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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.        )

 

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551 Fifth Avenue, Suite 300
New York, New York 10176

February 7, 2011

Dear Fellow Shareholders:

        You are cordially invited to attend the 2011 Annual Meeting of Shareholders of ABM Industries Incorporated in The Grand Paris Ballroom at the Sofitel Hotel, 45 West 44^th Street, New York, New York 10036, on Tuesday, March 8, 2011, at 10:00 a.m. At the meeting, shareholders will: (1) elect three directors to serve three-year terms until the 2014 Annual Meeting and until their successors are duly elected and qualified, (2) vote on the ratification of KPMG LLP as ABM's independent registered public accounting firm for the current year, (3) provide an advisory vote on executive compensation, (4) provide an advisory vote on the frequency of the advisory vote on executive compensation, and (5) transact such other business as may properly come before the meeting.

        Whether or not you plan to attend the meeting in person, please take the time to vote on the Internet, by telephone or by mailing your proxy card. As explained in the Proxy Statement, you may revoke your proxy at any time before it is actually voted at the meeting.

        Only shareholders of record at the close of business on January 12, 2011 will be entitled to vote at the meeting and any adjournments thereof. A list of shareholders on that date will be available for inspection by any shareholder for ten days prior to the meeting during normal business hours at ABM's corporate headquarters located at 551 Fifth Avenue, Suite 300, New York, New York 10176. You may make an appointment to review the list of shareholders by contacting ABM at (212) 297-0200.

        If you plan to attend the meeting in person and vote at the meeting, please remember to bring a form of personal identification with you. If you are acting as a proxy for another shareholder, please bring appropriate documentation from the record owner for whom you are acting as a proxy. If you will need any special assistance at the meeting, please contact ABM at (212) 297-0200 prior to the meeting.

        We look forward to seeing you at the meeting.

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551 Fifth Avenue, Suite 300
New York, New York 10176

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2011 ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MARCH 8, 2011
10:00 A.M.
NOTICE OF MEETING AND PROXY STATEMENT

YOUR VOTE IS IMPORTANT

        ABM Industries Incorporated ("ABM" or the "Company") will hold its 2011 Annual Meeting of Shareholders in The Grand Paris Ballroom at the Sofitel Hotel, 45 West 44^th Street, New York, New York 10036 on Tuesday, March 8, 2011, at 10:00 a.m. At the Annual Meeting, shareholders will: (1) elect three directors to serve three-year terms until the 2014 Annual Meeting and until their successors are duly elected and qualified, (2) vote on the ratification of KPMG LLP as ABM's independent registered public accounting firm for the current year, (3) provide an advisory vote on executive compensation, (4) provide an advisory vote on the frequency of the advisory vote on executive compensation, and (5) transact such other business as may properly come before the meeting.

        If you are a shareholder of record, you may vote in any one of four ways: in person by attending the Annual Meeting, by Internet, by telephone, or by mail using the enclosed proxy card. Specific voting information is included under the caption "Voting Procedures." Only shareholders of record at the close of business on January 12, 2011, are entitled to vote. On that day 52,903,469 shares of ABM common stock were outstanding. Each share entitles the holder to one vote.

        The ABM Board of Directors asks you to vote in favor of the director nominees, for the ratification of KPMG LLP as ABM's independent registered public accounting firm, for the approval, on an advisory basis, of the compensation of our executive officers and for the approval, on an advisory basis, of a triennial advisory vote on compensation. This Proxy Statement provides you with detailed information about each of these matters. We encourage you to read this Proxy Statement carefully. In addition, you may obtain information about ABM from our Annual Report on Form 10-K for the fiscal year ended October 31, 2010, and from our Annual Report to Shareholders, as well as from additional documents that we have filed with the Securities and Exchange Commission that are available on ABM's Web site at www.abm.com.

        This Notice and Proxy Statement are dated February 7, 2011, and were first mailed, together with a proxy card, to shareholders on or about February 7, 2011.

Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on March 8, 2011.

        The Proxy Statement, Annual Report on Form 10-K for the fiscal year ended October 31, 2010 and Annual Report to Shareholders and the means to vote by Internet are available at www.proxyvote.com.

        Instead of receiving paper copies of future annual reports and proxy statements in the mail, you 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 you as well as conserve natural resources. With electronic delivery, we will notify you by e-mail as soon as the annual report and proxy statement are available on the Internet, and you can easily submit your shareholder vote online. If you are a shareholder of record, you may enroll in the electronic delivery service at the time you vote by marking the appropriate box on your proxy card, or by selecting

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electronic delivery if you vote on the Internet, and following the enrollment instructions. If you are a beneficial holder, you may also have the opportunity to receive annual meeting materials electronically. Please check the information provided in the proxy materials mailed to you by your brokerage firm, bank or trustee.

        You may contact ABM at 212-297-0200 to obtain directions to the site of the Annual Meeting.

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VOTING PROCEDURES AND ANNUAL MEETING ATTENDANCE

Who may vote and how many votes do I have?

        Shareholders of record at the close of business on the record date, January 12, 2011, may vote. On that date, there were 52,903,469 outstanding shares of ABM common stock.

        All of the shares of ABM's common stock are entitled to vote at the meeting. Shareholders of record will have one vote for each share they hold.

How many votes must be present to hold the annual meeting?

        A majority of the votes that may be cast (at least 26,451,735 votes), present in person or represented by proxy, is needed to hold the 2011 Annual Meeting. If you properly vote on any proposal, your shares will be included in the number of shares to establish a quorum for the annual meeting. Shares represented by proxy cards marked "abstain" or returned without voting instructions will be counted as present for the purpose of determining whether the quorum for the annual meeting is satisfied. In addition, if you hold shares through a bank or brokerage account, your shares will be counted as present for the purpose of determining whether the quorum for the annual meeting is satisfied, even if you do not provide voting instructions to your bank or brokerage firm. However, neither these shares nor any abstentions will count in the voting results.

        We urge you to vote by proxy even if you plan to attend the meeting. That will help us to know as soon as possible that we have enough votes to hold the meeting. Returning your proxy card will not affect your right to revoke your proxy or to attend the 2011 Annual Meeting and vote in person.

How do I vote my shares?

        You may vote at the annual meeting by proxy or in person.

        If you are a "holder of record" (that is, if your shares are registered in your own name with our transfer agent), you have several options. You may vote by telephone, on the Internet or by attending the meeting and voting in person. In addition, you may vote by mail using the enclosed proxy card.

        If you hold your shares in "street name" (that is, if you hold your shares through a broker, bank or other holder of record), you received this proxy statement and voting instruction card from your broker, bank or other holder of record. The voting instruction card explains which voting options are available to you. As the beneficial owner of shares held in street name, you have the right to direct your bank or broker how to vote your shares, and it is required to vote your shares in accordance with your instructions. If you do not give instructions to your bank or brokerage firm, it will nevertheless be entitled to vote your shares with respect to "routine" items, but it will not be permitted to vote your shares with respect to "non-routine" items. In the case of a non-routine item, your shares will be considered "broker non-votes" on that proposal. If you want to vote in person at the annual meeting, you must obtain a power of attorney or proxy from your broker, bank or other holder or record authorizing you to vote. You must bring this power of attorney or proxy to the meeting.

How do I attend the annual meeting?

        All shareholders as of the record date, January 12, 2011, or their proxy holders, are welcome to attend the annual meeting. If you are voting by mail, by telephone or via the Internet, but still wish to attend the meeting, follow the instructions on your proxy card or via the Internet (www.proxyvote.com) to tell us that you plan to attend. When you arrive at the meeting, please look for the "Shareholders' Welcome Desk," where you will be asked for photo identification in order to receive your admittance card.

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        If you hold your shares in street name and you decide to attend, you must bring to the meeting a copy of your bank or brokerage statement evidencing your ownership of ABM Industries Incorporated common stock as of the record date. Please go to the "Shareholders' Welcome Desk" and provide the bank or brokerage statement, as well as your photo identification, in order to obtain an admittance card.

What happens if the annual meeting is postponed or adjourned?

        Your proxy will still be valid and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.

Can I change or revoke my proxy?

        Yes, you may change your vote or revoke your proxy at any time at or before the annual meeting. If you are a holder of record, you may change your vote or revoke your proxy through any of the following means:

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by casting a new vote by telephone or the Internet prior to the annual meeting, or by properly completing and signing another proxy card with a later date and returning the proxy card prior to the annual meeting;



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giving written revocation to our Corporate Secretary prior to the annual meeting directed to the address on page 5, or at the meeting; or



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voting in person at the annual meeting.

What if I do not indicate my vote for one or more of the matters on my proxy card?

        If you are a registered shareholder and you return a proxy card without indicating your vote, your shares will be voted in accordance with the Board's recommendations for proposals described in this proxy statement.

What if I do not return a proxy card or vote at the annual meeting?

        If you are a registered shareholder and you do not return a proxy card or vote at the annual meeting, your shares will not be voted and will not count towards the quorum requirement to hold the annual meeting. Your shares that are not voted will not affect the outcome of any of the company's proposals.

What if my shares are held in "street name" and I do not give my bank or broker instructions on how to vote?

        If your shares are held in "street name" and you do not give your bank or broker instructions on how to vote, your shares will be counted towards the quorum requirement for the annual meeting.

        The failure to instruct your bank or broker how to vote will have one of two effects on the proposals for consideration at the annual meeting, depending upon the type of proposal. For the election of directors in Proposal 1, and for Proposals 3 and 4, absent instructions from you, the bank or broker may not vote your shares at all and your shares will be considered broker non-votes, which will have no effect on the outcome of the proposal. For Item 2 involving ratification of our independent registered public accounting firm for 2011, the broker may vote your shares at its discretion.

Will my vote be confidential?

        Yes. Your vote is confidential and will not be disclosed to our directors or employees.

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Will the Company's independent registered public accounting firm be present at the annual meeting?

        Yes, representatives of KPMG LLP ("KPMG") will attend the meeting. They will be available during the meeting to answer your questions and they will have the opportunity to make a statement, if they desire to do so. The Audit Committee of our Board has approved the appointment of KPMG as our independent registered public accounting firm for our 2011 fiscal year.

Will our directors attend the annual meeting?

        It is expected that our directors will attend our annual meeting.

Who will be soliciting proxies on our behalf?

        The Company pays the cost of preparing proxy materials and soliciting your vote. Proxies may be solicited on our behalf by our directors, officers or employees by telephone, electronic or facsimile transmission or in person.

Who will count the vote?

        Broadridge Financial Solutions, Inc. will be the proxy tabulator and IVS Associates, Inc. will act as the Inspector of Election.

What is "householding"?

        Shareholders who hold their shares in the name of their bank or broker and live in the same household as other shareholders may receive only one copy of this Proxy Statement. This practice is known as "householding." If you hold your shares in your broker's name and would like additional copies of these materials, please contact your broker. If you receive multiple copies and would prefer to receive only one, please contact your broker. ABM does not use householding for the copies of the proxy statement that it delivers directly to shareholders.

SHAREHOLDER PROPOSALS, DIRECTOR NOMINATIONS AND
COMMUNICATING WITH OUR BOARD

How do I submit a shareholder proposal or director nomination for consideration at the 2012 Annual Meeting?

        Our 2012 Annual Meeting is currently scheduled for March 6, 2012. If you wish to submit a proposal to be included in the 2012 proxy statement, you must submit your proposal in writing so that we receive it no later than October 10, 2011. Proposals should be sent to the Corporate Secretary, Sarah H. McConnell, at 551 Fifth Avenue, Suite 300, New York, New York 10176.

        Under our bylaws, any shareholder wishing to make a nomination for director or wishing to introduce any business at the 2012 Annual Meeting of Shareholders (other than a proposal submitted for inclusion in the Company's proxy materials) must provide the Company advance notice of such business which must be received by the Company no earlier than November 9, 2011 and no later than December 9, 2011. Nominations for director for consideration by the Governance Committee should include the candidate's name and qualifications for Board membership and fulfill all of the requirements set forth in the Company's Bylaws, and should be sent within the time frame specified in the Bylaws.

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How do I communicate with the Board?

        You may communicate with our entire Board or the independent directors as a group by sending an e-mail to boardofdirectors@abm.com or by writing to Board of Directors, ABM Industries Incorporated, 551 Fifth Avenue, Suite 300, New York, New York 10176. Our Corporate Secretary will forward all communications relating to ABM's interests, other than business solicitations, advertisements, job inquiries or similar communications, directly to the appropriate directors.

        In addition, we maintain a Compliance Hotline that is available 24 hours a day, seven days a week, to receive calls, e-mails, and letters to report a concern or complaint, anonymous or otherwise. The Compliance Hotline can be reached at 1-877-253-7804 or online at abmhotline.ethicspoint.com.

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OUR BOARD OF DIRECTORS

General

        Our Certificate of Incorporation provides that the Board of Directors shall be divided into three classes serving staggered three-year terms, each class to be as nearly equal in number as the other two. The terms of Messrs. Bane and Fernandes and Ms. Herringer expire at the 2011 annual meeting.

Nominees

        Our Board has proposed the following nominees for election as directors with three-year terms expiring at the annual meeting in 2014: Dan T. Bane, Anthony G. Fernandes and Maryellen C. Herringer. Mr. Bane was elected by the Board to serve for his present term on September 26, 2008. Mr. Fernandes and Ms. Herringer were elected to serve for their present terms at the 2008 annual meeting of shareholders. The six remaining directors will continue in office until the expiration of their terms at the 2012 or 2013 annual meeting. The Board expects each nominee for election as a director to serve if elected. If a nominee is unable or unwilling to serve, proxies will be voted in favor of the other nominees and may be voted for a substitute nominee. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or retirement.

        Each nominee was recommended by the Governance Committee, has been nominated by the Board of Directors for election and has consented to serve. In recommending Messrs. Bane and Fernandes and Ms. Herringer for election as directors, the Governance Committee considered these directors' service to our Board, their independence, skills, contributions to the Board, current and previous occupations and current and former directorships with other public companies.

        Our Board is composed of individuals who have experience as current or former chief executive officers, current or former senior executives with significant operational, finance or audit responsibilities and individuals who have extensive experience in legal matters, investment management and finance, mergers and acquisitions, government and public policy as well as service on the boards of other public companies. As such, they have strong leadership skills and working knowledge of matters facing companies such as ours. The Board of Directors' Skills Matrix sets out selection criteria used by our Board in connection with nominations to our Board and generally reflects the current skills and experience of our Board.

Board of Directors' Skills Matrix

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PROPOSAL 1—ELECTION OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS VOTES "FOR" THE ELECTION OF ALL OF THE NOMINEES AS DIRECTORS

        The three persons who receive a plurality of the votes cast will be elected as directors. This means that the three director nominees with the most votes are elected. Only votes "For" affect the outcome. Withheld votes do not affect the voting calculation.

Nominees for Election as Directors with Terms Expiring in 2014

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Directors with Terms Expiring in 2012

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Directors with Terms Expiring in 2013

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CORPORATE GOVERNANCE

Corporate Governance Principles and Committee Charters

        Our Board of Directors has adopted Corporate Governance Principles that reflect our commitment to good corporate governance and the role of governance in building long-term shareholder value. As described below, our Board committee charters are designed to assure that our Board fully discharges its responsibilities, and our Board regularly reviews these charters and Corporate Governance Principles in response to changing regulatory requirements, evolving best practices and the concerns of our shareholders and other constituents. Our Corporate Governance Principles, which include our independence standards, are published on our Web site at http://investor.abm.com. Other information relating to our corporate governance is also available on our Web site at the same address, including our Code of Business Conduct ("Code of Conduct"), and the Charters of our Audit Committee, Compensation Committee, and Governance Committee. These documents are also available in printed hard-copy format upon written request to the Corporate Secretary at the Company's corporate headquarters.

Governance Information

Director Independence

        Our Corporate Governance Principles provide that a majority of our directors will be independent and that our Audit Committee, Compensation Committee and Governance Committee shall consist solely of independent directors. Each year our Governance Committee reviews the independence of each of our directors under the NYSE listing standards and considers any current or previous employment relationship as well as any transactions or relationships between our Company and our directors or any members of their immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder). The purpose of this review is to determine whether any relationships or transactions exist that preclude a director from being deemed independent under the NYSE listing standards or are otherwise inconsistent with a determination that the director is independent. To facilitate this process, our Governance Committee reviews directors' responses to our annual Directors' and Officers' Questionnaire, which requires disclosure of each director's and his or her immediate family's relationships to our Company, as well as any potential conflicts of interest that may otherwise be brought to the attention of our Governance Committee.

        In this context, our Governance Committee considered the employment of a relative of one of the Company's directors with the Company in an entry-level management position. The relative voluntarily left the Company in January 2010. Our Governance Committee also considered the retirement benefits of Mr. Steele that are described under "Transactions with Related Persons." Our Governance Committee determined that these relationships were not material. Based on its analysis of these relationships and our independence standards, our Governance Committee concluded and recommended to our Board that neither of these relationships impaired the independence of these directors, and our Governance Committee affirmatively determined and recommended to our Board, and the Board confirmed, that all of our directors, other than our Chief Executive Officer ("CEO"), should be designated as independent.

Board Leadership Structure

        The Company currently has separate persons serving as its Chairman of the Board and CEO in recognition of the differences between the two roles. As set forth in the Company's Bylaws, the CEO has general and active management over the business and affairs of the Company, subject to the control of the Board. Our Chairman, on the other hand, is charged with presiding over all meetings of the Board and our shareholders, as well as providing advice and counsel to the CEO, coordinating the

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preparation of agendas, keeping directors informed of matters impacting the Company, and maintaining contact with the Company's General Counsel. Maryellen Herringer serves as Chairman of the Board, a position she has held since 2006. The Board of Directors believes that by separating the roles of CEO and Chairman, the CEO is better able to focus his or her time and energy on managing the Company's operations. The Board of Directors believes that the separate CEO/Chairman structure is the most appropriate and effective leadership structure for the Company and its shareholders at this time.

The Board's Role in Risk Management

        Our Board of Directors exercises oversight of the Company's strategic, operational and financial matters, as well as compliance and legal risks. In connection with this role, the Board oversees our enterprise risk management process, which is designed to fortify our risk management capability as well as to monitor business risks. The Board, as permitted in the Company's Bylaws and committee charters, exercises its oversight, in part, through the Audit Committee, the Compensation Committee and the Governance Committee. The Audit Committee reviews and discusses guidelines and policies with respect to risk assessment and risk management. The Compensation Committee annually reviews and assesses risks, if any, arising from the Company's compensation policies and practices for its employees and whether any such risks are reasonably likely to have a material adverse effect on the Company. The Governance Committee considers risks in relationship to succession planning. The Board's role in risk oversight has not affected its leadership structure.

Executive Sessions of Directors

        At least four times a year, after regularly scheduled and special Board meetings, independent directors meet in executive session without management present and consider matters important to our Company and corporate governance. Executive sessions are chaired by our Chairman. During fiscal year 2010, our Board met in executive session nine times.

Code of Business Conduct

        The Board of Directors has adopted the Code of Conduct. The Code of Conduct applies to all directors, officers and employees of ABM, including ABM's CEO, Chief Financial Officer ("CFO") and Chief Accounting Officer. The Code of Conduct is available on ABM's Web site under "Governance" at http://investor.abm.com and in printed hard-copy format upon written request to the Corporate Secretary at the Company's corporate headquarters. If any amendments are made to the Code of Conduct or if any waiver, including any implicit waiver, of a provision of the Code of Conduct is granted to ABM's CEO, CFO or Chief Accounting Officer, ABM will disclose such amendment or the nature of such waiver on its Web site.

Committees of the Board of Directors

Audit Committee

        The Audit Committee of the Board of Directors performs the responsibilities set forth in its Charter, which include overseeing the Company's financial reporting process and the internal and independent audits of ABM and the communication process among the Board, management and ABM's independent registered public accounting firm. The responsibilities of the Audit Committee include: (1) assisting the Board with respect to the Company's compliance with legal and regulatory requirements; (2) selecting the independent registered public accounting firm; (3) approving the fees for the independent registered public accounting firm; (4) ensuring the independence of the independent registered public accounting firm; (5) overseeing the work of the independent registered public accounting firm; (6) reviewing ABM's system of internal accounting controls; and (7) reviewing

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policies with respect to risk assessment and risk management. The members of the Audit Committee are: Mr. Fernandes, Chair, and Messrs. Bane, Ferguson, Helms, and Steele.

        Each member of the Audit Committee has been determined to be independent under the standards for independence for audit committee members established by the NYSE. In addition, the Board of Directors has determined that each member of the Committee is financially literate and that each qualifies as an "audit committee financial expert" under the definition promulgated by the Securities and Exchange Commission ("SEC").

Compensation Committee

        The Compensation Committee performs the responsibilities set forth in its Charter, which include: (1) providing direction to the Company in the area of executive compensation; (2) annually reviewing and approving corporate goals and objectives relevant to the CEO's compensation, and evaluating the CEO's performance in light of those goals and objectives; (3) recommending for approval to the directors who are both independent under applicable NYSE and SEC rules and "outside" directors under Section 162(m) of the Internal Revenue Code of 1986 (the "Code"), the CEO's compensation, including equity grants; (4) reviewing the Company's compensation structure and approving the compensation of all other employees of the Company who are executive officers of the Company; (5) with the assistance of an outside consultant retained directly by the Committee, conducting a review of all executive incentive plans at least once every three years and making recommendations to the Board with respect to incentive compensation plans and equity-based compensation plans for the Company; (6) making awards under and overseeing the administration of the Company's executive benefit and equity-based compensation plans; (7) reviewing the CEO's employment agreement and recommending the terms of the CEO's employment agreement to the independent and outside directors; (8) reviewing and approving the Company's employment agreements with executive officers, other than the CEO; (9) reviewing and recommending to the Board severance and other terms in any change-in-control agreements and policies; (10) reviewing and discussing with management the Company's proposed disclosures in respect of the "Compensation Discussion and Analysis" required under the Securities Exchange Act rules and recommending to the Board that the Compensation Discussion and Analysis reviewed by the Committee be included in the Company's Proxy Statement and Annual Report on Form 10-K; (11) preparing annually the Compensation Committee Report required under Securities Exchange Act rules; and (12) reviewing and assessing risks, if any, arising from the Company's compensation policies and practices.

        The CEO attends meetings of the Compensation Committee and provides recommendations regarding compensation levels for employees, other than himself, whose compensation is subject to review by the Committee. The CEO also provides input and recommendations pertaining to other compensation issues under discussion by the Compensation Committee, other than CEO compensation. The Committee meets in executive session without the CEO when discussing the CEO's compensation and certain other matters, including, from time to time, the compensation of other executives. The members of the Compensation Committee are: Ms. Chavez, Chair, Mr. Bane, Ms. Herringer, and Mr. Kotkins. As described above, each member of the Compensation Committee has been determined to be independent.

Compensation Committee Interlocks and Insider Participation

        None of the members of the Compensation Committee during fiscal year 2010 or as of the date of this Proxy Statement is or has been an officer or employee of the Company and no executive officer of the Company served on the compensation committee or board of any company that employed any member of the Company's Compensation Committee or Board of Directors.

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Governance Committee

        The Governance Committee performs the responsibilities set forth in its Charter, which include: (1) making recommendations to the Board as to the optimal number of directors on the Board; (2) reviewing and recommending criteria and candidates for selection of new directors and the reelection of incumbent directors; (3) reviewing and recommending management succession plans; (4) making equity grants to nonemployee directors; (5) reviewing and recommending to the Board any changes in cash compensation of nonemployee directors; and (6) other matters of corporate governance. The members of the Governance Committee are: Mr. Helms, Chair, Ms. Chavez, and Messrs. Ferguson and Kotkins. As described above, each member of the Governance Committee has been determined to be independent.

Executive Committee

        The Executive Committee has the authority to exercise all power and authority of the Board in the management of the business and affairs of ABM, except: (1) any functions delegated to other committees of the Board, and (2) any powers that, under Delaware law, may only be exercised by the full Board. The members of the Executive Committee are: Mr. Steele, Chair, Ms. Herringer, and Messrs. Helms and Slipsager.

Meetings and Attendance

        During fiscal year 2010, the Board of Directors met 13 times, the Audit Committee met 12 times, the Compensation Committee met 15 times, the Governance Committee met 6 times, and the Executive Committee did not meet. During this period, each of the Company's directors attended 98% or more of the aggregate number of meetings of the Board and committees on which he or she served.

Identifying and Evaluating Nominees for Directors

        Our Board is responsible for selecting nominees for election as directors. The Board delegates the screening process to the Governance Committee with the expectation that other members of the Board, including the CEO, are asked to take part in the process as appropriate. Candidates recommended by the Governance Committee are subject to approval by the Board. Our Governance Committee regularly assesses the appropriate size of the Board, and whether any vacancies on the Board are expected because of retirement or otherwise. In the event that any vacancy is anticipated, or otherwise arises, the Governance Committee considers various potential candidates for director.

        Our Governance Committee recommends to the Board the criteria for director candidates, and the Board establishes the criteria. The Governance Committee of the Board is responsible for reviewing with the Board the requisite skills and characteristics of new Board candidates and current Board members in the context of the current composition of the Board.

        In analyzing director nominations and director vacancies, our Governance Committee seeks to recommend candidates for director positions who will create a collective membership on the Board with varied experience and perspectives and who maintain a Board that reflects diversity, including, but not limited to, gender, ethnicity, background, and experience. We do not have a policy that requires specified types of diverse backgrounds. The Governance Committee strives to recommend candidates who demonstrate leadership and significant experience in a specific area or endeavor, understand the role of a public company director, and can provide insights and practical wisdom based on their experience and expertise.

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        When analyzing whether directors and nominees have the requisite experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company's business and structure, the Governance Committee and the Board of Directors focus on the areas set forth in the Board of Directors' Skills Matrix. The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director, such as search firms and the relationships of current directors. Candidates may also come to the attention of the Governance Committee through shareholders or other persons. These candidates are evaluated at regular or special meetings of the Governance Committee and may be considered at any point during the year.

        Our Directors are expected to prepare for, attend and participate in Board meetings and meetings of the Committees of the Board on which they serve and to spend the time needed and to meet as frequently as necessary to properly discharge their responsibilities and duties as directors. Each Board member is expected to arrange his or her schedule so that other existing and planned future commitments do not materially interfere with the member's service as a director. Ordinarily, directors who are full-time employees of ABM or who serve as chief executive officers or in equivalent positions at other companies may not serve on the boards of more than two other publicly traded companies. Other directors may not serve on the boards of more than four other publicly traded companies. Service on other boards and other commitments are considered by the Governance Committee and the Board when reviewing Board candidates.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Policy for the Review, Approval or Ratification of Transactions with Related Persons

        The Board of Directors has adopted a written policy for review of transactions involving more than $120,000 in any fiscal year in which ABM or its subsidiaries are a participant and in which any director, executive officer, holder of more than 5% of the outstanding shares of ABM common stock or any immediate family member of any of these persons has a direct or indirect material interest. Such transactions may include employment or consulting relationships with a related person or contracts under which ABM receives goods or services from (or provides goods and services to) a related person or a company for which the related person is an employee or otherwise affiliated. Directors and executive officers are required to inform ABM of any such transaction promptly after they become aware of it, and ABM also collects information from directors and executive officers about their affiliations and the affiliations of their family members. The policy does not require review of the following transactions:

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the compensation of executive officers and directors approved in accordance with ABM Corporate Governance Principles and the Governance and Compensation Committee charters;



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transactions with entities where the sole interest of the director, executive officer, more than 5% shareholder or immediate family member is as a director of the entity;



•

transactions with entities where the sole interest of director, executive officer, more than 5% shareholder or immediate family member arises from direct or indirect ownership, together with any other related persons, of less than 10% equity interest in such entity (other than partnerships);



•

transactions with entities where the sole interest of the director, executive officer, more than 5% shareholder or immediate family member arises from such person's position as a limited party in a partnership in which the person and all other related parties have an interest of less than 10%, and the person is not a general partner and does not hold another position in the partnership; and



•

transactions in which all security holders receive proportional benefits.

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        Generally, transactions that are determined by ABM's General Counsel to be covered by the policy are subject to a determination of materiality by the Board and, if so determined to be material to the related party, must be approved or ratified by the Board. The Board approves or ratifies a transaction if it determines, in its business judgment based on the available information, that the transaction is fair and reasonable to ABM and consistent with the best interests of ABM.

Transactions with Related Persons

        The General Counsel informed the Board, based on a review of potential transactions with related persons, that there were no transactions involving related persons requiring review by the Board in fiscal year 2010 under the terms of the Related Party Transactions Policy.

        Mr. Steele is a current director. He retired as an officer and employee of ABM in October 2000. Pursuant to his previous employment contract, ABM is paying retirement benefits of $8,333 per month to Mr. Steele for a 10-year period ending June 2011. ABM also contributes $901 per month for medical and dental insurance for Mr. Steele and his spouse (until each is age 75) and provides him with $150,000 in life insurance coverage for the remainder of his life. In addition, under the terms of the previous employment contract, ABM pays certain club dues for Mr. Steele, which in 2010 amounted to $5,131.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires ABM's directors, officers and persons who own more than 10% of a registered class of ABM's securities to file reports of beneficial ownership and changes in ownership with the Securities and Exchange Commission. Based solely on a review of the reporting forms and representations of its directors and officers, ABM believes that during fiscal year 2010 all forms required to be filed by its executive officers and directors under Section 16(a) were filed on a timely basis, except that there was one inadvertently late Form 4 filing on February 3, 2010 for each of Messrs. Farwell, Lusk, McClure, Yospe, Wallace and Zaccagnini and Ms. Andre reporting stock withheld by the Company to satisfy tax withholding obligations resulting from the vesting on January 7, 2010 of equity grants previously made to these persons, which grants had been timely reported.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        The Compensation Discussion and Analysis ("CD&A") describes our executive compensation practices and decisions of the Compensation Committee of the Board of Directors (the "Committee"). Our CD&A discusses compensation earned during fiscal year 2010 by our CEO, CFO and our other three most highly compensated executive officers, as set forth in the tables below under "Compensation of Executive Officers." Collectively, we refer to these executives as our named executive officers ("NEOs").

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Objectives of Our Executive Compensation Program

        Our executive compensation programs are designed to attract, motivate and retain qualified executives while at the same time balancing these goals against our desire to improve profitability and control costs in a service business characterized by narrow margins. ABM's executive compensation programs are designed to meet the following goals, as demonstrated by the characteristics of our pay-for-performance program (all as further described below in this CD&A):

•

Support ABM's goal of enhancing long-term shareholder value by providing compensation that reflects the performance of ABM and its executives.

Approximately 75% of our regular equity grants in fiscal year 2010 are tied directly to Company performance through a combination of performance shares that are earned based on business results over three years and stock options that have value only if our long-term stock price increases over the vesting period.

•

Provide compensation opportunities that compare reasonably with those of relevant peer group companies.

The Committee works with its independent consultant to review the competitiveness of our program within a specified peer group.

•

Motivate and reward achievement of business objectives, as well as individual contributions.

Our cash incentives were based on positive business results during fiscal year 2010 plus individual leadership, whereas executives did not receive payouts on certain prior performance shares because business results over a longer period did not meet target levels.

•

Enable ABM to attract and retain executives with the qualifications, skills and experience required to provide high-quality leadership.

A substantial percentage of each executive's potential compensation is based on performance against annual financial and operating goals, with the percentage varying in relationship to the executive's position and responsibilities.

•

Link executive rewards to the creation of shareholder value.

A significant portion of compensation opportunities is tied to shareholder value through our equity grants.

•

Encourage executive stock ownership.

During fiscal year 2010, we increased our equity ownership guidelines for the CEO, CFO and Executive Vice Presidents.

        ABM provides compensation in the form of salary, annual cash performance incentives, equity awards and benefits. Generally, total compensation opportunity is weighted toward incentive compensation linked to the financial performance of ABM and individual performance that contributes to ABM's strategic initiatives. ABM's incentive-based pay rewards executives for meeting or exceeding corporate and divisional financial and operating objectives overall and against budget, for their individual contributions to these results, and for optimizing the creation of shareholder value.

Executive Compensation Process

        The Committee approves the design of our executive compensation programs, including the determination of performance metrics, benchmark targets, and peer group. The Committee approves the compensation of the NEOs, other than our CEO, and recommends the compensation of our CEO to the members of our Board who are both independent and "outside" directors for purposes of

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Section 162(m) of the Internal Revenue Code (the "CEO Committee"). During fiscal year 2010, the CEO Committee was responsible for approving equity grants to and cash compensation for the CEO.

        Within the parameters of the executive compensation programs approved by the Committee, the Committee considers recommendations of the CEO with respect to the level of base salary, the annual cash incentive awards, and long-term equity incentive awards for NEOs other than himself. These recommendations are based upon his review and assessment of the individual's performance, the performance of the individual's respective business or department function, and other considerations, including employee retention considerations. The Committee reviews these recommendations and also considers information about compensation levels and programs that it receives from the Senior Vice President-Human Resources, other members of management from whom it may request information, and such consultants as may be engaged by the Committee or management from time to time. The Committee approves any changes to levels of compensation for the NEOS, other than the CEO, in its sole discretion. Currently, the Committee evaluates the CEO and makes recommendations about the CEO's compensation to the CEO Committee. The CEO is not present during the deliberations about his compensation.

        The Committee assesses all components of pay in connection with its annual review of the executive compensation program, including base salary, annual incentives, equity compensation (including accumulated vested and unvested equity compensation) and the value of benefits (including potential severance benefits) and perquisites. The Committee bases its assessment in part on tally sheets prepared by management for each NEO. A review of tally sheets gives the Committee detail with respect to the totality of each executive's compensation, as well as the components that comprise the overall compensation package, and how compensation earned by each executive compares to the compensation earned by others. The tally sheets also help the Committee understand the effect that changing any element of pay will have on total compensation. Additionally, tally sheets reveal how well each pay element is aligned with Company philosophy and objectives.

Role of Independent Consultants

        The Committee has exclusive authority under its charter to retain and approve fees and other terms of engagement for consultants to assist it in the evaluation of the compensation for our executive officers. The Committee has retained Exequity LLP ("Exequity") since 2008 as its independent executive compensation consultant to provide advice and ongoing recommendations concerning executive compensation programs to the Committee. Exequity reports directly to the Committee. Under direction of the Committee, Exequity may work with management as needed to support its work for the Committee, such as gathering information and reviewing our compensation programs and levels. The Committee's consultant is expected to achieve the following objectives:

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Attend meetings of the Committee, as requested;



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Communicate with the chair of the Committee, as requested;



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Provide advice and assistance with respect to the design of our executive compensation programs;



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Supply data and other information necessary to support decisions regarding executive compensation levels;



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Provide general insight into executive compensation practices across markets that are relevant to the Company; and



•

Provide support with respect to technical matters that impact executive compensation and benefits.

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        Management may retain consultants on behalf of the Company, from time to time, to provide benchmarking data, program design review and other services related to the implementation of executive compensation programs.

Use of Market Data and Benchmarking

        Each year the Committee considers the compensation levels, programs and practices of certain other companies in connection with its assessment of our compensation programs and levels. ABM, through its subsidiaries, is a leading provider in the United States of facility services. Given its size and national footprint, few public companies are directly comparable to ABM. Accordingly, the Committee, working with its compensation consultant, regularly reviews the various criteria by which it benchmarks ABM's pay practices. In fiscal year 2010, the Committee reviewed benchmark criteria and determined to maintain the peer group composition used in fiscal year 2009, deleting only those companies that had a change in corporate status, making it difficult to gather compensation information. The peer group companies were originally selected with reference to the following criteria:

•

companies, like ABM, that provide business-to-business services, such as outsourcing, logistics management, food service, staffing, freight service, cleaning and pest control;



•

companies in other industries (e.g., restaurant, hotel management) that have a high ratio of employees to revenue or market capitalization; and



•

companies that generate between $2.5 billion and $5 billion in annual revenue.

        The following 25 companies (the "Peer Group") were selected by the Committee as ABM's primary peer group in reviewing pay and making compensation decisions for fiscal year 2010:

        The Committee's decisions relating to NEO pay are informed by its review of the compensation practices reported in the proxy statements filed by the companies in the Peer Group, as compiled for the Committee by its compensation consultant. This information forms the basis for the analysis the Committee uses to assess the competitiveness of NEO pay. The proxy analysis reviewed by the Committee in fiscal year 2010 compared base salaries, short-term incentives, long-term incentives and total compensation.

        The Committee believes that the proxy data reviewed provide a reasonable indicator of total compensation paid by companies that recruit executives with skill sets similar to those that we seek in our executives. Compensation for our executives is generally managed within the ranges of compensation paid by companies in the Peer Group and the general industry community. While the Committee normally references the benchmark group median (50^th percentile) for each compensation element, the Committee uses its subjective judgment to determine pay levels necessary to attract and retain executive talent. In exercising its judgment, the Committee looks beyond the competitive data and places significant weight on individual job performance (based on specific financial and operating objectives for each executive, as well as leadership skills), experience, compensation history, future potential, internal comparisons, affordability, retention risk, and, in the case of new hires, compensation

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at former employers, as well as, in the case of executives other than the CEO, the CEO's recommendations. The Committee's independent consultant reported that compensation expenditure in fiscal year 2010 was within the range of benchmark norms.

        The following chart shows our compensation positioning for our NEOs in fiscal year 2010 in relation to 50^th percentile Peer Group practices:

Elements of Compensation

        The principal elements of our executive compensation program are:

•

base salary;



•

annual cash performance incentives;



•

long-term equity incentives; and



•

benefits.

        The Committee believes that each of these elements supports one or more of our compensation objectives but also considers each element to be part of a total compensation package, and, therefore, the Committee considers the impact of each element on an NEO's total compensation when making decisions regarding compensation. The use of each compensation element is based on a subjective determination by the Committee of the importance of each compensation element in supporting ABM's business and talent strategies, as well as the prevalence, weight and value of these elements for executives at other companies. The Committee believes that the overall mix among base salary, cash and noncash incentives effectively balances short- and long-term performance objectives.

Base Salary

        The Committee annually reviews and approves (or recommends to the CEO Committee) base salaries for executives in the first quarter of each fiscal year and, as needed in connection with recruitment, promotions or other changes in responsibilities. Base salary amounts affect potential annual cash performance incentive payments and equity awards described in the following sections because these other elements are generally based on a percentage of base salary. Accordingly, when making base salary decisions, the Committee also considers the impact of salary changes on these other elements of compensation.

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        The Committee annually establishes the base salary for the NEOs, other than the CEO, and reviews and recommends the base salary of the CEO to the CEO Committee. In general, base salaries are set at a level that the Committee believes will effectively reward, attract and retain necessary talent, considering the factors described previously. In establishing compensation levels for each NEO, or in the case of the CEO, making a recommendation as to base salary for the CEO to the CEO Committee, the Committee considers the internal relationship of positions based on scope and level of responsibility, impact on the Company or on the business unit, the background and skills required to perform the position responsibilities, and the NEO's experience and individual performance. This consideration also includes the relationship of each NEO's compensation to the CEO's compensation.

        In fiscal year 2009, our NEOs' salaries were frozen due to the then-current economic conditions. The Committee reassessed base salary levels in the first fiscal quarter of 2010. The Committee also eliminated most perquisites, including club dues and automobile-related allowances, effective January 1, 2010. The elimination of these perquisites was taken into consideration in connection with salary increases, as were other matters relating to performance. After taking into consideration these factors, the Committee recommended to the CEO Committee that Mr. Slipsager receive an increase of 6.27%, effective January 1, 2010. The CEO Committee approved this increase. The Committee increased Mr. Lusk's salary by 8.45%, Mr. McClure's salary by 5.73%, Mr. Zaccagnini's salary by 8.45%, and Ms. McConnell's salary by 14.41%, in each case, effective January 1, 2010. If the amounts of increase reflecting the elimination of certain perquisites had not been included, salary increases would have been recommended in the range of 3% to 5%, with the exception of Ms. McConnell, whose salary increase was larger because a review of Peer Group practices showed her base salary was below the 50^th percentile of the Peer Group.

Annual Cash Performance Incentive Payments

        The target bonuses, maximum bonuses, performance factors and weightings, and the actual fiscal year 2010 bonus awards for the NEOs are set forth in the following table. A description of the principles behind our annual cash performance incentive payments and how fiscal year 2010 bonus awards were achieved follows the table.

Fiscal Year 2010 Bonus Targets, Weighting, and Awards

        In fiscal year 2010, the potential range of bonuses for all NEOs was 0% to 180% of target bonus. For the CEO, the target equals 100% of base salary. For the other NEOs, the target ranges from 40%

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to 75% of their base salaries. The Committee references the Peer Group median when it establishes an executive's target bonus. In establishing a bonus range of 0% to 180% of the target for the NEOs, the Committee took into consideration the fact that both financial objectives and nonfinancial objectives are used to measure performance in connection with determining annual cash incentive compensation. The Committee believed that, for the portion of bonus that was based on financial objectives, the range of bonus should be from 0% to 200% of target, which reflects the bonus range median in the Peer Group. For the portion of bonus that was based on more subjective elements, the Committee believed that the range of bonus should be from 0% to 150% of target. It was the view of the Committee that a wider range of 0% to 200% was appropriate for measures that could be objectively determined but that there should be a narrower range with respect to measures that were less amenable to exact measurement. However, rather than have a different range for different metrics, the Committee chose a blend for an overall range of 0% to 180% of target.

•

CEO Annual Cash Performance Incentive Payment

        The CEO's annual cash performance incentive payment is based on an assessment of the CEO's performance against the CEO's performance objectives. The CEO's performance objectives are annually reviewed and approved in the first quarter of the Company's fiscal year by the Committee, in consultation with the independent directors, following a discussion of the most important objectives for the Company in the coming year. The CEO participates in this process by providing his proposed objectives to, and reviewing his proposed objectives with, the Committee.

        In fiscal year 2010, the Committee established the potential range of bonus for the CEO as 0% to 180% of target. The target equals base salary. This bonus range is consistent with the range of bonus established by the Committee for the other NEOS.

        In fiscal year 2010, the Committee continued its practice of utilizing a combination of financial metrics and Board evaluation of nonfinancial performance objectives in recommending the cash bonus for the CEO, reflecting its belief that year-to-year flexibility is important in connection with the nonfinancial objectives. At the beginning of the year, the Committee agreed upon Company financial goals on which the CEO's bonus would partly depend. The Committee also agreed upon key leadership and strategic objectives for the CEO. At the end of the year, the Committee first reviewed whether the financial objectives had been met. Then the Committee considered the nonfinancial objectives and also generally whether the CEO had shown effective leadership and helped position the Company for future growth.

        Financial Objectives.    Mr. Slipsager's 2010 fiscal year financial performance objectives were twofold: (1) to achieve or exceed budgeted targets for profit for fiscal year 2010, adjusted to reflect acquisitions and divestitures, and (2) to continue to focus on and generate positive cash flow for the Company. Targets established with respect to these financial objectives were:

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        Nonfinancial Objectives.    Mr. Slipsager's nonfinancial performance objectives included:

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reporting to the Board on a regular basis with respect to the Company's return on investment ("ROI"),



•

incorporating ROI into regular planning and measurement systems,



•

working with the Board with respect to the strategic direction of the Company,



•

development and implementation of a leadership growth and management succession plan,



•

capitalizing on the capabilities of the information technology ("IT") platform created under the recently completed IT transformation project,



•

continued emphasis on investor communications and analyst coverage, and



•

development of key metrics to be presented regularly to the Board in order to monitor Company performance and direction.

        In assessing the extent to which Mr. Slipsager met, exceeded or did not meet his nonfinancial performance objectives, the Committee reviewed Mr. Slipsager's interactions and communications with the Board, including the extent to which ROI was being incorporated as a tool with respect to planning and measurement systems. The Committee similarly reviewed the development of his leadership team, increased uses of the Company's IT platform to improve and facilitate the strategic use of data within the Company, and the growth in analyst coverage over the prior year. The Committee also focused on the key role that Mr. Slipsager played in leading the Company through a challenging economic environment and on the successful execution of acquisitions during the fiscal year and the timely integration of acquired businesses. In addition, the Committee interviewed each independent Board member and received the Board's feedback as to the performance of the CEO in these and related areas. After considering these factors and the CEO's self-assessment, the Committee concluded that Mr. Slipsager's leadership had positioned the Company to execute its strategy well in 2011 and in the future and assigned a 142% achievement out of a possible 150% with respect to nonfinancial objectives.

        Overall Bonus Determination.    In fiscal year 2010, the Committee believed it was appropriate to weight financial goals and nonfinancial goals equally. Since financial goals were achieved at 106% and nonfinancial goals at 142%, this resulted in an overall achievement of 124%. The Committee recommended to the CEO Committee (and the CEO Committee agreed) that Mr. Slipsager should receive an annual cash incentive payment equal to $1,008,000 (124% of target).

•

Other NEOs' Annual Cash Performance Incentive Payments

        The annual cash performance incentive program (the "PIP") for executives and key employees is designed to motivate and reward achievement of annual financial and individual performance objectives and to provide a competitive total compensation opportunity in support of our compensation objectives. The PIP provides short-term incentive award opportunities for executives based on the Company's financial performance, business unit or department performance, as the case may be, and individual performance. All NEOs, other than the CEO, participated in this program during fiscal year 2010. The Committee establishes a target bonus for each executive based on a percentage of base salary. In addition, each executive's target bonus is weighted based on Company objectives, business unit (or department for certain corporate executives) objectives and individual performance objectives to reflect the executive's responsibilities. The Committee approves the Company and business unit objectives, the threshold and range of awards related to these objectives, and the range of awards related to department and individual performance objectives. The CEO approves the department and individual performance objectives for these persons. Generally, the performance criteria associated with the Company and business unit performance are objective, while those associated with department and individual performance objectives are more subjective in nature.

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        In the first quarter of fiscal year 2010, the Committee reviewed and approved the target bonus levels for the NEOs, evaluating current duties and responsibilities and comparative compensation information with the Committee's independent compensation consultant. The following criteria were used in determining payments for NEOs under the fiscal year 2010 PIP:

•

Corporate Results.  Company performance based on targets for income from continuing operations ("Corporate Results"), subject to discretionary strategic results modifiers such as revenue growth, DSO, operating profit margins, cash flow, cost reduction and other strategic performance targets. The Committee believes that these criteria constitute important business value drivers and align the Company's non-equity incentive compensation with the interests of the Company's shareholders.



•

Business Unit or Department Results.  Performance of the operating subsidiaries ("Business Unit Results"), in the case of executives having responsibilities for operating subsidiaries (Messrs. McClure and Zaccagnini), or department performance ("Department Results"), in the case of executives having responsibilities for corporate departments (Mr. Lusk and Ms. McConnell).



•

Individual Performance.  Individual performance in providing strategic leadership, employee leadership, and compliance and administration ("Individual Performance").

        Since positions held by the NEOs participating in the PIP differ in terms of areas of focus, scope and impact on the Company, the relative weighting of these criteria varies based on position and responsibilities, and the individual and department performance objectives vary depending on the nature of responsibilities of each executive.

        Following the end of the fiscal year, Corporate Results and Business Unit Results or Department Results are determined and submitted to the Committee. The CEO provides the Committee with his assessment of the achievement of Department Results and Individual Performance. The Committee discusses the CEO's assessments of the other NEOs with the CEO and has discretion to modify his assessments. The Committee may adjust Corporate Results and Business Unit Results or Department Results to take into consideration unusual items such as acquisitions or divestitures. Determining Individual Performance and Department Results involves subjective judgments by the Committee.

        Corporate Results.    Corporate Results for each NEO under the PIP were measured by the Company's fiscal year 2010 income from continuing operations relative to (1) fiscal year 2010 budget and (2) fiscal year 2009 income from continuing operations, each weighted equally. A bonus would not be earned for achievement below a specified performance threshold. In fiscal year 2010, the Company's income from continuing operations was 94.3% of budget and 138% of fiscal year 2009 income from continuing operations, which translated into funding levels of 82.9% and 138%, respectively, resulting in a Corporate Results funding level of 110.5%.

Business Unit or Department Results.

•

Mr. McClure's Business Unit Results were based on the Janitorial segment's fiscal year 2010 income from continuing operations (1) relative to budget and (2) relative to fiscal year 2009 income from continuing operations, with the two factors weighted equally. In fiscal year 2010, Janitorial's fiscal year 2010 net income from continuing operations was 92% of budget and 102.4% of Janitorial's fiscal year 2009 income from continuing operations, which translated into funding levels of 76% and 102.4%, respectively, for an overall funding level of 89.9%. However, exercising its discretion, and after considering the recommendation of the CEO, the Committee approved funding of this portion of Mr. McClure's bonus at 0%. This decision reflected both a consideration of the decrease in revenues in the Janitorial segment and the fact that it was in line with bonus determinations for senior-level employees within the Janitorial segment.

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•

Mr. Zaccagnini's responsibilities in fiscal year 2010 included the non-Janitorial business units of the Company. Therefore, his Business Unit Results were measured by the sum of the Parking, Engineering and Security fiscal year 2010 income from continuing operations (1) relative to budget and (2) relative to fiscal year 2009 income from continuing operations, with the two factors weighted equally. In fiscal year 2010, these business units' income from continuing operations was 98.1% of the budgeted number and 124.9% of fiscal year 2009 income from continuing operations, which translated into funding levels of 94.3% and 124.9%, respectively, for an overall funding level of 109.6%.



•

Mr. Lusk's department performance objectives related to the execution of plans in support of the CFO top 8 initiatives for fiscal year 2010, establishment of a flexible, scalable and efficient core business platform to support business efficiency, establishment of an enterprise-wide project prioritization process, development of an integrated planning process across the business to link strategy, enterprise risk management, major projects and budgets, and ongoing matters relating to SEC and other compliance matters. After taking into consideration Mr. Lusk's self-assessment and the CEO's assessment, the Committee reviewed performance on a qualitative basis ranging from "Outstanding" to "Unsatisfactory," with an overall assessment of "Outstanding" resulting in a multiplier of 150%; an overall assessment of "Meets Requirements" resulting in a multiplier of 100%; and an overall assessment of "Unsatisfactory" resulting in a multiplier of 0%. After considering the CEO's assessment of Mr. Lusk's overall success in achieving his Department Results, the Committee agreed with the CEO that a multiplier of 150% was appropriate.



•

Ms. McConnell's department performance objectives included maintaining the strength of the legal department, providing ongoing support to the Board of Directors with emphasis on corporate governance, partnering with the Company's risk management function to identify opportunities for risk reduction, continued litigation management, and support relating to the planning and development of compliance-related tools for the Company. After taking into consideration Ms. McConnell's self-assessment and the CEO's assessment with respect to Ms. McConnell's department performance objectives, the Committee reviewed Ms. McConnell's department objectives and department performance against objectives. The Committee did not assign numerical points to these department objectives but rather assessed performance on a qualitative standard ranging from "Outstanding" to "Unsatisfactory," with an overall assessment of "Outstanding" resulting in a multiplier of 150%; an overall assessment of "Meets Requirements" resulting in a multiplier of 100%; and an overall assessment of "Unsatisfactory" resulting in a multiplier of 0%. After considering the CEO's assessment of Ms. McConnell's overall success in achieving her Department Results, the Committee agreed with the CEO that a multiplier of 120% was appropriate.

        Individual Performance.    For each NEO, points were assigned to particular components customized for each NEO's particular responsibilities. The CEO assesses each NEO's performance and provides the Committee with his judgment of the NEO's achievement of his or her objectives, with a maximum score of 150%. In addition to the assessment by the CEO, each NEO completes a self-assessment, which is reviewed by the Committee. The Committee then finalizes its assessment of each NEO's Individual Performance. The following describes each NEO's Individual Performance objectives and results:

•

Mr. McClure's objectives included components relating to general management, sales and marketing, compliance/administration, and individual objectives involving leadership and organizational improvements. The Committee noted positive progress through Mr. McClure's leadership in driving internal restructuring and in effectively integrating acquired businesses. Based on the CEO's assessment of Mr. McClure's performance in these areas and its agreement with this assessment, the Committee approved a multiplier of 100% for Individual Performance.

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•

Mr. Zaccagnini's objectives included components relating to the areas of general management, customer relations/market development, compliance/administration, and certain specified individual objectives. The Committee particularly noted the strength of Mr. Zaccagnini's contributions relating to acquisitions and leadership. Based on the CEO's assessment of Mr. Zaccagnini and its agreement with this assessment, the Committee approved a multiplier of 130% for Individual Performance.



•

Mr. Lusk's objectives included components relating to general management, customer relations/market development, and compliance/administration. The Committee noted Mr. Lusk's outstanding contributions in a number of these areas. Based on the CEO's assessment of Mr. Lusk and its agreement with this assessment, the Committee approved a multiplier of 140% for Individual Performance.



•

Ms. McConnell's objectives included components relating to general management, customer relations/market development, and compliance/administration. The Committee particularly noted Ms. McConnell's continued improvement in leadership and her role in directing legal work relating to acquisitions. Based on the CEO's assessment of Ms. McConnell and its agreement with this assessment, the Committee approved a multiplier of 120% for Individual Performance.

Equity Incentives

        Equity incentives create a direct link between executive compensation and shareholder returns by tying a significant portion of total compensation to the performance of the Company's stock. The Committee believes equity incentives encourage executives to remain at the Company. Equity awards may be granted to senior executives annually (or, in the case of newly hired executives, at the time they join ABM) but may also be granted from time to time in connection with promotions or assumption of additional responsibilities, as well as to promote retention, and/or to create focus on specific performance objectives. We grant the following types of equity awards:

•

Performance Shares:  Performance shares are earned based on specified performance results combined with service requirements. Typically, our performance shares are based on one-, two- or three-year financial performance measures but do not vest until the third anniversary of the grant date. The threshold, target and maximum performance goals are established with reference to the Company's budgeted growth rate for the relevant periods and other factors determined by the Committee for the applicable performance period. The Committee believes that these awards align employee and shareholder interests by tying value to both business results and future stock price.



•

Restricted Stock Units ("RSUs"):  To meet the Company's objective to retain key executive talent, the Company generally grants RSUs, representing full value shares of our common stock, that vest based on continued service with the Company. Typically, 50% of the RSUs vest two years from the grant date and the remaining 50% vest four years from the grant date. However, the Committee may provide a different vesting schedule if it determines, in its subjective judgment, that a different vesting schedule is appropriate. RSUs are intended to promote retention and alignment of executive interests with the interests of shareholders. The Committee believes that RSUs enhance retention value as they vest over time.



•

Stock Options:  The Committee believes that stock options focus executives on managing the Company from the long-term perspective of an owner with an equity stake in the business. Stock options provide value to the recipient only if the price of the Company's common stock increases above the option exercise price, which is the fair market value of the stock on the date of grant. Typically our stock options vest over four years. Our stock options are granted for a maximum term of seven years and are subject to earlier termination three months following a termination of employment.

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Fiscal Year 2010 Equity Incentives

        When determining the number of equity awards granted to individual NEOs, the Committee looks to various factors, including Peer Group practices. Generally, the Committee considers the 50^th percentile of Peer Group practices and takes into account how equity grants to our NEOs compare to equity grants equal in size to the 50^th percentile Peer Group awards to executives having comparable roles. In its subjective judgment, the Committee believes that the 50^th percentile signifies the "typical" award level in the external market and is the appropriate measure by which to assess equity grants to the NEOs. In addition, although there is not exact formula, the Committee considers each individual's accumulated vested and unvested awards, the current value of the awards, comparison of individual awards between executives and in relation to other compensation elements, and total accounting expense of existing awards (because it considers share-based expense to be part of the Company's internal cost structure). The Committee also looks at the total mix of compensation (salary, cash bonus and long-term equity incentives) both by internal peer comparison and on an individual basis when it approves grants to the NEOs. The Committee uses its subjective judgment to determine grant amounts that are appropriate to retain and motivate executive officers while maintaining acceptable levels of compensation expense.

        Special Equity Grants.    In March 2010, the CEO requested that the Committee consider making special equity grants to Messrs. Lusk, McClure and Zaccagnini and Ms. McConnell, both to recognize contributions made by these executives to the Company and to serve as a retention vehicle. Mr. Slipsager specifically requested that he not be considered for an award. The Committee reviewed various considerations related to the proposed awards (including the factors it normally considers in making equity grants as described above) and decided that these awards would further the Company's goals and objectives. On March 31, 2010, the Committee made special grants of stock options and RSUs to the NEOS (other than the CEO) in the amounts set forth in the table titled "Grants of Plan-Based Awards During Fiscal Year 2010." The stock option and RSUs awards do not vest until the fifth anniversary of the date of grant and do not contain accelerated vesting in the event of an executive's retirement, resignation or other termination prior to the vesting date except for termination in the event of death or disability. The dollar value of these March 2010 equity grants was allocated 50% to RSUs and 50% to stock options. The Committee believed that the long vesting schedule was consistent with Company retention objectives and the mix of RSUs and stock options aligned with the long-term interests of Company shareholders.

        Regular Equity Grants.    In fiscal year 2009, equity awards were reduced by approximately 50% in light of the then-current economic conditions. In fiscal year 2010, the Committee returned to equity grant levels more consistent with years prior to fiscal year 2009. As part of this regular grant cycle of equity awards, the Committee awarded performance shares to the NEOs and other key employees in January 2010, with performance metrics described below. In September 2010, as part of the Company's regular grant cycle, the Committee made equity grants of RSUs and stock options to NEOs and other eligible employees as described below.

        In connection with regular equity grants, the Committee generally approves an equity award of a specific dollar value for each recipient based on a multiple of the recipient's base salary. For Mr. Slipsager, the awards may range from 0% to 200% of base salary. For Messrs. Lusk, McClure and Zaccagnini, the awards may range from 0% to 125% of base salary, and for Ms. McConnell, the awards may range from 0% to 100% of base salary.

        The dollar value of the regular equity awards made in January 2010 and September 2010 was distributed among the following equity vehicles:

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