8-KLeadership ChangesCorporate ChangesOther Events+1

Cencora, Inc. 8-K Report, Executive Changes (Nov 13, 2007)

Filed November 13, 2007For Securities:COR

Summary

Cencora, Inc. (COR), formerly AmerisourceBergen, filed an 8-K on November 12, 2007, detailing significant corporate governance and executive compensation changes. The Compensation and Succession Planning Committee approved performance measures and target incentive levels for the 2008 Annual Incentive Plan (AIP), which will primarily focus on corporate and business group financial metrics such as EPS, return on invested capital, and EBIT. Additionally, a long-term incentive award was approved for CEO R. David Yost, contingent on achieving specific EPS and Total Stockholder Return (TSR) goals over three years, aimed at aligning his compensation with peer CEO levels. The company also announced amendments to its bylaws that change the director election standard from a plurality to a majority of votes cast in uncontested elections, coupled with a new policy requiring directors to tender irrevocable resignations if they fail to receive majority support. Furthermore, the company is moving towards uncertificated shares to facilitate participation in the Direct Registration System for more efficient stock transfers. These governance changes aim to enhance accountability and streamline operations for shareholders. Finally, the company announced a significant 50% increase in its quarterly dividend and a $500 million increase to its share repurchase program, signaling confidence and a commitment to returning capital to shareholders.

Key Highlights

  • 1New performance metrics and target incentive levels for the 2008 Annual Incentive Plan (AIP) have been established, focusing on EPS, ROIC, and EBIT.
  • 2A long-term incentive award of up to $4.05 million for CEO R. David Yost is tied to achieving EPS and Total Stockholder Return (TSR) goals over a three-year period.
  • 3Director elections in uncontested situations will now require a majority of votes cast, a change from the previous plurality standard.
  • 4A new policy mandates that directors must tender irrevocable resignations if they fail to secure majority shareholder support in future elections.
  • 5The company is transitioning to uncertificated shares to enable participation in the Direct Registration System for improved stock transfer efficiency.
  • 6The quarterly dividend per common share has been increased by 50% to $0.075.
  • 7The authorized share repurchase program has been increased by $500 million.

Frequently Asked Questions

For fiscal year 2008, executive bonuses under the Annual Incentive Plan (AIP) will primarily depend on achieving specified corporate-level and/or business group financial performance measures, including earnings per share (EPS), return on invested capital (ROIC), and earnings before interest and taxes (EBIT).

A long-term incentive award was granted to CEO R. David Yost because his total compensation was considered substantially below the target level for his peer group. The award, potentially up to $4.05 million, is contingent upon achieving specific EPS and Total Stockholder Return (TSR) goals over a three-year performance period (October 1, 2007, to September 30, 2010). Payout is generally subject to his continuous employment.

In uncontested director elections, shareholders will now need a majority of votes cast for a director to be elected, replacing the previous plurality standard. This change, along with a new policy requiring directors to tender resignations if they don't receive majority support, aims to increase director accountability to shareholders.

Issuing uncertificated shares allows Cencora to participate in the Direct Registration System. This system enables investors to hold securities electronically without physical certificates, facilitating faster and more secure electronic transfers and potentially reducing administrative costs and risks associated with physical stock certificates.