Summary
This Form 8-K filing from Flextronics International Ltd. (FLEX) on July 2, 2014, details the approval of executive compensation plans for Fiscal Year 2015, effective June 26, 2014. The company's Board of Directors has implemented an Annual Incentive Bonus Plan and a Performance Long Term Cash Incentive Plan designed to incentivize key executive officers based on predefined financial and operational targets. The Annual Incentive Bonus Plan for FY2015 focuses on a mix of quarterly and annual performance metrics, including revenue growth, earnings per share, operating profit, and return on invested capital, with varying target percentages of base salary for different executive roles. The Performance Long Term Cash Incentive Plan, which replaces a portion of performance-based restricted stock units for executives (excluding the CEO), is solely based on achieving cumulative three-year free cash flow growth targets, with payouts occurring three years post-grant.
Key Highlights
- 1Flextronics approved its Annual Incentive Bonus Plan for Fiscal Year 2015 on June 26, 2014.
- 2The FY2015 Annual Incentive Bonus Plan ties executive bonuses to a combination of quarterly (50%) and annual (50%) performance goals.
- 3Key performance metrics for the annual bonus include revenue growth, EPS, operating profit, and return on invested capital at the company level, and business-unit specific targets.
- 4Target bonus opportunities for the CEO are 150% of base salary, 110% for the CFO, and 80-110% for other officers.
- 5The company also approved a Performance Long Term Cash Incentive Plan for FY2015 for executives (excluding the CEO).
- 6This long-term plan is based on cumulative three-year free cash flow growth, with payouts on the third anniversary of the grant.
- 7Both plans utilize adjusted, non-GAAP measures for performance evaluation.