8-KLeadership Changes

FREEPORT-MCMORAN INC 8-K Report, Executive Changes (Feb 11, 2019)

Filed February 11, 2019For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) filed an 8-K on February 11, 2019, reporting on its newly approved Annual Incentive Plan (AIP), effective for fiscal years beginning January 1, 2019. This plan replaces the previous incentive plan and is designed to provide a framework for annual cash incentive awards for the Company's senior executives. The AIP's structure is a response to the repeal of the performance-based compensation exception under Section 162(m) of the Internal Revenue Code. The Compensation Committee will administer the plan, setting performance goals and designating target awards within the first 90 days of each plan year. A key provision limits individual annual awards to a maximum of $5 million, providing a clear cap for executive compensation under this program.

Key Highlights

  • 1Freeport-McMoRan (FCX) approved a new Annual Incentive Plan (AIP) effective January 1, 2019.
  • 2The AIP replaces the prior incentive plan utilized for fiscal years 2014-2018.
  • 3The new plan is designed to comply with changes in tax law, specifically the repeal of the Section 162(m) performance-based compensation exception.
  • 4The Compensation Committee will administer the AIP, establishing performance goals and participant awards.
  • 5Awards will be determined within the first 90 days of each plan year.
  • 6A cap of $5 million is set for any individual participant's annual award.
  • 7All executive officers are participants in the AIP for the 2019 fiscal year.

Frequently Asked Questions

The main purpose of the AIP is to provide a framework for annual cash incentive award opportunities for Freeport-McMoRan's senior executives, while also ensuring compliance with current tax regulations regarding executive compensation.

The new AIP replaces the prior plan that covered fiscal years 2014 through 2018. It is specifically structured to address the repeal of the performance-based compensation exception under Section 162(m) of the Internal Revenue Code, while still aiming to incentivize performance through annual cash awards.

Under the new AIP, no participant is eligible to receive an annual award exceeding $5 million for a given fiscal year.

The Compensation Committee of the Board of Directors is responsible for administering the AIP. They will establish the performance goals and designate each participant's target award within the first 90 days of each plan year.