8-KLeadership Changes

COSTCO WHOLESALE CORP /NEW 8-K Report, Executive Changes (Nov 28, 2011)

Filed November 28, 2011For Securities:COST

Summary

This 8-K filing from Costco Wholesale Corporation announces the compensation arrangements for Craig Jelinek, who is set to become President and Chief Executive Officer effective January 1, 2012. The Compensation Committee has determined his new salary and bonus structure, as well as details regarding his Restricted Stock Units (RSUs) award. This information is crucial for investors to understand the executive compensation plan as a new leadership phase begins for the company.

Key Highlights

  • 1Craig Jelinek's compensation as incoming President and CEO for fiscal year 2012 has been determined.
  • 2Mr. Jelinek will receive an annual base salary of $650,000, prorated from January 1, 2012.
  • 3He is eligible for a bonus of up to $200,000.
  • 4Mr. Jelinek will continue to receive his current employee benefits.
  • 5A previous award of 50,000 RSUs for fiscal 2012 is intended to be performance-based.
  • 6These RSUs are contingent on Costco achieving specified percentage increases in either total sales or pre-tax income relative to fiscal 2011 for fiscal 2012.
  • 7Vesting of the RSUs will occur over five years, with 20% vesting annually starting in October 2012, provided continued employment through October 2015.

Frequently Asked Questions

Craig Jelinek is set to become the President and Chief Executive Officer of Costco Wholesale Corporation, effective January 1, 2012. This filing details his compensation for this new leadership position.

Mr. Jelinek will receive an annual base salary of $650,000, prorated from his start date of January 1, 2012. Additionally, he is eligible for a bonus of up to $200,000.

The 50,000 RSUs awarded to Mr. Jelinek for fiscal 2012 are subject to performance-based criteria. These targets can be met if Costco achieves specified percentage increases in either total sales or pre-tax income for fiscal year 2012 when compared to fiscal year 2011.

If the performance targets are met, the RSUs will be granted after the end of fiscal year 2012. They will then vest over five years, with 20% of the shares vesting each October starting in 2012, contingent on his continued employment with Costco through October 2015.