What are the primary goals of the 2012 Performance Share Program and 2012 Executive Annual Incentive Plan?

Both programs aim to focus key employees on achieving specific performance targets, reinforce a team orientation, provide significant award potential for outstanding performance, and enhance Adobe's ability to attract and retain highly talented individuals. They are designed to drive revenue growth, operating profits, and the execution of strategic objectives.

What is the minimum performance required for executives to earn anything under these plans?

For the 2012 Performance Share Program, the company must achieve at least 80% of the GAAP revenue target. For the 2012 Executive Annual Incentive Plan, the company must achieve at least 90% of the GAAP revenue target.

How are the actual awards determined under the Performance Share Program?

If the initial revenue threshold is met, participants can earn up to 150% of their target award (the Maximum Award). The actual number of shares earned is then determined by the level of achievement against six sets of strategic objectives, with each objective having a weighting and a cap on achievement percentage. Vesting is time-based over three years following performance certification, conditional on continued employment.

How are the actual bonuses calculated under the 2012 Executive Annual Incentive Plan?

The actual bonus is calculated as Participant Target Bonus x Corporate Result x Individual Result. The Corporate Result is based on adjusted revenue and adjusted non-GAAP operating profit, while the Individual Result is based on individual performance goals. Both metrics can influence the final bonus payout, with reductions applied if certain thresholds are not met. There's also a maximum bonus cap of $5 million for the CEO and specific percentage limits for other named executive officers.

ADBE 8-K: Leadership Changes

Summary

This Form 8-K filing by Adobe Systems Incorporated on January 26, 2012, details the approval and adoption of two key executive compensation plans for fiscal year 2012: the 2012 Performance Share Program and the 2012 Executive Annual Incentive Plan. These programs are designed to align executive compensation with company performance, focusing on achieving specific financial and strategic objectives. The Performance Share Program utilizes performance shares with a tiered earning structure based on GAAP revenue targets and strategic objectives, with vesting contingent on continued employment. The 2012 Executive Annual Incentive Plan provides cash bonuses to eligible executives, also tied to achieving revenue and operating profit targets, with a maximum bonus cap and potential reductions based on corporate and individual performance metrics. Both plans emphasize driving revenue growth, profitability, and strategic execution while aiming to attract and retain key talent. Investors should note the detailed performance metrics and payout structures, which indicate a strong emphasis on measurable results for executive compensation.

Key Highlights

1Adobe Systems Incorporated approved the 2012 Performance Share Program and the 2012 Executive Annual Incentive Plan on January 24, 2012.
2The Performance Share Program requires achieving at least 80% of the GAAP revenue target as an initial threshold to earn any performance shares.
3Performance shares under the 2012 program can reach a Maximum Award of 150% of the target award, dependent on strategic objective achievement.
4The 2012 Executive Annual Incentive Plan requires a minimum of 90% of the GAAP revenue target to be met for any bonuses to be paid.
5Maximum bonuses under the Incentive Plan can reach up to 200% of the target bonus (or $5 million for the CEO), subject to corporate and individual performance.
6Both plans include clawback provisions in accordance with applicable laws.
7Vesting for performance shares is time-based, occurring over three years after certification of performance achievement, contingent on continued employment.

ADOBE INC. 8-K Report, Executive Changes (Jan 26, 2012)

Summary

Key Highlights

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