8-KLeadership ChangesExhibits & Filings

DOVER Corp 8-K Report, Executive Changes (May 13, 2009)

Filed May 13, 2009For Securities:DOV

Summary

This 8-K filing from Dover Corporation (DOV) details the shareholder approval of significant amendments to its 2005 Cash and Equity Incentive Plan and its Executive Officers Annual Incentive Plan during the 2009 annual meeting. The key changes focus on expanding the performance criteria used to determine incentive payouts for executives. These amendments are designed to better align executive compensation with company performance by introducing new metrics and broadening the applicability of existing ones across various award types. The amendments introduce performance shares as a new equity award type under the 2005 plan, which are contingent on achieving pre-established performance targets over a minimum three-year period. Furthermore, a wider array of financial and operational metrics, including EBITDA, cash flow, and total shareholder return, have been added as potential performance criteria for both equity and cash incentive awards. These changes aim to enhance the alignment of executive interests with those of shareholders by tying compensation to a more comprehensive set of performance indicators and objectives.

Key Highlights

  • 1Shareholders approved amendments to the 2005 Cash and Equity Incentive Plan and the Executive Officers Annual Incentive Plan.
  • 2The 2005 plan now includes 'performance shares' as a new equity award type, payable in company stock upon meeting performance targets over at least three years.
  • 3Expanded performance criteria for both plans now include EBITDA, cash flow, total shareholder return, sales/revenue, and expense targets, among others.
  • 4These expanded criteria apply to a broader range of awards, including cash performance awards (CP awards) and performance share awards.
  • 5For CP awards, internal total shareholder return (iTSR) will be the basis, replacing previous criteria.
  • 6Aggregate maximum cash payouts for CP awards are now a fixed percentage of incremental value created, with an individual cap of $5,000,000.
  • 7The amendments aim to further align executive compensation with company performance and shareholder value.

Frequently Asked Questions

The primary outcome was the shareholder approval of amendments to two key executive incentive plans: the 2005 Cash and Equity Incentive Plan and the Executive Officers Annual Incentive Plan. These amendments aimed to enhance the performance-based nature of executive compensation.

Performance shares are a new type of equity award under the amended 2005 plan. These awards are granted based on the potential to achieve pre-established performance targets. If these targets are met over a performance period of at least three years, the award is paid out in shares of Dover Corporation's common stock. The number of shares earned can be fixed or based on the degree of performance target achievement.

The amendments significantly broadened the performance criteria. Previously, criteria like earnings per share and operating earnings were used. Now, in addition to these, the plans incorporate metrics such as EBITDA, cash flow, total shareholder return, sales/revenue, expense targets, and operational efficiency goals. These apply to both cash and equity-based awards.

For CP awards, the performance metric will now be based on internal total shareholder return (iTSR). Additionally, the total potential payout for CP awards in any given period is now determined as a fixed percentage of the incremental value created by a business unit or the company as a whole. There is also a maximum individual payout limit of $5,000,000.