8-KLeadership ChangesExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Executive Changes (Jul 24, 2007)

Filed July 24, 2007For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation filed an 8-K on July 24, 2007, detailing changes to executive compensation and a severance agreement. The Compensation Committee approved adjustments to base salaries for several key officers, effective January 1, 2007. Notably, Francisco D’Souza (CEO) and Gordon Coburn (CFO/COO) received significant increases in their base salaries, reflecting their roles and responsibilities. Additionally, the filing announces changes to annual cash incentive bonus targets for 2007. While most executive targets remained stable, Rajeev Mehta's bonus target percentage saw a slight increase. A significant development is the severance and noncompetition agreement entered into with Rajeev Mehta, which outlines terms for compensation and benefits in the event of termination, including provisions for accelerated stock option vesting upon a change of control.

Key Highlights

  • 1Cognizant's Compensation Committee approved increased base salaries for key Named Executive Officers, including the CEO and CFO/COO, effective January 1, 2007.
  • 2Francisco D’Souza, President and CEO, received a base salary increase from $360,000 to $432,000.
  • 3Gordon Coburn, CFO and COO, saw his base salary rise from $324,000 to $388,800.
  • 4The annual cash incentive bonus target for Rajeev Mehta was increased from 67% to 70% of his salary.
  • 5Lakshmi Narayanan, Vice Chairman, had his base salary remain unchanged at $240,000 and his cash incentive bonus was eliminated.
  • 6A Severance and Noncompetition Agreement was executed with Rajeev Mehta, providing for one year's base salary and full annual bonus upon termination (excluding for cause).
  • 7The agreement with Rajeev Mehta also includes accelerated vesting of all stock options in the event of a change of control.

Frequently Asked Questions

Cognizant announced increases in base salaries for several Named Executive Officers, including the CEO and CFO/COO, effective January 1, 2007. Additionally, the annual cash incentive bonus target for Rajeev Mehta was slightly increased, while Lakshmi Narayanan's bonus was eliminated.

This agreement provides Rajeev Mehta with financial protection, ensuring he receives one year's base salary and a full annual bonus upon termination of employment (unless for cause). It also includes a one-year noncompetition clause and a provision for accelerated vesting of all his stock options in the event of a change of control for the company.

No, the changes were specific. While Rajeev Mehta's bonus target percentage increased from 67% to 70%, the targets for Francisco D'Souza, Gordon Coburn, and Ramakrishnan Chandrasekaran remained at 70%. Lakshmi Narayanan's cash incentive bonus was eliminated entirely.

The filing states that the Compensation Committee considered and approved the base salary adjustments. While specific justifications for each individual are not detailed, such increases are typically based on factors like increased responsibilities, market competitiveness, and individual performance as assessed by the Compensation Committee.