Page 64 - MIC 2014 - English

EXECUTIVE COMPENSATION

and MacSween participate in the combination provision of executive’s remuneration for executive employment

the plan.
earned, generally after the executive completes
25 years of service. The total pension is limited to 70%
In addition to the pension provided under the Suncor
Energy Pension Plan, certain executive officers may receive of the executive’s remuneration, as described below.

supplemental retirement payments under the terms of the • Executive remuneration is an annualized amount of the
SERP. Under the terms of the SERP, any new participants average salary plus target bonus for the best

must be approved by the HR&CC. Nine persons who are consecutive 36 months of the last 180 months of
currently Suncor senior executives were participants in the continuous service. Target bonus cannot exceed 80%

SERP as at December 31, 2013.
of base salary for Senior Vice Presidents and Executive
Vice Presidents and 100% for other executives,

including the CEO.
‘‘The SERP design features
• Five years of executive employment including, where
support attracting key applicable, the period of notice of termination or

payment in lieu of such notice, are required for rights
mid-career senior executives, under the SERP to vest. Executive officers with less than

balanced with responsible five years of executive employment are not eligible to
receive supplemental retirement payments under the
governance of pension SERP except in the event of a change of control, or a

loss of employment upon or after the occurrence of
obligations.’’
certain specified events.

• SERP payments for retirement prior to age 60 will be

reduced by 5⁄12 th of 1% for each month that the
The SERP is a non-registered supplemental retirement executive officer retires before age 60; no reduction is
arrangement designed to attract mid-career executives with
applied for retirement after age 60.
a competitive career based pension that features an
up-front accrual. This attraction element is balanced by • The normal form of payment on retirement, and the
basis on which benefits in the table under ‘‘Defined
features that limit the executive pension by: (i) requiring
that an executive provide five years of service to be entitled Benefit Plans’’ are computed is, for married employees,
joint and survivor, with 50% to the non-member
to SERP benefits, which is three years more than the
service required under the Suncor Energy Pension Plan;
surviving spouse; and for single employees, for life,
with ten years guaranteed.
(ii) limiting service to Suncor related experience only, both
for vesting and benefit accrual purposes; (iii) limiting the • A portion of retirement income is payable by the

executive’s total pension to 50%, unless there is total Suncor Energy Pension Plan, including both the defined
service greater than 25 years, in which case the maximum benefit and defined contribution components, and a

is 70% of executive remuneration; and (iv) limiting portion is payable under the SERP. Canada Pension Plan
executive remuneration to a maximum of two times base payments are in addition to payments under the

salary (base salary plus annual incentive target bonus of up Suncor pension plans.
to 100% of base salary). All of the Named Executive
Officers, with the exception of Mr. Jackman, are members • Trust arrangements have been established to provide
for the long-term funding of Suncor’s
of the SERP. Additional details of the SERP follow.
non-U.S. taxpayer SERP obligations.
• Executive employment commences at the date of entry
into the SERP.
Petro-Canada Retirement Arrangements. The Petro-

• The SERP pension is based on the executive’s Canada Retirement Plan is a registered pension plan that
provides retirement income to certain Suncor employees
remuneration multiplied by a combined accrual rate of
5%, multiplied by the number of years of executive and former employees who worked for legacy Petro-
Canada prior to the merger, including Mr. Jackman. The
employment plus a pension formula percentage
determined in respect of the Suncor Energy Pension defined benefit provision of the plan has been closed to
new entrants since July 1, 1996. Mr. Jackman retired
Plan relating to service prior to becoming an executive,
limited to a combined accrual rate of 50%. The effective September 30, 2013.

pension increases by an additional 1.5% of the

62 SUNCOR ENERGY INC. MANAGEMENT PROXY CIRCULAR 2014