Summary
This Form 8-K filing from Cognizant Technology Solutions Corporation, dated February 25, 2011, details the compensation arrangements for its Named Executive Officers for the 2010 and 2011 fiscal years. The most significant information for investors revolves around the 2010 annual cash incentive bonuses, where executives received payouts significantly exceeding their targets, averaging 189.4% of their target bonus amounts. This indicates strong performance in 2010 that met or exceeded company objectives, leading to substantial bonus payouts for top leadership.
Key Highlights
- 1Cognizant's Compensation Committee awarded 2010 annual cash incentive bonuses to its Named Executive Officers on February 23, 2011.
- 2All Named Executive Officers received 189.4% of their target 2010 bonus amounts.
- 3The CEO, Francisco D'Souza, received a bonus of $816,968 against a target of $431,280.
- 4The CFO and COO, Gordon Coburn, received a bonus of $735,286 against a target of $388,160.
- 5Base salaries for the Named Executive Officers were increased for the 2011 calendar year.
- 6A 2011 Bonus Program was approved, with target bonuses set at 85% of annual base salary for Named Executive Officers.
- 7The 2011 bonus program performance metrics are tied to revenue, operating income, and days sales outstanding.
Frequently Asked Questions
The filing indicates that the Compensation Committee determined the bonus payouts after a 'thorough evaluation,' and the widespread achievement of 189.4% of target bonuses suggests that Cognizant's financial performance in 2010 significantly exceeded the predetermined performance objectives set for the executive team.
The 2011 bonus program's performance metrics are based on three key financial indicators: company revenue, operating income (excluding stock-based compensation expenses), and days sales outstanding (DSO).
Yes, the maximum bonus payable per participant for the 2011 program is capped at two times their target bonus amount. Additionally, there's an overall limit of $3 million per person per calendar year.
For both his 2010 bonus and his 2011 base salary and potential bonus, Mr. Chandrasekaran's compensation will be converted to and paid in Indian Rupees using a fixed USD/INR exchange rate of 48.58, which was the rate in effect on December 31, 2008. This is done to eliminate the impact of currency fluctuations on his compensation.