Summary
Flex Ltd. (FLEX) has announced the approval of one-time supplemental equity awards for two key executive officers, Michael P. Hartung (President, Chief Commercial Officer) and Hooi Tan (President, Global Operations and Components). These awards, totaling $4.6 million each in grant date fair value at target, are designed to enhance long-term retention and incentivize continued strong shareholder returns. The awards are structured as 50% performance-based restricted share units (PSUs) and 50% service-based restricted share units (RSUs), with vesting tied to rigorous performance goals and extended service periods. The performance component is tied to adjusted earnings per share (EPS) growth over a three-year period (Fiscal Years 2025-2027), with payouts ranging from 0% to 200% of target. Importantly, these performance goals are considered "stretch goals" and are more demanding than those in the company's standard FY25 long-term incentive plan. Vesting of earned PSUs is further extended beyond the performance period, requiring continued employment for two additional years. The RSUs will cliff vest on the third anniversary of the grant date. These supplemental awards have more restrictive forfeiture and acceleration conditions compared to standard executive awards, particularly regarding retirement or termination without cause/for good reason absent a change of control, underscoring the company's commitment to retaining these critical executives.
Key Highlights
- 1One-time supplemental equity awards granted to two named executive officers: Michael P. Hartung and Hooi Tan.
- 2Each executive received awards with a grant date fair value of $4.6 million at target.
- 3Awards are split equally between performance-based restricted share units (PSUs) and service-based restricted share units (RSUs).
- 4PSUs are tied to rigorous adjusted EPS growth performance goals (CAGR) over fiscal years 2025-2027, with potential payouts from 0% to 200% of target.
- 5Both PSUs and RSUs feature extended vesting schedules and more restrictive service requirements for retention compared to standard awards.
- 6Vesting of earned PSUs is contingent on continued employment for two years beyond the three-year performance period.
- 7More stringent conditions apply to acceleration of these awards upon retirement or termination without cause/for good reason, emphasizing long-term commitment.