What is the primary purpose of the approved bonus plan for Flex Ltd. executives?

The primary purpose of the Annual Incentive Bonus Plan for Fiscal Year 2022 is to provide Flex Ltd.'s executive officers with the opportunity to earn annual cash bonuses. These bonuses are designed to incentivize and reward the achievement of pre-established company and segment-level performance goals, thereby aligning executive interests with the company's financial performance and strategic objectives.

What are the key performance metrics for the executive bonuses?

The key performance metrics for the executive bonuses include company-level operating profit, free cash flow, and revenue targets. For certain executives, segment-level operating profit and revenue targets will also be considered. The plan allows for different metrics, target levels, and weightings to be applied to different executives.

What is the potential payout range for the executive bonuses?

The actual payout opportunities for each bonus component can range from a threshold of 30% of the target amount for operating profit and revenue, and 50% of target for free cash flow, up to a maximum of 200% of the target amount. However, if the company or segment fails to achieve the threshold level for any performance measure, no payout is awarded for that specific measure.

Are the bonus calculations based on GAAP or non-GAAP measures?

For the purpose of determining the achievement of award opportunities under the incentive bonus plan, adjusted, non-GAAP measures are used.

FLEX 8-K: Leadership Changes

Summary

Flex Ltd. (FLEX) filed an 8-K on June 14, 2021, detailing its approved Annual Incentive Bonus Plan for Fiscal Year 2022. This plan outlines the structure for executive cash bonuses, linking payouts to the achievement of specific company and segment-level performance goals. Key performance metrics include operating profit, free cash flow, and revenue targets, with specific weightings and thresholds defined to incentivize executive performance and align their interests with the company's financial health and growth objectives. The Compensation and People Committee retains discretion to adjust payouts based on overall company performance.

Key Highlights

1Flex Ltd. approved its Annual Incentive Bonus Plan for Fiscal Year 2022, effective June 9, 2021.
2Executive bonuses are tied to pre-established performance goals: company-level operating profit, free cash flow, and revenue.
3Certain executives will also have bonuses measured against segment-level operating profit and revenue targets.
4Target award opportunities are set at 150% of base salary for the CEO, 110% for the CFO, and 100-110% for other named executive officers.
5Payouts can range from 30% of target (threshold) to 200% of target (maximum) for each performance metric.
6Failure to meet threshold performance for any metric results in no payout for that specific measure.
7Company operating profit serves as a funding metric, potentially adjusting overall bonus payouts.

FLEX LTD. 8-K Report, Executive Changes (Jun 15, 2021)

Summary

Key Highlights

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