What is the primary purpose of the Amgen Inc. 2009 Equity Incentive Plan (2009 Plan)?

The primary purpose of the 2009 Plan is to provide a framework for equity-based compensation for Amgen's executives and employees, designed to align their interests with those of stockholders and to incentivize long-term value creation. It is intended to replace the company's existing equity award plans.

How will awards be determined under the new 2009 Performance Program?

Awards under the 2009 Performance Program will be denominated in performance units, which entitle the participant to one share of common stock upon earning. The payout will be determined by a combination of Amgen's one-year financial performance (revenue and adjusted EPS) and a three-year comparative total stockholder return (TSR) multiplier. The maximum payout is 200% of the granted performance units.

What is the significance of stockholder approval for the 2009 Plan?

Stockholder approval of the 2009 Plan is critical. If not approved, the performance unit awards granted under the 2009 Performance Program for the 2009-2011 performance period will be canceled and become null and void. This ensures that the grants qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code.

What was Amgen's performance in 2008 that led to the EIP awards?

Amgen reported strong 2008 performance, with composite scores significantly exceeding targets. The company achieved approximately 179% of target performance overall, with approximately 183% against target for financial delivery (revenue growth and adjusted EPS growth) and 172% for pipeline delivery. This strong performance directly influenced the 2008 annual cash incentive awards paid to executives.

AMGN 8-K: Leadership Changes

Summary

Amgen Inc. (AMGN) filed an 8-K on March 8, 2009, detailing executive compensation and incentive plans. The most significant event reported is the adoption of the Amgen Inc. 2009 Equity Incentive Plan (the "2009 Plan") and the associated 2009 Performance Award Program (the "2009 Performance Program"), subject to stockholder approval. These new plans are designed to replace existing equity award plans and are intended to align executive compensation with long-term stockholder value creation. The 2009 Performance Program will utilize performance units denominated in shares, with awards tied to financial metrics like revenue and adjusted EPS, as well as a three-year comparative total stockholder return (TSR) multiplier. Additionally, the filing provides details on the 2008 annual cash incentive awards granted under the Executive Incentive Plan (EIP) and the continuation of performance goals for 2009. Amgen executives received substantial cash bonuses for 2008 performance, with specific award amounts disclosed for named executive officers. The company highlighted strong 2008 performance exceeding targets, particularly in revenue and adjusted EPS growth, and pipeline development, which influenced the bonus payouts.

Key Highlights

1Adoption of the Amgen Inc. 2009 Equity Incentive Plan (2009 Plan), subject to stockholder approval.
2Introduction of the 2009 Performance Award Program (2009 Performance Program) linked to the 2009 Plan, replacing existing equity plans.
3Awards under the 2009 Performance Program will be based on a combination of revenue, adjusted EPS, and a three-year total shareholder return (TSR) multiplier.
4Stockholder approval of the 2009 Plan is a condition for the performance unit awards under the 2009 Performance Program to be valid.
5Details provided on 2008 annual cash incentive awards under the Executive Incentive Plan (EIP) for named executive officers.
6Significant bonuses were paid for 2008 performance, with Kevin Sharer receiving $3,875,000.
7Amgen reported strong 2008 financial performance with composite scores significantly above target for both financial metrics and pipeline delivery.

AMGEN INC 8-K Report, Executive Changes (Mar 9, 2009)

Summary

Key Highlights

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