What are the primary performance metrics for the FY2026 executive bonus plan?

The primary performance metrics for the FY2026 executive bonus plan are company-level operating profit, free cash flow, and revenue targets. Additionally, for the President and Chief Commercial Officer, segment-level operating profit and revenue targets are included.

How does the Company's overall operating profit impact bonus payouts?

Company operating profit serves as a critical funding metric. Actual bonus payouts for executives can be increased or decreased by up to 20 percentage points based on the Company's operating profit achievement relative to the enterprise-wide bonus payout level. If the Company fails to achieve the threshold level for operating profit, no payout is awarded for any performance measure.

Are the performance metrics based on GAAP or non-GAAP figures?

For the purpose of determining achievement of award opportunities under the Annual Incentive Bonus Plan, the plan uses adjusted, non-GAAP measures. The Compensation and People Committee also has the discretion to exclude extraordinary items or events that have an unanticipated impact.

FLEX 8-K: Leadership Changes

Q: What is the maximum bonus an executive can receive?

The maximum bonus payout opportunity for each performance metric is 200% of the target. However, actual payouts are subject to a modifier based on Company operating profit ( +/- 20 percentage points) and individual performance ( +/- 10 percentage points), as well as the achievement of threshold performance levels. If the threshold for all measures is not met, the bonus payout is capped at the target level.

Summary

Flex Ltd. (FLEX) announced on June 13, 2025, the approval of its Annual Incentive Bonus Plan for fiscal year 2026. This plan outlines the structure for executive cash bonuses, directly tying compensation to the achievement of pre-established performance goals. Key financial metrics for the company-wide plan include operating profit, free cash flow, and revenue targets. Specific executives, like the President and Chief Commercial Officer, will also have segment-level operating profit and revenue targets influencing their bonuses. The plan details target bonus percentages based on base salary for various executive roles, with the CEO eligible for up to 165% and the CFO for up to 115%. Payouts range from a threshold of 30% (or 50% for free cash flow) to a maximum of 200% of the target, contingent on meeting performance measures. Importantly, the plan incorporates a modifier tied to overall Company operating profit, which can adjust payouts by +/- 20 percentage points, and individual performance can further modify payouts by +/- 10 percentage points. The Compensation and People Committee retains discretion to exclude extraordinary items and will use adjusted, non-GAAP measures for performance calculation.

Key Highlights

1Flex Ltd. has approved its Annual Incentive Bonus Plan for fiscal year 2026, effective June 12, 2025.
2Executive bonuses are performance-based, tied to company-level operating profit, free cash flow, and revenue targets.
3Certain executives, including the President and Chief Commercial Officer, will also be evaluated on segment-level operating profit and revenue.
4Target bonus opportunities range from 100% to 165% of base salary for named executive officers, with the CEO at 165% and CFO at 115%.
5Payouts for individual metrics can range from 30% (or 50% for free cash flow) to 200% of the target amount.
6Company operating profit acts as a funding metric, potentially adjusting overall bonus payouts by +/- 20 percentage points.
7Individual performance can modify payouts by +/- 10 percentage points, and the plan uses adjusted, non-GAAP measures for performance calculation.

FLEX LTD. 8-K Report, Executive Changes (Jun 13, 2025)

Summary

Key Highlights

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