8-KLeadership ChangesExhibits & Filings

BOSTON SCIENTIFIC CORP 8-K Report, Executive Changes (Oct 30, 2014)

Filed October 30, 2014For Securities:BSX

Summary

Boston Scientific Corporation (BSX) filed an 8-K report on October 30, 2014, detailing amendments and approvals related to executive compensation and retirement plans. The most significant updates concern the 2015 Annual Bonus Plan and two new Performance Share Programs (PSPs) for 2015, designed to align executive incentives with company performance and shareholder value. These plans introduce specific performance metrics and award structures, with provisions for recoupment in cases of misconduct or financial restatements. Additionally, the report includes an amendment and restatement of the Executive Retirement Plan, introducing a new eligibility classification for "Grandfathered Individuals" with specific criteria related to executive roles and "Special Assignments." These changes are effective in late 2014 and early 2015, signaling a focus on performance-driven compensation and executive retention strategies for the upcoming fiscal year.

Key Highlights

  • 1Approval of the 2015 Annual Bonus Plan, with performance tied to adjusted EPS and global sales (constant currency).
  • 2Introduction of the 2015 Total Shareholder Return Performance Share Program (TSR PSP) to align executive pay with stock performance relative to the S&P 500 Healthcare Index.
  • 3Establishment of the 2015 Free Cash Flow Performance Share Program (FCF PSP) to incentivize achievement of key free cash flow objectives.
  • 4Both 2015 PSPs are structured with award ranges (0-200% for TSR, 0-150% for FCF) and vesting requirements.
  • 5Inclusion of recoupment policies (clawbacks) for both annual bonuses and performance shares in cases of executive misconduct, financial restatements, or legal requirements.
  • 6Amendment and restatement of the Executive Retirement Plan, creating a new "Grandfathered Individual" eligibility for certain senior executives in "Special Assignments."
  • 7Specific lump sum retirement benefit calculations for Grandfathered Individuals based on their tenure in executive roles and "Special Assignments."

Frequently Asked Questions

The filing outlines the 2015 Annual Bonus Plan, which is tied to corporate financial performance (adjusted EPS and global sales), and two long-term incentive programs: the 2015 Total Shareholder Return Performance Share Program (TSR PSP) and the 2015 Free Cash Flow Performance Share Program (FCF PSP). These are designed to reward performance at various levels and align executive interests with shareholders.

The 2015 Annual Bonus Plan will be based on achieving specific goals for adjusted earnings per share (EPS) and global sales on a constant currency basis. The 2015 TSR PSP will measure performance against the S&P 500 Healthcare Index's Total Shareholder Return over a three-year period, while the 2015 FCF PSP will focus on the company's free cash flow performance against its financial plan for 2015.

Yes, the filing states that awards under the 2015 Annual Bonus Plan and both 2015 PSPs are subject to the Company's recoupment policy. This policy allows the company to recover awards in the event of executive misconduct causing significant harm, financial restatements that would have reduced the award, or as required by law under provisions like the Dodd-Frank Act.

The Executive Retirement Plan was amended and restated, effective November 1, 2014. A new classification, "Grandfathered Individuals," was created. This applies to employees who have at least 10 years of service, are in a "Special Assignment" requested by senior leadership after serving in an executive committee or division president role for at least five years, and have been approved by the Compensation Committee. Specific lump-sum retirement benefits are defined for these individuals.