Who is the new CEO of Flex Ltd. and what is her background?

Revathi Advaithi has been appointed as the new CEO of Flex Ltd., effective February 11, 2019. She has a robust background in the industrial sector, most recently serving as President and Chief Operating Officer of the Electrical Sector at Eaton Corporation plc. Prior to that, she held several senior roles at Honeywell.

What is the compensation structure for the new CEO?

Ms. Advaithi's compensation includes an annual base salary of $1,150,000. She is eligible for annual bonuses with a target of 150% and a maximum of 375% of her base salary, starting in fiscal year 2020. Her package also includes a $2 million sign-on restricted stock unit (RSU) grant vesting over three years, a $7.5 million target value equity grant for fiscal year 2020 (split between performance and restricted stock units), and a $3 million cash sign-on bonus which may be subject to repayment.

What happens to Ms. Advaithi's compensation if her employment is terminated?

In the event of termination by the company without cause, or by Ms. Advaithi for good reason, she is entitled to accelerated vesting and payment of her sign-on compensation. Additionally, she would receive two years of continued base salary payments, two years of her target annual bonus amount, two years of continued vesting for outstanding equity awards and deferred compensation, and two years of continued benefits coverage.

Is there any disclosed business relationship between Flex and the CEO's former employer, Eaton?

Yes, the filing discloses that Flex Ltd. had supplier arrangements with Eaton Corporation plc (Ms. Advaithi's former employer). Flex made payments of $12.8 million to Eaton in fiscal year 2018 and approximately $10.0 million in fiscal year 2019. These arrangements were stated to be in the ordinary course of business and on arm's-length terms, and were established prior to discussions regarding Ms. Advaithi's appointment.

FLEX 8-K: Leadership Changes & Regulation FD

Summary

Flex Ltd. (FLEX) announced a significant leadership change in an 8-K filing on February 11, 2019, appointing Revathi Advaithi as its new Chief Executive Officer, effective immediately. Ms. Advaithi also joins the Board of Directors, replacing Scott Offer who had been serving as acting CEO. Ms. Advaithi brings extensive experience from her previous roles at Eaton Corporation plc, where she served as President and Chief Operating Officer of the Electrical Sector, and prior experience at Honeywell. Her compensation package includes a base salary of $1,150,000, eligibility for significant annual bonuses (target 150%, max 375% of base salary starting FY2020), a deferred compensation plan with a potential company contribution of up to 30% of base salary (starting FY2020), and a one-time $2 million deferred compensation payment vesting after three years. Additionally, she receives substantial equity awards, including a $7.5 million target value grant for FY2020 (split between PSUs and RSUs) and a $2 million RSU sign-on grant. A $3 million cash sign-on bonus is also provided, subject to repayment under specific termination conditions. The filing also discloses past and current supplier relationships with Eaton Corporation.

Key Highlights

1Revathi Advaithi appointed as new Chief Executive Officer (CEO) and Board Member, effective February 11, 2019.
2Scott Offer steps down as acting CEO.
3Ms. Advaithi has a strong background, including President and COO of Eaton's Electrical Sector and roles at Honeywell.
4Competitive CEO compensation package includes a $1,150,000 base salary, significant bonus potential (up to 375% of base salary), and substantial equity awards.
5Sign-on bonus of $3 million is partially contingent on continued employment.
6Details on severance provisions for Ms. Advaithi in case of termination without cause or for good reason, including salary, bonus, and equity acceleration.
7Disclosure of ongoing supplier relationship between Flex and Eaton Corporation, Ms. Advaithi's former employer.

FLEX LTD. 8-K Report, Executive Changes (Feb 11, 2019)

Summary

Key Highlights

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