8-KLeadership Changes

EIDP, Inc. 8-K Report, Executive Changes (Feb 5, 2008)

Filed February 5, 2008For Securities:CTA-PBCTA-PA

Summary

EIDP, Inc. (CTA-PB) filed an 8-K on February 4, 2008, detailing executive compensation adjustments approved on January 30, 2008. The key focus is on the increased salary and significant incentive payouts for CEO Mr. Holliday. His annual salary was increased by 3.75% to $1.370 million, and he received a substantial short-term incentive payment of $2.207 million for 2007, reflecting corporate performance. The filing also outlines the compensation structure for 2008, including a target short-term incentive award of $1.932 million for Mr. Holliday and the performance-based metrics for determining these awards. Furthermore, the report details long-term incentive (LTI) awards, with Mr. Holliday receiving a $6.5 million LTI award to be delivered in a mix of stock options, restricted stock units (RSUs), and performance-based restricted stock units (PSUs). The structure of these LTI awards, including vesting schedules, performance metrics for PSUs (revenue growth and total shareholder return relative to a peer group), and dividend treatment, is explained. This filing provides transparency into the company's executive compensation philosophy and the incentives tied to corporate and individual performance.

Key Highlights

  • 1CEO Mr. Holliday's annual salary increased by 3.75% from $1.320 million to $1.370 million, effective January 30, 2008.
  • 2Mr. Holliday received a 2007 short-term incentive payment of $2.207 million, consistent with company performance and incentive plan guidelines.
  • 3A 2008 target short-term incentive award of $1.932 million was approved for Mr. Holliday.
  • 4The 2008 short-term incentive award formula incorporates Corporate Performance (20%), Business Unit Performance (60%), and Individual Performance (20%).
  • 5Mr. Holliday was granted a Long-Term Incentive (LTI) award valued at $6.5 million, effective February 6, 2008.
  • 6The LTI award will be delivered as an equal mix of stock options, time-vested RSUs, and performance-based RSUs (PSUs).
  • 7PSU payouts are contingent on achieving pre-established corporate objectives for revenue growth and total shareholder return (TSR) relative to a defined peer group over a three-year performance period, with payouts ranging from 0% to 200% of the target award.

Frequently Asked Questions

The CEO, Mr. Holliday, received a 3.75% salary increase, bringing his annual salary to $1.370 million. He was also awarded a substantial short-term incentive payment of $2.207 million for 2007 and a $6.5 million long-term incentive award.

For 2008, short-term incentive awards are calculated using a formula that weighs Corporate Performance (20%), Business Unit Performance (60%), and Individual Performance (20%). Specific metrics are defined for each component, such as EPS growth for corporate performance and revenue/profitability for business unit performance.

The LTI award for Mr. Holliday, valued at $6.5 million, will be delivered as an equal mix of stock options, RSUs, and PSUs. The PSUs have a three-year performance period and their payout is based on achieving specific corporate objectives for revenue growth and total shareholder return (TSR) compared to a peer group, with potential payouts ranging from 0% to 200% of the target.

Stock options vest in one-third increments over three years and have a six-year term. Time-vested RSUs also vest in one-third increments over a three-year period. The filing also outlines specific provisions for vesting acceleration or proration upon certain termination events like retirement, disability, or death.