Summary
This 8-K filing by Baker Hughes, a GE company, details a significant one-time equity award granted to CEO Lorenzo Simonelli on June 1, 2018. The award, valued at an initial $3,000,000, is structured as a mix of Outperformance Share Units (OPSUs) and Restricted Stock Units (RSUs) designed to align Mr. Simonelli's interests with shareholder value creation over the next five years. The performance metrics for the OPSUs are tied to Total Shareholder Return (TSR), with tiered payouts based on absolute and relative performance against a peer group, incentivizing exceptional results.
Key Highlights
- 1CEO Lorenzo Simonelli received a one-time equity award valued at $3,000,000 (based on target OPSUs) on June 1, 2018.
- 2The award comprises 60% Outperformance Share Units (OPSUs) and 40% Restricted Stock Units (RSUs).
- 3A five-year vesting schedule is in place, with 50% vesting on June 1, 2021, and the remaining 50% on June 1, 2023, to encourage long-term commitment.
- 4OPSUs are contingent on a Total Shareholder Return (TSR) performance goal over a three-year period ending May 31, 2021.
- 5OPSUs can pay out at up to 300% of target if Baker Hughes achieves at least 20% annual TSR and is at or above the median TSR of its peer group.
- 6No OPSUs are earned unless the company achieves at least 5% annual TSR.
- 7Payouts are subject to adjustments based on relative TSR performance and a cap on the value appreciation of delivered shares.