Summary
Analog Devices Inc. (ADI) filed an 8-K on November 3, 2010, to report on the approval of its 2011 Executive Performance Incentive Plan by its Compensation Committee on October 29, 2010. This plan outlines the structure for bonus payments to executive officers and senior management for Fiscal Year 2011, linking compensation directly to company performance metrics. The plan establishes a bonus target based on an individual's base salary and a predetermined Individual Target Bonus Percentage, which can range from 50% to 160%. This target is then adjusted by a Bonus Payout Factor, which is determined quarterly. The Bonus Payout Factor is a weighted average (50/50) of the company's performance against operating profit before tax (OPBT) as a percentage of revenue and revenue growth compared to the prior fiscal year. Performance thresholds are set, notably a minimum OPBT of 15% of revenue is required for any bonus payout factor to be generated from the OPBT component.
Key Highlights
- 1Approval of the 2011 Executive Performance Incentive Plan for executive officers and senior management.
- 2Bonus targets are calculated based on base salary multiplied by an Individual Target Bonus Percentage (50%-160%).
- 3Bonus Payout Factor is determined quarterly, based 50% on OPBT as a percentage of revenue and 50% on quarterly revenue growth.
- 4A minimum OPBT of 15% of revenue is required for the OPBT component of the Bonus Payout Factor to be non-zero.
- 5The Bonus Payout Factor can range from 0% to 300%, impacting the final bonus payment.
- 6Individual bonuses can range from 0% to 300% of the calculated Fiscal 2011 Bonus Target.
- 7Certain participants (excluding Ray Stata and Jerald Fishman) are eligible for an additional individual payout factor of up to 30% for superior business performance.