8-KMaterial AgreementsOther Events

COLGATE PALMOLIVE CO 8-K Report, Material Agreement (Mar 10, 2006)

Filed March 10, 2006For Securities:CL

Summary

Colgate-Palmolive Company (CL) filed an 8-K on March 10, 2006, detailing decisions made by its Personnel & Organization Committee (P&O Committee) and Board of Directors on March 9, 2006. The P&O Committee established performance measures for executive compensation, including annual bonus awards for 2006 and long-term restricted stock awards for the 2006-2008 period, focusing on earnings-per-share and net sales growth targets. The filing also disclosed current base salaries for key executives and approved a 4% salary increase for CEO Reuben Mark, effective April 2006. Additionally, the Board of Directors authorized a new share repurchase program, replacing the previous one that was set to expire. This new program allows for the repurchase of up to 30 million shares of common stock, demonstrating a commitment to returning value to shareholders and potentially impacting earnings per share through a reduced share count.

Key Highlights

  • 1Establishment of performance measures for 2006 annual bonus awards, based on an earnings-per-share goal.
  • 2Setting of compounded annual net sales and earnings-per-share growth targets for 2006-2008 long-term restricted stock awards.
  • 3Disclosure of current base salaries for key Named Executive Officers, including CEO Reuben Mark ($1,817,000).
  • 4Approval of a 4% base salary increase for CEO Reuben Mark, effective April 2006, bringing his salary to $1,890,000.
  • 5Authorization of a new share repurchase program to buy back up to 30 million shares of common stock.
  • 6The new share repurchase program replaces the October 2004 program and is effective immediately as of March 9, 2006.
  • 7The company had approximately 515 million shares of common stock outstanding as of February 28, 2006.

Frequently Asked Questions

For annual bonus awards in 2006, the P&O Committee established an earnings-per-share (EPS) goal. For long-term restricted stock awards covering the 2006 through 2008 measurement period, the targets were compounded annual net sales growth and compounded annual EPS growth.

Yes, the P&O Committee approved a 4% increase in CEO Reuben Mark's base salary, bringing it to $1,890,000. This increase was set to be effective in April 2006.

The new share repurchase program authorizes the buyback of up to 30 million shares of Colgate-Palmolive's common stock. This program replaces an expiring one and signals the company's intent to reduce the number of outstanding shares, which can potentially boost earnings per share and return capital to shareholders.

Salary increases for other executive officers, if approved, will be based on factors such as individual performance, business unit performance, assumption of new responsibilities, company salary budget guidelines, other performance measures (like customer service, product development, market share, and productivity), and competitive data.