8-K/ALeadership ChangesExhibits & Filings

QUEST DIAGNOSTICS INC 8-K/A Report, Executive Changes (Mar 1, 2022)

Filed March 1, 2022For Securities:DGX

Summary

This 8-K filing from Quest Diagnostics Inc. (DGX) details the 2022 compensation package for Mr. Davis, a key executive. The Compensation Committee approved a base salary of $800,000, a target annual bonus of 100% of base salary, and a target long-term incentive (LTI) award with a grant date fair value of approximately $4.88 million. The LTI award is structured as a mix of performance shares, stock options, and restricted stock units, with specific performance metrics tied to base business revenue growth, COVID-19 testing revenue, return on invested capital, and relative total shareholder return. Investors should note that the terms of Mr. Davis's compensation are generally aligned with those of other senior executives. The performance metrics for the LTI award are designed to incentivize growth and profitability over a three-year period, reflecting the company's strategic objectives. While no significant executive departures or new appointments are reported, this filing provides transparency into executive remuneration and the performance drivers the company is focused on.

Key Highlights

  • 1Mr. Davis's 2022 compensation includes a base salary of $800,000.
  • 2Target annual bonus for Mr. Davis is set at 100% of his base salary ($800,000).
  • 3Mr. Davis's target Long-Term Incentive (LTI) award has a grant date fair value of approximately $4.88 million.
  • 4The LTI award is composed of 50% performance shares, 25% stock options, and 25% restricted stock units.
  • 5Performance metrics for the LTI award include base business revenue growth (35%), COVID-19 testing revenue (15%), return on invested capital (30%), and relative total shareholder return (20%).
  • 6The performance period for the LTI award's performance shares is three years.
  • 7Mr. Davis's compensation structure and performance metrics are substantially aligned with other senior executives.

Frequently Asked Questions

Mr. Davis has a base salary of $800,000 and a target annual bonus of 100% of his base salary, which amounts to another $800,000. Thus, the target cash compensation is $1,600,000, excluding any payouts from the LTI award.

The key performance indicators for Mr. Davis's performance shares, which constitute 50% of his LTI award, are compound annual growth of base business revenues (35% weight), cumulative COVID-19 testing revenues (15% weight), average return on invested capital (30% weight), and relative total shareholder return (20% weight).

No, the filing states that the terms of Mr. Davis's Annual Bonus and LTI Award, including the performance metrics, are substantially the same as those granted to the company's other executive officers. This suggests a standardized approach to executive compensation.

The LTI award includes performance shares with a 3-year performance period, stock options, and restricted stock units. The specific vesting schedules for the stock options and RSUs, and the precise payout mechanism for performance shares based on achieving the metrics, are not detailed in this 8-K filing but are governed by the company's incentive plans.