8-KLeadership Changes

EIDP, Inc. 8-K Report, Executive Changes (Feb 8, 2007)

Filed February 8, 2007For Securities:CTA-PBCTA-PA

Summary

This 8-K filing from E. I. du Pont de Nemours and Company (DuPont) details compensation adjustments and awards for its named executive officers, effective early February 2007. The Board of Directors approved a modest 2% salary increase for Mr. Holliday, along with a significant variable compensation payout for fiscal year 2006, reflecting strong corporate performance. Additionally, substantial equity awards, including stock options and performance-based restricted stock units, were granted to key executives, aligning their incentives with the company's future success and shareholder value. Investors should note the specific details of these compensation packages, as they provide insight into the company's assessment of its 2006 performance and its outlook for the upcoming performance period (2007-2009). The structure of the performance-based awards, particularly the shift to an absolute measure of Return on Invested Capital for the 2007-2009 period, is a key detail for understanding how executive compensation will be tied to future financial results.

Key Highlights

  • 1Mr. Holliday's annual salary increased by 2% from $1.293 million to $1.320 million.
  • 2A 2006 variable compensation payment of $2.103 million was approved for Mr. Holliday, reflecting corporate results.
  • 3Mr. Holliday received grants of 228,000 stock options, 42,500 performance-based RSUs, and 42,500 time-vested RSUs.
  • 4Named executive officers received variable compensation awards for 2006 based on corporate performance.
  • 5Stock options and restricted stock units (time-vested and performance-based) were granted to several named executive officers, including T. M. Connelly, Jr., R. R. Goodmanson, J. L. Keefer, and S. J. Mobley.
  • 6The performance period for performance-based RSUs is 2007-2009.
  • 7For performance-based RSUs covering 2007-2009, Return on Invested Capital will be measured on an absolute basis, not a relative one.

Frequently Asked Questions

The filing reports a 2% salary increase for Mr. Holliday and significant variable compensation payouts for 2006 for both Mr. Holliday and other named executive officers, reflecting corporate performance. It also details grants of stock options and restricted stock units (performance-based and time-vested) to key executives.

The performance-based RSUs granted have a performance period of 2007-2009. A notable change for this grant is that the Return on Invested Capital metric will be measured on an absolute basis, rather than a relative basis as previously structured.

The variable compensation payments for 2006, which are substantial for the named executive officers, indicate that the company achieved its corporate performance objectives for that year, consistent with the guidelines applicable to all eligible employees.

Mr. Holliday was granted 228,000 stock options, 42,500 performance-based restricted stock units, and 42,500 time-vested restricted stock units. The actual value will depend on DuPont's stock price performance and the achievement of performance targets.