Summary
Cardinal Health, Inc. (CAH) filed an 8-K on August 3, 2011, primarily to report on its financial results for the quarter and fiscal year ended June 30, 2011, and to announce changes in its board and executive compensation programs. The company released its earnings on August 4, 2011, through a press release, details of which are included as exhibits. The filing also disclosed the election of David P. King to the Board of Directors, effective September 1, 2011, who is also Chairman, President, and CEO of Laboratory Corporation of America Holdings. A significant portion of the filing details the approval of a new Performance Share Unit (PSU) program for executive compensation. This program aims to better align executive interests with shareholders by incorporating three-year PSUs into the long-term incentive mix, alongside stock options and Restricted Share Units (RSUs). The PSUs will be tied to key performance metrics such as non-GAAP earnings per share growth and dividend yield, with payout potential ranging from 50% to 200% of target based on performance.
Key Highlights
- 1Cardinal Health announced its financial results for the quarter and fiscal year ended June 30, 2011, via a press release filed on August 4, 2011.
- 2David P. King was elected to the Board of Directors, effective September 1, 2011. He currently serves as Chairman, President, and CEO of Laboratory Corporation of America Holdings.
- 3A new Performance Share Unit (PSU) program was approved by the Human Resources and Compensation Committee to enhance executive compensation, effective for fiscal year 2012.
- 4The long-term incentive compensation mix for senior executives will shift to one-third stock options, one-third RSUs, and one-third PSUs for fiscal year 2012.
- 5PSU performance goals are based on compound annual growth rate in non-GAAP earnings per share and dividend yield.
- 6PSU payouts can range from 50% to 200% of target, contingent upon achieving specified performance thresholds.
- 7The PSU program incorporates provisions for vesting upon death, disability, retirement, and change of control, as well as clawback provisions under the Dodd-Frank Act.