What are the main changes to Boston Scientific's incentive plan for 2008?

The primary changes involve the performance metrics, with a new weighting of 50% for Adjusted Earnings Per Share, 25% for Free Cash Flow, and 25% for Global Sales. Corporate Net Income has been removed as a direct metric. Additionally, performance goals are now set annually and measured quarterly, with an increased annual weighting.

How will these changes potentially impact the company's focus?

The shift in metrics suggests a greater focus on profitability on a per-share basis (Adjusted EPS), cash generation (Free Cash Flow), and top-line growth (Global Sales). The removal of Corporate Net Income as a direct metric might indicate a move towards measures that are less susceptible to certain accounting adjustments or that better align with shareholder returns.

What is the significance of the change in measurement frequency?

The move to annual goal setting and measurement (with quarterly reviews) aims to provide a more consistent annual focus for employees, while still allowing for quarterly adjustments. The increased weighting on annual performance suggests that longer-term strategic goals are being emphasized.

Will quality still be a factor in employee compensation?

Yes, the filing states that quality objectives will continue to be considered in determining the total amount of funding available under the plan, even though they are not a direct financial performance metric.

BSX 8-K: Material Agreements

Summary

Boston Scientific Corporation (BSX) has announced the adoption of its 2008 Performance Incentive Plan, effective January 1, 2008. This plan outlines the structure for annual cash incentives for eligible employees, including executive officers, aimed at driving financial results and shareholder value. The key change for investors is the adjustment of performance metrics, with a new emphasis on Adjusted Earnings Per Share (50%), Free Cash Flow (25%), and Global Sales (25%). Notably, Corporate Net Income has been removed as a direct performance metric under this plan.

Key Highlights

1Adoption of the 2008 Performance Incentive Plan, effective January 1, 2008.
2Annual cash incentives for eligible salaried personnel, including executive officers.
3Key performance metrics for 2008 are Adjusted Earnings Per Share (50%), Free Cash Flow (25%), and Global Sales (25%).
4Corporate Net Income has been removed as a direct performance metric.
5Quality objectives will still be considered in determining the overall funding for the plan.
6Performance goals are now set annually and measured quarterly, shifting from a purely quarterly measurement approach.
7The weighting for annual performance measurement has increased to 40%, with quarterly weightings reduced.

BOSTON SCIENTIFIC CORP 8-K Report, Material Agreement (Jan 25, 2008)

Summary

Key Highlights

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