this group, they found:  44% are freezing executive salaries.  10% are reducing executive salaries, with the most common approach a 10% reduction below 2008 levels.  16% saw executives forgo — or compensation committees reduce — payouts of earned incentive awards in  14% announced that 2009 annual or LTI awards will be reduced or eliminated.  7% are curbing pay for directors. These findings suggest that many companies are struggling to strike the right balance between risk and reward. They're wrestling with pay-for-performance issues, along with risk tolerance, goal setting and other challenges in an environment of great uncertainty, where defining meaningful targets is much more difficult than usual. To get a sense of likely 2009 trends in executive compensation, Towers Perrin examined the Compensation Discussion and Analysis disclosures filed by the compensation committees of 135 Fortune 500 companies. For this group, they found:  44% are freezing executive salaries.  10% are reducing executive salaries, with the most common approach a 10% reduction below 2008 levels.  16% saw executives forgo — or compensation committees reduce — payouts of earned incentive awards in  14% announced that 2009 annual or LTI awards will be reduced or eliminated.  7% are curbing pay for directors. These findings suggest that many companies are struggling to strike the right balance between risk and reward. They're wrestling with pay-for-performance issues, along with risk tolerance, goal setting and other challenges in an environment of great uncertainty, where defining meaningful targets is much more difficult than usual.

8 Advice as You Negotiate Your “NEW DEAL”  Conduct due diligence on compensation philosophy  Review plan documents  Understand payout history on short and long term bonus plans  Ask about perks  Get it in writing  Hire a lawyer for contract review  Conduct due diligence on compensation philosophy  Review plan documents  Understand payout history on short and long term bonus plans  Ask about perks  Get it in writing  Hire a lawyer for contract review

9 Human Capital Consulting Partners LLC Contact: Jim Geier President and Founder Human Capital Consulting Partners LLC Cell: Office: Website: Contact: Jim Geier President and Founder Human Capital Consulting Partners LLC Cell: Office: Website: