Summary
This Form 8-K filing by Flextronics International Ltd. (now Flex Ltd.) on June 16, 2015, primarily discloses the approval of executive compensation plans for fiscal year 2016. The company's Board of Directors established an Annual Incentive Bonus Plan and a Performance Long Term Cash Incentive Plan. These plans are designed to incentivize executive officers through cash bonuses tied to specific financial performance metrics. The Annual Incentive Bonus Plan for FY2016 will offer bonuses based on a combination of quarterly (50%) and annual (50%) objectives. Performance metrics include revenue growth, earnings per share, operating profit, and return on invested capital at the company level, with additional business unit-specific targets for certain executives. Payouts range from 50% to 200% of target for quarterly bonuses and up to 300% for annual bonuses, with awards based on adjusted, non-GAAP measures. The Performance Long Term Cash Incentive Plan for FY2016, excluding the CEO, focuses on a cumulative three-year objective related to free cash flow increases. Payouts can range from 50% to 200% of target and will be paid out on the third anniversary of the grant date if performance targets are met, also using an adjusted, non-GAAP measure for free cash flow.
Key Highlights
- 1Flextronics International Ltd. approved new executive compensation plans for Fiscal Year 2016.
- 2The Annual Incentive Bonus Plan for FY2016 includes both quarterly (50%) and annual (50%) performance components.
- 3Key performance indicators for the annual bonus include revenue growth, EPS, operating profit, and ROIC at the company level, plus business unit targets for some executives.
- 4Bonus payout opportunities under the annual plan range from 50% to 200% of target for quarterly payouts and up to 300% of target for annual payouts.
- 5A Performance Long Term Cash Incentive Plan was also approved for executive officers (excluding the CEO) for FY2016.
- 6The long-term incentive plan is based on cumulative three-year free cash flow growth, with payouts ranging from 50% to 200% of target.
- 7Both incentive plans utilize adjusted, non-GAAP financial measures for performance evaluation.