01—Abstract
Summary
Summary of the 8-K filed March 28, 2019. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) filed an 8-K report on March 28, 2019, detailing executive compensation adjustments.
The report outlines the approval of cash bonuses for the fiscal year 2019 performance for key executive officers, including Marc Benioff, Keith Block, Mark Hawkins, Parker Harris, and Alexandre Dayon. These bonuses were primarily based on corporate and individual performance metrics achieved during FY2019. Furthermore, the filing discloses compensation arrangements for fiscal year 2020, including updated annual base salaries and annual target bonus percentages for the same executive team.
A significant portion of the executive compensation strategy involves equity awards, including stock options, restricted stock units (RSUs), and performance-based RSUs. These awards are subject to standard vesting schedules and, notably, the performance-based RSUs have a unique structure tied to Salesforce's Total Shareholder Return (TSR) relative to the NASDAQ-100 Index over a three-year performance period, with special provisions for change-of-control scenarios.
02—Key points
Key Highlights
- Approval of Fiscal Year 2019 cash bonuses for Named Executive Officers (NEOs) based on corporate and individual performance.
- Details on bonus amounts paid out and to be paid, including mid-year payouts.
- Establishment of FY2020 annual base salaries and target bonus percentages for NEOs.
- Grant of stock options, restricted stock units (RSUs), and performance-based RSUs to NEOs.
- Performance-based RSUs are contingent on Salesforce's Total Shareholder Return (TSR) ranking against the NASDAQ-100 Index over a three-year period.
- Performance-based RSUs can vest between 0% and 200% of target, with specific thresholds based on TSR percentile rank.
- Special vesting and accelerated vesting provisions for equity awards in the event of a change of control.
03—Questions
Frequently Asked Questions
What is the main purpose of this 8-K filing?
The main purpose of this 8-K filing is to disclose material information regarding executive compensation at Salesforce. Specifically, it details the approval of cash bonuses for the fiscal year 2019 and outlines new compensation arrangements, including base salaries, target bonuses, and equity awards, for the fiscal year 2020 for the company's Named Executive Officers.
How are the performance-based restricted stock units (PSUs) tied to company performance?
The PSUs are directly linked to Salesforce's Total Shareholder Return (TSR) performance relative to companies in the NASDAQ-100 Index over a three-year period. The vesting percentage of these awards ranges from 0% to 200%, depending on where Salesforce's TSR ranks within the index. A ranking at the 60th percentile would result in 100% target vesting, with performance above or below this percentile adjusting the payout accordingly, and no payout if TSR ranks below the 30th percentile. Absolute negative TSR limits payout to 100%.
Are there any special provisions for executive compensation in case of a merger or acquisition (change of control)?
Yes, the filing explicitly states that special vesting rules apply in the event of a change of control. In such scenarios, the vesting of equity awards, particularly performance-based RSUs, will be assessed based on TSR performance up to the date of the change of control. A portion of the shares will vest immediately, with the remainder vesting over the original performance period, subject to continued employment. Accelerated vesting can also occur if the officer's employment terminates under specific circumstances related to a change of control.
What are the bonus amounts for the top executives for FY2019?
For Fiscal Year 2019 performance, the bonuses approved were $2,325,000 for Marc Benioff, $1,701,250 for Keith Block, $675,000 for Mark Hawkins, $750,000 for Parker Harris, and $675,000 for Alexandre Dayon. These amounts are net of mid-year bonus payouts.
04—Continue