Edgar Filing: WABCO Holdings Inc.

Definitive Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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WABCO Holdings Inc.

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LOGO

WABCO Holdings Inc.

Notice of Annual Meeting

of Shareholders and

Proxy Statement

May 25, 2012

Kramer, Levin, Naftalis

and Frankel, LLP

1177 Avenue of the

Americas

New York, NY 10036

Global Headquarters

Chaussée de Wavre, 1789

1160 Brussels

Belgium

Phone +32.2.663.98.00

Jacques Esculier

Chairman and Chief Executive Officer

April 13, 2012

Dear Shareholder:

I invite you to the Annual Meeting of Shareholders of WABCO Holdings Inc. This year’s meeting will be held on Friday, May 25, 2012, at 10:00 a.m. at the New York offices of Kramer, Levin, Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York 10036.

Our directors and representatives of our senior management will attend the meeting. We will consider the items of business listed in the attached formal notice of meeting and proxy statement. Our 2011 Annual Report accompanies this proxy statement.

Your vote is very important, regardless of the number of shares you hold. Whether or not you plan to attend the meeting in person, please cast your vote, as instructed in the Notice Regarding Availability of Proxy Materials or proxy card, over the Internet or by telephone, as promptly as possible. If you received only a Notice Regarding Availability of Proxy Materials in the mail or by electronic mail, you may also request a paper proxy card to submit your vote by mail, if you prefer. However, we encourage you to vote over the Internet because it is convenient and will save printing costs and postage fees, as well as natural resources.

On behalf of the management team and your Board of Directors, thank you for your continued support and interest in WABCO Holdings Inc.

Sincerely,

LOGO

Jacques Esculier

Chairman and Chief Executive Officer

WABCO Holdings Inc.

Notice of 2012 Annual Meeting of Shareholders

and Proxy Statement

To the Shareholders of

WABCO Holdings Inc.:

The Annual Meeting of Shareholders of WABCO Holdings Inc. will be held at the New York offices of Kramer, Levin, Naftalis & Frankel, LLP, 1177 Avenue of the Americas, New York, New York 10036, on Friday, May 25, 2012, at 10:00 a.m. to consider and vote upon the following proposals:

1. Election of three directors to Class II with terms expiring at the 2015 Annual Meeting of Shareholders.

2. Ratification of the appointment of Ernst & Young Bedrijfsrevisoren BCVBA/Reviseurs d’Entreprises SCCRL (“Ernst &Young Belgium”) as the company’s independent registered public accounting firm for the year ending December 31, 2012.

3. An advisory vote to approve the company’s executive compensation (“Say-on-Pay”).

We may also transact any other business as may properly come before the meeting.

Shareholders of record of the company’s common stock as of the close of business on April 4, 2012 are entitled to receive notice of the Annual Meeting of Shareholders and to vote. Shareholders who hold shares in street name may vote through their brokers, banks or other nominees.

Regardless of the number of shares you own, please vote. All shareholders of record can vote (i) over the Internet, (ii) by toll-free telephone (please see the proxy card for instructions), (iii) by written proxy by signing and dating the proxy card and returning it, or (iv) by attending the Annual Meeting of Shareholders in person. These various options for voting are described in the Notice Regarding the Availability of Proxy Materials and on the proxy card.

We encourage you to receive all proxy materials in the future electronically to help us save printing costs and postage fees, as well as natural resources in producing and distributing these materials. If you wish to receive these materials electronically next year, please follow the instructions on the proxy card.

By order of the Board of Directors,

LOGO

Vincent Pickering

Chief Legal Officer and Secretary

Brussels, Belgium

April 13, 2012

TABLE OF CONTENTS


	Page
ABOUT THE ANNUAL MEETING OF SHAREHOLDERS		1
BOARD RECOMMENDATION ON VOTING FOR PROPOSALS		4
PROPOSAL 1—ELECTION OF DIRECTORS		5
Recommendation		5
DIRECTORS		6
Nominees for Election for Class II Directors—Terms Expiring at 2012 Annual Meeting of Shareholders		6
Directors Continuing in Office		7
Class III Directors—Terms Expiring at 2013 Annual Meeting of Shareholders		7
Class I Directors—Terms Expiring at 2014 Annual Meeting of Shareholders		9
GOVERNANCE		11
Board Matters and Committee Membership		11
Committees of the Board		11
Risk Oversight		13
Compensation Committee Interlocks and Insider Participation		13
Board Attendance at the Annual Meeting of Shareholders		14
Independence Standards for Board Service		14
Board Leadership Structure		14
Communication with the Company’s Board of Directors		14
Availability of Corporate Governance Materials		15
DIRECTOR COMPENSATION		16
Director Compensation Program		16
Director Stock Ownership Guidelines		17
Director Compensation Table		17
CERTAIN RELATIONSHIPS OR RELATED PERSON TRANSACTIONS AND SECTION 16 REPORTING COMPLIANCE		18
Certain Relationships and Related Person Transactions		18
Section 16(a) Beneficial Ownership Reporting Compliance		18
AUDIT COMMITTEE MATTERS		19
Audit Committee Pre-Approval Policies and Procedures		19
Audit and Non-Audit Fees		20
PROPOSAL 2—RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		21
Recommendation		21
REPORT OF THE AUDIT COMMITTEE		22
REPORT OF THE COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE		23
COMPENSATION DISCUSSION AND ANALYSIS		24
Executive Summary		24
2011 “Say-on-Pay” Advisory Vote on Executive Compensation		27
Executive Compensation Philosophy; Compensation Program Objectives		27
Compensation Mix		29
Role of the WABCO CNG Committee in the Compensation Process		29
Role of Management in the Compensation Process		30
Peer Group		30
Components of 2011 Executive Compensation		31
Executive Stock Ownership Guidelines		38
Retirement Benefits		38
Perquisites		39
Payments upon Severance or Change of Control		39
Employment Matters		40
Impact of Taxation on Executive Compensation		41


	Page
EXECUTIVE COMPENSATION		43
Summary Compensation Table		43
Grants of Plan-Based Awards		45
Outstanding Equity Awards at Fiscal Year-End		47
Option Exercises and Stock Vested		49
Pension Benefits		49
Nonqualified Deferred Compensation		49
Other Retirement Plans		50
Potential Payments upon Termination or Change in Control		50
Potential Post-Employment Payments		50
EQUITY COMPENSATION PLANS		56
PROPOSAL 3—SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION		57
Recommendation		57
COMMON STOCK OWNERSHIP OF OFFICERS, DIRECTORS AND SIGNIFICANT SHAREHOLDERS		58
Ownership of Common Stock by Directors and Executive Officers		58
Ownership of Common Stock by Certain Significant Shareholders		59
OTHER MATTERS		60
Shareholder Proposals for the 2013 Annual Meeting of Shareholders		60
Director Nominations		60
Multiple Shareholders Sharing the Same Address		61
Electronic Access to Proxy Statement and Annual Report		61
Appendix A—Definition of Director Independence		A-1
Appendix B—Reconciliation of Non-GAAP Measures		B-1

ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

Why have I received these materials? The Board of Directors is soliciting proxies for use at the Annual Meeting of Shareholders of the company to be held on May 25, 2012.

Who may vote? You are entitled to vote if our records show you held one or more shares of the company’s common stock at the close of business on April 4, 2012, which we refer to as the record date. At that time 64,572,710 shares of common stock were outstanding and entitled to vote. Each share will entitle you to one vote at the Annual Meeting of Shareholders. For ten days prior to the Annual Meeting of Shareholders, during normal business hours, a complete list of all shareholders on the record date will be available for examination by any shareholder at the company’s offices at One Centennial Avenue, Piscataway, New Jersey 08855. The list of shareholders will also be available at the Annual Meeting of Shareholders.

How do I vote shares registered in my name? Under rules adopted by the Securities and Exchange Commission (“SEC”), we are primarily furnishing proxy materials to our shareholders on the Internet, rather than mailing paper copies of the materials (including our 2011 Annual Report to Shareholders (“annual report”)) to each shareholder. If you received only a Notice Regarding the Availability of Proxy Materials (the “Notice”) by mail or electronic mail, you will not receive a paper copy of these proxy materials unless you request one. Instead, the Notice will instruct you as to how you may access and review the proxy materials on the Internet. The Notice will also instruct you as to how you may access your proxy card to vote over the Internet. If you received a Notice by mail or electronic mail and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice.

We anticipate that the Notice will be mailed to our shareholders on or about April 13, 2012, and will be sent by electronic mail to our shareholders who have opted for such means of delivery on or about April 13, 2012. The Internet and telephone voting facilities for shareholders of record will close at 11:59 p.m., Eastern Daylight Time, on May 24, 2012.

About the proxy statement. The words “company,” “WABCO,” “we,” “us” and “our” refer to WABCO Holdings Inc., a Delaware corporation. We refer to the U.S. Securities and Exchange Commission as the “SEC” and the New York Stock Exchange as the “NYSE.” We were spun off from American Standard on July 31, 2007. We refer to this event as the “Spin-off.” American Standard later changed its name to “Trane,” and in 2008 was acquired by Ingersoll Rand. We use “Trane” in this proxy statement to refer to American Standard, even for periods prior to its name change and prior to the Spin-off. Finally, the words “common stock,” “stock” and “shares” refer to the company’s common stock, par value $.01 per share, which trades on the NYSE under the symbol WBC.

How will the company representatives vote for me? The company representatives, Jacques Esculier, Ulrich Michel, Todd Weinblatt and Vincent Pickering or anyone else they choose as their substitutes, have been chosen to vote in your place as your proxies at the Annual Meeting of Shareholders. Whether you vote by proxy card, Internet or telephone, the company representatives will vote your shares as you instruct them. If you do not indicate how you want your shares voted, the company representatives will vote as the Board recommends. If there is an interruption or adjournment of the Annual Meeting of Shareholders before the agenda is completed, the company representatives may still vote your shares when the meeting resumes. If a broker, bank or other nominee holds your common stock, they will ask you for instructions and instruct the company representatives to vote the shares held by them in accordance with your instructions.

Can I change my vote after I have returned my proxy card or given instructions over the Internet or telephone? Yes. After you have submitted a proxy, you may change your vote at any time before the proxy is exercised by submitting a notice of revocation or a proxy bearing a later date. Whether or not you vote using a traditional proxy card, through the Internet or by telephone, you may use any of those three methods to change your vote. Accordingly, you may change your vote either by submitting a proxy card prior to or at the Annual

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Meeting of Shareholders or by voting again before 11:59 p.m., Eastern Daylight Time, on May 24, 2012, the time at which the Internet and telephone voting facilities close. The later submitted vote will be recorded and the earlier vote revoked.

How do I vote shares held by a broker? If a broker, bank or other nominee holds shares of common stock for your benefit, and the shares are not in your name on the company’s stock transfer records, then you are considered a “beneficial owner” of those shares. Shares held this way are sometimes referred to as being held in “street name.” In that case, if you have previously elected to receive a paper copy of your proxy materials, this proxy statement and a proxy card have been sent to the broker. You may have received this proxy statement directly from your broker, together with instructions as to how to direct the broker to vote your shares. If you desire to have your vote counted, it is important that you return your voting instructions to your broker. Rules of the NYSE determine whether proposals presented at shareholder meetings are “routine” or “non-routine.” If a proposal is routine, a broker or other entity holding shares for an owner in street or beneficial name may vote on the proposal without voting instructions from the owner. If a proposal is non-routine, the broker or other entity may vote on the proposal only if the owner has provided voting instructions. A “broker non-vote” occurs when the broker or other entity is unable to vote on a proposal because the proposal is non-routine and the owner does not provide instructions. Proposal 1, the proposal to elect directors and Proposal 3, the “Say-on-Pay” advisory vote, are considered non-routine proposals under the rules of the NYSE. As a result, brokers or other entities holding shares for an owner in street name will not be able to vote on Proposals 1 or 3 unless such broker or entity receives voting instructions from the beneficial owner of the shares. We believe that Proposal 2, the proposal to ratify the appointment of Ernst & Young Belgium as the independent registered public accounting firm for the company for fiscal 2012, is considered a routine proposal under the rules of the NYSE. As a result, brokers or other entities holding shares for an owner in street name should be able to vote on Proposal 2, even if no voting instructions are provided by the beneficial owner of the shares. See “The effect of abstentions and broker non-votes” below.

Votes required for approval. Provided that a quorum is present, the nominees for director receiving a plurality of the votes cast at the meeting in person or by proxy will be elected. Approval of Proposal 2 requires the affirmative vote of a majority of shares present or represented and entitled to vote at the Annual Meeting of Shareholders. An affirmative vote of a majority of shares present or represented and entitled to vote at the Annual Meeting of Shareholders will be required to approve, on an advisory basis, Proposal 3, although such vote will not be binding on the company.

The effect of abstentions and broker non-votes. Abstentions are not counted as votes “for” or “against” a proposal, but are counted in determining the number of shares present or represented on a proposal for purposes of establishing a quorum. However, since approval of Proposals 2 and 3 require the affirmative vote of a majority of the shares of common stock present or represented at the Annual Meeting of Shareholders, abstentions will have the same effect as a vote “against” those Proposals. As discussed above under “How do I vote shares held by a broker?”, a “broker non-vote” occurs if you fail to vote shares held by a broker in respect of a proposal that is considered non-routine, and thus the broker cannot use its own discretion in casting the vote.

If you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of directors (Proposal 1). In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate. Changes in the rules have taken away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Moreover, if you hold your shares in street name it is critical that you cast your vote if you want it to count in the “Say-on-Pay” advisory vote (Proposal 3). As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), advisory votes on executive compensation are considered non-routine matters for which brokers do not have discretionary authority to vote shares held by account holders.

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What constitutes a quorum for purposes of the Annual Meeting of Shareholders? There is a quorum when the holders of a majority of the company’s common stock are present in person or by proxy. Withheld votes for the election of directors, proxies marked as abstentions and broker non-votes are treated as present in determining a quorum.

Who pays for this solicitation? The expense of preparing, printing and mailing this proxy statement and the accompanying material will be borne by WABCO Holdings Inc. Solicitation of individual shareholders may be made by mail, personal interviews, telephone, facsimile, electronic delivery or other telecommunications by officers and regular employees of the company who will receive no additional compensation for those activities. We will reimburse brokers and other nominees for their expenses in forwarding solicitation material to beneficial owners.

What happens if other business not discussed in this proxy statement comes before the meeting? The company does not know of any business to be presented at the Annual Meeting of Shareholders other than the three proposals in this proxy statement. If other business comes before the meeting and is proper under Delaware law, the company representatives will use their discretion in casting all of the votes they are entitled to cast.

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BOARD RECOMMENDATION ON VOTING FOR PROPOSALS

The Board’s recommendation for each proposal is set forth in this proxy statement together with the description of each proposal. In summary, the Board recommends a vote:

•

FOR Proposal 1 to elect three Class II directors.

•

FOR Proposal 2 to ratify the appointment of Ernst & Young Belgium as the company’s independent registered public accounting firm for the year ending December 31, 2012.

•

FOR Proposal 3 to approve, on an advisory basis, the compensation paid to the Company’s named executive officers (“Say-on-Pay”).

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PROPOSAL 1—ELECTION OF DIRECTORS

The company has three classes of directors. The number of directors is split among the three classes as equally as possible. The term of each directorship is three years so that one class of directors is elected each year. All directors are elected for three-year terms and until their successors are duly elected and qualified. The total number of directors established by resolution of the Board of Directors is currently ten but will automatically decrease to nine upon the expiration of the term of James F. Hardymon at the 2012 Annual Meeting of Shareholders, as discussed below.

At this Annual Meeting of Shareholders, the shareholders will vote to re-elect two current Class II directors, Michael T. Smith and John F. Fiedler. Shareholders will also vote to elect for the first time Jean-Paul L. Montupet to the Board as a Class II director. Mr. Montupet was recommended as a candidate by a third-party search firm and was elected to our Board of Directors as of April 1, 2012. The Class II directors will have a term expiring at the 2015 Annual Meeting of Shareholders.

The Board of Directors has no reason to believe that any of the nominees will not serve if elected. If a nominee should become unavailable to serve as a director, and if the Board designates a substitute nominee, the company representatives named on the proxy card will vote for the substitute nominee designated by the Board unless you submit a proxy withholding your vote from the nominee being substituted. Under the company’s amended by-laws, vacancies are filled by the Board of Directors.

Recommendation

The Board of Directors unanimously recommends that shareholders vote FOR Proposal 1, the election of Michael T. Smith, John F. Fiedler and Jean-Paul L. Montupet, as Class II directors.

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DIRECTORS

Nominees for Election for Class II Directors—Terms Expiring at 2012 Annual Meeting of Shareholders

James F. Hardymon, age 77, is currently a Class II director. In accordance with the retirement policy set forth in our Corporate Governance Guidelines, Mr. Hardymon will not stand for re-election and will retire from the Board of Directors when his term expires at the 2012 Annual Meeting of Shareholders. Mr. Hardymon was our Chairman of the Board from 2007-2009 and our Lead Director from 2009-2012. The Board of Directors extends its utmost appreciation to Mr. Hardymon for his five years of service on the Board.

Michael T. Smith—Age 68

Director since July 2007

Mr. Smith served as the Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation from 1997 to 2001, before retiring in 2001. Prior to his election to those positions, Mr. Smith had been Vice Chairman of Hughes Electronics and Chairman of the Hughes Aircraft Company. Mr. Smith joined Hughes Electronics in 1985 as Senior Vice President and Chief Financial Officer after spending nearly 20 years with General Motors in a variety of financial management positions. In 1992 he was elected Vice Chairman of Hughes Electronics and President of Hughes Missile Systems Group, and in 1995 he was elected Chairman of Hughes Aircraft Company. Mr. Smith was also a member of the board of directors of Alliant Techsystems until 2009. Mr. Smith is a member of the board of directors of Ingram Micro, Inc., Teledyne Technologies, Inc. and Flir Systems, Inc.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Smith to serve as a director of the company: significant executive management experience gained as an executive officer of a Fortune 500 company that is publicly traded on the New York Stock Exchange; strong international experience gained as the Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation; financial expertise acquired as Chief Financial Officer of Hughes Electronics and by holding various financial management positions with General Motors; and board experience gained as a member of the board of directors of three publicly-held companies. In summary, Mr. Smith has leadership and financial management abilities that substantially strengthen the company due to his multinational knowledge of the global automotive sector and his understanding of the strategic needs of major original equipment manufacturers.

John F. Fiedler—Age 73

Director since September 2007

Mr. Fiedler served as Chairman of the Board and Chief Executive Officer of BorgWarner Inc. from 1995 to 2003, before retiring in 2003. Before joining BorgWarner in 1994, Mr. Fiedler was an Executive Vice President with The Goodyear Tire & Rubber Company, culminating a 29-year career with the company by leading its North American tire division. He is a Member of the Board of Directors of Mohawk Industries and Snap-On Corporation. He is also a member of the Kent State Foundation Commission, an advisor to the Board of Trustees of the Manufacturers Alliance/MAPI and a member of the Board of Advisors of Prism Funds.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Fiedler to serve as a Director of the Company: significant executive management experience gained as an executive officer at Fortune 500 companies publicly traded on the New York Stock Exchange; strong international experience gained as a Chairman of the Board of Directors of BorgWarner; financial expertise acquired as a Chairman of the Board and member of three audit committees; and board experience gained as a director of four publicly-held companies and also as chairman of compensation and governance committees. In summary, Mr. Fiedler has board-level leadership abilities that are particularly relevant for the company due to his extensive knowledge of the global automotive sector and its associated dynamics surrounding technology, manufacturing and customer satisfaction.

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Jean-Paul L. Montupet—Age 64

Director since April 2012

Mr. Montupet was elected to the Board by our Board of Directors in March 2012 with effect from April 1, 2012. As a Class II director, Mr. Montupet is now nominated by the Board for election by our shareholders, along with the other Class II directors.

Mr. Montupet has been an Executive Vice President of Emerson Electric Co. since 1990, and is also an advisory Director of Emerson and President of Emerson Europe. In addition, Mr. Montupet is a director of Lexmark International, Inc. and PartnerRe Ltd.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Montupet to serve as director of the company: significant executive management experience gained as an executive officer at a global NYSE-listed Fortune 500 company; strong international experience gained as an executive officer of Emerson Electric Co., a company with more than 129,000 employees and 250 manufacturing locations worldwide; financial expertise acquired as a president and as a chief financial officer and serving on the audit committees of two publicly-traded companies; strong educational background with an advanced business degree from HEC Paris, one of the top business schools in Europe; and additional experience gained as a director of another company publicly-traded on the NYSE and the Paris Stock Exchange.

Directors Continuing in Office

Class III Directors—Terms expiring at 2013 Annual Meeting of shareholders

Jacques Esculier—Age 52

Director since July 2007 and Chairman since May 2009

Jacques Esculier has served as our Chief Executive Officer and Director since July 2007. Since May 2009, he has also served as our Chairman of the Board. Prior to July 2007, Mr. Esculier served as Vice President of American Standard Companies Inc. and President of its Vehicle Control Systems business, a position he had held since January 2004. Prior to holding that position, Mr. Esculier served in the capacity of Business Leader for American Standard’s Trane Commercial Systems’ Europe, Middle East, Africa, India & Asia Region from 2002 through January 2004. Prior to joining American Standard in 2002, Mr. Esculier spent more than six years in leadership positions at AlliedSignal/Honeywell. He was Vice President and General Manager of Environmental Control and Power Systems Enterprise based in Los Angeles and Vice President of Aftermarket Services—Asia Pacific based in Singapore.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Esculier to serve as our Chairman and Chief Executive Officer: significant executive management experience gained as an executive officer at two NYSE-traded Fortune 500 companies; strong international experience gained as an executive officer of American Standard; and financial expertise acquired as chief executive officer with the chief financial officer as a direct report and by holding several senior management positions. In summary, Mr. Esculier has multi-cultural leadership and outstanding strategic abilities to steward and sustain the company’s performance as it maintains its position as an industry innovation leader while pursuing global expansion and excellence in execution.

Kenneth J. Martin—Age 58

Director since July 2007

Mr. Martin served as the Chief Financial Officer and Vice Chairman of Wyeth (formerly American Home Products) from 2000 to 2007, before retiring in 2007. Mr. Martin joined American Home Products in 1984 as Assistant Director of Corporate Compliance and subsequently held the positions of Assistant Vice President of Finance for American Home Food Products. In 1989, he was appointed Vice President and Comptroller of American Home Products Corporation. In 1992, he became Executive Vice President for American Home Food

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Products. Two years later, he was promoted to Executive Vice President of Whitehall-Robins Healthcare and in 1995, President of American Home Food Products. He was named President of Whitehall-Robins Healthcare in 1997 and Senior Vice President and Chief Financial Officer of Wyeth-Ayerst Pharmaceuticals in 1998. In 2000, he was appointed Senior Vice President and Chief Financial Officer of Wyeth and in 2002, he was named Executive Vice President and Chief Financial Officer.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Martin to serve as a director of the company: significant executive management experience gained as an executive officer of a Fortune 500 company, publicly traded on the New York Stock Exchange; strong international experience gained as an executive officer of Wyeth; financial expertise acquired as a chief financial officer and by serving on two audit committees; and board experience gained as a member of our Board of Directors and Chairman of our Audit Committee, and a member of the executive committee of another publicly-held company. In summary, Mr. Martin has financial management and corporate compliance expertise that strongly contributes to the company’s success as a global operating entity in an industry that is subject to different safety and environmental regulations in different countries around the world where trucks, buses and trailers are manufactured, used or exported.

Donald J. Stebbins—Age 54

Director since September 2007

As Chairman and Chief Executive Officer of Visteon Corporation, Donald J. Stebbins is responsible for leading Visteon’s long-term strategy and overseeing the company’s global operations and administrative functions. Mr. Stebbins joined Visteon in 2005 as President and Chief Operating Officer, and was elevated to Chief Executive Officer effective June 1, 2008 and to Chairman effective December 1, 2008. He has more than 20 years of leadership experience and a solid history of performance in managing global business issues. He has served on Visteon’s board of directors since December 2006. Mr. Stebbins is also a director of ITT Corporation.

Mr. Stebbins joined Visteon from Lear Corp., where he was President and Chief Operating Officer of Lear’s operations in Europe, Asia and Africa. Prior to this position, he was President and Chief Operating Officer of Lear’s operations in the Americas. Stebbins joined Lear in 1992 as Vice President and Treasurer. He held various financial positions of increasing responsibility with Lear, including a 1997 promotion to Senior Vice President and Chief Financial Officer. Previous to Lear, Mr. Stebbins held positions at Bankers Trust Company and Citibank.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. Stebbins to serve as a director of the company: significant executive management experience gained as an executive officer of two Fortune 500 companies that are publicly traded on the New York Stock Exchange; strong international experience gained as Chairman and Chief Executive Officer of Visteon; financial expertise acquired by holding various financial positions of increasing responsibility with Lear, including the position of senior vice president and chief financial officer and also by holding various positions with banks; and board experience gained as a member of the Board of Directors of a publicly-held company. In summary, Mr. Stebbins has global leadership abilities, as well as deep connections with the corporate culture of the global automotive industry and is a contributor to the company’s strategy of geographic expansion while maintaining a leading technology and industry position in the Americas.

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Class I Directors—Terms Expiring at the 2014 Annual Meeting of Shareholders

G. Peter D’Aloia—Age 67

Director since July 2007

Mr. D’Aloia served as Senior Vice President and Chief Financial Officer of American Standard Companies Inc., a position he held since 2000, before retiring in 2008. Before joining American Standard, Mr. D’Aloia worked for Honeywell where he most recently served as Vice President—Business Development. He spent 27 years with Honeywell’s predecessor company, AlliedSignal, in diverse finance management positions. During his career with AlliedSignal, he served as Vice President—Taxes; Vice President and Treasurer; Vice President and Controller; and Vice President and Chief Financial Officer for the Engineered Materials Sector. Early in his career, he worked as a tax attorney for the accounting firm, Arthur Young and Company. Mr. D’Aloia is a director of FMC Corporation and ITT Corporation.

The Board of Directors concluded that the following experience, qualifications and skills qualified Mr. D’Aloia to serve as a director of the company: significant executive management experience gained as an executive officer of two Fortune 500 companies, both publicly traded on the New York Stock Exchange; strong international experience gained as Vice President and Chief Financial Officer for American Standard; financial expertise acquired as Chief Financial Officer of American Standard and by holding diverse financial management positions with AlliedSignal and working as tax attorney for the accounting firm, Arthur Young and Company; and board experience gained as a member of the board of directors of two publicly-held companies. In summary, Mr. D’Aloia has financial management abilities, including multinational legal, tax and banking expertise, that significantly contribute to the company’s success as a globally operating entity while taking full advantage of business opportunities in developed as well as emerging economies.

Juergen W. Gromer—Age 67

Director since July 2007

Dr. Gromer is the retired President and CEO of Tyco Electronics, a position which he held from April 1999 until December 31, 2007. Dr. Gromer formerly held senior management positions from 1983 to 1998 at AMP (acquired by Tyco in April 1999) including Senior Vice President of Worldwide Sales and Services, President of the Global Automotive Division, and Vice President of Central and Eastern Europe, and General Manager of AMP Germany. Dr. Gromer has over 20 years of AMP and Tyco Electronics experience, serving in a wide variety of regional and global assignments. Before working for Tyco Electronics and AMP, Dr Gromer held management positions at ZF Friedrichshafen, ITT and Procter & Gamble. Dr. Gromer serves as a member of the boards of directors of TE Connectivity (formerly Tyco Electronics) and Marvell Technology Group Inc. Dr. Gromer served as a director of RWE Rhein Ruhr AG from 2000 to 2009. He is also Chairman of the Board of the Society for Economic Development of the District Bergstrasse/Hessen, a member of the Advisory Board of Commerzbank, and a director and Vice President of the American Chamber of Commerce in Germany.

The Board of Directors concluded that the following experience, qualifications and skills qualified Dr. Gromer to serve as a director of the company: significant executive management experience gained as an executive officer of a Fortune 500 company publicly traded on the New York Stock Exchange; strong international experience gained as President of Tyco Electronics; financial expertise acquired as a President of Tyco Electronics and through various senior management positions and also as a member of the Advisory Board of Commerzbank; and board experience gained as a director of publicly-held companies. In summary, Dr. Gromer has global leadership abilities, as well as deep connections with European corporate culture, and he strongly contributes to the company’s strategy of geographic expansion while maintaining a leading technology and industry position in Europe.

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Mary L. Petrovich—Age 49

Director since November 2011

Mary Petrovich has been serving as a senior advisor to private equity with the Carlyle Group and American Security Partners since June 2011. Prior to this role, Ms. Petrovich served as General Manager of AxleTech International, a supplier of off-highway and specialty vehicle drive train systems and components, after its acquisition by General Dynamics in December 2008. Ms. Petrovich served as Chairman and Chief Executive Officer of AxleTech International from 2001 through the December 2008 sale of the company to General Dynamics. Prior to AxleTech, in 2000, Ms. Petrovich was President of the Driver Controls Division of Dura Automotive, possessing management responsibility for 7,600 employees. Ms. Petrovich is also a director at the following public companies: Woodward, Inc.; GT Advanced Technologies Inc. and Modine Manufacturing Company.

The Board of Directors concluded that the following experience, qualifications and skills qualified Ms. Petrovich to serve as a director of the company: extensive experience with mergers, acquisitions and the integration of acquired businesses in the automotive, off-highway and transportation industries; extensive operational experience with Six Sigma lean manufacturing techniques and supply chain management; significant experience in evaluating new business opportunities; and board experience gained as a director of publicly-held companies.

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GOVERNANCE

Board Matters and Committee Membership

Our business, property and affairs are managed under the direction of our Board of Directors. Members of our Board are kept informed of our business through discussions with our Chairman and Chief Executive Officer and other officers and employees, by reviewing materials provided to them during visits to our offices and plants and by participating in meetings of the Board and its committees.

The Board of Directors held a total of 6 meetings in 2011. The standing committees of the Board of Directors are the Audit Committee and the Compensation, Nominating and Governance Committee (the “CNG Committee”). All directors attended 75% or more of the combined total number of meetings of the Board of Directors and the Board committees on which they served during 2011.

The table below provides committee assignments and 2011 meeting information for each of the Board committees:


Name	Audit Committee			Compensation, Nominating and Governance Committee
G. Peter D’Aloia		X
Juergen W. Gromer⁺		X
James F. Hardymon					X
Kenneth J. Martin		X	*
Michael T. Smith					X	*
Jacques Esculier
John F. Fiedler					X
Donald J. Stebbins					X	⁺
Mary L. Petrovich		X	⁺
2011 Meetings		11			6

*	Indicates Committee Chair

⁺	In October 2011, Mr. Stebbins moved from the Audit Committee to the CNG Committee, and Dr. Gromer moved from the CNG Committee to the Audit Committee. Ms. Petrovich was appointed to the Audit Committee simultaneously with her election to the Board of Directors effective November 1, 2011.

Mr. Montupet was elected to the Board on March 28, 2012 with effect from April 1, 2012. Mr. Montupet has not yet been appointed to any Board committees.

Committees of the Board

Audit Committee

The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. Each member of the Audit Committee is independent as defined by the NYSE listing standards and the company’s independence standards. The Audit Committee’s responsibilities, as set forth in its charter, include:

•

reviewing the scope of internal and independent audits;

•

reviewing the company’s quarterly and annual financial statements and annual report on Form 10-K;

•

reviewing the adequacy of management’s implementation of internal controls;

•

reviewing with management and the independent auditors the company’s actions and activities concerning risk assessment and risk management;

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•

reviewing the company’s accounting policies and procedures and significant changes in accounting policies;

•

appointing the independent auditors and reviewing their independence and performance and the reasonableness of their fees; and

•

reviewing compliance with the company’s Code of Conduct and Ethics, major litigation, compliance with environmental standards and the investment performance and funding of the company’s retirement plans.

The Board of Directors has determined that Mr. Martin, chair of the Audit Committee, is an audit committee financial expert as defined by the SEC. In addition, the Board has determined that each member of the Audit Committee is financially literate as defined by the NYSE.

Compensation, Nominating and Governance Committee

Our Board of Directors has delegated its compensation, nominating and governance functions to a single standing committee, the CNG Committee. Each member of the CNG Committee is independent as defined by the NYSE listing standards and the company’s independence standards. The CNG Committee’s responsibilities, as set forth in its charter, include:

•

identifying individuals qualified to become members of the Board and recommending to the Board director nominees to be presented at the annual meeting of shareholders as well as nominees to fill vacancies on the Board;

•

recommending Board committee memberships, including committee chairpersons;

•

considering and making recommendations concerning director nominees proposed by shareholders;

•

developing and recommending to the Board corporate governance principles for the company and processes for Board evaluations;

•

reviewing and making recommendations concerning compensation of directors;

•

reviewing and making recommendations concerning officers’ salaries and employee benefit and executive compensation plans and administering certain of those plans, including the company’s incentive compensation and stock incentive plans;

•

reviewing and approving performance goals and objectives for all officers, evaluating performance against objectives and based on its evaluation, approving base and incentive compensation for all officers except for the Chairman and Chief Executive Officer, whose base and incentive compensation is recommended by the CNG Committee and approved by the independent members of the Board; and

•

evaluating executive succession plans, the quality of management, and leadership and management development.

For a description of the Committee’s responsibility in determining executive compensation, see “Compensation Discussion and Analysis—Role of the WABCO CNG Committee in the Compensation Process” in this proxy statement. Our Board of Directors includes several directors with European and international leadership experience which we believe provides the diversity of perspective necessary for a European-based company listed in the United States with increasingly global operations and sales. While international leadership experience is important to our CNG Committee, as described in “Other Matters—Director Nominations” below, our CNG Committee will also consider judgment, age, skills, gender, ethnicity, race, culture, thought, geography and other measures to ensure that the Board as a whole reflects a range of viewpoints, backgrounds, skills, experience and expertise.

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Risk Oversight

Our Board of Directors oversees risk management and risk assessment both directly and indirectly through the board committees. Board oversight is enterprise-wide, with a particular focus on five primary areas of risk: strategic, operational, financial, compliance and governance. To organize its risk oversight responsibilities, our Board of Directors reviews a comprehensive risk governance scorecard that identifies all of the material risk categories within these five primary areas and identifies a responsible person or “owner” among our senior management for managing that risk. Each risk category is then assigned to the full Board of Directors or to one or more of the board committees for primary monitoring responsibility. Both the company processes for managing the risk and the Board’s (or committee’s) processes for monitoring the risk are clearly set forth in the risk governance scorecard and both these processes and the delegation of responsibilities in the scorecard will be reviewed annually by our full Board of Directors.

Our audit committee focuses on financial risk, including internal controls, and receives regular reports from members of senior management, including our Chief Financial Officer, Controller, Chief Legal Officer, Treasurer, Vice President, Taxes and General Auditor. Our CNG Committee focuses on the risks associated with leadership assessment, management succession planning, corporate governance and executive compensation programs and policies. Each of these committees regularly reports to the full Board of Directors. In addition, our Board of Directors oversees the company’s strategic planning and receives reports at the beginning of each year regarding our annual operating plan and budget as well as our long-term planning and strategy.

Risk Assessment of our Compensation Program

In designing our compensation program for our executive officers, including our named executive officers, our CNG Committee structures such programs to balance reward and risk, while mitigating the incentive for excessive risk taking. The possibility of excessive risk taking is limited by the following measures:

•

Base salaries are fixed amounts;

•

Annual and long-term incentive plans are based on a balanced mix of complementary general corporate financial measures and do not take into consideration any specific/individual results of business units;

•

Maximum payouts under our annual and long-term incentive plans are capped;

•

Our long-term incentive plan is comprised of a combination of performance-based cash incentive awards and time-vested stock options and restricted stock units that vest over multiple years, or after multiple years (i.e. cliff vest), which aligns our named executive officers’ interests with our shareholders’ interests;

•

Cash and equity incentive awards are subject to forfeiture upon termination;

•

Members of the CNG Committee approve the final incentive awards after reviewing the executive and corporate performance achievements and may utilize negative discretion;

•

The company adopted an incentive pay recoupment policy, also referred to as a “clawback,” that requires recovery from executive officers of any 2012 Annual Incentive Plan awards if such compensation was received during the three-year period preceding the date of a restatement of any financial statements due to material non-compliance with the financial reporting rules; and

•

All of our directors and officers, including our named executive officers, are subject to stock ownership guidelines, as described below.

Our CNG Committee has determined that our officer and employee compensation programs, policies and practices are not reasonably likely to have a material adverse effect on our company.

Compensation Committee Interlocks and Insider Participation

None.

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Board Attendance at the Annual Meeting of Shareholders

In accordance with our Corporate Governance Guidelines, all directors are expected to attend the Annual Meeting of Shareholders. While the Board understands that there may be situations that prevent a director from attending, the Board strongly encourages all directors to make attendance at all annual meetings of shareholders a priority. All of our directors attended the company’s 2011 Annual Meeting of Shareholders.

Independence Standards for Board Service

The Board of Directors has adopted a definition of director independence for non-management directors that serve on the company’s Board of Directors which meet and in some areas exceed the NYSE listing standards. Each director, other than Jacques Esculier, the company’s Chairman and Chief Executive Officer, satisfies the definition of director independence adopted and accordingly has no material relationship with the company (either directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with the company) other than serving as a director of, and owning stock and options in, the company. A copy of our definition of director independence is attached to this proxy statement as Appendix A and is also available on our web site www.wabco-auto.com, by following the links “Investor Relations—Governance—Definition of Director Independence.” In addition, none of the company’s directors and executive officers participated in any related person transactions nor were any other transactions considered by the Board in determining directors’ independence. For a discussion of the company’s policy on related person transactions, please see “Certain Relationships or Related Person Transactions and Section 16 Reporting Compliance—Certain Relationships and Related Person Transactions” in this proxy statement.

Board Leadership Structure

From August 2007 through May 2009, the positions of Chairman of the Board and Chief Executive Officer were held by separate people, due in part to the fact that the company was a newly independent stand-alone public company, no longer part of Trane, and also due to the fact that the Board was newly constituted and, in large part, unfamiliar with the Chief Executive Officer. Based in part on the strong governance structure laid down by our then non-executive Chairman of the Board, the Board’s increasing familiarity and comfort with the Chief Executive Officer and in recognition of the potential efficiencies of having the Chief Executive Officer also serve in the role of Chairman of the Board, the Board decided to revise its structure. In 2009, our Board of Directors unanimously approved a proposal to combine the Chairman of the Board and Chief Executive Officer roles and appointed Jacques Esculier as Chairman of the Board. In connection with this appointment, our Board of Directors created the position of Lead Director and unanimously approved a proposal to appoint James Hardymon, who was formerly our non-executive Chairman of the Board, to such position effective as of the same date. Because of our mandatory retirement policy, Mr. Hardymon will not be standing for re-election to the Board. The Board has approved Michael Smith to succeed Mr. Hardymon as our Lead Director. Mr. Smith will commence as our Lead Director upon the expiration of Mr. Hardymon’s term as a director at our 2012 Annual Meeting of Shareholders.

As the Chairman of the Board, Mr. Esculier provides leadership to the Board and works with the Board to define its structure and activities in fulfillment of its responsibilities. Our Lead Director’s duties include presiding at all meetings of the company’s non-management directors and, in consultation with the Chairman of the Board, developing the agendas for the board meetings and determining the appropriate scheduling for board meetings. Our Lead Director also acts as a liaison between the company’s Chairman of the Board and the company’s non-management directors and assists the company’s independent directors in discharging their duties to the company and its shareholders. A more detailed description of the role of our Lead Director is included in our Corporate Governance Guidelines.

Communication with the Company’s Board of Directors

Our Lead Director presides over all executive sessions of the non-management directors. Shareholders or other interested parties wishing to communicate with our Board of Directors can communicate with our Board of

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Directors by writing to: Chief Legal Officer, c/o WABCO Holdings Inc., One Centennial Avenue, Piscataway, New Jersey 08855. Your message will not be screened or edited before it is delivered to the Lead Director. The Lead Director will determine whether to relay your message to other Board members. See “Other Matters—Director Nominations” below for a description of how shareholders may submit the names of candidates for director nominees to our Board of Directors.

Availability of Corporate Governance Materials

The company’s Code of Conduct and Ethics and Corporate Governance Guidelines, including our definition of director independence, as well as the charters for the Audit Committee and the Compensation, Nominating and Compensation Committee are available on our web site www.wabco-auto.com under the caption “Investor Relations—Governance.” The foregoing information is available in print to any shareholder who requests it. Requests should be addressed to Chief Legal Officer, WABCO Holdings Inc., One Centennial Avenue, Piscataway, New Jersey 08855.

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DIRECTOR COMPENSATION

The CNG Committee recommends to the full Board of Directors the compensation of the company’s non-management directors, including the level of stock awards and stock option grants that should be made annually to such directors. The full Board of Directors must approve any change to the compensation payable to the company’s non-management directors, whether in the form of cash or equity awards. The Board of Directors has responsibility for administering the company’s Omnibus Incentive Plan in respect of the company’s non-management directors. Neither the CNG Committee nor the Board of Directors has delegated any of its responsibilities regarding the compensation of the company’s non-management directors.

The CNG Committee annually reviews the aggregate compensation payable to the company’s non-management directors to determine that the level of stock awards made under the Omnibus Incentive Plan and the amount of cash compensation payable in respect of the annual retainer fee, the meeting attendance fees and the fees for service as a chair of the standing committees of the Board continue to be appropriate and consistent with the practices generally applicable at public companies of comparable size and in similar industries. As part of this review, the CNG Committee considers whether the allocation between cash and equity-based compensation continues to be appropriate. In connection with this annual review, the CNG Committee may request from time to time that the independent executive compensation consultant retained by the CNG Committee, Pearl Meyer & Partners (“PM&P”), review the pertinent data and advise on the competitiveness and appropriateness of the company’s compensation arrangements for its non-management directors. In early 2011, PM&P recommended some changes to the Director Compensation Program as described below. The CNG Committee also seeks input from the current Chairman and Chief Executive Officer and Chief Human Resources Officer of the company with respect to any recommendations that it may make regarding changes to the compensation program for non-management directors, but no other executive officer has any substantive role in the setting of such compensation.

Director Compensation Program

In January 2011, our Board of Directors, upon recommendation of the CNG Committee, approved the new Director Compensation Program. Under this Program, except for the Lead Director, each non-management director is paid an annual retainer of $110,000, of which $55,000 is paid in cash on a quarterly basis. The remaining $55,000 is paid in the form of deferred stock units (“DSUs”). Our Lead Director receives an annual retainer of $130,000, of which $75,000 is paid in cash on a quarterly basis and the remaining $55,000 is paid in the form of DSUs. Newly-elected non-management directors also receive DSUs equivalent in value to $50,000 based on the closing price of WABCO common stock on the last trading day before the director’s election to the Board.

The Chairs of the Audit and CNG Committees receive annual retainers of $15,000. All non-management directors receive $1,500 per day for attendance at in-person Board or committee meetings and $750 for attendance at telephonic Board or committee meetings (or for attending in-person meetings by telephone). Directors are also reimbursed for reasonable expenses incurred to attend meetings.

Equity Retainer—Deferred Stock Units

Our non-management directors received the equity portion of their annual retainer during 2011 in the form of fully vested DSUs. Each DSU provides a non-management director the right to issuance of a share of our common stock, within ten days after the earlier of the director’s death or disability, the 13th month anniversary of the grant date or the separation from service. Our non-management directors may elect within a month after the grant date to defer the receipt of shares for five or more years. A non-management director may not elect to accelerate the issuance of stock from a DSU. DSUs that will be provided to our non-management directors for the 2012 fiscal year will be granted in the same manner as in 2011.

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All equity granted to our non-management directors in the past has been issued under the company’s Omnibus Incentive Plan.

Deferred Compensation Plan

The Board of Directors adopted the WABCO Holdings Inc. Deferred Compensation Plan in December 2007. While the Deferred Compensation Plan is by its terms open to all non-management directors and executive officers, the Board has determined that only non-management directors will currently be entitled to participate in the Deferred Compensation Plan. The Deferred Compensation Plan permits the non-management directors to defer receipt of all or part of the cash portion of their retainer, meeting fees and any other amounts specified under the plan into either an interest bearing account or notional shares of WABCO common stock, as elected by the participant at the time he makes the election to defer the compensation. Once allocated to the interest account or the stock account, a participant may not change the manner in which the amounts deferred are deemed invested. The Deferred Compensation Plan provides that the company may also make discretionary contributions (including discretionary matching contributions) in addition to the amounts electively deferred by a participating non-management director. No discretionary matching contributions were made on behalf of non-management directors in 2011. Only one of our non-management directors, Mr. Stebbins, participated in the Deferred Compensation Plan in 2011. Mr. Stebbins has also elected to participate in the Deferred Compensation Plan for 2012.

Director Stock Ownership Guidelines

Under our stock ownership guidelines, our non-management directors are required to own shares of our common stock with a value equal to five times their annual cash retainer fees. Our non-management directors have five years from January 1, 2011 to attain such ownership levels. All non-management directors except Ms. Petrovich, who joined the Board in November 2011, and Mr. Montupet, who joined the Board in April 2012, are in compliance with the new ownership guidelines as of March 1, 2012. See “Compensation Discussion and Analysis—Executive Officer Stock Ownership and Stock Holding Guidelines” for a description of our stock ownership guidelines.

Director Compensation Table


Name	Fees Earned or Paid in Cash ($)		DSU Awards ($)⁽¹⁾		Total ($)
James F. Hardymon	$	91,500	$	55,000	$	146,500
G. Peter D’Aloia	$	73,750	$	55,000	$	128,750
John F. Fiedler	$	71,500	$	55,000	$	126,500
Juergen W. Gromer	$	72,250	$	55,000	$	127,250
Kenneth J. Martin	$	89,500	$	55,000	$	144,500
Mary L. Petrovich⁽²⁾	$	16,500	$	50,000	$	66,500
Michael T. Smith	$	86,500	$	55,000	$	141,500
Donald J. Stebbins⁽³⁾	$	73,750	$	55,000	$	128,750

(1)	The grant date fair value of these awards was $55,000 per director. The value of these awards was determined in accordance with ASC Topic 718.

(2)	Ms. Petrovich received a DSU award of $50,000 when she joined the Board on November 1, 2011.

(3)	Mr. Stebbins has elected to defer receipt of all of his 2011 cash compensation through the WABCO Deferred Compensation Plan.

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CERTAIN RELATIONSHIPS OR RELATED PERSON TRANSACTIONS AND SECTION 16

REPORTING COMPLIANCE

Certain Relationships and Related Person Transactions

The Audit Committee of the Board of Directors has adopted a written policy governing the review and approval or ratification of related person transactions. Under the policy, a related person transaction is any transaction exceeding $120,000 in which the company or a subsidiary, on the one hand, and an executive officer, director, holder of 5% or more of the company’s voting securities or an immediate family member of such person, on the other hand, had or will have a direct or indirect material interest.

No related person transaction shall be approved or ratified if such transaction is contrary to the best interest of the company. Unless determined otherwise by the Audit Committee, any related person transaction must be on terms that are no less favorable to the company than would be obtained in a similar transaction with an unaffiliated third party under the same or similar circumstances.

Unless the Audit Committee determines otherwise, any proposed related person transaction directly between the company and an executive officer, director or immediate family member should be reviewed prior to the time the transaction is entered into. In addition, the policy provides that ordinary course transactions are not considered related person transactions, and therefore do not require approval under the company’s related person transaction policy. An ordinary course transaction means a transaction that occurs between the company or any of its subsidiaries and any entity (i) for which any related person serves as an executive officer, partner, principal, member or in any similar executive or governing capacity, or (ii) in which such related person has an economic interest that does not afford such related person control over such entity, and such transaction occurs in the ordinary course of business on terms and conditions that are no less favorable to the company or, if applicable, a subsidiary than would otherwise apply to a similar transaction with an unrelated party. In addition, all immaterial relationships and transactions identified in the Instructions to Item 404(a) of Regulation S-K are incorporated into the policy, and accordingly, all such immaterial relationships or transactions are not related person transactions and do not require approval under the policy.

The Chief Legal Officer is responsible for making the initial determination as to whether any transaction constitutes a related person or ordinary course of business transaction and for taking all reasonable steps to ensure that all related person transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K are presented to the Audit Committee for pre-approval or ratification. If a related person transaction involves the Chief Legal Officer, the Chief Financial Officer shall perform the responsibilities under the policy.

The Audit Committee reviews and assesses the adequacy of the policy annually.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, certain executive officers, and persons who own more than 10% of the outstanding common stock to file reports of ownership and changes in ownership with the SEC and the NYSE. The SEC regulations require the company to identify anyone who failed to file a required report or filed a late report during the most recent fiscal year. To the company’s knowledge, with respect to fiscal year ended December 31, 2011, all applicable filings were timely filed, except that on July 12, 2011, a late Form 4 was filed for Mr. Michel to report the July 7, 2011 disposition of shares following the exercise of certain stock options and the vesting of certain restricted stock units.

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AUDIT COMMITTEE MATTERS

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of Ernst & Young Belgium, our independent registered public accounting firm (“independent auditor”). The independent auditor reports directly to the Audit Committee. As part of its responsibility, the Audit Committee established a policy to pre-approve all Audit Services and permissible Non-Audit Services performed by the independent auditor. In pre-approving services, the Audit Committee considers whether such services are consistent with the SEC’s rules on auditor independence.

The Audit Committee also considers whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its understanding and knowledge of the company’s business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the company’s ability to manage or control risk or improve audit quality.

The Audit Committee is mindful of the relationship between fees for Audit and permissible Non-Audit Services in deciding whether to pre-approve any such services and may determine, for each fiscal year, the appropriate relationship between the total amount of fees for Audit and Audit-Related Services and the total amount of fees for Tax Services and certain permissible Non-Audit Services classified as “All Other Services.” Prior to the engagement of the independent auditor for an upcoming audit/non-audit service period, defined as a twelve-month timeframe, Ernst & Young Belgium submits to the Audit Committee for approval a detailed list of services expected to be rendered during that period as well as an estimate of the associated fees for each of the following four categories of services:

Audit Services consist of services rendered by an external auditor for the audit of the company’s annual consolidated financial statements (including tax services performed to fulfill the auditor’s responsibility under generally accepted auditing standards), the audit of internal control over financial reporting performed in conjunction with the audit of the annual consolidated financial statements and reviews of financial statements included in Form 10-Qs. Audit Services includes services that generally only an external auditor can reasonably provide, such as comfort letters, statutory audits, attest services, consents and assistance with and review of documents filed with the SEC.

Audit-Related Services consist of assurance and related services (e.g., due diligence) by an external auditor that are reasonably related to audit or review of financial statements, including employee benefit plan audits, due diligence related to mergers and acquisitions, employee benefit plan audits, accounting consultations and audits in connection with proposed or consummated acquisitions, internal control reviews, attest services related to financial reporting that are not required by statute or regulation, audit-related litigation advisory services and consultation concerning financial accounting and reporting standards, including compliance with Section 404 of the Sarbanes-Oxley Act.

Tax Services consist of services performed by the independent auditor’s tax personnel except those included in Audit Services above. Tax Services include those services rendered by an external auditor for tax compliance, tax consulting, tax planning, expatriate tax services, transfer pricing studies, tax planning, and tax issues related to stock compensation.

Other Non-Audit Services are any other permissible work that is not an Audit, Audit-Related or Tax Service and include non-audit-related litigation advisory services and administrative assistance related to expatriate services.

For each type of service, details of the service as well as estimated fees are reviewed and pre-approved by the Audit Committee as either an annual amount or specified stand-alone activity. Pre-approval of such services is used as the basis for establishing the spend level, and the Audit Committee requires the independent auditor to report detailed actual/projected fees versus the budget periodically throughout the year by category of service and by specific project.

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Circumstances may arise during the twelve-month period when it may become necessary to engage the independent auditor for additional services or additional effort not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent auditor.

This review is typically done in formal Audit Committee meetings, however, the Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

Audit and Non-Audit Fees

Fees billed to the company by Ernst & Young Belgium for services rendered in 2011 and 2010 were as follows:


Type of Services⁽¹⁾	2011		2010
	(in thousands)
Audit	$	3,024	$	2,664
Audit-Related	$	61	$	41
Tax	$	386	$	400
All Other	$		$	9

Total	$	3,471	$	3,114

(1)	For a description of the types of services, see “Audit Committee Matters—Audit Committee Pre-Approval Policies and Procedures,” above.

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PROPOSAL 2—RATIFICATION OF APPOINTMENT OF THE

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed Ernst & Young Belgium as the company’s independent registered public accounting firm to examine the consolidated financial statements of the company for the year 2012 upon terms set by the Audit Committee. The Board of Directors recommends that this appointment be ratified by the shareholders. If the appointment of Ernst & Young Belgium is not ratified by the shareholders, the Audit Committee will give consideration to the appointment of other independent certified public accountants.

Representatives of Ernst & Young Belgium will be present at the Annual Meeting of Shareholders, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Recommendation

The Board of Directors unanimously recommends that shareholders vote FOR Proposal 2, the ratification of the appointment of Ernst & Young Belgium as the company’s independent registered public accounting firm for the year ending December 31, 2012.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the company’s financial reporting process on behalf of the Board of Directors. In fulfilling its responsibilities, the committee has reviewed and discussed the audited financial statements in the Annual Report with the company’s management and independent auditors.

Management has the primary responsibility for the financial statements and the reporting process including the internal controls systems, and has represented to the Audit Committee that such financial statements were prepared in accordance with generally accepted accounting principles. The independent auditors are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles.

The Audit Committee has discussed with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended. In addition, the committee has discussed with the independent auditor, the auditor’s independence, including the matters in the written disclosures and letter which were received by the committee from the independent auditors, as required by Independence Standard Board No. 1, Independence Discussions with Audit Committees. The Audit Committee has also considered whether the independent auditor’s provision of non-audit services to the company is compatible with maintaining the auditor’s independence.

The committee discussed with the company’s internal and independent auditors the overall scope and plans for their respective audits. The committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the company’s internal controls, and the overall quality of the company’s financial reporting.

Based on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2011, for filing with the Securities and Exchange Commission.

Members of the Audit Committee:

Kenneth J. Martin, Chairman

G. Peter D’Aloia

Juergen W. Gromer

Mary L. Petrovich

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REPORT OF THE COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE

The Compensation, Nominating and Governance Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the members of the Compensation, Nominating and Governance Committee identified below recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Members of the Compensation, Nominating and Governance Committee

Michael T. Smith, Chairman

John F. Fiedler

James F. Hardymon

Donald J. Stebbins

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

We seek to closely align the interests of our named executive officers with the interests of our shareholders. Our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder return, while at the same time avoiding incentives that encourage unnecessary or excessive risk-taking. Our named executive officers’ total compensation is comprised of a mix of base salary, annual cash incentive awards and long-term incentive awards that include both performance-based cash and equity awards.

For 2011, our named executive officers (“NEOs”) were:


• Jacques Esculier		Chairman and Chief Executive Officer

• Ulrich Michel		Chief Financial Officer

• Jean-Christophe Figueroa		Vice President, Vehicle Control Systems

• Nikhil Varty		Vice President, Americas and Mergers & Acquisitions (formerly Vice President, Compression and Braking)

• Kevin Tarrant		Chief Human Resources Officer

2011 Performance

2011 was a very successful year for us and one in which we continued to outperform the global market for truck and bus production. We experienced an improved global economic climate and continued to benefit from cost savings actions taken in 2009 as well as the execution of our growth and performance strategy. Market conditions improved more than our original expectations as our sales reached a record $2.8 billion, up 22% in local currencies from a year ago and 87% from 2009. We capitalized on this growth by delivering another record level of incremental operating profit margin at 27%. We also reported full year 2011 performance net income¹ of $325.7 million or $4.73 per diluted share versus performance net income of $190.2 million or $2.86 per diluted share for 2010. We also dramatically improved our free cash flow² to $228 million in 2011 from negative $263.7 million in 2010.

Performance net income is a non-GAAP financial measure that excludes separation and streamlining costs, one-time and discrete tax items, as well as a one-time transitional impact from the adoption of a new accounting standard. See Appendix B for a discussion of non-GAAP measures and reconciliation to the most comparable GAAP measures.

Free cash flow is a non-GAAP financial measure that reflects net cash provided by operating activities less net cash used for purchases of property, plant, equipment and computer software and proceeds from the disposal of property. See Appendix B for a discussion of non-GAAP measures and reconciliation to the most comparable GAAP measures.

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Pay for Performance

We believe that there is a strong correlation between our financial performance results, which were used to determine the payments under our incentive plans, and our stock performance. The following graph illustrates the alignment between executive compensation for our CEO and our total shareholder return ending the prior year since equity grants and cash incentives are typically made during the first quarter based on prior year performance.

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¹	CEO Pay (in $000s) includes base salary, the annual incentive award for 2011 performance, the 2009-2011 LTIP award, restricted stock and option awards granted in February 2011 and the full value of the special performance-based restricted stock award granted in May 2011.

²	Total shareholder return (“TSR”) = stock price appreciation plus reinvested dividends. TSR is indexed to December 31, 2008 in the exhibit above.

Overview of 2011 Compensation Decisions and Actions

We believe the compensation decisions made by our CNG Committee and our Board of Directors in 2011 reflect our company’s continued strong performance for 2011 and improvements in the global economy, specifically in the commercial vehicle industry. In light of (i) our improved financial performance, including growth in sales and earnings, (ii) our financial performance relative to our peers, (iii) the scope of responsibility and performance of our NEOs throughout the global downturn, and (iv) our compensation levels relative to our peer group based in part on market data provided by Pearl Meyer & Partners (“PM&P”), the following compensation actions were taken for 2011 by the CNG Committee, or by the independent members of the Board of Directors in the case of CEO compensation actions:

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In January 2011, the CNG Committee established the 2011 cash annual incentive plan (“AIP”) target award levels and performance goals.

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In February 2011, the CNG Committee made grants of equity-based incentives to the NEOs at target award levels. Similar to prior years, the equity award value was evenly split between stock options and restricted stock.

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In March 2011, the CNG Committee established the 2011-2013 LTIP target award levels and performance goals. Awards under this overlapping long-term cash incentive program will only be paid, if earned, after the end of 2013.

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In May 2011, we increased the base salaries of each of our NEOs by 3%, except for an increase of 11% for our Chairman and Chief Executive Officer to better approximate peer group median levels.

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After year end, the CNG Committee approved 2011 annual incentive award payouts at 158% to 176% of target for the NEOs, with the CEO’s award at 160% of his target award. These award levels reflect strong corporate and individual performance, particularly for 2011 performance net income, incremental operating margin and free cash flow goals which had each been achieved at above maximum levels.

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After year end, the CNG Committee also approved 2009-2011 long-term incentive plan (“LTIP”) cash award payouts at 200% of target since each of the three performance goals, three-year sales, earnings per diluted share and return on invested capital, had been achieved at above maximum levels.

As part of its comprehensive succession planning and retention review process, the CNG Committee also considered special compensation actions at its May 2011 meeting. As a result of the Company’s demonstrated results through the economic downturn and its positive impact on the stock price, each of the NEOs has meaningful stock ownership. “Tally sheet” analysis of the value of all vested, unvested, exercised and unexercised equity identified an elevated retention risk as several historical equity awards were scheduled to vest in early 2012. Based on this review process and with the objective of supporting longer term management performance and continuity, the following special compensation actions were approved by the CNG Committee, or by the independent members of the Board of Directors in the case of CEO compensation actions:

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We granted our Chairman and Chief Executive Officer a special performance-based restricted stock unit award that will vest on May 26, 2015, or four years after the grant date, subject to the company achieving certain pre-determined performance goals relating to cumulative earnings per diluted share over the four-year period.

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We granted each of our other NEOs an additional award of restricted stock units that will vest on May 25, 2014, subject to continued employment with the company.

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We also adopted an exchange rate protection policy for our Chairman and Chief Executive Officer so that his compensation would not be adversely impacted by drastic swings in the U.S. dollar/Euro exchange rate. See “Perquisites.”

Executive Compensation Policy Changes

We strive to maintain strong corporate governance practices with respect to executive compensation. In this respect, we implemented the following significant changes to our executive compensation policies in 2011:

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We removed the excise tax gross-up payment provisions previously included in our Change in Control Severance Plan, effective January 1, 2012.

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We adopted an incentive pay recoupment policy, also referred to as a “clawback,” that requires the company to recover from any current or former executive officer any compensation received under our 2012 Annual Incentive Plan, if such compensation was received by the executive officer during the three-year period preceding the date by which the company files a restatement of any annual audited or unaudited interim financial statements due to material non-compliance with the financial reporting rules under the federal securities laws.

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We revised our equity award agreements under our Omnibus Incentive Plan to provide that, beginning in 2012, all equity compensation awarded will be subject to recoupment by the company in the event that a recipient is terminated for cause or the recipient breaches certain confidentiality, non-solicitation, non-competition or other contractual arrangements specified in the equity award agreements. The amended equity award agreements will also provide for the immediate forfeiture of any unexercised options and unvested restricted stock unit or share awards in such cases. Option gains or share value received within 12 months prior to termination for cause or breach of restrictive covenants will also be subject to recoupment. The CNG Committee believes that allowing the company to “clawback” these amounts will decrease the likelihood of grantees engaging in conduct that is potentially harmful to the company and therefore aligns grantee interests more closely with shareholder interests.

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We also continued to:

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prohibit our directors, NEOs, and other key executive officers from hedging the economic interest in the company securities that they hold.

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prohibit our directors and company personnel, including the NEOs, from engaging in any short-term, speculative securities transactions, including purchasing securities on margin, engaging in short sales, buying or selling put or call options, and trading in options (other than those granted by the company).

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provide a balanced compensation program that emphasizes at-risk incentive pay which is earned based on successful achievement of multiple complementary performance metrics.

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follow stock ownership guidelines, as well as mandatory holding periods.

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use an independent compensation consultant that does not provide any services to management and that had no prior relationship with management prior to the engagement.

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maintain a strong risk management program, which includes our CNG Committee’s significant oversight of the ongoing evaluation of the relationship between our compensation programs and risk.

We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our executive compensation program, including information about the 2011 compensation of our NEOs.

2011 “Say-on-Pay” Advisory Vote on Executive Compensation

We provided shareholders a “say-on-pay” advisory vote on our executive compensation in April 2011 pursuant to the Dodd-Frank Act and SEC rules. At our 2011 Annual Meeting of Shareholders, shareholders expressed substantial support for the compensation of our NEOs, with approximately 96% of the votes cast for approval of the “say-on-pay” advisory vote. The CNG Committee carefully evaluated the results of the 2011 annual advisory “say-on-pay” vote, and although the “say-on-pay” vote is advisory and is not binding on our Board of Directors, the CNG Committee took the approval into consideration in determining that our current compensation philosophy and objectives remain appropriate for use in determining the compensation of our NEOs.

Executive Compensation Philosophy; Compensation Program Objectives

Our executive compensation program is intended to deliver competitive total cash compensation upon achievement of performance objectives and has been developed consistent with our strategy to attract, motivate and develop leaders who will drive the creation of shareholder value. We generally seek to compensate our executives at approximately the median level of total compensation among similarly situated executives in our peer group when we set compensation levels for targeted levels of performance. See the section entitled “Peer Group” below for more information about our peer group.

Our compensation program generally involves a mixture of fixed and variable and cash and equity compensation programs. Variable compensation programs are balanced between short- and long-term objectives, placing a significant amount of the executive’s compensation at risk based on company and individual performance.

Each of the program components is designed to drive a complementary set of behaviors and outcomes.

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Base salary and benefits are designed to attract and retain executives over time by providing regular and continued payment in line with the executive’s position, experience and responsibilities.

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Annual performance-based cash awards are designed to focus our executives on short-term objectives to foster short-term growth and profitability.

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Long-term incentives are designed to develop a clear line of sight and linkage to our long-term strategy, as well as to attract and retain our executives and employees. Long-term incentives consist of a mix of equity awards and cash awards. The equity awards, usually in the form of stock options and restricted stock units, comprise the majority of long-term incentive value and are used to align the interests and financial opportunities of our executive officers with those of our shareholders. For example, the special performance-based restricted stock unit award that we granted to our Chairman and Chief Executive Officer will only vest if the company achieves certain cumulative earnings per diluted share performance goals over the four-year period ending on May 26, 2015.

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Severance benefits and change of control plans are designed to neutralize the potential conflicts our executive officers may face in the context of a potential change of control or other possible termination situation and to facilitate our ability to attract and retain key executives as we compete in a marketplace where such protections are commonly offered. As a European-based company with European national executive officers, we also consider the effect of statutory severance and change of control benefits that may apply under the law of the executive’s country of citizenship and European Union law when designing our contractual severance benefits.

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Other benefits and perquisite programs are evaluated in light of market practice, the law of the executive’s country of citizenship and European Union law.

Each of these elements is described in more detail below.

The CNG Committee evaluates all compensation and benefit programs and decisions in light of the total compensation package awarded to each NEO (including the impact of how these programs and decisions impact other elements of compensation). To that end, the CNG Committee reviews “tally sheets” once per year that include all of the components of each NEO’s compensation, including base salary, target annual incentive awards, target long-term incentive awards, the value of all vested, unvested, exercised and unexercised equity, benefits and perquisites. These “tally sheets” are organized to reflect both the value of each NEO’s total compensation assuming continuing employment, as well as the additional compensation the NEO would be entitled to earn upon a separation from the company for voluntary reasons, involuntary reasons, or pursuant to a change of control of the company.

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Compensation Mix

We believe that a significant portion of an executive’s compensation should be directly linked to our own performance and the creation of shareholder value. To that end, our CNG Committee has structured our executive compensation program so that a high percentage of our NEOs’ total direct compensation (which includes base salary, cash incentives and equity incentives) is at risk. As illustrated and explained below, 80% of our Chief Executive Officer’s total direct compensation, and, on average, 68% of our other NEOs’ total direct compensation, is based on attaining performance goals or paid in the form of equity incentives.

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1. The percentages attributable to cash incentives are based on the dollar amount payable due to attaining performance goals at target.

2. The percentages attributable to equity incentives are based on the potential fair market value at target levels of such incentives (stock option and restricted stock units) in accordance with Black-Scholes option valuation methodology. In any given year, we may exceed these target percentages. For example, in 2011, the percentage of NEO total direct compensation attributable to equity incentives was higher due to the May 2011 special performance-based restricted stock unit awards. See “Special Restricted Stock Unit Awards” below.

We believe that our compensation program reinforces our pay-for-performance philosophy, has the flexibility to adapt to market conditions and has resulted in pay outcomes that are in line with our business performance.

Role of the WABCO CNG Committee in the Compensation Process

As required by its charter, our CNG Committee is responsible for developing our total compensation philosophy, recommending to our Board of Directors our executive compensation programs, including cash incentives, equity incentives, benefits and perquisites, and reviewing our compensation philosophy and compensation and benefits programs to determine whether they are properly coordinated and achieving their intended purposes. The CNG Committee reviews and approves the compensation of our executive officers and recommends for approval to the independent members of our Board the compensation of our Chairman and Chief Executive Officer. The CNG Committee also sets performance goals for all performance-based compensation, and reviews and certifies payouts of awards based on its evaluation of the company’s performance and the executive officers’ performance against such goals.

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To assist the CNG Committee in meeting its responsibilities, the CNG Committee engaged Pearl Meyer & Partners as its independent outside compensation consultant to provide executive compensation market analysis and insight, with respect to our executive officers, including our NEOs. PM&P only provides services on behalf of the CNG Committee with respect to executive and director compensation.

Role of Management in the Compensation Process

Our Chairman and Chief Executive Officer works with our Chief Human Resources Officer to make recommendations to the CNG Committee with respect to the compensation of other executive officers, including base salary levels, target annual incentive awards, target long-term incentive awards, benefits and perquisites. At the CNG committee’s request, our Chairman and Chief Executive Officer attends meetings of the CNG Committee to present his views with respect to the appropriate levels of compensation for his executive team, but is not present when his own compensation is discussed. All decisions regarding NEO compensation are ultimately made by the CNG Committee.

In addition, under our governance documents, our independent Board members are required to approve all compensatory programs, awards or payouts relating to our Chairman and Chief Executive Officer, upon recommendations from the CNG Committee.

At the direction of the CNG Committee, our human resources department provides compensation-related information to PM&P relating to our executive officers that PM&P uses as part of its development of market competitiveness analyses and recommendations for executive compensation program design.

Peer Group

The peer group comprises 16 companies reflecting both U.S. and European publicly-traded companies that operate in the same industry sector, compete with us for executive talent and have executive positions similar in breadth, complexity and global responsibility. Our peer group was initially established in 2008 and was comprised of companies of similar size in a range of approximately one-third to three times our revenue, market value and enterprise value. Since the peer group was first established, Tomkins plc has been acquired and its data are no longer available.

The following companies are WABCO’s peers for compensation benchmarking purposes in 2011:


U.S. Based		Non-U.S. Based
Accuride Corporation		Autoliv, Inc.
BorgWarner Inc.		Bekaert NV
Cooper Tire & Rubber Company		Brembo S.p.A.
Harman International Industries, Incorporated		GKN plc
Modine Manufacturing Company		Haldex Aktiebolag
Polaris Industries Inc.		Sogefi S.p.A.
Rockwell Automation Inc.		Valeo
Sauer-Danfoss Inc.
Tenneco Inc.

In February 2012, based on an updated study by PM&P, our CNG Committee modified our peer group by removing Accuride Corporation, Bekaert NV and Rockwell Automation Inc. and by adding Meritor, Inc., Snap-On Inc., Trelleborg AB and Wabtec Corp. Our CNG Committee will continue to monitor our peer group and may adjust it in the future as appropriate.

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We generally seek to compensate our executives at approximately the median level of total compensation among similarly situated executives in our peer group when we set compensation levels for targeted levels of performance. Our compensation philosophy emphasizes at-risk incentive pay, including long-term cash incentives and equity-based incentives. In general, our compensation philosophy with respect to long-term incentives is more comparable with U.S. best practices so we place greater emphasis on the median values of long-term incentives of our U.S.-based peer companies when benchmarking those pay elements.

Components of 2011 Executive Compensation

Base Salary

We develop base salary guidelines for our NEOs generally at the median of our peer group companies, employing analyses developed by PM&P. Company management and PM&P may also review compensation data from various survey providers as a general context. However, the CNG Committee’s salary decisions reflect the market data as well the individual’s responsibilities and more subjective factors, such as the CNG Committee’s assessment of the officer’s individual performance and expected future contributions and leadership. The CNG Committee reviews base salaries for our officers every year.

Pursuant to its annual review of base salary levels, in May 2011, the CNG Committee recommended and the Board approved 3% increases in the base salaries of Messrs. Michel, Figueroa, Varty and Tarrant and an 11% increase for Mr. Esculier, which increases were designed to more closely align our NEOs’ base salaries with the median level of our peer group.

Variable Compensation

Traditionally, we offer an annual incentive program (“AIP”) and a cash-based three-year long-term incentive program (“Cash LTIP”) for our NEOs. Awards under both the AIP and the Cash LTIP are issued each year under the company’s Omnibus Incentive Plan. The CNG Committee seeks to establish performance goals for the new AIP and Cash LTIP performance periods at its first or second meeting each year but in no event later than March 31. Target awards under both the AIP and the Cash LTIP are fixed as a percentage of the executive’s base salary. Each NEO’s business manager agreement provides for specific target AIP and Cash LTIP award percentages. None of our NEOs received any increase in their AIP or LTIP target percentages in 2011.

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Annual Incentive Program

Our annual incentive program is based upon achievement of financial and non-financial performance goals. Financial and non-financial goals under our AIP are primarily derived from our annual operating plan. AIP award opportunities are typically set so that achieving the target level of performance results in a cash payment that is approximately at the median or 50th percentile of annual incentives paid by our peer group. The actual payment under an AIP award may be above the 50th percentile in years of strong performance against objectives or below the 50th percentile or zero, depending on the actual level of performance achieved. The CNG Committee and the Board of Directors review and approve our annual operating plan to ensure that the AIP goals are sufficiently challenging and set at levels consistent with internal and external market performance expectations. The chart below demonstrates the alignment between our CEO’s AIP award payouts and company’s traditional financial targets: sales, gross profit margin, net income and free cash flow.

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Fiscal Year 2011 Annual Incentive Plan

In March 2011, our CNG Committee determined the maximum amounts payable to our executive officers for AIP awards for the 2011 performance year by establishing a pool equal to 10% of WABCO earnings before interest and taxes with 35% of the pool allocated to our Chief Executive Officer at maximum and the remainder allocated evenly among the other executive officers at maximum. The AIP pool established by the formula described above was not necessarily an expectation of awards that would be paid. It represented the maximum amount that the CNG Committee could approve for payment. Our CNG Committee generally exercises its discretion to pay less than the maximum amount after considering the financial and non-financial performance goals described below.

The 2011 AIP was designed so that the achievement of financial goals received 80% weighting and the achievement for non-financial goals received 20% weighting. AIP payouts equal the percentage of the performance goal achieved multiplied by the participant’s annual target AIP percentage. Annual target AIP percentages under this program are established for each participant as a percentage of base salary, as stipulated in their respective employment agreements. In between threshold and maximum performance, achievement levels and payouts are interpolated using a defined performance curve.

The performance goals established by the CNG Committee included the following financial goals, each weighted 20%:

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sales growth,

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incremental operating margin,

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performance net income and

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free cash flow.

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The CNG Committee believes that this mix of financial goals is complementary and well-balanced so that business tradeoffs are appropriately reflected, e.g., sales growth vs. profitability, incremental operating margin vs. additional investment, net income vs. cash flow, etc. The 80% weighting on financial goals also ensures that these key drivers of value for shareholders are the primary focus for management. Each year, the financial goals are set based on the company’s annual operating plan which is designed to represent challenging, but attainable performance levels. In setting AIP goals, the CNG Committee also considers internal and external performance expectations, the potential impact of global economic conditions on the variability of performance outcomes, the degree to which prior year results were atypical, changes in corporate tax rates and other legislation that may impact the company’s business prospects and other factors that may be relevant in a specific year.

“Sales growth” is the total increase in company sales. “Incremental operating margin” is the percentage of profit realized from an increase in sales from one period to the next. It is used to measure how successful WABCO is at converting additional dollars of sales into profit, as an increment to current performance. “Performance net income” is a non-GAAP financial measure that excludes separation and streamlining costs, one-time and discrete tax items, as well as a one-time transitional impact from the adoption of a new accounting standard. Free cash flow is a non-GAAP financial measure that refers to net cash provided by operating activities less any amounts attributable to the purchase of property, plant, equipment and computer software and the proceeds from the disposal of property.

The non-financial performance goals established by the CNG Committee related to improving cost reduction programs and technical quality (measured by reference to product defects found on a “parts per million” basis). These measures drive cross-functional collaboration to improve the industrialization of WABCO products and ensure that the development roadmaps and processes we have defined will be used to develop high quality products. Each specific non-financial goal established by the CNG Committee carried an equal weighting of 10%.

For the 2011 AIP, based on our annual operating plan, our CNG Committee established the following financial goals, each weighted equally, and certified, in February 2012, the following achievement levels and scores:


Measure	Target		Maximum		Achievement		Scoring
Sales Growth (excluding the impact of foreign exchange)	$	2,530 million	$	2,740 million	$	2,580 million		123.7	%
Incremental Operating Margin		24%		26.5%		28.6%		200	%
Performance Net Income	$	265 million	$	285 million	$	323 million		200	%
Free Cash Flow	$	210 million	$	230 million	$	253 million		200	%
Aggregate Score								180.9	%

The achievement amounts shown in this table differ from our actual achievements as shown in our executive summary as they are based on the exchange rate prevailing when the performance targets of our AIP were established, while our reported numbers are based on the actual exchange rates for 2011.

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Measuring achievement of the non-financial goals included in the 2011 AIP is in the discretion of the CNG Committee. For 2011, the CNG Committee scored our achievement against predetermined and aggressive targets at 56.7% with regard to improvements in our cost reduction programs and 0% with regard to our goals with respect to technical quality. As a result, the company’s aggregate performance score for the 2011 AIP (applying an 80% weighting for the financial performance goals and 20% for the non-financial performance goals) was 150.4%, and the target award for each NEO was adjusted to reflect this percentage.


	Weight		Results		Total
Financial measures (80%)
Sales		20		123.7%		24.7%
Incremental Margin		20		200%		40%
Net Income		20		200%		40%
Free Cash Flow		20		200%		40%
Non-financial measures (20%)
Cost Reduction Program		10		56.7%		5.7%
Technical Quality		10		0%		0%
TOTAL						150.4%

The CNG Committee also considered each executive’s individual performance. Each NEO received a performance score corresponding to a percentage range (0-200%). This percentage was then applied to the executive’s target award, as adjusted by the company’s performance score, as discussed immediately above. Mr. Esculier presented the individual performance scores for each of the other NEOs to the CNG Committee, which approved them (see below table).

Mr. Figueroa led the Vehicle Control System business unit to several significant business wins in 2011. These wins included the execution of the first agreement with Hyundai Motors in South Korea to develop and supply our breakthrough technology, OnGuardPlus, the sale of the first use of adaptive cruise control system on a commercial vehicle in China at Yutong, and the award of a significant contract at Iveco for anti-lock braking with our breakthrough ESCsmart system. In addition, he successfully integrated the Drive Line Control organization into the Vehicle Control Systems business unit.

Mr. Varty led the Compression & Braking business unit to several significant business wins in 2011 for air disc brakes and air compressor technology. These wins included the sale of a breakthrough air compressor technology to one of the world’s largest truck makers and securing a long-term contract to supply a new generation of air processing technology for the full range of light, medium and heavy trucks for Iveco in Brazil.

Mr. Michel supported the organization to exceed our objectives in incremental margin and cash flow. Under his leadership, we reduced the 2011 tax rate from 15.6% to 13.5%. He also completed negotiations for a new revolving credit facility at very attractive costs and favorable terms for WABCO.

Mr. Tarrant led our talent management strategies to achieve a flexible workforce that can adapt to our business cycles and mitigate workforce reduction costs associated with those cycles. His workforce planning strategy has better aligned our headcount to support the globalization of our business, and 30% of our total workforce is now employed on a temporary or “flexible” basis. Mr. Tarrant also implemented several HR initiatives that enhance our ability to develop and retain our most critical management talent. He exceeded HR targets in terms of productivity enhancement by reducing absenteeism, turnover and the impact of salary increases.

With respect to Mr. Esculier’s AIP award, the CNG Committee considered his leadership of the company in the successful execution of our growth and performance strategy to take advantage of an improved global economic climate, the development and enhanced depth of his management team and his growing recognition

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within the industry as a dynamic and proven leader. The CNG Committee then met with the other independent members of the Board and, as a group, they determined Mr. Esculier’s individual performance as shown below.


	Annual Incentive Target		Corporate performance			Individual performance			Annual Incentive Payment
Jacques Esculier	$	1,000,000		150.4	%		106.38	%	$	1,600,000
Ulrich Michel	$	292,903		150.4	%		110	%	$	484,580
Jean-Christophe Figueroa	$	246,058		150.4	%		115	%	$	425,582
Nikhil Varty	$	216,300		150.4	%		105	%	$	341,581
Kevin Tarrant	$	208,884		150.4	%		115	%	$	361,286

Messrs. Michel and Figueroa consented to the payment of their 2011 AIP award in the form of warrants to purchase shares of a listed mutual fund composed of equity securities of European corporate issuers. The exercise price for the warrants on the date of purchase was approximately equal to the trading price of fund shares subject to the warrant on the purchase date. The warrants were purchased by WABCO from an independent third party financial institution following the determination by our CNG Committee of the earned awards under the 2011 AIP and transferred to Messrs. Michel and Figueroa at the same time cash payments under our 2011 AIP were paid to our other NEOs. Upon receipt, the warrants were immediately transferrable by Messrs. Michel and Figueroa without any restrictions against transfer – see “Impact of Taxation on Executive Compensation.”

Fiscal Year 2012 Annual Incentive Plan

In February 2012, our CNG Committee approved a cash AIP award opportunity based on the achievement of certain defined financial and non-financial performance goals. The financial performance goals established by our CNG Committee are related to sales growth, gross profit margin, performance net income and free cash flow. Two non-financial performance goals were also selected that were designed to promote both quality production and cost reduction efforts behavior. These same non-financial goals were used in the 2011 AIP and they remain important for 2012. Each of the financial goals is equally weighted and together they comprise 80% of the plan funding. The two non-financial goals are also equally weighted and comprise 20% of the plan funding. Each financial and non-financial goal may be overachieved and funded up to 200%, and resulting award amounts will be further adjusted by an individual performance score ranging from 0-200%.

AIP Clawback

As noted above, in 2011 we adopted a clawback policy that requires the company to recover from any current or former executive officer any compensation received under our 2012 Annual Incentive Plan, if such compensation was received by the executive officer during the three-year period preceding the date by which the company files a restatement of any annual audited or unaudited interim financial statements due to material non-compliance with the financial reporting rules under the federal securities laws. The amount to be recovered is the difference, if any, between what such executive officer received and what such executive officer would have received had the financial measures against which payments were calculated been impacted by the accounting restatement. Under the clawback policy, our Board of Directors, based upon recommendations from the CNG Committee, will have the discretion to determine the amounts to be recouped from such executive officer. The company’s clawback policy will continue to be reviewed for possible changes in order to conform with implementation of the required clawback provisions under the Dodd-Frank Act.

Long-Term Incentive Program

Pursuant to the company’s Omnibus Incentive Plan, the CNG Committee has authority to establish both equity and cash-based long-term incentive programs for our executive officers, including our NEOs. Our long-term incentive program is designed to promote both the achievement of long-term performance goals as well as

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retention by linking our executive officers’ wealth more closely to the performance of our stock price. Our CNG Committee designed our long-term incentive program so that approximately 70% of the value of any executive officer’s long-term incentive compensation would be comprised of annual equity awards split evenly between stock option awards and restricted stock units, both of which will vest ratably over a three-year period. The remaining 30% of the value of an executive officer’s long-term incentive compensation would be comprised of the executive’s target Cash LTIP award, the attainment of which would be tied to the achievement of certain financial and non-financial goals over a three-year performance period. The performance goals for the Cash LTIP are established on a rolling basis and generally include three to four of the following measures: sales, gross revenues, gross and incremental margins, earnings per diluted share, internal rate of return, return on equity, return on capital, income or earnings (including without limitation, gross earnings before certain deductions such as interest, taxes, depreciation or amortization), cash flow, free cash flow, market share, stock price, costs, management of accounts and non-performing debt. Each financial goal may be overachieved and funded up to 200%. We also use non-GAAP “performance” versions of the financial measures referred to above which exclude separation and streamlining costs, one-time and discrete tax items, as well as a one-time transitional impact from the adoption of a new accounting standard.

Total long-term incentive award opportunities are typically set so that achieving the target level of performance results in award values approximately at the median or 50th percentile of long-term incentives offered by our U.S. peer companies. The actual realized award value may be above the 50th percentile in years of strong financial and stock performance or below the 50th percentile, depending on the actual level of performance achieved. The long-term award value for an individual executive may also vary from the 50^th percentile based on the CNG Committee’s consideration of an executive’s strategic impact, performance history or retention risk.

2009-2011 Cash LTIP

All of our NEOs participated in the 2009-2011 Cash LTIP.

Our CNG Committee based the 2009-2011 Cash LTIP on achievement against financial goals relating to sales, earnings per share and return on invested capital. These three financial goals are the same as in prior Cash LTIP awards and they were chosen to complement the financial goals under the AIP awards. At the time these goals were established, they were viewed as extremely challenging based on internal and external forecasts, particularly due to the negative economic environment that prevailed in early 2009.

For the 2009-2011 performance cycle, our CNG Committee set the following equally-weighted financial goals (no strategic or other non-financial goals were included for this cycle) and certified, in February 2012, the following achievement levels and scores:


Cycle Measure	Target	Achievement	Scoring
Sales Growth (excluding the impact of foreign exchange)	Attainment of 2009 operating plan ($1,600 million) plus 10% increase until 2011	58.7% sales growth ($2,380 million)	200%
Performance Earnings Per Diluted Share (“EPS”)⁽¹⁾	$1.00	$4.08	200%
Return on Invested Capital	9.5%-10.5% on 3-year average	36.5%	200%
Aggregate Score			200%

(1)	Performance Earnings Per Diluted Share refers to earnings per diluted share, excluding separation and streamlining costs, one-time and discrete tax items, as well as a one-time transitional impact from the adoption of a new accounting standard.

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See footnote 2 to the “Summary Compensation Table” for the final award amounts paid to our NEOs under the 2009-2011 Cash LTIP. Similar to the AIP payment, Messrs. Michel and Figueroa consented to the payment of their 2009-2011 LTIP award in the form of warrants—see “Impact of Taxation on Executive Compensation.”

2011-2013 Cash LTIP

In March 2011, our CNG Committee approved a Cash LTIP based on the achievement of certain defined financial performance goals. The financial performance goals established by our CNG Committee are again related to sales growth, earnings per diluted share and return on invested capital. Each of the financial goals is equally weighted. Furthermore, our CNG Committee has discretion to upgrade or downgrade the Cash LTIP results by 25%. Awards under this overlapping long-term cash incentive program will only be paid, if earned, after the end of 2013.

2011 Annual Equity Awards

As discussed above, annual equity awards are part of our long-term incentive program. On February 23, 2011, each of our NEOs received a combination of stock options and restricted stock units, both of which vest ratably over three years following the date of grant, assuming continued employment with the company. See the “Grants of Plan-Based Awards” table for a break out of the annual equity awards granted to our NEOs in 2011.

In December 2011, our CNG Committee approved amending prospective equity award agreements to permit the company to recoup equity compensation in the event a recipient breaches certain confidentiality, non-competition and other contractual arrangements during employment or within 12 months after termination of employment. These rules changes affect all of our employees, including our NEOs.

Special Restricted Stock Unit Awards

As discussed above, upon the recommendation of the CNG Committee, and in consideration of (i) our improved financial performance, (ii) our financial performance relative to our peers, and (iii) the scope of responsibility and performance of our NEOs throughout the global downturn, we made the following special restricted stock unit awards to our NEOs in May 2011:

•

73,497 performance-based restricted stock units to Mr. Esculier, that will vest four years from the grant date, on May 26, 2015, subject to his continued employment with the company and to the company achieving certain pre-determined performance goals relating to cumulative earnings per diluted share over the four-year period (the “Performance Period.”) To meet the performance goal, WABCO Holdings Inc. must achieve certain “Performance EPS” goals during the Performance Period. If a change of control occurs first, the restricted stock units will fully vest if the CNG Committee so provides. If a “Retirement” (as defined under local law or, if there is no relevant local law, in accordance with the policies established by the CNG Committee from time to time) occurs first, the requirement that Mr. Esculier remain employed through the entire four-year period will be waived, although the company still must meet the performance goals. “Performance EPS” is a non-GAAP financial measure and means, for each successive 12-month period within the Performance Period, beginning with May 26, 2011, the Company’s net income per diluted share from continuing operations, excluding certain items such as separation, streamlining, one-time and discrete tax items, and other non-recurring items, as applicable.

•

1,470 time-based restricted stock units to each of Messrs. Michel, Figueroa, Varty and Tarrant, which will vest on May 25, 2014, or three years from the grant date, subject to continued employment with the company.

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Executive Stock Ownership and Stock Holding Guidelines

Our stock ownership and stock holding guidelines for our executive officers, including our NEOs, are designed to reinforce the goal of increasing WABCO equity ownership among our executive officers and other key managers and more closely align their interests with those of our shareholders. Our executive officer stock ownership and stock holding guidelines are as follows:

•

for the Chief Executive Officer: 6x base salary

•

for all other NEOs: 3x base salary

Equity ownership that counts towards this ownership goal includes shares owned outright, shares beneficially owned by direct family members (spouse, dependent children), shares underlying vested and unvested restricted stock unit awards, net shares acquired through stock option exercise and shares acquired on the open market. Vested and unvested stock options do not count towards satisfying the guideline goals.

Participants, including our NEOs, have five years from January 1, 2011 to meet the stock ownership guidelines.

We also require our NEOs to hold our equity upon vesting of restricted stock and restricted stock units and upon exercise of stock options in certain situations.

•

All executive officers must hold net after-tax shares received (or credited) upon vesting of restricted stock and restricted stock units for a period of six months after the shares have vested. This mandatory holding requirement applies to any outstanding, unvested grants of restricted stock or restricted stock units.

•

Furthermore, all executives must hold net gain shares received upon exercise of vested stock options for a period of six months after the exercise if they do not yet meet the stock ownership guidelines at the time of exercise. Net gain shares are the shares remaining after payment of the option exercise price and any related taxes. This mandatory holding requirement applies to any stock option grants made after January 2011.

The minimum number of shares to be held by each officer is calculated on the first business day of March each year using the average of the stock prices of the company’s common stock on the NYSE for the past year. The stock price for each trading day within the one-year time period will be the average of the high and low sales prices of the company common stock on the NYSE on that date. In the event of a base salary change or a promotion to a higher executive level, the executive will have five years from the date the change was implemented to acquire additional shares needed to fulfill the stock ownership guidelines. During the first five years, the CNG Committee will review annually each executive’s company stock ownership. After the initial five year period, the CNG Committee may review these guidelines to include specific penalties for failing to adhere to the recommendations. There may be instances in which the stock ownership guidelines would place a substantial hardship on an executive or prevent the executive from complying with the guidelines. These circumstances may apply to all executives in the company, such as a financial crisis impacting the entire stock market or circumstances generating unusual volatility of the company’s share price, or be particular to an individual, such as a court order in the case of a divorce settlement or estate planning transactions. In such circumstances, the guidelines may be waived or modified in the sole discretion of the company’s CNG Committee.

Retirement Benefits

We have established a tax qualified 401(k) plan, in which all of our U.S. employees are eligible to participate. In addition, all employees whose eligible compensation exceeds limits imposed by the U.S. Internal Revenue Code participate in the Supplemental Savings Plan. Under the Supplemental Savings Plan, the company credits 3% on eligible compensation between the tax code limits and $250,000 plus a matching contribution of up

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to 6% on all eligible compensation in excess of the tax code limits, based upon the employee’s contribution election to the tax qualified 401(k) plan. For Mr. Esculier, we credited 3% on all eligible compensation in excess of the tax code limits in 2011, plus a matching contribution of up to 6% on all eligible compensation in excess of the tax code limits, based upon his contribution election to the tax qualified 401(k) plan. As discussed below, beginning in 2012, Messrs. Esculier, Tarrant and Varty will no longer participate in our tax qualified 401(k) plan and our Supplemental Savings Plan, and will participate in our Belgian benefits plans.

Messrs. Michel and Figueroa participate in a Belgian tax-qualified defined contribution plan and have elected to participate in a Belgian Supplemental Pension Plan established in the form of a defined contribution plan.

Perquisites

We provide perquisites that we believe are reasonable, competitive with our peer group and consistent with our overall compensation philosophy. We currently offer to our executive officers, including our NEOs, financial planning, an executive health exam and an executive life insurance policy as well as tax return preparation assistance. In addition, our NEOs are eligible to receive certain other perquisites, including a housing allowance, home leave, a company car and tuition reimbursement for dependent children.

We have also adopted an exchange rate protection policy for our Chairman and Chief Executive Officer so that his compensation would not be adversely impacted by drastic swings in the U.S. dollar/Euro exchange rate. Under this policy, Mr. Esculier’s base salary, annual and long-term cash incentive payments, and sales of our common stock pursuant to the exercise of stock options or the vesting of restricted stock units, which are denominated in U.S. dollars, would be paid to Mr. Esculier in Euros at a fixed rate of one Euro to the lower of $1.35 or the exchange rate at the time of payment (or, with respect to stock options and restricted stock units, as soon as practicably possible after settlement of Mr. Esculier’s sales of the underlying common stock). Payments made with respect to stock option exercises and sales of vested restricted stock units are applied to the after tax proceeds of such sales. We adopted the policy for Mr. Esculier in 2011 because he was the only NEO that was a non-U.S. citizen whose compensation was denominated in U.S. dollars. With the change to business manager status in January 2012 (see Transition to “Business Manager” Status for Named Executive Officers below), Mr. Esculier has waived the benefits of this policy going forward.

Payments upon Severance or Change of Control

Under the business manager agreements we have entered into with our NEOs (discussed below), they will be provided with certain severance benefits if their service is terminated by us without cause or if they terminate their service for good reason. The severance provisions of the business manager agreements are generally similar to those in the employment agreements that were effective until January 1, 2012. We believe that severance payments to these officers are appropriate in these specified circumstances and that the amount of the severance benefits is reasonable and necessary to attract and retain superior executive talent. An estimate of the amount of severance benefits that each NEO would receive upon a termination of service as of December 31, 2011 is included in “Executive Compensation—Severance Benefits as of December 31, 2011” below.

We also provide certain payments or other benefits to our executive officers, including our NEOs, in the event of a change of control in order to allow them to act in the best interests of shareholders without the distraction of potential negative repercussions of a change of control on their own position with the company. Severance benefits payable in connection with a change of control are triggered only in the event of both (i) a change of control and (ii) an NEO’s loss of job or resignation on account of material diminution in terms and conditions of employment. This is sometimes referred to as a “double trigger” change in control provision. Under our Omnibus Incentive Plan, in the event of a change of control, any outstanding stock options will become immediately exercisable and, unless assumed by the new employer, may be cashed out at the discretion of the CNG Committee. The restricted period shall lapse as to any outstanding restricted stock or restricted stock units,

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unless the CNG Committee determines prior to the change of control that any stock option, restricted stock or restricted stock unit will be replaced or otherwise honored by the new employer on terms that do not adversely affect the participants. In addition, all performance periods for annual incentive and long-term incentive awards will end and pay out at target on a prorated basis.

Removal of Excise Tax Gross-Up

As of January 1, 2012, the excise tax gross-up payment provisions included in our Change in Control Severance Plan, which were intended to neutralize any excise taxes imposed on the NEOs under Section 4999 of the Internal Revenue Code upon a change of control of the company, were removed. This affects current and future officers, including the NEOs, and no “grandfathering” will be applicable to current executives who were entitled to such benefit before January 1, 2012.

Employment Matters

Amendment to Employment Agreement

Effective May 26, 2011, the CNG Committee approved an amendment to Mr. Varty’s employment agreement, entitling him to certain severance benefits in the event his employment was involuntarily terminated in order to conform Mr. Varty’s agreement with that of the other NEOs. As noted below, Mr. Varty is now a “business manager” under Belgian law and the terms of his service with the company are governed by his business manager agreement.

Transition to “Business Manager” Status for Named Executive Officers

Prior to January 1, 2012, Messrs. Esculier, Tarrant and Varty were treated as U.S. employees on overseas assignment and were entitled to additional benefits under our expatriate policy. Our expatriate policy, however, generally expires after five years and is due to expire for our NEOs on August 1, 2012, the fifth anniversary of the Spin-off. After considering the costs and benefits associated with “localizing” our NEOs by entering into Belgian law governed agreements with Messrs. Esculier, Tarrant and Varty (who were previously under contract with one of our U.S. subsidiaries), we determined to structure the employment of all of our NEOs, including Messrs. Michel and Figueroa, such that they would qualify under Belgian law as “business managers.” Generally, senior executives in Belgian listed companies elect business manager status, and such status is only available to senior executives under Belgian law. Under Belgian law, a business manager is not treated the same as an employee for social security purposes, and certain reductions in social security coverage and company contribution requirements will result from the shift to business manager status. In light of these and other considerations, on December 31, 2011, we replaced the prior employment agreements of our NEOs with “business manager contracts,” effective January 1, 2012. Under these “local” business manager contracts, Messrs. Esculier, Tarrant and Varty’s base salaries were converted from U.S. dollars to Euros and benefits such as goods and services allowance (cost-of-living adjustment) and U.S. tax equalization that these officers previously received under our expatriate policy were phased-out or discontinued. We elected to maintain certain other benefits for these NEOs, such as the housing allowance and tuition fee reimbursement, which is a common practice for many of our foreign employees working in Brussels.

As a result of this localization to Belgium, effective January 1, 2012, Messrs. Esculier, Tarrant and Varty continue to participate in a number of executive-level plans, including the AIP, LTIP, and Change in Control Severance Plan. These NEOs also continue to be eligible to receive equity awards under the Omnibus Incentive Plan. However, these NEOs no longer participate in certain other benefit plans of our U.S. subsidiary, including the tax-qualified 401(k) plan and our Supplemental Savings Plan. They now participate in our Belgian benefit plans which include retirement, death, disability and medical coverage. With regard to retirement contributions, we have agreed, going forward, to contribute to such plan, on an annual basis, an amount equal to 9% of Mr. Esculier’s base salary and target cash annual incentive award, and for the other NEOs, amounts equal to 9%

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of each executive’s base salary and 4.5% of each executives’ target annual incentive award. These contribution levels are similar to the contributions we made to the 401(k) plan and the Supplemental Savings Plan. Also in connection with the shift to business manager status, we agreed to provide, at a de minimis cost, new life insurance policies to our NEOs that provide enhanced benefits over their prior policies, in order to defray the additional cost of inheritance taxes to which the NEOs’ estates would be subject as a result of their change of status. Each of our NEOs now receives life insurance coverage equal to three times his base salary. Each of the NEOs is eligible to receive severance payments under certain circumstances. If a termination of the business manager agreement occurs without cause by the company or by the business manager for good reason, they are eligible to receive severance payments equal to 1.5 times (2 times, in the case of Mr. Esculier) their base salary, their then current annual incentive target award and company contributions for group insurance and medical coverage, plus reimbursement of up to $5,000 for financial planning services.

Particular features of each NEO’s business manager agreement are noted below:

Jacques Esculier—Mr. Esculier’s agreement provides for an annual base salary of €769,231, an annual incentive target of 100% of base salary and a long-term cash incentive target of 100% of base salary. Under his agreement, Mr. Esculier also receives a housing allowance, a home leave, a company car, a goods and services allowance which is phased-out over a three-year period and a tuition reimbursement for his children, as further described in the Summary Compensation Table below.

Ulrich Michel—Mr. Michel’s executive agreement provides for an annual base salary of €351,203, an annual incentive target of 60% of base salary and a long-term cash incentive target of 45% of base salary. Under his agreement, Mr. Michel also receives a housing allowance, a company car and a tuition reimbursement for his children as further described in the Summary Compensation Table below.

Jean-Christophe Figueroa—Mr. Figueroa’s executive agreement provides for an annual base salary of €295,033, an annual incentive target of 60% of base salary and a long-term cash incentive target of 45% of base salary. Under his agreement, Mr. Figueroa also receives a housing allowance, a home leave, a company car and a tuition reimbursement for his children as further described in the Summary Compensation Table below.

Nikhil Varty—Mr. Varty’s executive agreement provides for an annual base salary of €277,308, an annual incentive target of 60% of base salary and a long-term cash incentive target of 45% of base salary. Under his agreement, Mr. Varty also receives a housing allowance, a home leave, a company car, a goods and services allowance which is phased-out over a three-year period and a tuition reimbursement for his children, as further described in the Summary Compensation Table below.

Kevin Tarrant—Mr. Tarrant’s executive agreement provides for an annual base salary of €267,800, an annual incentive target of 60% of base salary and a long-term cash incentive target of 45% of base salary. Under his agreement, Mr. Tarrant also receives a housing allowance, a home leave, a company car, a goods and services allowance which is phased-out over a three-year period and a tuition reimbursement for his children, as further described in the Summary Compensation Table below.

Impact of Taxation on Executive Compensation

Compensation paid to our employees in Belgium is subject to very high social security and income tax rates. As a result, the cash bonuses paid to our Belgian executive officers result in higher costs to the company and lower net payments to these executive officers than cash bonuses paid to our other executive officers. In 2011, our CNG Committee allowed our employees in Belgium, including our NEOs Messrs. Michel and Figueroa, to benefit from a recognized tax-effective remuneration technique in Belgium and receive their 2011 AIP and Cash LTIP awards, if earned, in the form of warrants. Under Belgian law, compensation paid in the form of warrants from an independent third party issuer does not trigger social security tax. The warrants allow the holder to purchase shares of a listed mutual fund composed of equity securities of European corporate issuers (other than the company). Amounts paid by the company to purchase warrants on behalf of our Belgian employees and executive officers is deductible under Belgian law.

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Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation in excess of $1,000,000 per year paid to the chief executive officer and the three highest compensated officers other than the chief financial officer for the taxable year. Certain compensation, including “performance-based compensation,” may qualify for an exemption from the deduction limit if it satisfies various technical requirements under Section 162(m). A subsidiary of the company has employed the NEOs and deducted compensation paid to them under applicable local law since the Spin-off. As such, Section 162(m) does not currently limit the deductibility of their compensation. Nevertheless, our CNG Committee takes into account the requirements of Section 162(m) with respect to performance-based compensation and views the tax deductibility of executive compensation as one factor to be considered in the context of its overall compensation philosophy.

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EXECUTIVE COMPENSATION

Summary Compensation Table

Set forth below is information concerning the compensation of our NEOs for 2011.


Name & Principal Position⁽¹⁾	Year		Salary ($)		Bonus ($)		Stock Awards ($)⁽²⁾		Option Awards ($)⁽²⁾		Non-Equity Incentive Plan Compensation ($)⁽³⁾		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)⁽⁴⁾		Total ($)
Jacques Esculier		2011	$	950,000		—	$	5,900,042	$	900,125	$	3,333,334		—	$	1,006,764	$	12,090,265
Chairman and Chief Executive Officer		2010	$	850,000		—	$	875,840	$	878,040	$	2,259,233		—	$	486,153	$	5,349,266
Chairman and Chief Executive Officer		2009	$	800,000		—	$	787,287	$	1,139,827	$	655,556		—	$	407,524	$	3,790,194

Ulrich Michel		2011	$	572,304			$	345,044	$	245,046	$	906,837		—	$	282,916	$	2,352,147
Chief Financial Officer		2010	$	444,825			$	250,025	$	249,900	$	608,640		—	$	285,974	$	1,839,364
Chief Financial Officer		2009	$	455,725		—	$	216,508	$	345,206	$	205,006		—	$	305,690	$	1,528,135

Jean-Christophe Figueroa		2011	$	483,113			$	305,044	$	205,039	$	780,306		—	$	292,878	$	2,066,380
Vice President, Vehicle Controls Systems		2010	$	373,681			$	210,010	$	209,920	$	489,609		—	$	260,555	$	1,543,775
		2009	$	382,838		—	$	181,576	$	289,687	$	197,047		—	$	260,367	$	1,311,515


Nikhil M. Varty		2011	$	355,248			$	285,014	$	185,047	$	637,006		—	$	244,731	$	1,707,046
Vice President, Compression & Braking		2010	$	326,498		—	$	200,020	$	199,920	$	466,036		—	$	240,711	$	1,433,185
		2009	$	303,000		—	$	156,472	$	245,554	$	123,293		—	$	412,846	$	1,241,165


Kevin Tarrant		2011	$	343,070			$	277,547	$	177,541	$	661,157		—	$	209,621	$	1,668,936
Chief Human Resources Officer		2010	$	331,500			$	190,003	$	189,930	$	454,670		—	$	256,314	$	1,422,417
Chief Human Resources Officer		2009	$	325,000		—	$	167,793	$	247,375	$	109,688		—	$	272,473	$	1,122,329

(1)

Certain amounts shown in the “Summary Compensation Table” were paid in Euros and converted into U.S. dollars at the average conversion rate of U.S. dollars to Euros during the period January 1, 2011 to December 31, 2011, even if the amounts were paid after December 31, 2011. The average conversion rate is one Euro equals $1.39. This is also the convention that we used to convert Euros to U.S. dollars in the audited financial statements we included with our annual report on Form 10-K for the fiscal year ended December 31, 2011.

(2)

Amounts set forth in this column represent the aggregate grant date fair value of awards granted during the year computed in accordance with ASC 718, Compensation-Stock Compensation. The aggregate grant date fair value of the RSU and stock option awards reflected in these columns was determined using the valuation methodology and assumptions set forth in Note 5 (“Capital Stock”) of the Notes to Consolidated Financial Statements included in our annual reports on Form 10-K for the fiscal years ended December 31, 2011, 2010 and 2009.

(3)

Amounts included in this column represent the cash amounts earned in respect of (a) annual performance-based cash bonuses made under the WABCO annual incentive plan for the 2011 annual performance period and (b) long-term performance-based cash bonuses earned under the WABCO long-term incentive plan for the performance period beginning on January 1, 2009 and ending on December 31, 2011. The following table shows a break down of these amounts:


Names	Annual Incentive Payment for 2011		Long-Term Incentive Payment for 2009-2011 Performance Period
Jacques Esculier	$	1,600,000	$	1,733,334
Ulrich Michel	$	484,579	$	422,258
Jean-Christophe Figueroa	$	425,582	$	354,724
Nikhil M. Varty	$	341,581	$	295,425
Kevin Tarrant	$	361,286	$	299,871

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(4)	The following table provides information regarding the compensation disclosed in the All Other Compensation column. This information includes identification and quantification of each perquisite and personal benefit received by each NEO, regardless of amount.


Names	Premiums for Life Insurance⁽¹⁾		Defined Contribution Plan Contributions⁽²⁾		Health Care Reimbursements⁽³⁾		Perquisites and Other Personal Benefits⁽⁴⁾		Total
Jacques Esculier	$	19,461	$	22,050	$	21,200	$	944,053	$	1,006,764
Ulrich Michel	$	25,997	$	52,834	$	15,233	$	188,852	$	282,916
Jean-Christophe Figueroa	$	37,975	$	43,743	$	2,471	$	208,689	$	292,878
Nikhil Varty	$	2,875	$	22,050	$	17,965	$	201,841	$	244,731
Kevin Tarrant	$	5,032	$	22,050	$	18,248	$	164,291	$	209,621

(1)

Includes premiums for Group Life Insurance and Executive Life Insurance.

(2)

Includes employer basic and matching contributions to defined contribution plans in which the NEO participates.

(3)

Includes health care reimbursements to private schemes in France for Mr. Esculier, in the Unites States for Messrs. Varty and Tarrant and in Belgium for Messrs. Michel and Figueroa. Also includes executive health exams for Mr. Esculier.

(4)

Includes contributions to the company’s Supplemental Savings Plan, a Non Qualified Deferred Compensation Plan, executive perquisites as well as benefits payable under our expatriate policy as follows:


Names	Supplemental Savings Plan		Financial Planning		Company Car⁽¹⁾		Housing and Utilities⁽¹⁾		Tax Allowance⁽²⁾		School Fees⁽¹⁾		Cost of Living Allowance⁽¹⁾		Bank and Tax Fees⁽¹⁾		Home Leave⁽¹⁾		Exchange Rate Protection⁽³⁾		Total
Jacques Esculier	$	139,950		—	$	28,030	$	87,528		—	$	19,333	$	158,676	$	764	$	12,241	$	497,531	$	944,053
Ulrich Michel		—	$	4,489	$	27,173	$	118,764		—	$	28,645	$	9,781		—		—		—	$	188,852
Jean-Christophe Figueroa		—		—	$	23,694	$	108,153		—	$	56,000		—		—	$	20,842		—	$	208,689
Nikhil M. Varty	$	19,050	$	721	$	22,670	$	57,171		—	$	42,117	$	45,194	$	764	$	14,154		—	$	201,841
Kevin Tarrant	$	17,898	$	10,000	$	18,874	$	74,487		—		—	$	42,532	$	500		—		—	$	164,291

(1)

We maintain an expatriate policy under which employees who are asked to relocate from their home country in connection with their work assignments are reimbursed for certain costs and expenses associated with relocating to, and living in, another country. Currently, all of our NEOs are receiving benefits under our expatriate policy since each of them has relocated to Belgium in connection with their service to WABCO. We believe that these types of benefits are customary for employees who accept foreign assignments. The level of benefits that we provide under the expatriate policy, such as the cost-of-living adjustment and the housing differentials, are determined based upon the advice provided to the company by outside consultants. As noted above, under the business manager agreements into which the NEOs entered effective January 1, 2012, the goods and services allowance (cost-of-living adjustment) and tax equalization to the U.S. that these NEOs previously received under our expatriate policy are being phased out (in the case of the goods and services allowance) or discontinued (in the case of the tax equalization). We do not provide any special benefits to our NEOs under this policy that our other expatriate employees are not eligible to receive.

(2)

Tax allowances are provided to individuals on expatriate assignments to make their assignments effectively tax and cost neutral to them. Under these arrangements, WABCO paid on behalf of Messrs. Esculier, Michel, Tarrant and Varty certain foreign taxes in respect of services rendered during 2009, but as to which the amount payable was not due or determinable until 2011. These amounts were reduced by the hypothetical taxes withheld from the individuals’ compensation. As the amounts of hypothetical taxes were higher than the actual taxes paid by the company, the related negative amounts were reported as nil.

(3)

As discussed in “Compensation Discuss & Analysis—Perquisites,” the CNG Committee approved, retroactive to January 1, 2011, an exchange rate protection policy for our Chairman and Chief Executive Officer, Mr. Esculier. Under this policy, Mr. Esculier’s base salary, annual and long-term cash incentive payments, stock option exercises and restricted stock unit vesting which are denominated in U.S. dollars, would be paid by the company to Mr. Esculier at a fixed rate of one Euro to the lower of $1.35 or the exchange rate at the time of payment. The total value of this exchange rate protection benefit in 2011 was $497,531, of which $21,023 was attributable to maintaining an exchange rate for base salary payments, $52,865 to maintaining an exchange rate for 2010 AIP and LTIP payouts (paid in March 2011) and $423,643 for 2011 stock option exercises.

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Grants of Plan-Based Awards

The following table sets forth information about awards granted to our NEOs in 2011.


				Estimated Future Payouts Under Non-Equity Incentive Plan Awards					All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Sh)		Market Price on Grant Date ($/Sh)⁽⁷⁾		Grant Date Fair Value of Stock and Option Awards ($)⁽⁸⁾
Names	Grant Date			Threshold ($)	Target ($)		Maximum ($)						Exercise or Base Price of Option Awards ($/Sh)		Market Price on Grant Date ($/Sh)⁽⁷⁾		Grant Date Fair Value of Stock and Option Awards ($)⁽⁸⁾
Jacques Esculier		3/17/2011	⁽¹⁾	0	$	1,000,000	$	2,000,000
		1/31/2011	⁽²⁾	0	$	1,000,000	$	3,500,000
		2/23/2011	⁽³⁾									39,216	$	59.26	$	59.26	$	900,125
		2/23/2011	⁽⁴⁾							15,188							$	900,041
		5/26/2011	⁽⁵⁾							73,497							$	5,000,000

Ulrich Michel		3/17/2011	⁽¹⁾	0	$	219,677	$	439,355
		1/31/2011	⁽²⁾	0	$	292,903	$	1,171,613
		2/23/2011	⁽³⁾									10,676	$	59.26	$	59.26	$	245,046
		2/23/2011	⁽⁴⁾							4,135							$	245,040
		5/26/2011	⁽⁶⁾							1,470							$	100,004

Jean-Christophe Figueroa		3/17/2011	⁽¹⁾	0	$	184,543	$	369,086
		1/31/2011	⁽²⁾	0	$	246,058	$	984,230
		2/23/2011	⁽³⁾									8,933	$	59.26	$	59.26	$	205,039
		2/23/2011	⁽⁴⁾							3,460							$	205,040
		5/26/2011	⁽⁶⁾							1,470							$	100,004

Nikhil Varty		3/17/2011	⁽¹⁾	0	$	162,225	$	324,450
		1/31/2011	⁽²⁾	0	$	216,300	$	865,200
		2/23/2011	⁽³⁾									8,062	$	59.26	$	59.26	$	185,047
		2/23/2011	⁽⁴⁾							3,122							$	185,010
		5/26/2011	⁽⁶⁾							1,470							$	100,004

Kevin Tarrant		3/17/2011	⁽¹⁾	0	$	156,663	$	313,326
		1/31/2011	⁽²⁾	0	$	208,884	$	835,536
		2/23/2011	⁽³⁾									7,735	$	59.26	$	59.26	$	177,541
		2/23/2011	⁽⁴⁾							2,996							$	177,543
		5/26/2011	⁽⁶⁾							1,470							$	100,004

(1)

These awards relate to a three-year performance period, beginning on January 1, 2011 and ending on December 31, 2013. Each award was granted under the long-term incentive program for officers and key employees of WABCO and becomes payable, if at all, subject to each NEO’s continued employment during such period (except in the case of death or disability) and the achievement of pre-established performance objectives. The objectives were established by our CNG Committee. This Committee will certify whether the performance goals are met at the end of the performance period. Under the terms of our long-term incentive program, each NEO could earn up to a maximum of 200% of his target award, if the performance goals for the period are exceeded. The maximum level of award listed above is the maximum amount permitted to be paid in respect of such award under the terms of such award. The amounts mentioned under respectively threshold, Target and maximum columns are based on the base salary applicable after the CNG Committee review in May 2011.

(2)

These awards relate to annual incentive awards granted to our NEOs under our Omnibus Plan. Under the terms of our annual incentive program, each NEO could earn up to a maximum of 400% of his base salary, if the performance goals for the period are exceeded. The maximum level of award listed above is the maximum amount permitted to be paid in respect of such award under the terms of such award subject to further limitations included in our Omnibus Incentive Plan. The amounts mentioned under respectively threshold, Target and maximum columns are based on the base salary applicable after the CNG Committee review in May 2011. The actual amounts that were earned in respect of these awards for 2011 are listed in the Summary Compensation Table above under the column entitled “Non-Equity Incentive Plan Compensation.”

(3)

Grants of stock options were made to the NEOs as part of our annual equity awards under our Long-Term Incentive Program under the Omnibus Incentive Plan. Each grant will become vested and exercisable, generally subject to the NEO’s continued employment with the company or a subsidiary, in three equal installments on the first three

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anniversaries of the date the option is granted. The option will become exercisable (and could be settled for cash) in connection with the occurrence of a change of control.

(4)

These grants of restricted stock units were made to the NEOs as part of our annual equity awards under our Long-Term Incentive Program under the Omnibus Incentive Plan. These grants will become vested, generally subject to the NEO’s continued employment with the company or a subsidiary, in three equal installments on the first three anniversaries of the grant date. The restricted stock units will also become vested in connection with a change of control of WABCO.

(5)	This grant of performance stock units was made to Jacques Esculier under the Omnibus Incentive Plan. Please see the section “Special Restricted Stock Unit Awards” for additional information regarding vesting and other provisions of the se awards.

(6)

These grants of restricted stock units were made to the NEOs as a special equity award grant under the Omnibus Incentive Plan. These grants will all become vested on 5/26/2014 subject to the NEO’s continued employment with the company. These restricted stock units will also become vested in connection with a change of control of WABCO.

(7)

The stock option grants made under the Omnibus Incentive Plan have an exercise price equal to the fair market value of WABCO Holdings Inc. common stock on the date of grant. For purposes of that plan, fair market value is defined as the closing price reported on the principal national exchange on which WABCO’s common stock is listed for trading on the immediately preceding business day. This is a common method to determine fair market value for the purposes of such awards, and is an accepted method of establishing such value for federal income tax purposes.

(8)	Represents the grant date fair value of each option and restricted stock unit, determined in accordance with ASC Topic 718.

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information on outstanding equity awards held by our NEOs on December 31, 2011.


Name	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options - Exercisable (#)		Number of Securities Underlying Unexercised Options - Unexercisable (#)			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock - Unvested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)⁽⁹⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (i)⁽⁹⁾
Jacques Esculier		0		39,216	⁽¹⁾	$	59.26		02/23/2021
		0		60,000	⁽²⁾	$	27.37		02/22/2020
		0		43,322	⁽³⁾	$	11.75		02/17/2019
		0		96,270	⁽³⁾	$	11.75		02/17/2019
		69,960		69,960	⁽⁴⁾	$	42.39		02/22/2018
		69,960		0		$	42.39		02/22/2018
		50,947		0		$	48.64		08/01/2017
		30,022		0		$	48.64		08/01/2017
		84,277		0		$	46.87		02/05/2017
		23,333		0		$	38.06		02/02/2015
																73,497	⁽¹⁰⁾	$	3,189,770
											15,188	⁽⁵⁾	$	659,159
											21,334	⁽⁶⁾	$	925,896
											22,696	⁽⁷⁾	$	985,006

Ulrich Michel		0		10,676	⁽¹⁾	$	59.26		02/23/2021
		8,538		17,077	⁽²⁾	$	27.37		02/22/2020
		31,604		15,802	⁽³⁾	$	11.75		02/17/2019
		48,948		26,475	⁽³⁾	$	11.75		02/17/2019
		16,756		16,757	⁽⁴⁾	$	42.39		02/22/2018
		21,349		0		$	42.39		02/22/2018
		10,008		0		$	48.64		08/01/2017
		8,989		0		$	46.87		02/05/2017
		7,680		0		$	22.57		02/01/2016
		2,666		0		$	32.38		02/01/2016
		5,760		0		$	27.35		02/02/2015
		2,000		0		$	38.06		02/02/2015
		3,456		0		$	21.22		02/04/2014
		4,320		0		$	12.28		03/03/2013
											1,470	⁽⁸⁾	$	63,798
											4,135	⁽⁵⁾	$	179,459
											6,090	⁽⁶⁾	$	264,306
											6,242	⁽⁷⁾	$	270,903

Jean-Christophe Figueroa		0		8,933	⁽¹⁾	$	59.26		02/23/2021
		7,172		14,345	⁽²⁾	$	27.37		02/22/2020
		0		13,275	⁽³⁾	$	11.75		02/17/2019
		0		22,203	⁽³⁾	$	11.75		02/17/2019
		16,756		16,757	⁽⁴⁾	$	42.39		02/22/2018
		18,145		0		$	42.39		02/22/2018
		10,008		0		$	48.64		08/01/2017
		13,484		0		$	46.87		02/05/2017
		4,000		0		$	32.38		02/01/2016
		1,666		0		$	37.84		05/17/2015
											1,470	⁽⁸⁾	$	63,798
											3,460	⁽⁵⁾	$	150,164
											5,116	⁽⁶⁾	$	222,034
											5,235	⁽⁷⁾	$	227,199

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Name	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options - Exercisable (#)		Number of Securities Underlying Unexercised Options - Unexercisable (#)			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock - Unvested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)⁽⁹⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (i)⁽⁹⁾
Nikhil M. Varty		0		8,062	⁽¹⁾	$	59.26		02/23/2021
		0		13,662	⁽²⁾	$	27.37		02/22/2020
		0		10,939	⁽³⁾	$	11.75		02/17/2019
		0		19,134	⁽³⁾	$	11.75		02/17/2019
		0		16,757	⁽⁴⁾	$	42.39		02/22/2018
		7,606		0		$	48.64		08/01/2017
		13,484		0		$	46.87		02/05/2017
											1,470	⁽⁸⁾	$	63,798
											3,122	⁽⁵⁾	$	135,495
											4,872	⁽⁶⁾	$	211,445
											4,511	⁽⁷⁾	$	195,777

Kevin Tarrant		0		7,735	⁽¹⁾	$	59.26		02/23/2021
		6,489		12,979	⁽²⁾	$	27.37		02/22/2020
		0		9,778	⁽³⁾	$	11.75		02/17/2019
		0		20,518	⁽³⁾	$	11.75		02/17/2019
		16,756		16,757	⁽⁴⁾	$	42.39		02/22/2018
		10,008		0		$	48.64		08/01/2017
											1,470	⁽⁸⁾	$	63,798
											2,996	⁽⁵⁾	$	130,026
											4,628	⁽⁶⁾	$	200,855
											4,837	⁽⁷⁾	$	209,926

(1)	Stock options vest at the rate of 33.3% per year, with vesting dates of 2/23/2012, 2/23/2013 and 2/23/2014.

(2)	Stock options vest at the rate of 33.3% per year, with vesting dates of 2/22/2011, 2/22/2012 and 2/22/2013.

(3)	Stock options vest at the rate of 33.3% per year, with vesting dates of 2/17/10, 2/17/11 and 2/17/12.

(4)	Stock options vest at the rate of 50% on 2/17/11 and 50% on 2/17/12.

(5)	Reflects grants of restricted stock units related to WABCO common stock. These units vest at the rate of 33.3% per year with vesting dates of 2/23/12, 2/23/13 and 2/22/14.

(6)	Reflects grants of restricted stock units related to WABCO common stock. These units vest at the rate of 33.3% per year with vesting dates of 2/22/11, 2/22/12 and 2/22/13.

(7)	Reflects grants of restricted stock units related to WABCO common stock. These units vest at the rate of 33.3% per year with vesting dates of 2/17/10, 2/17/11 and 2/17/12.

(8)	Reflects grants of restricted stock units related to WABCO common stock. These units fully vest on 5/25/14.

(9)	Values in this column are based on the closing price of a share of our common stock on December 31, 2011, i.e. $43.40

(10)	Reflects grant of performance stock units related to WABCO common stock. These units fully vest on 5/26/2015 subject to Mr. Esculier’s continued employment and to the realization of performance goals described more fully in the section “Special Restricted Stock Unit Awards” above.

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Option Exercises and Stock Vested

The following table sets forth information about WABCO options that were exercised to purchase WABCO common stock in 2011 and restricted stock units (RSUs) that vested in 2011.


	Option Awards				Stock Awards
Names	Number of shares acquired on exercise (#)⁽¹⁾		Value realized on exercise ($)⁽²⁾		Number of shares acquired on vesting (#)⁽³⁾		Value realized on vesting ($)⁽⁴⁾
Jacques Esculier		207,924	$	10,969,847		39,456	$	2,479,770
Ulrich Michel		6,700	$	372,418		11,146	$	700,048
Jean-Christophe Figueroa		51,232	$	2,811,256		9,372	$	588,577
Nikhil M. Varty		79,987	$	2,920,440		8,312	$	521,983
Kevin Tarrant		45,958	$	2,303,696		8,516	$	535,055

(1)	Represents the gross number of shares acquired upon exercise of vested options without taking into account any shares that may be withheld to cover option exercise price or applicable tax obligations.

(2)	Represents the value of exercised options calculated by multiplying (i) the number of shares of WABCO’s common stock to which the exercise of the option is related, by (ii) the difference between the fair market value of those shares on the date of exercise and the exercise price of the options.

(3)	Represents the gross number of shares acquired upon vesting of RSUs without taking into account any shares that may be withheld to satisfy applicable tax obligations.

(4)

Represents the value of vested RSUs calculated by multiplying the gross number of vested RSUs by the Fair Market Value of WABCO’s shares on the vesting date. According to our Omnibus Incentive Plan, fair market value on any date is defined as the closing trading price of a share of the WABCO’s common stock on the immediately preceding date. This is a common method to determine fair market value for the purposes of such awards, and is an accepted method of establishing such value for federal income tax purposes.

Pension Benefits

None of our NEOs participated in a pension plan in 2011.

Nonqualified Deferred Compensation

The following table sets forth information about deferred compensation benefits accrued by our NEOs in 2011:


Names	Executive Contributions in Last FY⁽¹⁾ ($)		Registrant Contributions in Last FY ($)⁽²⁾		Aggregate Earnings in Last FY ($)⁽²⁾		Aggregate Withdrawals / Distributions ($)		Aggregate Balance at Last FYE ($)⁽²⁾
Jacques Esculier		—	$	139,950		—		—	$	402,334
Ulrich Michel	$	327,996		—		—		—	$	593,963
Jean-Christophe Figueroa	$	261,760		—		—		—	$	521,997
Nikhil M. Varty		—	$	19,050		—		—	$	53,930
Kevin Tarrant		—	$	17,898		—		—	$	53,478

(1)	Messrs. Figueroa and Michel, employed in our Belgian subsidiary, have elected to participate in a nonqualified deferred compensation plan where they contribute half of their AIP award.

(2)

All employees whose eligible compensation exceeds limits imposed by Section 401(a)(17) of the Internal Revenue Code (“IRS Limits”) participate in the company’s Supplemental Savings Plan, except for Messrs. Figueroa and Michel. Under the Supplemental Savings Plan, we credit 3% on eligible compensation between the IRS Limits and $250,000 plus a matching contribution of up to 6% on eligible compensation in

- 49 -

excess of the IRS Limits based upon the employee’s contribution election to the tax qualified 401(k) plan. For Mr. Esculier, we credit a basic contribution of 3% on all eligible compensation in excess of the IRS Limits and an additional 6% matching contribution, based on Mr. Esculier’s contribution election to the tax-qualified 401(k) plan. Effective January 1, 2012, under the terms of their business manager agreements, none of the NEOs will participate in the Supplemental Savings Plan.

Other Retirement Plans

The company’s tax qualified 401(k) plan, in which Messrs. Esculier, Tarrant and Varty participated in 2011, includes a basic contribution equal to 3% of eligible compensation plus a matching contribution of up to 6% of eligible compensation.

Messrs. Michel and Figueroa participated in 2011 in a Belgian tax-qualified defined contribution plan under which the company contributes 3% of base pay up to the Belgian social security covered pay limit plus 9% of base pay on pay above the Belgian social security covered pay limit, and 9% of half of the target annual incentive bonus.

Potential Payments upon Termination or Change-in-Control

Under their employment arrangements, Messrs. Esculier, Michel, Figueroa, Varty and Tarrant are entitled to severance payments in the event their employment is involuntarily terminated by us without cause or they terminate their employment with us for good reason (as defined below). Mr. Esculier will be paid a lump sum amount equal to two times his annual base salary at the time of termination, plus two times his then current annual incentive target award. Messrs. Michel, Figueroa, Varty and Tarrant will be paid a lump sum amount equal to one and one half times their annual base salary at the time of termination, plus one and one half times their then current annual incentive target award. In addition, group life and group medical coverage will be continued for up to 18 months (24 months, in the case of Mr. Esculier) following termination and reimbursement of financial planning services of up to $5,000 will be provided if such expenses are submitted within one year of termination of employment. Payment of some or all of these amounts may be delayed for six months following a participant’s termination, or the period over which welfare benefits are provided may be shortened, to the extent required to avoid subjecting the participant to additional taxes or accelerated income recognition under Section 409A of the Internal Revenue Code. These contractual severance benefits will be offset by any statutory entitlements to which any of the NEOs may become entitled under applicable law. The terms “good reason” and “cause” as referenced herein have the same meaning as in the Change of Control Severance Plan described below. These severance payments and benefits will not be payable in the event Messrs. Esculier, Michel, Figueroa, Varty and Tarrant are entitled to benefits under the Change of Control Severance Plan in connection with their termination of employment.

Potential Post-Employment Payments

Severance Arrangements

If their employment had terminated on December 31, 2011, Messrs. Esculier, Michel, Figueroa, Varty and Tarrant would have been entitled to severance payments in the event their employment was involuntarily terminated by us without cause or they terminated their employment with us for good reason (as defined below). Mr. Esculier would be paid a lump sum amount equal to two times his annual base salary at the time of termination, plus two times his then current annual incentive target award. Messrs. Michel, Figueroa, Varty and Tarrant would be paid a lump sum amount equal to one and one half times their annual base salary at the time of termination, plus one and one half times their then current annual incentive target award. In addition, group life and group medical coverage would be continued for up to 18 months (24 months, in the case of Mr. Esculier) following termination and reimbursement of financial planning services of up to $5,000 would be provided if such expenses are submitted within one year of termination of employment. Payment of some or all of these amounts may be delayed for six months following a participant’s termination, or the period over which welfare

- 50 -

benefits are provided may be shortened, to the extent required to avoid subjecting the participant to additional taxes or accelerated income recognition under Section 409A of the Internal Revenue Code. These contractual severance benefits would be offset by any statutory entitlements to which any of the NEOs may become entitled under applicable law. The terms “good reason” and “cause” as referenced herein have the same meaning as in the Change of Control Severance Plan described below. These severance payments and benefits would not be payable in the event Messrs. Esculier, Michel, Figueroa, Varty and Tarrant are entitled to benefits under the Change of Control Severance Plan in connection with their termination of employment. Effective January 1, 2012, severance payments other than those provided under the Change of Control Severance Plan will be paid under the terms of the business manager agreements discussed in greater detail under Transition to “Business Manager” Status for Named Executive Officers.

Severance Benefits as of December 31, 2011

The table set forth below illustrates the amount of severance benefits and the value of continued welfare benefits that would have been payable to each of our NEOs if his employment had been terminated by the company without cause or if such officer had terminated his employment for good reason under the agreements described above on December 31, 2011 and assuming that such terminations occurred prior to the occurrence of a change of control. The actual amounts payable in the event that any such NEO incurred a qualifying termination would likely be different from the amounts shown above, depending on such NEO’s then current compensation at the date of termination.


Names	Cash Severance Benefit⁽¹⁾		Value of Continued Welfare Benefits and Financial Planning Reimbursement⁽²⁾		Total Value of Termination Benefits Payable
Jacques Esculier	$	4,000,000	$	63,282	$	4,063,282
Ulrich Michel	$	1,171,614	$	66,845	$	1,238,459
Jean-Christophe Figueroa	$	984,230	$	65,669	$	1,049,899
Nikhil Varty	$	865,200	$	36,260	$	901,460
Kevin Tarrant	$	835,536	$	39,920	$	875,456

(1)

Column (1) reflects, for Mr. Esculier, two times annual base salary as of December 31, 2011, plus two times the annual incentive plan target as of December 31, 2011, and for our other NEOs, 1.5 times annual base salary as of December 31, 2011, plus 1.5 times the annual incentive plan target as of December 31, 2011

(2)

Column (2) reflects, for Mr. Esculier, the estimated value of company provided group life and group medical coverage for two years and reimbursement of financial planning services of up to $5,000 for one year, and for our other NEOs, the estimated value of company provided group life and group medical coverage for 18 months and reimbursement of financial planning services of up to $5,000 for one year.

A group of approximately twenty key executives of the company, including all the NEOs, participate in the WABCO Change of Control Severance Plan. Under the Change of Control Severance Plan, participants are entitled to severance benefits and company-paid outplacement services in the event their service with the company is involuntarily terminated by us (or any successor to us) without cause or they terminate their service with the company for good reason, in each case, within 24 months after the occurrence of a change of control of the company. Under these circumstances, Messrs. Esculier, Michel and Tarrant would be paid a lump sum amount equal to three times their annual base salary at the time of termination, plus three times their then current annual incentive target award. Other executive participants, including Messrs. Varty and Figueroa would be paid a lump sum amount equal to two times their respective annual base salary at the time of termination or departure, plus two times their then-current annual incentive target award. In addition, group life and group medical coverage will be continued for up to 36 months for Messrs. Esculier, Michel and Tarrant, and 24 months for other executive participants, including Messrs. Varty and Figueroa. Messrs. Esculier, Michel and Tarrant are also eligible to receive reimbursement of financial planning services of up to $5,000 if such expenses are submitted

- 51 -

within one year of the executive’s termination of service with the company. Payment of some or all of these amounts may be delayed for six months following the termination of an officer’s service with the company, or the period over which welfare benefits are provided to the executives may be shortened, to the extent required to avoid subjecting the executive to additional taxes or accelerated income recognition under Section 409A of the Internal Revenue Code. These contractual severance benefits will be offset by any statutory entitlements to which any of the executives, including the NEOs, may become entitled under applicable law.

As mentioned in the section Payments upon Severance or Change of Control of the Compensation Discussion & Analysis, the Company removed the excise tax gross-up payment provisions included in its Change in Control Severance Plan, effective as of January 1, 2012. This decision affects current and future officers, including the NEOs.

For purposes of the entitlement to severance benefits under the Change of Control Severance Plan, “cause” means a participant’s (1) willful and continued failure to substantially perform his duties with the company or any subsidiary after a demand for substantial performance is made identifying the manner in which it is believed that such participant has not substantially performed his or her duties and such participant is provided a period of thirty (30) days to cure such failure, (2) conviction of, or plea of nolo contendere to, a felony, or (3) the willful engaging by such participant in gross misconduct materially and demonstrably injurious to the company or any subsidiary or to the trustworthiness or effectiveness of the participant in the performance of his duties. Under the Change of Control Severance Plan, “good reason” is defined to mean the occurrence of any of the following events, without the written consent of the participant, so long as the participant actually terminates service with the company within 90 days of the occurrence of such event:

an adverse change in the participant’s position or status as an executive or a material diminution in the participant’s duties, authority, responsibilities or status;

relocation of the participant’s principal place of service with the company to a location more than 30 miles away from the participant’s prior principal place of service with the company;

a reduction in the participant’s base salary;

the taking of any action by the company or a subsidiary (including the elimination of a plan without providing substitutes therefor or the reduction of such participant’s award thereunder) that would substantially diminish the aggregate projected value of such participant’s award opportunities under the incentive plans in which he or she was participating at the time of the taking of such action; or

the taking of any action that would substantially diminish the aggregate value of the benefits provided to the participant under the medical, health, accident, disability, life insurance, thrift and retirement plans in which he or she was participating at the time of the taking of such action (unless resulting from a general change in benefits applicable to all similarly situated employees of the company and its affiliates).

However, a participant may not terminate his or her service with the company for good reason on account of any of the events or actions described in items 3, 4 and 5 above, if such event or action is part of a cost savings program and any adverse consequences for the executive of such events or action applies proportionately to all similarly situated executives.

Under the Omnibus Incentive Plan, in the event of a change of control of the company (as defined in the manner described below), any outstanding stock options or stock appreciation rights will become immediately exercisable and may be cashed out at the discretion of the CNG Committee, and the restricted period shall lapse as to any outstanding restricted stock or restricted units. Subject in the case of certain stock options, subject to limitations required to comply with conditions imposed under federal income tax laws, any cash out will occur using a change of control settlement value that is based on the highest price of the stock prevailing during the 60-day trading period immediately preceding the occurrence of the event that gives rise to a change of control. Notwithstanding the foregoing, no acceleration of exercisability, vesting or cash settlement will occur if the CNG

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Committee determines, prior to the change of control, that any stock option, stock appreciation right, restricted share or restricted unit will be replaced or otherwise honored by the new employer. Upon a change of control, all performance periods for annual incentive and long-term incentive awards shall end, and awards shall become payable at target levels, prorated for the portion of the performance period completed prior to the change of control. Under the Omnibus Incentive Plan, any participant whose employment is terminated other than for cause on or after the date of the company’s shareholders approve a change of control, but before the change of control occurs, will receive the same benefits as though he or she remained employed until the change of control.

Change of Control Benefits

The table set forth below illustrates the amount that would be payable for each of the NEOs under the Change of Control Severance Plan and the Omnibus Incentive Plan in the event that a change of control occurred on December 31, 2011 and a qualifying termination occurred on or within twenty-four months after a change of control. The amounts listed in the table below are only estimates of the amounts that would have been payable in the event that a change of control had occurred on December 31, 2011, based on the assumptions described in this section. The actual amounts payable in the event that a change of control does occur will be more or less than the amounts shown below, depending on the actual terms and conditions of any such event and the facts and circumstances actually prevailing at the time of such event. Thus, the actual amount payable in the event of a change of control could be significantly greater or less than the estimated amounts shown in the table below.


Names (a)	Total Value of Termination Benefits Payable (b)⁽¹⁾		Total Value of Equity Acceleration (c)⁽²⁾		Other Incremental Benefits Payable (d)⁽³⁾		Tax Gross- ups (e)⁽⁴⁾		Total Value of Benefits Payable Due to a Change of Control (f)⁽⁵⁾
Jacques Esculier	$	6,092,423	$	3,468,798	$	2,810,412		N/A	$	12,371,633
Ulrich Michel	$	2,471,916	$	97,327	$	719,748		N/A	$	3,288,991
Jean-Christophe Figueroa	$	1,398,199	$	84,604	$	604,634		N/A	$	2,078,437
Nikhil M. Varty	$	1,200,280	$	79,026	$	520,003		N/A	$	1,799,309
Kevin Tarrant	$	1,745,912	$	76,980	$	512,030		N/A	$	2,334,922

(1)	For the purposes of this table, base salary as of December 31, 2011 was used for all the named executive officers.

For Messrs. Esculier, Michel and Tarrant, this amount reflects three times annual base salary as of December 31, 2011, plus three times the annual incentive plan target as of December 31, 2011, and the estimated value of company provided group life and group medical coverage for 3 years and reimbursement of financial planning services up to $5,000 for one year.

For Messrs. Varty and Figueroa, this amount reflects two times annual base salary as of December 31, 2011, plus two times the annual incentive plan target as of December 31, 2011 and the estimated value of company provided group life and group medical coverage for 2 years and reimbursement of financial planning services up to $5,000 for one year.

All are eligible for company-paid outplacement services. The value of such benefits is not included in these estimates.

(2)

Column (c) of the above table represents an estimate of the incremental value related to a change of control cash-out of any unvested options to purchase WABCO common stock and the acceleration and cash-out value of any WABCO restricted stock unit award outstanding on December 31, 2011 under the Omnibus Incentive Plan. The number of unvested stock options and the number of outstanding restricted stock awards are represented in the “Number of Securities Underlying Unexercised Options—(#) Unexercisable” and “Number of Shares or Units of Stock – Unvested (#)” columns, respectively, of the Outstanding Equity Awards at Fiscal Year-End table. To the extent relevant, amounts in the above table were calculated assuming that the price paid for the company’s common stock in connection with the assumed change of control was $43.40, which was the closing price of a share of company stock on December 31, 2011. The

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amount in the above table with respect to the “Total Value of Equity Acceleration” includes, in the case of options, the amount that would be payable in respect of such options were each to be cashed out in accordance with the terms of the 2009 Omnibus Incentive Plan determined by using the change of control value described above minus the applicable exercise price of the option. It also includes the market value on December 31, 2011 of unvested restricted stock unit that would have been accelerated. The values shown in the table above are the amounts contingent on a change of control determined in accordance with IRC section 280G. The total amounts payable for unvested stock options and restricted stock as of December 31, 2011 based on a $43.40 per share settlement rate are approximately: $11,210,377, $2,407,202, $2,032,949, $1,794,252 and $1,788,451 for Messrs. Esculier, Michel, Figueroa, Varty and Tarrant, respectively.

(3)	Column (d) represents an estimate of the pro-rata target awards under all in progress performance cycles for AIP and LTIP awards as of December 31, 2011.

For Mr. Esculier, these amounts represent $1,000,000, $866,667, $616,000 and $327,745 for the 2011 AIP, 2009-2011, 2010-2012 and 2011-2013 long-term incentive plan performance cycles, respectively.

For Mr. Michel, these amounts represent $292,903, $211,129, $142,558 and $73,158 for the 2011 AIP, 2009-2011, 2010-2012 and 2011-2013 long-term incentive plan performance cycles, respectively.

For Mr. Figueroa, these amounts represent $246,058, $177,362, $119,757 and $61,457 for the 2011 AIP, 2009-2011, 2010-2012 and 2011-2013 long-term incentive plan performance cycles, respectively.

For Mr. Varty, these amounts represent $216,300, $146,713, $103,183 and $53,807 for the 2011 AIP, 2009-2011, 2010-2012 and 2011-2013 long-term incentive plan performance cycles, respectively.

For Mr. Tarrant, these amounts represent $208,884, $149,936, $101,248 and $51,962 for the 2011 AIP, 2009-2011, 2010-2012 and 2011-2013 long-term incentive plan performance cycles, respectively.

(4)

As mentioned in the section “Payments upon Severance or Change of Control” of the Compensation Discussion & Analysis, the Company has determined that, as of January 1, 2012, the excise tax gross-up payment provisions included in the Change of Control Severance Plan have been removed. This decision affects current and future officers, including the NEOs.

(5)	Sum of (b) through (e).

For purposes of the Change of Control Severance Plan and the Omnibus Incentive Plan, a “change of control” is defined to include the occurrence of any of the following events: (i) a person (other than WABCO, any of its subsidiaries or any employee benefit plan maintained by WABCO or any of its subsidiaries) is or becomes the beneficial owner, directly or indirectly, of securities of the company representing 20% or more of the combined voting power of WABCO’s then-outstanding securities (or 25% to the extent that, prior to meeting the 20% threshold, the non-management members of our Board unanimously adopt a resolution consenting to such acquisition by such beneficial owners); (ii) during any consecutive 24-month period, individuals who at the beginning of such period constitute our Board, together with those individuals who first become directors during such period (other than by reason of an agreement with WABCO or our Board in settlement of a proxy contest for the election of directors) and whose election or nomination for election to our Board was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; (iii) the consummation of any merger, consolidation, recapitalization or reorganization involving WABCO, other than any such transaction immediately following which the persons who were the beneficial owners of the outstanding voting securities of WABCO immediately prior to such transaction are the beneficial owners of at least 55% of the total voting power represented by the voting securities of the entity surviving such transaction or the ultimate parent of such entity in substantially the same relative proportions as their ownership of WABCO’s voting securities immediately prior to such transaction; provided that, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such threshold (or to preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of WABCO, such surviving entity, any subsidiary or any subsidiary of

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such surviving entity; (iv) the sale of substantially all of the assets of WABCO to any person other than any subsidiary or any entity in which the beneficial owners of the outstanding voting securities of WABCO immediately prior to such sale are the beneficial owners of at least 55% of the total voting power represented by the voting securities of such entity or the ultimate parent of such entity in substantially the same relative proportions as their ownership of WABCO’s voting securities immediately prior to such transaction; or (v) the shareholders of WABCO approve a plan of complete liquidation or dissolution of WABCO.

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EQUITY COMPENSATION PLANS

The following table sets forth certain information regarding WABCO’s equity compensation plans as of December 31, 2011:


Plan Category	Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, Rights and RSUs			Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity compensation plans approved by security holders		4,427,521	⁽¹⁾	$	29.61		4,393,602
Equity compensation plans not approved by security holders		—					89,88	⁽²⁾

Total		4,427,521					4,483,489

(1)	Includes options to purchase 3,942,677shares of common stock and 484,844 RSUs granted under our omnibus incentive plans. The options have a weighted average remaining term of 6.3 years.

(2)	Represents shares remaining available for issuance under the Deferred Compensation Plan. For information regarding the material terms of the Deferred Compensation Plan, please see the section entitled, “Director Compensation—Deferred Compensation Plan.”

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PROPOSAL 3—SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables the company’s shareholders to vote to approve, on an advisory and non-binding basis, the compensation of the company’s named executive officers as disclosed in this proxy statement in accordance with SEC rules.

As we discuss in the “Compensation Discussion and Analysis,” our executive compensation program is intended to deliver competitive total compensation upon achievement of performance objectives and has been developed consistent with our strategy to attract, motivate and develop leaders who will drive the creation of shareholder value. Our executive compensation is discussed in further detail under “Compensation Discussion and Analysis” and “Executive Compensation,” which includes information about the 2011 compensation of our named executive officers.

The company is asking its shareholders to indicate their support for the compensation paid to the company’s named executive officers. This proposal is not intended to address any specific item of compensation, but rather the overall compensation of the company’s named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, the company is asking its shareholders to vote FOR the following resolution at the Annual Meeting.

“RESOLVED, that the company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the company’s proxy statement for the 2012 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC.”

The vote on executive compensation is advisory, and therefore not binding; however, the CNG Committee will consider the outcome of the vote when considering future executive compensation arrangements.

Recommendation

The Board of Directors unanimously recommends that shareholders vote FOR Proposal 3, the approval of the compensation paid to the company’s named executive officers, as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules.

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COMMON STOCK OWNERSHIP OF OFFICERS, DIRECTORS

AND SIGNIFICANT SHAREHOLDERS

Ownership of Common Stock by Directors and Executive Officers

The following table sets forth, as of March 1, 2012, beneficial ownership of WABCO common shares by each executive officer named in the Summary Compensation Table in this proxy statement, each director or director nominee, and by all directors and executive officers as a group. Unless otherwise indicated, each beneficial owner had sole voting and investment power with respect to the common stock held.


Name of Beneficial Owner	Shares Beneficially Owned			Shares that May be Acquired Within 60 Days			Total		Percentage of Class
James F. Hardymon		28,039	⁽¹⁾⁽²⁾		17,769			45,808		*
Jacques Esculier		110,552	⁽²⁾		499,087			559,639		*
G. Peter D’Aloia		21,128	⁽¹⁾		154,239	⁽³⁾		175,367		*
John F. Fiedler		5,469	⁽¹⁾		2,730			8,199		*
Jean-Christophe Figueroa		19,262	⁽²⁾		110,319			129,581		*
Juergen W. Gromer		5,402	⁽¹⁾		2,730			8,132		*
Kenneth J. Martin		5,402	⁽¹⁾		2730			8,132		*
Ulrich Michel		18,599	⁽²⁾		221,989			240,588		*
Mary L. Petrovich		0			996			996		*
Donald J. Stebbins		5,469	⁽¹⁾		11,516	⁽³⁾		16,985		*
Michael T. Smith		7,402	⁽¹⁾		2,730			10,132		*
Nikhil M. Varty		18,443	⁽²⁾		59,668			78,110		*
Kevin Tarrant		12,169	⁽²⁾		79,236			91,405		*
All current directors and executive officers of the company as a group (15) persons		264,137			1,227,648			1,491,785		2.3	%

*	Less than 1%.

(1)

The number of shares shown for directors in the table above includes shares allocated to their accounts in the outside directors trust established by the company for the non-management directors. Under the outside directors trust, a trust account holds shares of common stock for each participating non-management director. The shares are voted by the trustee of the trust on behalf of each participating director in accordance with the director’s instructions. The trust shares do not vest to direct ownership while the director is in office. Shares held under this plan are as follows: Mr. Hardymon, 6,437; Mr. D’Aloia, 5,405; Mr. Fiedler, 5,469; Mr. Gromer, 5,402; Mr. Martin, 5,402, Mr. Smith, 5,402 and Mr. Stebbins, 5,469. In July 2009, the company’s Board of Directors voted to discontinue the use of the outside directors trust.

(2)	Shares include vested restricted stock units as follows: Mr. Hardymon, 6,062 shares, Mr. Esculier, 110,552 shares, Mr. Figueroa, 19,262 shares, Mr. Michel, 18,599 shares, Mr. Varty, 18,443 shares and Mr. Tarrant, 10,468 shares.

(3)	Shares include deferred stock shares allocated under the company’s Deferred Compensation Plan as follows: Mr. D’Aloia, 1,508 shares and Mr. Stebbins, 8,786 shares.

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Ownership of Common Stock by Certain Significant Shareholders

As of March 1, 2012, unless otherwise indicated below, the following are beneficial owners of more than 5% of our outstanding common stock:


Name and Address of Beneficial Owner	Shares Beneficially Owned		Percent of Class⁽¹⁾
Lone Pine Managing Member LLC⁽²⁾		4,910,277		7.5	%
Two Greenwich Plaza
Greenwich, Connecticut 06830
T. Rowe Price Associates, Inc.⁽³⁾		4,496,100		6.8	%
100 E. Pratt Street
Baltimore, MD 21202
The Vanguard Group, Inc.⁽⁴⁾		3,312,182		5.04	%
100 Vanguard Blvd.
Malvern, PA 19355

(1)	As of March 1, 2012, we had 64,802,424 shares of our common stock outstanding.

(2)

In an amended Schedule 13G filed on February 14, 2012, Lone Pine Managing Member LLC reported, on behalf of itself, Stephen F. Mandel, Jr. and the entities listed below, that, as of December 31, 2011, it was deemed, pursuant to Rule 13d-1 of the Securities Exchange Act of 1934, as amended, to hold sole dispositive power and sole voting power with respect to 4,910,277 shares of our common stock reported in the table above, by virtue of the fact that it is the Managing Member of Lone Pine Associates, Lone Pine Members and Lone Pine Capital, has the power to direct the affairs of Lone Pine Associates, Lone Pine Members and Lone Pine Capital. Lone Pine Associates, the general partner of Lone Spruce, Lone Sequoia and Lone Balsam, has the power to direct the affairs of Lone Spruce, Lone Sequoia and Lone Balsam, including decisions respecting the disposition of the proceeds from the sale of shares. Lone Pine Members, the general partner of Lone Cascade and Lone Sierra, has the power to direct the affairs of Lone Cascade and Lone Sierra, including decisions respecting the disposition of the proceeds from the sale of shares. Lone Pine Capital, the investment manager of Lone Cypress, Lone Kauri and Lone Monterey Master Fund, has the power to direct the receipt of dividends from or the proceeds of the sale of shares held by Lone Cypress, Lone Kauri and Lone Monterey Master Fund. Stephen F. Mandel, Jr., the Managing Member of Lone Pine Managing Member, has sole dispositive power and sole voting power with respect to 4,910,277 shares of our common stock.

(3)

In an amended Schedule 13G filed on February 9, 2012, T. Rowe Price Associates, Inc. reported that, as of December 31, 2010, it was deemed, pursuant to Rule 13d-1 of the Securities Exchange Act of 1934, as amended, to hold sole dispositive power with respect to the 4,496,100 shares of our common stock reported in the table above, but sole voting power with respect to only 985,100 of such shares, by virtue of the fact that it is the parent holding company of a group of investment companies, including T. Rowe Price MID-CAP Growth Fund, Inc.

(4)

In a Schedule 13G filed on February 6, 2012, The Vanguard Group, Inc. reported that, as of December 31, 2011, it was deemed, pursuant to Rule 13d-1 of the Securities Exchange Act of 1934, as amended, to hold sole dispositive power with respect to 3,265,345 shares of our common stock reported in the table above, but sole voting power with respect to only 46,837 shares.

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OTHER MATTERS

Shareholder Proposals for the 2013 Annual Meeting of Shareholders

Proposals for Inclusion in the Proxy Statement. Under the rules of the SEC, if a shareholder wants to include a proposal for consideration in our proxy statement and proxy card at our 2013 Annual Meeting of Shareholders, the proposal must be received at our executive offices located at One Centennial Avenue, Piscataway, New Jersey 08855 no later than December 14, 2012. The proposal should be sent to the attention of the Secretary of the company.

Proposals to be Offered at an Annual Meeting. Under our amended and restated by-laws, and as permitted by the rules of the SEC, certain procedures are provided which a shareholder must follow to nominate persons for election as directors or to introduce an item of business at an annual meeting if such matter is not intended to be considered for inclusion in the proxy statement. These procedures provide that director nominations and/or proposals relating to another item of business to be introduced at an annual meeting of shareholders must be submitted in writing by certified mail to the Secretary of the company at our executive offices located at One Centennial Avenue, Piscataway, New Jersey 08855. We must receive the notice of your intention to introduce a nomination or proposed item of business at our 2013 Annual Meeting no later than 90 days in advance of the anniversary of the 2012 Annual Meeting and no earlier than 120 days in advance of such date. In addition, nominations for a non-incumbent director must be accompanied by information concerning the proposed nominee, including such information as is required by the company’s amended and restated by-laws and the proxy rules under the SEC.

Director Nominations

The Board of Directors has delegated to the CNG Committee the responsibility of identifying, screening and recommending candidates to the Board. Potential candidates are interviewed by the Chairman and Chief Executive Officer and the Chair of the CNG Committee prior to their nomination, and may be interviewed by other directors and members of senior management. The CNG Committee then meets to consider and approve the final candidates, and either makes its recommendation to the Board to fill a vacancy, add an additional member, or recommends a slate of candidates to the Board for nomination for election to the Board. The selection process for candidates is intended to be flexible, and the CNG Committee, in the exercise of its discretion, may deviate from the selection process when particular circumstances warrant a different approach.

The CNG Committee will consider candidates proposed by shareholders to be director nominees. Shareholders wishing to recommend a director candidate for consideration by the CNG Committee should provide the name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate’s willingness to serve, if elected, and evidence of the nominating shareholder’s ownership of company stock to the attention of the Secretary of the company at One Centennial Avenue, Piscataway, New Jersey 08855. Shareholders wishing to directly nominate a director should follow the company’s nominating process set forth above under the caption “Shareholder Proposals for the 2013 Annual Meeting of Shareholders” and more fully described in the company’s amended and restated by-laws. The CNG Committee’s policy is to evaluate director nominees proposed by shareholders in the same manner that all other director nominees are evaluated. The general criteria our CNG Committee consider important in evaluating director candidates are: (i) senior-level management and decision-making experience; (ii) a reputation for integrity and abiding by exemplary standards of business and professional conduct; (iii) ability to devote time and attention necessary to fulfill the duties and responsibilities of a director; (iv) a record of accomplishment in their respective fields, with leadership experience in a corporation or other complex organization, including government, educational and military institutions; (v) independence and the ability to represent all WABCO shareholders; (vi) legal and NYSE listing requirements; (vii) sound business judgment; (viii) candor; (ix) judgment, age, skills, gender, ethnicity, race, culture, thought, geography and other measures to ensure that the Board as a whole reflects a range of viewpoints, backgrounds, skills, experience and expertise; and (x) the needs of the Board of Directors.

The company may, in the future, pay a third-party a fee to assist it in the process of identifying and/or evaluating director candidates.

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Multiple Shareholders Sharing the Same Address

We have adopted a procedure approved by the SEC called “householding.” Under this procedure, shareholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of our annual report and proxy statement unless one or more of these shareholders notifies us that they wish to continue receiving individual copies. This procedure will reduce our printing costs and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards.

If you and other shareholders of record participate in householding and wish to receive a separate copy of the 2011 Annual Report or this proxy statement, or if you wish to receive separate copies of future annual reports and/or proxy statements, please contact our Investor Relations Department by telephone at 732-369-7477 or in writing at One Centennial Avenue, Piscataway, New Jersey 08855-6820.

If you and other shareholders of record with whom you share an address currently receive multiple copies of annual reports and/or proxy statements, or if you hold stock in more than one account and, in either case, you wish to receive only a single copy of the annual report or proxy statement for your household, please contact our Investor Relations Department at the telephone number or address above.

If you are a beneficial owner, you can request additional copies of the annual report and proxy statement or you may request householding information from your bank, broker or nominee.

Electronic Access to Proxy Statement and Annual Report

This proxy statement and the 2011 Annual Report are available on the company’s web site at www.wabco-auto.com. Instead of receiving paper copies of the annual report and proxy statement in the mail, shareholders can elect to receive an e-mail that will provide an electronic link to these documents. Choosing to receive your proxy materials online will save us the cost of producing and mailing documents to your home or business, and also will give you an electronic link to the proxy voting site.

Shareholders of Record. Shareholders of record can choose to receive materials electronically by following the instructions provided if voting over the Internet or by telephone. You can also choose between receiving electronic and paper copies by contacting our Investor Relations Department by telephone at 732-369-7477 or in writing at One Centennial Avenue, Piscataway, New Jersey 08855-6820.

If you choose to receive future proxy statements and annual reports over the Internet, you will receive an e-mail next year with instructions containing the Internet address of those materials and the electronic link to the proxy voting site. The election will remain in effect until you write or call the company’s Investor Relations Department and tell us otherwise.

Beneficial Shareholders. If you hold your shares in a brokerage account, you may also have the ability to receive copies of the annual report and proxy statement electronically. Please check the information provided in the proxy materials sent to you by your bank, broker or other holder of record regarding the availability of electronic delivery.

By order of the Board of Directors,

LOGO

VINCENT PICKERING

Chief Legal Officer and Secretary

April 13, 2012

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Appendix A

WABCO Holdings Inc.

Definition of Director Independence

The following definition of “Director Independence” was adopted by the Board on July 27, 2007:

The New York Stock Exchange listing rules define “Independent Director” as a director who has no material relationship with the Company that may interfere with the exercise of the director’s independent judgment. To assist the Board in making determinations of director independence for all purposes, including under the securities laws and regulations applicable to the Company, the New York Stock Exchange listing rules and the Company’s Corporate Governance Guidelines, the Board hereby adopts the following standards:

In general, the guiding principle of WABCO is that the only money or perquisites received, directly or indirectly, by independent directors or their immediate family members from the Company is the remuneration directly related to the director’s service as a director of the Company.

Without limiting the foregoing, a director shall not qualify as “independent” if any of the following are true.

(i)

The director or an immediate family member is, or within the past three years was, an officer or employee of the Company.

(ii)

The director or an immediate family member is, or within the past three years has been, affiliated with or employed by the Company’s auditor or any other entity that, within the past three years, acted as the Company’s auditor.

(iii)

The director is, or within the past three years has been, part of an “interlocking directorate,” which means: (x) an officer of the Company serves or served on the compensation committee of another company that concurrently employs or employed the director or an immediate family member; (y) an officer of the Company served as a director of another company at the same time that one of the officers of the other company was on the Compensation, Nominating and Governance Committee of the Company; or (z) an officer of the Company serves or served on the compensation committee of another company at the same time that one of the officers of the other company serves or served on the Compensation, Nominating and Governance Committee of the Company.

(iv)

The director or an immediate family member has received any compensation from the Company during any of the past three years other than compensation and benefits, including deferred compensation and pension benefits, directly related to such director’s Board service.

(v)

The director is a current partner in, or a significant shareholder, officer or employee or the director’s immediate family member is a current executive officer, of any company to which the Company made, or from which the Company received, payments (other than those arising solely from such entity’s investments in the Company’s securities) in any of the last three fiscal years that exceeded the greater of $1 million or 2% of the Company’s or such other business’s consolidated gross revenue.

(vi)

The director or an immediate family member is a director or officer of a tax-exempt organization to which the Company’s contributions exceeded the greater of $1 million or 2% of such organization’s consolidated gross revenue in any of the last three fiscal years (other than matching employee contributions through the Company’s matching gifts program, if applicable).

For purposes of clauses (i) and (iii) above, employment of a family member in a non-officer position does not preclude the Board from determining that a director is independent. For purposes of clause (ii) above, employment of a director or an immediate family member by, or affiliation with, the Company’s auditor within

A-1

the last three years (but not currently) does not preclude the Board from determining that a director is independent unless the director or immediate family member personally worked on the Company’s audit within that time.

For purposes of interpreting these standards, the Board has adopted the following definitions:

“Company” means WABCO and/or any of its subsidiaries.

“Immediate family member” means the director’s spouse, parents, step-parents, children, step-children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than a tenant or employees) who shares his or her home.

“Officer” has the meaning specified in Rule 16a-1(f) of the Securities Exchange Act of 1934, or any successor rule, or, for any entity that is not an “issuer” as defined in the Rule, a person who performs functions similar to an “officer” as defined in such Rule.

“Significant shareholder” of any entity means a person who is the direct or indirect beneficial owner of more than 10% of the equity interests of the entity.

A-2

Appendix B

WABCO HOLDINGS INC.

Reconciliation of Performance Net Income to Net Income

(Unaudited)


	Twelve Months Ended December 31,
(Amounts in millions, except per share data)	2011			% of Sales/ Adj Sales	2010				% of Sales/ Adj Sales	Chg vs. 2010			% Chg vs. 2010
Net Income/(Loss)
Reported Net Income/(Loss)	$	357.0			$	(226.1	)			$	583.1
Streamlining cost, net of tax		2.2				2.8					(0.6	)
Tax items		(13.2	)			5.2					(18.4	)
Separation costs, net of tax and separation related taxes		(20.3	)			4.1					(24.4	)
UK pension adjustment, net of tax		—				3.8					(3.8	)
EC fine		—				400.4					(400.4	)

Performance Net Income	$	325.7			$	190.2				$	135.5

Performance Net Income per Diluted Common Share	$	4.73			$	2.86
Common Shares Outstanding—Diluted		68.8				66.5		A

Incremental Gross Profit and Operating Income Margin		Gross Profit				Operating Income
Increase in adjusted sales from ‘10		485.6				485.6
Increase in adjusted income from ‘10		155.7				128.7

Incremental Income as a % of Sales		32.1	%			26.5	%

***	Percentage Not Meaningful

A—Diluted common shares outstanding reported for 2010 is 64.6 million since reported net income is a loss (no dilution is included). Since performance net income is positive, 1.9 million common stock equivalents have been added to the diluted common shares outstanding for purposes of calculating performance net income per share.

Note: The presentation of the performance measures above are not in conformity with generally accepted accounting principles (GAAP). These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner.

B-1

WABCO HOLDINGS INC.

Reconciliation of Net Cash Provided

By Operating Activities to Free Cash Flow

(Unaudited)


(Amounts in millions)	Three Months Ended December 31,						Twelve Months Ended December 31,
	2011			2010			2011			2010
Net Cash Provided by Operating Activities	$	87.2		$	74.3		$	333.2		$	(190.0	)
Deductions or Additions to Reconcile to Free Cash Flow:
Net purchases of property, plant, equipment and computer software		(39.6	)		(31.7	)		(105.2	)		(73.7	)

Free Cash Flow	$	47.6		$	42.6		$	228.0		$	(263.7	)

Less: EC fine indemnification payment^(A)	$	—		$	—		$	—		$	(437.2	)
Less: one time impact from implementation of accounts receivable securitization program	$	—		$	—		$	—		$	59.6
Less: Streamlining & separation payments	$	(4.6	)	$	(6.8	)	$	(22.1	)	$	(28.2	)

Free Cash Flow excluding streamlining & separation payments	$	52.2		$	49.4		$	250.1		$	142.1

(A)	Represents 326 million Euro payment made in September 2010 translated at a Euro to USD rate of approx. 1.34 on the date of payment.

Note: This statement reconciles net cash provided by operating activities to free cash flow. Management uses free cash flow, which is not defined by US GAAP, to measure the Company’s operating performance. Free cash flow is also one of the several measures used to determine incentive compensation for certain employees.

B-2


		VOTE BY INTERNET - www.proxyvote.com
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The Board of Directors recommends you vote FOR the following:

For
All

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All

For All
Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

Election of Directors

Nominees

Michael T. Smith 02 John F. Fiedler 03 Jean-Paul L. Montupet

The Board of Directors recommends you vote FOR proposals 2 and 3.

For

Against

Abstain

Ratify the selection of Ernst & Young Bedrijfsrevisoren BCVBA/Reviseurs d’Enterprises SCCRL as the company’s independent registered public accounting firm for the year ending December 31, 2012.

An advisory vote to approve the compensation paid to the Company’s named executive officers (“Say-on-Pay”)

NOTE: In their discretion, the proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponements thereof. The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1, 2 and 3.

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

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		Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report is/are available at www.proxyvote.com.


				WABCO HOLDINGS INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS May 25, 2012 The stockholder(s) hereby appoint(s) Jacques Esculier, Ulrich Michel, Todd Weinblatt and Vincent Pickering, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of WABCO Holdings Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., (Eastern Time) on Friday, May 25, 2012, at the New York offices of Kramer, Levin, Naftalis & Frankel, LLP, 1177 Avenue of the Americas, New York 10036 and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR EACH PROPOSAL PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address change/comments:




						(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
						Continued and to be signed on reverse side