Summary
Salesforce, Inc. (CRM) filed an 8-K on November 28, 2016, disclosing material changes to the compensation arrangements for its Named Executive Officers, effective November 22, 2016. The report details adjustments to annual base salaries and annual target bonuses for Fiscal Year 2018, alongside new grants of stock options, restricted stock units (RSUs), and performance-based RSUs (PRSUs). These changes reflect the company's strategy to align executive compensation with company performance and shareholder value creation.
Key Highlights
- 1Adjustments to base salaries and target bonuses for Named Executive Officers effective February 1, 2017, for FY2018.
- 2Grant of stock options to all Named Executive Officers, with standard four-year vesting.
- 3Grant of Restricted Stock Units (RSUs) to most Named Executive Officers, also subject to a four-year vesting schedule.
- 4Significant awards of Performance-Based Restricted Stock Units (PRSUs) to Named Executive Officers, with vesting tied to total shareholder return (TSR) relative to the NASDAQ-100 Index.
- 5PRSU vesting has a performance period through December 15, 2019, with potential payouts ranging from 0% to 200% of target shares based on relative TSR ranking.
- 6PRSUs include provisions for accelerated vesting upon a change of control, contingent on relative TSR performance and employment status.
- 7The filing includes the form of the Performance-Based Restricted Stock Unit Agreement as an exhibit.
Frequently Asked Questions
The 8-K details updated annual base salaries and annual target bonuses for fiscal year 2018, effective February 1, 2017, for key executives including Marc Benioff and Mark Hawkins. Additionally, the company has granted stock options, restricted stock units (RSUs), and performance-based restricted stock units (PRSUs) to these executives.
The performance-based restricted stock units (PRSUs) have a vesting tied to Salesforce's total shareholder return (TSR) performance relative to companies in the NASDAQ-100 Index over a three-year period ending December 15, 2019. Payouts can range from 0% to 200% of the target shares, with specific thresholds for achieving certain percentile rankings in TSR.
In the event of a change of control, the vesting of performance-based restricted stock units will be determined based on TSR performance up to the date of the change of control, using the same relative performance scale. Accelerated vesting provisions are also in place for executives under specific termination conditions following a change of control.
The new annual base salaries and annual target bonuses reported in this filing are effective February 1, 2017, for the company's fiscal year 2018.