8-KMaterial AgreementsExhibits & Filings

COSTCO WHOLESALE CORP /NEW 8-K Report, Material Agreement (Nov 15, 2010)

Filed November 15, 2010For Securities:COST

Summary

Costco Wholesale Corp. (COST) filed an 8-K report on November 15, 2010, detailing executive compensation plans for fiscal year 2011. The Compensation Committee approved performance criteria for executive bonuses, with most officers eligible for up to 20% of their salary based on pre-tax income and operational targets. CEO James D. Sinegal has a discretionary bonus potential of up to $200,000, and Chairman Jeffrey H. Brotman's bonus is also discretionary. The filing also outlined performance targets for Restricted Stock Unit (RSU) grants under the 2002 Incentive Plan. Key officers, including Mr. Sinegal, Mr. Brotman, and W. Craig Jelinek, are eligible for specific RSU amounts. These grants are contingent upon Costco achieving specified percentage increases in total sales or pre-tax income relative to fiscal 2010. Vesting of these RSUs is scheduled to occur over a period ending in October 2014, with a portion vesting annually, contingent on continued employment.

Key Highlights

  • 1Costco's Compensation Committee approved fiscal 2011 executive bonus criteria based on pre-tax income and operational targets.
  • 2Most executive officers are eligible for bonuses up to approximately 20% of their salary.
  • 3CEO James D. Sinegal's bonus potential for fiscal 2011 is up to $200,000, at the Board's or Committee's discretion.
  • 4Chairman Jeffrey H. Brotman's bonus for fiscal 2011 is also at the discretion of the Board or Committee.
  • 5Performance targets were set for Restricted Stock Unit (RSU) grants for key officers for fiscal 2011.
  • 6RSU grants are tied to achieving specific percentage increases in fiscal 2011 total sales or pre-tax income compared to fiscal 2010.
  • 7RSUs are subject to continued employment through October 2014, with 20% vesting annually starting in 2010.

Frequently Asked Questions

This 8-K filing details Costco's executive compensation plans for fiscal year 2011, specifically outlining the criteria for performance-based bonuses and restricted stock unit (RSU) grants for its executive officers.

For most executive officers (excluding the Chairman and CEO), bonuses are tied to achieving specific performance targets related to pre-tax income and operational metrics, with a maximum bonus of approximately 20% of salary. The actual amounts are determined by the CEO, subject to Committee approval.

RSU grants are performance-based and contingent upon Costco achieving a specified percentage increase in either total sales or pre-tax income for fiscal year 2011 compared to fiscal year 2010. These grants also require continued employment through October 2014, with vesting occurring over five years.

Yes. CEO James D. Sinegal has a discretionary bonus potential of up to $200,000 for fiscal 2011. Chairman Jeffrey H. Brotman's bonus is also entirely at the discretion of the Board of Directors or the Compensation Committee.