Summary
Flex Ltd. (FLEX) filed an 8-K on June 30, 2017, to announce the approval of its executive compensation plans for fiscal year 2018. The Board of Directors adopted 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, pre-established performance metrics. The Annual Incentive Bonus Plan for Fiscal 2018 focuses on both quarterly and annual objectives, with 50% of the bonus opportunity linked to quarterly goals and the other 50% to annual goals. 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. The plan uses adjusted, non-GAAP measures for performance evaluation and allows for payout opportunities ranging from 50% to 200% of target for quarterly components and up to 300% of target for annual bonuses.
Key Highlights
- 1Flex Ltd. approved its Annual Incentive Bonus Plan for Fiscal Year 2018 on June 29, 2017.
- 2The Annual Incentive Bonus Plan links 50% of bonus opportunities to quarterly objectives and 50% to annual objectives.
- 3Key performance indicators for the annual bonus include revenue growth, EPS, operating profit, and ROIC at the company level, plus business unit-specific targets for some executives.
- 4Target bonus opportunities are set as percentages of base salary: 200% for CEO, 110% for CFO, and 80-110% for other officers.
- 5Actual bonus payouts can range from 50% to 200% of target for quarterly components and up to 300% of target for annual bonuses.
- 6The company also approved a Performance Long Term Cash Incentive Plan for fiscal year 2018, excluding the CEO.
- 7This long-term plan is based on cumulative three-year objectives, specifically increases to free cash flow, with payouts occurring on the third anniversary of the grant date if targets are met.