Summary
Cintas Corporation's Form 8-K filing on June 13, 2005, reports the adoption of the 2006 Executive Incentive Plan by its Compensation Committee on June 8, 2005. This plan outlines the compensation structure for executive officers for fiscal year 2006, excluding two specific individuals. The plan emphasizes performance-based incentives tied to both company-wide earnings per share (EPS) growth and individual officer responsibilities. This structure aims to align executive compensation with key financial and strategic objectives, with potential bonuses ranging from 50% to 200% of a targeted amount based on goal achievement.
Key Highlights
- 1Cintas Corporation adopted the 2006 Executive Incentive Plan on June 8, 2005.
- 2The plan details bonus and equity award grants for fiscal year 2006 executive officers (excluding Robert J. Kohlhepp and Scott D. Farmer).
- 3Compensation includes base salary plus cash and long-term equity incentives.
- 4Incentives are linked to achieving targeted earnings per share (EPS) growth and individual executive goals.
- 5Bonuses can range from 50% to 200% of the targeted bonus amount, based on performance against goals.
- 6Bonuses will be paid in a combination of cash, Cintas restricted stock, and non-qualified stock options.
- 7Equity awards are subject to the 2005 Equity Compensation Plan, pending shareholder approval; failure to approve results in conversion of restricted stock to options.
Frequently Asked Questions
The 2006 Executive Incentive Plan is designed to incentivize executive officers by linking a portion of their compensation to the achievement of specific financial and strategic performance goals for fiscal year 2006. This includes company-wide earnings per share growth and individual performance objectives.
Executive officers will receive a base salary and are eligible for cash and long-term equity incentives. The incentive portion is performance-based, with bonuses determined by the company's EPS growth and the executive's individual goal achievement, potentially ranging from 50% to 200% of a target bonus.
If the 2005 Equity Compensation Plan is not approved by shareholders, any restricted stock awards granted to executives under the incentive plan will automatically convert into non-qualified stock options based on a pre-determined ratio.
No, the 2006 Executive Incentive Plan applies to executive officers of Cintas Corporation with the exception of Robert J. Kohlhepp and Scott D. Farmer.