Summary
Costco Wholesale Corp. (COST) filed an 8-K on October 27, 2011, to report on the approval of its fiscal year 2012 executive bonus plan. The Compensation Committee of the Board of Directors established the performance criteria for bonuses, which are tied to pre-tax income and operational targets relevant to each executive's role. This plan aims to incentivize executive performance and align their compensation with company financial objectives for the upcoming fiscal year.
Key Highlights
- 1Costco's Compensation Committee approved fiscal year 2012 executive bonus plan criteria.
- 2Bonuses for most executive officers are capped at 20% of salary.
- 3Bonus payouts are contingent on achieving specific pre-tax income and operational targets.
- 4The plan excludes Chairman Jeffrey H. Brotman and former CEO James D. Sinegal from the standard bonus structure.
- 5Current CEO Craig Jelinek's bonus determination is subject to the Compensation Committee's discretion.
- 6James D. Sinegal, in his remaining tenure as CEO for fiscal 2012, is eligible for a discretionary bonus of up to $66,667.
- 7The specific amounts of actual bonuses will be determined by President Craig Jelinek, subject to Committee approval.
Frequently Asked Questions
The primary purpose of this 8-K filing is to inform investors about the approval of Costco's executive bonus plan for fiscal year 2012 and the criteria that will be used to determine bonus payouts for its executive officers.
For most executive officers, bonuses are tied to company performance metrics like pre-tax income and operational goals, with a potential payout of up to 20% of their salary. The actual bonus amounts are discretionary and subject to approval by the Compensation Committee.
Yes, Chairman Jeffrey H. Brotman and former CEO James D. Sinegal have different arrangements. Mr. Sinegal, for his portion of fiscal 2012 as CEO, is eligible for a discretionary bonus of up to $66,667. The bonuses for Mr. Jelinek and Mr. Sinegal are at the discretion of the Board of Directors or the Compensation Committee.
While the performance criteria are set by the Compensation Committee, the actual bonus amounts for most executives will be determined by President Craig Jelinek, subject to further approval from the Compensation Committee. For certain key executives, the determination is directly at the discretion of the Board or the Committee.