Summary
This 8-K filing from Honeywell International Inc. (HON), filed on February 19, 2013, details the company's approach to executive incentive compensation for the 2013 fiscal year. The Management Development and Compensation Committee of the Board of Directors approved the corporate short-term financial objectives that will underpin the annual incentive compensation for executives under the Incentive Compensation Plan. These objectives are crucial for investors to understand as they directly influence a significant portion of executive compensation and are tied to the company's financial performance. The key financial metrics established for 2013 are Earnings Per Share (EPS), Free Cash Flow (FCF), and Working Capital Turns (WCT). Specific targets were set for each: an EPS target range of $4.75 - $4.95, an FCF target of $3.7 billion, and a WCT target of 7.3 turns. While these financial metrics are central, the filing also emphasizes that actual incentive payments will consider a broader set of performance measures. These include other financial metrics, segment performance, industry conditions, peer group comparisons, individual management objectives, and leadership behaviors, ensuring a holistic view of performance.
Key Highlights
- 1Honeywell's Compensation Committee approved 2013 short-term financial objectives for executive incentive compensation.
- 2Key performance metrics for the 2013 Incentive Compensation Plan are Earnings Per Share (EPS), Free Cash Flow (FCF), and Working Capital Turns (WCT).
- 3The target range for 2013 EPS is $4.75 to $4.95.
- 4The target for 2013 Free Cash Flow (FCF) is $3.7 billion.
- 5The target for 2013 Working Capital Turns (WCT) is 7.3 turns.
- 6Payouts are capped as a percentage of consolidated earnings, as per the 2011 Incentive Plan.
- 7Actual incentive awards will also consider other financial metrics, individual objectives, leadership behaviors, and external economic conditions.