8-KLeadership Changes

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Executive Changes (Nov 29, 2011)

Filed November 29, 2011For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) filed an 8-K on November 29, 2011, reporting on compensatory arrangements for its named executive officers. The Compensation Committee of the Board of Directors granted awards of Restricted Stock Units (RSUs) and Performance Units on November 28, 2011. These awards are intended to incentivize and retain key leadership talent by aligning their compensation with the company's performance and long-term value creation. The RSU awards vest over a three-year period, ensuring continued service for full vesting. The Performance Units, however, are directly tied to the achievement of specific 2012 revenue milestones, with a tiered payout structure ranging from 0% to 200% of the awarded units. This structure clearly links executive compensation to the company's top-line growth objectives for the upcoming fiscal year.

Key Highlights

  • 1Cognizant granted Restricted Stock Units (RSUs) to named executive officers on November 28, 2011, vesting over three years.
  • 2Performance Units were also granted, with vesting contingent on achieving specific 2012 revenue targets.
  • 3The CEO, Francisco D’Souza, received the largest grants of both RSUs (63,600) and Performance Units (95,400).
  • 4Performance Unit vesting is tiered based on 2012 revenue, with full vesting occurring at $7.525 billion and potential for 200% vesting at $8.0875 billion.
  • 50% of Performance Units vest if 2012 revenue is below $7.243 billion.
  • 6Performance Units have a dual vesting trigger: achievement of revenue milestones and continued service on specific issue dates (18 and 36 months post-grant).
  • 7All awards were granted under the company's 2009 Incentive Compensation Plan.

Frequently Asked Questions

These filings are made to publicly disclose material information about executive compensation, ensuring transparency for investors. Specifically, this 8-K details the grant of equity awards (Restricted Stock Units and Performance Units) to Cognizant's key executives, linking their incentives to company performance and retention.

The Performance Units directly tie a significant portion of executive compensation to the company's ability to achieve specific revenue targets in 2012. This incentivizes executives to focus on driving revenue growth, as their payout is directly dependent on meeting or exceeding these predefined financial goals.

The Restricted Stock Units (RSUs) vest in quarterly installments over three years, with full vesting by November 28, 2014, provided the executive remains employed. The Performance Units have a more complex vesting schedule that depends on achieving 2012 revenue milestones, with a portion vesting 18 months after the grant date and the remainder vesting 36 months after the grant date, both contingent on continued employment.

No, the Restricted Stock Units (RSUs) vest purely based on continued service over a three-year period. The Performance Units, on the other hand, have explicit revenue targets that must be met for any portion of those units to vest.