Summary
Freeport-McMoRan Inc. (FCX) filed an 8-K on June 17, 2014, primarily detailing the outcomes of its annual stockholder meeting held on June 16, 2014. The most significant event for investors was the approval of the new Annual Incentive Plan (AIP) for fiscal years 2014-2018. This plan, designed to incentivize senior executives through cash awards tied to pre-established performance goals, was approved by stockholders to help preserve the company's tax deductions under Section 162(m) of the Internal Revenue Code. The AIP sets a cap of $5 million per participant per year and gives the Compensation Committee discretion to adjust or eliminate awards even if goals are met. Beyond the incentive plan, the meeting saw the election of all sixteen director nominees and the ratification of Ernst & Young LLP as the independent registered public accounting firm. The compensation of named executive officers was approved on an advisory basis, though a significant portion of shares voted against it. A proposed stockholder resolution concerning environmental expertise on the board was not approved.
Key Highlights
- 1Stockholders approved the new Freeport-McMoRan Copper & Gold Inc. Annual Incentive Plan (AIP) for 2014-2018.
- 2The AIP is intended to provide annual cash incentives to senior executives based on performance goals, with a $5 million annual award cap per participant.
- 3Stockholder approval of the AIP aims to maintain tax deductibility of executive compensation under Section 162(m) of the IRC.
- 4All sixteen director nominees were elected to the Board of Directors.
- 5The appointment of Ernst & Young LLP as the independent auditor for fiscal year 2014 was ratified.
- 6Executive compensation was approved on an advisory basis, but a substantial number of votes were cast against it.
- 7A stockholder proposal requesting a director with environmental expertise failed to gain approval.