What are the key components of the executive compensation changes reported in this filing?

This filing primarily details the approval of long-term performance unit awards for the 2006-2008 period, which are tied to financial performance metrics like revenue and EPS growth. It also covers the payout of 2005 cash bonuses and the establishment of 2006 cash bonus targets under the Executive Incentive Plan (EIP), which are linked to Adjusted Net Income.

What is 'Adjusted Net Income' as defined for the 2006 EIP awards?

'Adjusted Net Income' is based on net income calculated according to GAAP, but it may be adjusted by the Compensation Committee for specific items. These potential adjustments include gains or losses from changes in accounting principles, amortization of acquired intangible assets, and expenses related to acquired in-process R&D or retention and severance associated with acquisitions.

Are there any changes to the company's corporate governance structure mentioned?

Yes, the Board of Directors approved an amendment to the company's Bylaws to reduce the authorized number of directors from 12 to 11. This change is scheduled to take effect on May 10, 2006, coinciding with the annual meeting of stockholders.

AMGN 8-K: Material Agreements & Corporate Changes

Q: How are the long-term performance unit awards determined?

The awards are denominated in performance units, and their value is contingent upon Amgen achieving specified financial performance goals. These goals include compound annual growth rates for revenue and earnings per share, evaluated both independently and in comparison to a peer group of biotechnology and pharmaceutical companies. The ultimate payout can range from 0% to 225% of the granted units.

Summary

This 8-K filing from Amgen Inc. on March 13, 2006, details actions taken by the Compensation and Management Development Committee regarding executive compensation. The primary focus is on awards approved under the Amended and Restated Amgen Inc. Performance Award Program and the Amgen Inc. Executive Incentive Plan (EIP). For the 2006-2008 performance period, the company has approved performance unit awards for its named executive officers, with the payout contingent on achieving specific financial performance goals related to compound annual growth rates for revenue and earnings per share, measured both independently and against a peer group of biotechnology and pharmaceutical companies. Additionally, the filing confirms the payout of 2005 EIP awards and establishes target awards for 2006, which are tied to a percentage of "Adjusted Net Income." The definition of Adjusted Net Income is provided, allowing for certain adjustments to net income for specific items like amortization of acquired intangibles. The company also announced an amendment to its bylaws to reduce the authorized number of directors from 12 to 11, effective May 10, 2006.

Key Highlights

1Amgen approved performance unit awards for executives under a long-term incentive plan (2006-2008 performance period) tied to revenue and EPS growth.
2Payout for these performance units depends on achieving both independent financial performance and comparative performance against industry peers.
32005 performance-based cash bonuses under the Executive Incentive Plan (EIP) were approved and will be paid out in March 2006 to named executive officers.
4For 2006, target cash bonuses under the EIP are set as a percentage of 'Adjusted Net Income' for each executive.
5The definition of 'Adjusted Net Income' for the EIP includes potential adjustments for items such as amortization of acquired intangibles and acquisition-related expenses.
6The Board approved an amendment to the Bylaws to decrease the authorized number of directors from 12 to 11, effective May 10, 2006.

AMGEN INC 8-K Report, Material Agreement (Mar 13, 2006)

Summary

Key Highlights

Frequently Asked Questions