Who is eligible for the Section 162(m) Long-Term Performance Pool Plan?

The Section 162(m) Long-Term Performance Pool Plan for 2007 and 2008 is exclusively for the company's five named executive officers as defined under Section 162(m) of the Internal Revenue Code.

How is 'adjusted net income' defined for the Long-Term Pool Plan?

'Adjusted net income' is defined as the company's reported net income with adjustments to exclude income and losses from discontinued operations, the cumulative effect of accounting changes, the operations of AMEX Assurance, and non-recurring separation costs.

What happens if an executive qualifies for an award under both the Long-Term Performance Plan and the Long-Term Pool Plan?

If an executive qualifies for a payout under the Long-Term Pool Plan for 2007 or 2008, they will receive that award, and their outstanding award under the corresponding Long-Term Performance Plan (2005-2007 for 2007, or 2006-2008 for 2008) will be cancelled.

AMP 8-K: Material Agreements

Q: What are the key performance metrics for the 2006-2008 Long-Term Performance Plan?

The key performance metrics for the 2006-2008 Long-Term Performance Plan are weighted earnings per share growth (40%), gross revenue growth (30%), and average return on equity (30%). Additionally, total shareholder return relative to an industry peer group can adjust the payout by up to 25%.

Summary

Ameriprise Financial, Inc. (AMP) filed an 8-K on July 3, 2006, detailing actions taken by its Compensation and Benefits Committee on June 27, 2006, regarding executive incentive compensation. The report outlines the performance measures and goals for the 2006-2008 Long-Term Performance Plan (LTPP) and establishes a Section 162(m) Long-Term Performance Pool Plan for 2007 and 2008. These plans are designed to align executive pay with company performance and ensure tax deductibility for the company. The LTPP for 2006-2008 is a three-year cash-denominated plan based on weighted financial objectives: earnings per share growth (40%), gross revenue growth (30%), and average return on equity (30%). Payouts can be adjusted by up to 25% based on relative total shareholder return compared to industry peers. The newly established Long-Term Pool Plan for 2007 and 2008 is targeted at the company's five named executive officers and links payouts to a percentage of adjusted net income, with provisions for negative discretion by the committee.

Key Highlights

1Ameriprise Financial established performance goals for its 2006-2008 Long-Term Performance Plan (LTPP), focusing on EPS growth, gross revenue growth, and return on equity.
2The LTPP uses a three-year performance period with potential payouts adjusted by up to 25% based on relative total shareholder return compared to industry peers.
3A Section 162(m) Long-Term Performance Pool Plan was created for 2007 and 2008, specifically for the company's five named executive officers.
4The Long-Term Pool Plan for 2007-2008 is tied to a percentage of the company's adjusted net income.
5Adjusted net income for the Long-Term Pool Plan excludes income/losses from discontinued operations, accounting changes, AMEX Assurance operations, and non-recurring separation costs.
6Awards under the Long-Term Pool Plan are intended to qualify as performance-based compensation for Section 162(m) deductibility.
7The Compensation Committee retains the ability to exercise negative discretion to reduce executive payouts under the Long-Term Pool Plan.

AMERIPRISE FINANCIAL INC 8-K Report, Material Agreement (Jul 3, 2006)

Summary

Key Highlights

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