8-KLeadership Changes

COPART INC 8-K Report, Executive Changes (Nov 3, 2008)

Filed November 3, 2008For Securities:CPRT

Summary

This Form 8-K filing by Copart, Inc. (CPRT) on November 3, 2008, primarily concerns executive compensation. The Compensation Committee of the Board of Directors has determined that CEO Willis J. Johnson and President A. Jayson Adair will be eligible to participate in the Executive Bonus Plan for the performance period of August 1, 2008, to July 31, 2009. Key aspects of the bonus plan include target bonus percentages set at 200% of their base salaries ($750,000 annually for each). The funding of these bonuses is tied directly to the Company's growth in North American revenue for fiscal year 2009 compared to fiscal year 2008. The plan outlines a tiered structure for bonus payouts, with potential to exceed target bonuses up to $2 million each if revenue growth surpasses targets, and a minimum payout of 125% of base salary if growth falls short but meets a specified minimum. Failure to achieve a minimum revenue growth threshold would result in no bonus payout.

Key Highlights

  • 1CEO Willis J. Johnson and President A. Jayson Adair are eligible for the Executive Bonus Plan for the August 2008 - July 2009 performance period.
  • 2Target bonus for both executives is set at 200% of their $750,000 base salary.
  • 3Bonus payouts are directly linked to the Company's North American revenue growth in fiscal year 2009 compared to fiscal year 2008.
  • 4If North American revenue growth exceeds the performance target, executives could receive bonuses greater than the target, up to a maximum of $2,000,000 each.
  • 5If North American revenue growth is below the target but meets a minimum threshold, bonuses will be reduced to a minimum of 125% of base salary.
  • 6No bonuses will be paid if a minimum percentage of North American revenue growth is not achieved.
  • 7The Compensation Committee retains discretion to reduce, but not increase, bonus payouts.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose details about the executive bonus plan for Copart, Inc.'s CEO and President, specifically their eligibility, bonus targets, and the performance metrics tied to their compensation for the August 1, 2008, to July 31, 2009, performance period.

The executive bonus is determined based on the Company's North American revenue growth for fiscal year 2009 compared to fiscal year 2008. A target bonus of 200% of base salary is set, with potential for higher payouts (up to $2 million each) if revenue growth exceeds targets, and a reduced minimum payout (125% of base salary) if growth falls short but meets a minimum threshold. No bonus is paid if the minimum growth target isn't met.

The base salary for both CEO Willis J. Johnson and President A. Jayson Adair is set at $750,000 per year.

Yes, the Compensation Committee has the discretion to reduce, but not increase, the amount of any bonus payable under the plan. This means they can pay less than the calculated bonus amount, but not more.