Summary
This 8-K filing from Cummins Inc. (CMI), dated February 18, 2005, details updates to its executive compensation plans. Specifically, the Compensation Committee of the Board of Directors has established key performance metrics for incentive payouts in 2006 and 2007. For 2006, the Senior Executive Bonus Plan will be measured by Return on Average Net Assets (ROANA) for the 2005 fiscal year. For awards to be paid in 2007 under the Senior Executive Medium Term Plan and the 2003 Stock Incentive Plan, the performance measure will be Return on Equity (ROE) over the 2005-2006 period.
Key Highlights
- 1Cummins Inc. updated its executive compensation plans on February 14, 2005.
- 2The 2006 bonus payouts under the Senior Executive Bonus Plan will be tied to Return on Average Net Assets (ROANA) for 2005.
- 3Targeted cash and restricted stock awards for 2007 payouts will be based on Return on Equity (ROE) for the 2005-2006 period.
- 4These performance measures are set by the Compensation Committee of the Board of Directors.
- 5The plans are designed to reward executives based on pre-determined financial performance measures.
- 6This filing provides transparency on the metrics used for senior executive incentives, which can influence investor evaluation of management alignment with shareholder value.