Summary
Copart, Inc. (CPRT) filed an 8-K on March 12, 2021, to announce the approval of a new Executive Incentive Compensation Plan (the "Plan") by its Compensation Committee. This new plan replaces the previous Copart, Inc. Executive Bonus Plan and is designed to better align executive cash incentive compensation with the company's strategic objectives. The Plan allows the Compensation Committee to set annual performance criteria and goals, which can include individual performance metrics, to determine bonus payouts for eligible executive officers and key employees. The Committee believes this structure will establish objective performance criteria that support Copart's strategic goals and shareholder interests.
Key Highlights
- 1Copart replaced its existing annual executive bonus plan with a new Executive Incentive Compensation Plan.
- 2The new plan aims to enhance alignment between executive compensation and the company's strategic objectives.
- 3The Compensation Committee will set annual performance criteria and goals, with flexibility for individual performance metrics.
- 4Eligible participants include all executive officers and other key employees.
- 5The Committee retains the authority to assess business performance against criteria and individual performance to determine bonus payments.
- 6The company believes the new plan will facilitate the establishment of objective performance criteria that benefit shareholders.
Frequently Asked Questions
The primary purpose of the new plan is to provide the Compensation Committee with enhanced flexibility to design cash incentive compensation for executive officers that is more closely aligned with Copart's strategic objectives and shareholder interests.
Generally, all of Copart's executive officers and other key employees are eligible to participate in the new Executive Incentive Compensation Plan.
Yes, as noted in the filing, Copart's CEO, A. Jayson Adair, is not eligible for any additional compensation beyond his $1 annual salary and approved perquisites until June 2022. He is not eligible for bonuses under this new plan during that period.
The Compensation Committee will establish annual performance criteria and goals, which may include individual performance metrics. Following each bonus period, the Committee will evaluate the company's performance against these criteria and each executive's individual performance to determine the cash bonus payment.