Item No. 6a Supp 
Meeting Date:   May 17, 2016 
Incentive Pay Plan 
2016 Salary and Benefits
Resolution Amendment 
May 17, 2016

Topics 
Incentive Pay Plan Design 
Customer Feedback 
Implementing the Incentive Pay Plan 
Partial year implementation 
Non-Financial Goals 

2

Incentive Pay Plan 
Results oriented 
Financial performance exceeds budget 
Payout is fully earned when two values driven, non-financial goals are met 
Self-funding and taxpayer oriented 
Financial performance must be above threshold before plan pays out 
At least half the positive variance is retained by the Port 
A portion is returned to the airport (required amount) 
A portion will go to the tax levy fund to help offset future increases 
Values driven, socially responsible 
Focuses on the triple bottom line 
Pays out to employees first, executive leadership follows 
Doesn't add to fixed salary costs 
Capacity building 
Makes the Port stronger over time 

Results oriented, self-funding and Century Agenda focused 
3

Business Case 
Motivates exceptional performance 
Drives Century Agenda goals 
Supports working together as "One Port" 
Improves the Port's ability to compete for talent 
Makes the Port more competitive with private employers 
Differentiates the Port among public sector employers 
Is consistent with high-performing employers 
Benefits taxpayers, may help offset future levy
increases 
One Port creating jobs in our community 
4

Motivating Exceptional Performance 
TWO TYPES OF GOALS 
1. Financial 
Self-funding 
2. Values Driven, non-financial 
Focuses the Port on the most important
social responsibility and environmental
sustainability commitments each year 
Results Oriented, Self-funding, Values Driven, Century Agenda Focused 
5

Incentive Pool Funding 
Adjusted Revenue Higher than
+  Budget 
Expenses Lower than Budget 
= Total Positive Variance                      Qualified
Employees 
Receive Incentive 
50% Retained 
by the Port               Incentive pool 
50% to 
Incentive Pool 

Financial & Non-Financial
Goals Met 
Financial goals must be met to fund pool 
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Payout Method 
Incentive
Pool 

Employees                       Executives 
Step 5 (Max)     Step 5.1 (Max) 
Step 4         Step 4.1 
Step 3         Step 3.1 
Step 2         Step 2.1 
Step 1         Step 1.1 
Minimum 
Incentive plan pays from the bottom up 
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Individual Payout Calculations 
Employees Earn Awards Based on Annual Performance Review Ratings 
Performance    Rating     Payout   Minimum  Step  Step  Step  Step   Step 5 - 
Rating     Distribution     Factor     Payout*    1     2     3     4    Maximum 
Unsatisfactory      0%      No Payout      0%     0%    0%    0%    0%      0% 
Contributing     0%  5%    1 X Payout     0.5%     1%    2%   3%    4%      5% 
Strong        65% - 70%    2 X Payout     1.0%     2%   4%   6%    8%      10% 
Highly
15% - 20%   3 X Payout    1.5%    3%   6%   9%   12%     15% 
Effective 
Exceptional     5% - 10%    4 X Payout     2.0%     4%    8%   12%   16%     20% 
Total Variance Needed to Fund            $2.0M                        $21.6M 
Payout Pool Funding                  $1.0M                       $10.8M 
NOTES  payouts are based on employees eligible earnings during the plan year 
Payouts assume all goals, financial and non-financial, are met
Funding step determined by the size of the payout pool 
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Positive Budget Variance Allocation 
At least 50% 
retained by the 
Port            Airport 
General/ Tax
Levy Fund 
Executive Leadership 
Team 
Employees 
50% Shared with 
employees 
For Illustrative Purposes Only 
Total variance shared with stakeholders 
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Following Up  Customer Feedback 
24 Line of Business customers contacted, 20
responded 
Overall, supportive of Incentive Pay 
Feedback reinforces our proposed plan design 
Tie to the Century Agenda, include a robust appraisal
process, emphasize self-funding 
Limited cautionary feedback 
Proceed cautiously, why not just increase base pay 
Helping employees work together is a good thing, but
hope it doesn't mean increased customer costs 
Some worry about cost of implementation, and possible
adverse impact on pay for ineligible employees 
Customers generally supportive of incentive pay 
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Implementing the Incentive Pay Plan 
RESOLUTION 
Commission authorizes pay and benefits 
PORT POLICY 
Policies related to authorized pay and benefits 
PLAN DOCUMENT 
Plan administration details 

Resolution is high level, Policy is mid-level, Documents are details 
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Implementing the Incentive Pay Plan 
Resolution 
Defines the Incentive Pay Plan, plan funding, specifies
goals must be communicated in advance, refers to Port
Policy HR-21 
Port Policy, HR-21, Pay Administration 
Includes link to the performance review program,
specifies performance ratings are considered when
determining individual performance awards 
Incentive Pay Plan Document 
Specifies how performance ratings are considered when
determining individual awards, specifies what the guided
performance rating distribution is, includes reference to
the performance review rating oversight process 
Details are contained in the plan document 
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Mid-year Implementation 
June 1, 2016 Implementation 
Mid-year implementation will require
adjustments 
Variance eligible to fund the payout pool will be pro-
rated 
Only 7/12 of the total positive variance will be
available for 2016 incentive pay plan calculations 
50% of the pro-rated total positive variance will
be used to determine payout step 
Only part of 2016 actual results will be incentive plan eligible 
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2016 Incentive Calculation Example 
If a 2016 year-end total positive         Then the variance eligible for
variance $21.6 Million            incentive pay plan calculations
$12.6 Million 

Retained 
by Port  
~58% of             $6.3M 
variance 
considered           Capped 
Incentive       Funds over cap
Pool  $5M      retained by the
Port  $1.3M 
7/12 pro-rating applied to actual         $5.0M capped payout pool estimated
reflecting June - December eligible        to fund Step 2.1, 0% to 8% payouts for
results                      employees and executive leaders 
Pro-rated total variance will result in smaller payouts 
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Values Driven Non-Financial Goals 
#1  Small Business and WMBE Participation 
a.   Increase small business contracting participation Port-wide, as
defined by the U.S. Small Business Administration guidelines to
35%, including the sub-goal of a 50% increase (over 2015) of
certified Washington State Office of Minority and Woman's
Business Enterprises to 5.1%. 
b.  By November 1, 2016, assess all Port efforts geared to
promoting small and WMBE business participation and provide
a report to the Commission rating the effectiveness of each and
providing specific recommendations for improvements for
Commission consideration. 

Focusing the Port on the triple bottom line 
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Values Driven Non-Financial Goals 
#2  Customer Satisfaction and Public Engagement 
a.   Quantitatively and qualitatively assess customer satisfaction of all
segments of non-aviation customers to measure satisfaction with Port
services and facilities; and identify specific areas for improvement.
b.   Improve aviation customer overall satisfaction, as measured by the
Airport Service Quality (ASQ), from 4.07 to 4.13. 
c.   Assess within our jurisdiction public and other local government
understanding of the Port and our role in the regional and local economy. 
d.   By November 1, 2016, provide a report to the Commission that includes: 
i.     Benchmarks for future goal setting to improve satisfaction with Port
services and facilities. 
ii.     Strategies to improve the ASQ. 
iii.    High impact actions and programs to improve public and other local
government understanding of the Port and our role in the regional
and local economy 
Focusing the Port on the triple bottom line 
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Values Driven Non-Financial Goals 
#3  Environmental Stewardship 
a.  Develop and ensure Port-wide implementation of an
environmental scorecard that measures the Port's
environmental footprint and that will serve to guide and
monitor reduction efforts in all Port operating and nonoperating
divisions. 
b.  By November 1, 2016, assess potential opportunities for
increasing the use of renewable energy and reducing
greenhouse gas emissions at Port owned facilities and
report findings and recommendations to the
Commission for consideration. 
Focusing the Port on the triple bottom line 
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ADDENDUM 


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Historical Port of Seattle Financial
Results 
2012        2013        2014        2015     2016 Forecast * 
Adjusted Act/Bud Var. 
Non-Aeronautical Revenues              $8,045       $2,031      $10,114      $19,895      $4,736 
Total Port O&M Expenses               $13,324      $16,846      $13,560      $11,092      $5,303 
Adjusted Total Favorable Var.             $21,369      $18,877      $23,674      $30,987      $10,039 
Available for Incentive Payout Pool    $10,684,669     $9,438,580    $11,837,106    $15,493,457    $2,911,310 
Payout Step      5           4           5           5          1.1 
Payout Pool Funding    $9,416,920    $7,769,582    $9,970,110    $11,179,303    $2,160,187 
Total Retained by POS    $11,952,417    $11,107,579    $13,704,102    $19,807,611    $7,878,813 
* includes pro-rated, partial year, total variance 


Proposed Incentive Pay Plan would have paid out in the last 4 years 
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Pool Funding Example 
PLAN FUNDS ITSELF 
2016 Budget  2016 Actual*   Variance 
Total Revenue            $584.5m 
Less Aeronautical Revenue   - $257.4m 
Adjusted Revenue        = $327.1m    $337.3m     $10.2m 
Total Port Expense         $336.1m    $324.7m    + $11.4m 
Total Variance                               = $21.6m 
50% to the Payout Pool                  $10.8m 
*NOTE  2016 Actual is for illustrative purposes only, total variance supports
maximum plan payout 
Incentive plan funded by positive budget variance 
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