01—Abstract
Summary
Summary of the 10-K/A filed March 19, 2010. Cited figures are marked; the original filing is the authoritative source.
This 10-K/A filing from Curtiss-Wright Corporation (CW) provides an amendment to its 2008 annual report, primarily focusing on the executive compensation details.
The document details the compensation philosophy, objectives, and specific elements for its Named Executive Officers (NEOs) for the fiscal year 2008. The company's compensation strategy is designed to align executive pay with company performance, shareholder interests, and market competitiveness, utilizing a mix of base salary, annual incentives, long-term equity-based awards, and retirement benefits. Key aspects of the executive compensation program include a strong emphasis on performance-based pay, with a significant portion of Total Direct Compensation (TDC) at risk and tied to achieving aggressive financial and operational goals.
The company utilizes a peer group analysis to benchmark compensation levels and ensure competitiveness in attracting and retaining executive talent. Furthermore, the filing outlines detailed severance and change-in-control agreements, designed to provide security to executives and align their interests with shareholders during significant corporate events. For investors, this filing offers transparency into how the company incentivizes its top leadership and links their pay to the company's financial success and strategic objectives.
02—Key points
Key Highlights
- The company's executive compensation program aims to align pay with company strategy, financial objectives, and performance, emphasizing a significant portion of compensation being at risk and tied to measurable success.
- A peer group of 17 manufacturing companies is used to benchmark compensation, with base salaries targeted at the 50th-60th percentile and variable pay components targeted at the 75th percentile, conditional on performance.
- The executive compensation structure includes base salary, annual cash incentives (Modified Incentive Compensation Plan - MICP), and long-term incentives (LTIP) comprising stock options, performance-based restricted stock, time-based restricted stock, and cash-based performance units.
- For 2008, the MICP awarded bonuses based on 60% company adjusted operating income and 40% individual performance, with actual payouts reflecting strong operational and financial performance.
- The LTIP for 2008 was allocated with 20% in stock options, 30% in performance-based restricted stock, 20% in time-based restricted stock, and 30% in cash-based performance units, all aimed at long-term value creation.
- Significant severance and change-in-control agreements are in place for Named Executive Officers, providing payouts of up to three times salary and bonus upon termination within a specified period following a change in control.
- The company has a stock ownership guideline requiring the CEO to hold stock valued at five times annual salary and other NEOs at three times annual salary, reinforcing alignment with shareholder interests.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Curtiss Wright Corp kept $0.06.
- Revenue$1.83B100.0%
- Cost of revenue−$1.21B66.3%
- Gross profit$616.1M33.7%
- Operating costs−$419.5M22.9%
- Operating income$196.6M10.7%
- Interest, other & tax−$87.2M4.8%
- Net income$109.4M6.0%
Where FY2008 revenue went
$1.83B- Cost of revenue: $1.21B, 66% of revenue
- Other operating costs: $369.9M, 20% of revenue
- Net income: $109.4M, 6.0% of revenue
- R&D: $49.6M, 2.7% of revenue
- Interest, other & tax: $87.2M, 4.8% of revenue
Kept 6.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2008filed March 19, 2010Financial Statements
05—Questions
Frequently Asked Questions
What is the primary purpose of this filing (Amendment No. 1 on Form 10-K/A)?
This filing is an amendment to Curtiss-Wright Corporation's 2008 Form 10-K. Its primary purpose is to amend and restate the disclosure in Part III, Item 11 (Executive Compensation) and re-file an exhibit. It does not update or change the financial statements or other disclosures from the original report, nor does it reflect events occurring after the original filing date.
How does Curtiss-Wright align executive compensation with company performance and shareholder interests?
Curtiss-Wright employs a compensation philosophy that links a significant portion of executive pay to company performance. This is achieved through performance-based incentives, including annual cash bonuses tied to operating income and individual goals, and long-term equity awards like performance-based restricted stock and stock options. The company also mandates stock ownership guidelines for executives to ensure alignment with shareholder value.
What are the key components of the long-term incentive plan (LTIP) for executives?
The LTIP is designed for long-term value creation and includes four components: 1) Non-qualified stock options, providing an incentive to increase share price; 2) Performance-based restricted stock, tied to metrics like net income versus budget and peer group performance; 3) Time-based restricted stock, serving as a retention incentive; and 4) Cash-based performance units, linked to long-term financial performance such as sales growth and return on capital, intended to mitigate stock market volatility.
What types of severance and change-in-control protections are provided to executives?
Executives are covered by at-will severance agreements providing one year's salary and benefits upon involuntary termination (not for cause). Additionally, comprehensive change-in-control severance protection agreements are in place, offering up to three times the sum of base salary and target incentive pay, along with extended benefit continuation, if their employment is terminated without cause or with good reason within two years following a change in control.
06—Continue