Summary
Costco Wholesale Corporation (COST) filed an 8-K on November 1, 2012, reporting on executive compensation and dividend declarations. The Compensation Committee approved performance criteria for fiscal year 2013 executive bonuses, which are tied to pre-tax income and operational targets, with individual bonuses capped at $200,000. The filing also details revised employment arrangements for former CEO James D. Sinegal, extending his employment until April 30, 2013, with continued salary, benefits, and accelerated vesting of restricted stock units.
Key Highlights
- 1Fiscal 2013 executive bonus program approved, tied to performance targets with a cap.
- 2James D. Sinegal's employment extension and revised compensation/stock vesting terms.
- 3Quarterly cash dividend of $0.275 per share declared.
- 4Dividend payable on November 30, 2012, to shareholders of record on November 16, 2012.
- 5Performance conditions for a portion of Mr. Sinegal's restricted stock units determined to be satisfied.
- 6Additional restricted stock units to vest for Mr. Sinegal upon continued employment.
- 7Full accelerated vesting of remaining unvested restricted stock units for Mr. Sinegal at employment conclusion.
Frequently Asked Questions
The fiscal 2013 executive bonus plan links bonuses to the achievement of specified targets relating to pre-tax income and operational characteristics relevant to each executive's responsibilities. Individual bonuses are capped and will be recommended by the CEO, subject to Compensation Committee approval.
Mr. Sinegal's employment has been extended to April 30, 2013. During this period, he will receive a monthly salary of $7,692, continue to receive employee benefits, and vest in additional restricted stock units. All unvested restricted stock units will vest acceleratedly upon his employment conclusion.
The Board of Directors declared a quarterly cash dividend of $0.275 per share. This dividend is payable on November 30, 2012, to shareholders who are recorded on the company's books at the close of business on November 16, 2012.
A portion of Mr. Sinegal's restricted stock units had their performance conditions met in October 2012. His continued employment until April 30, 2013, will lead to the vesting of an estimated additional 15,000 units, and all remaining unvested units are set to vest acceleratedly on April 30, 2013.