8-KLeadership Changes

FLEX LTD. 8-K Report, Executive Changes (Jun 5, 2008)

Filed June 5, 2008For Securities:FLEX

Summary

This 8-K filing by Flextronics International Ltd. (FLEX) on June 5, 2008, primarily discloses changes in executive compensation and the establishment of a new incentive plan. The Board of Directors approved Mr. Michael McNamara's annual base salary of $1,250,000 for fiscal year 2009, along with a special performance bonus of $1,200,000 for fiscal year 2008. These adjustments reflect the company's focus on retaining and incentivizing key leadership. Furthermore, the company introduced a three-year cash incentive bonus plan designed to reward executive officers based on achieving specific compounded annual EPS growth rates by fiscal year 2011. The plan outlines potential maximum bonuses for the CEO, CFO, and other senior executives, contingent on continued employment and meeting performance thresholds. The use of adjusted, non-GAAP diluted EPS for performance measurement is a key detail for investors evaluating these incentives.

Key Highlights

  • 1Flextronics CEO Michael McNamara's annual base salary for FY2009 set at $1,250,000.
  • 2CEO Michael McNamara awarded a special performance bonus of $1,200,000 for FY2008.
  • 3Company Board approved a new three-year cash incentive bonus plan for executive officers.
  • 4Incentive plan tied to achieving compounded annual EPS growth rates over three years (ending FY2011).
  • 5Maximum potential bonuses range from $4,000,000 for the CEO to $500,000/$625,000 for other executives.
  • 6Bonuses are contingent on continued employment through the payout period and meeting performance thresholds.
  • 7Performance targets for the bonus plan are based on adjusted, non-GAAP diluted earnings per share.

Frequently Asked Questions

The filing details an increase in CEO Michael McNamara's annual base salary to $1,250,000 for FY2009 and a special performance bonus of $1,200,000 for FY2008. Additionally, a new three-year cash incentive bonus plan has been established for executive officers.

The plan rewards executive officers based on achieving specific compounded annual EPS growth rates over a three-year period, ending in fiscal year 2011. Bonuses are only payable if executives remain employed until the payout date and if the company meets minimum performance thresholds. Performance is measured using adjusted, non-GAAP diluted EPS.

The maximum potential bonuses are set at $4,000,000 for the CEO, $1,250,000 for the CFO, and between $625,000 and $500,000 for other participating executive officers, depending on their position. These amounts are contingent on achieving target performance levels.

Yes, there are two primary conditions: executives must remain employed by the company through the payout period (after fiscal year 2011), and the company must achieve a threshold level of performance based on compounded annual EPS growth. Failure to meet the threshold results in no bonus payout.