8-K/ALeadership Changes

COSTCO WHOLESALE CORP /NEW 8-K/A Report, Executive Changes (Nov 29, 2011)

Filed November 29, 2011For Securities:COST

Summary

Costco Wholesale Corporation filed an 8-K/A amendment on November 29, 2011, primarily to disclose compensation details for Craig Jelinek, who is set to become President and CEO effective January 1, 2012. The filing outlines Mr. Jelinek's annual base salary of $650,000 (prorated) and a potential bonus of up to $200,000 for his new role. This information is crucial for investors to understand the executive compensation structure tied to leadership transitions. Additionally, the amendment details a performance-based award of 50,000 Restricted Stock Units (RSUs) for fiscal year 2012, contingent on the company achieving specific performance criteria related to total sales or pre-tax income growth compared to fiscal year 2011. The vesting of these RSUs is further tied to continued employment and potential acceleration for long-tenured employees, providing insights into performance-driven incentives for key leadership.

Key Highlights

  • 1Craig Jelinek's compensation package for his upcoming role as President and CEO (effective Jan 1, 2012) has been disclosed.
  • 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.
  • 4Existing employee benefits will continue for Mr. Jelinek.
  • 5An award of 50,000 RSUs for fiscal 2012 was granted, intended to be performance-based.
  • 6The RSUs are subject to performance criteria related to fiscal 2012 total sales or pre-tax income increases over fiscal 2011.
  • 7RSU vesting is contingent on continued employment through October 2016, with potential acceleration for over 25 years of service.

Frequently Asked Questions

The main purpose of this amended 8-K filing is to disclose the compensation arrangements for Craig Jelinek, who is transitioning into the role of President and Chief Executive Officer effective January 1, 2012.

Craig Jelinek will receive an annual base salary of $650,000, prorated from January 1, 2012. He is also eligible for a bonus of up to $200,000.

The 50,000 Restricted Stock Units (RSUs) awarded to Mr. Jelinek for fiscal 2012 are performance-based. They will vest if Costco achieves specified percentage increases, relative to fiscal 2011, in either total sales or pre-tax income for fiscal 2012.

The RSUs will be granted after the end of Costco's fiscal year if performance targets are met. Further vesting is dependent on Mr. Jelinek's continued employment through October 2016, with potential accelerated vesting for employees with over twenty-five years of service.