Summary
Freeport-McMoRan Inc. (FCX) announced on January 31, 2013, that its Corporate Personnel Committee approved the fiscal year 2012 Annual Incentive Plan (AIP) awards for its executive officers. Notably, the Chairman, CEO, and CFO received their entire 2012 AIP awards in the form of performance-based restricted stock units (RSUs), foregoing any cash bonuses. This shift signifies a greater alignment of executive compensation with long-term shareholder value creation. The total value of these performance-based RSUs for the top three executives amounts to $23.1 million. These RSUs are subject to a three-year cliff vesting period, contingent upon achieving a specified return on investment. Furthermore, a portion of the award is at risk, with 20% subject to forfeiture if FCX's total shareholder return underperforms its peer group median over the same three-year period, reinforcing performance-driven incentives.
Key Highlights
- 1FCX approved fiscal year 2012 Annual Incentive Plan (AIP) awards for executive officers.
- 2Chairman, CEO, and CFO received 100% of their 2012 AIP awards in performance-based restricted stock units (RSUs).
- 3No cash bonuses were paid to the Chairman, CEO, and CFO for fiscal year 2012.
- 4Total value of performance-based RSUs for these three executives is $23.1 million ($9.9M for Chairman and CEO, $3.3M for CFO).
- 5RSUs are valued at approximately 94% of the closing stock price on the grant date ($35.01 per share).
- 6Awards have a three-year cliff vesting period, contingent on achieving a specified return on investment.
- 720% of the award is subject to forfeiture if FCX's total shareholder return is below the median of its peer group over the three-year period.