Summary
Costco Wholesale Corporation filed an 8-K on October 15, 2020, primarily detailing the compensation structure for its executive officers for fiscal years 2020 and 2021. The Compensation Committee of the Board of Directors approved the performance criteria for fiscal year 2020 bonuses, which will be tied to pre-tax income and operational performance metrics for officers other than the CEO, with a maximum bonus potential of $80,000. For fiscal year 2021, the CEO's bonus structure was outlined, with a target bonus of $400,000, contingent on achieving specified targets related to pre-tax income and sales, with potential payouts ranging from zero to 120% of the target award for each performance goal.
Key Highlights
- 1Fiscal 2020 executive bonus criteria approved by the Compensation Committee.
- 2Executive officers (excluding CEO) eligible for bonuses up to $80,000.
- 3Fiscal 2020 bonuses are 50% based on pre-tax income achievement and 50% on operational characteristics.
- 4Executive VP bonus amounts require CEO recommendation and Committee approval.
- 5Fiscal 2021 CEO bonus target set at $400,000.
- 6Fiscal 2021 CEO bonus is up to 50% based on pre-tax income and up to 50% based on sales targets.
- 7Potential payout for CEO's fiscal 2021 bonus goals ranges from 0% to 120% of the target award based on achievement.
Frequently Asked Questions
The main purpose of this 8-K filing was to disclose the compensation structure and performance criteria for Costco's executive officers for fiscal years 2020 and 2021, specifically relating to bonus eligibility and targets.
For fiscal year 2020, executives other than the CEO are eligible for bonuses up to $80,000. This bonus is split equally (50/50) between achieving pre-tax income targets and meeting operational objectives relevant to their specific roles.
In fiscal year 2021, the CEO has a target bonus of $400,000. This bonus is linked to performance in two areas: pre-tax income and sales. Each of these performance goals can contribute up to 50% of the total bonus, with potential payouts ranging from zero to 120% of the target amount based on the level of achievement.
Yes, the filing specifies a different structure for the CEO in fiscal year 2021, with a higher target bonus and a split between pre-tax income and sales performance. While the non-CEO executive bonus structure for 2020 is detailed, the filing doesn't explicitly state the 2021 structure for these officers, only focusing on the CEO's 2021 plan.