Summary
Flextronics International Ltd. (FLEX) filed an 8-K on April 21, 2006, to report material definitive agreements related to executive compensation. The Compensation Committee of the Board of Directors approved bonus targets for fiscal year 2007 for key executives, Michael McNamara (CEO) and Thomas J. Smach (CFO). These targets are linked to the achievement of quarterly and annual Earnings Per Share (EPS) goals. For Mr. McNamara, the bonus is structured with a maximum potential of 300% of his base salary, with a cash payout capped at 200%, and any excess contributed to a deferred compensation account. Mr. Smach has a bonus target of up to 200% of his base salary. Additionally, Peter Tan, another named executive officer, was approved for a base salary of US$400,000 with a bonus potential of up to 150% of base salary, also tied to EPS performance. The company engaged an independent consultant to advise on these compensation decisions.
Key Highlights
- 1Flextronics' Compensation Committee approved FY2007 bonus targets for CEO Michael McNamara and CFO Thomas J. Smach on April 17, 2006.
- 2CEO Michael McNamara's bonus can reach up to 300% of base salary, with a maximum cash payout of 200%.
- 3Any bonus amounts for Mr. McNamara exceeding the cash limit will be contributed to his deferred compensation account.
- 4CFO Thomas J. Smach's bonus target is set at a maximum of 200% of his base salary.
- 5Bonus payouts for both executives are contingent upon achieving quarterly and annual EPS targets.
- 6Named executive officer Peter Tan's compensation includes a base salary of US$400,000 and a bonus potential of up to 150% of base salary, also linked to EPS.
- 7An independent executive compensation consultant was consulted in approving these bonus targets.