8-KLeadership Changes

HONEYWELL INTERNATIONAL INC 8-K Report, Executive Changes (Feb 21, 2014)

Filed February 21, 2014For Securities:HONHONIV

Summary

This 8-K filing from Honeywell International Inc. (HON), filed on February 20, 2014, reports on the company's Management Development and Compensation Committee's approval of the 2014 corporate financial objectives for its Incentive Compensation Plan for Executive Employees. These objectives, which will influence executive bonuses payable in Q1 2015, are primarily based on achieving specific targets for Earnings Per Share (EPS), Free Cash Flow (FCF), and Working Capital Turns (WCT). Investors should note the specific targets set for 2014: EPS between $5.35 and $5.55, FCF of $3.914 billion, and WCT of 7.2 turns. The filing also clarifies the definitions used for EPS, FCF, and WCT, including adjustments and exclusions for certain items. Beyond these core financial metrics, the Compensation Committee retains discretion to consider other factors, such as segment performance, industry conditions, peer group comparisons, and individual management objectives, ensuring a holistic approach to incentive compensation evaluation.

Key Highlights

  • 1Honeywell's Compensation Committee set 2014 financial objectives for executive incentive compensation.
  • 2Key financial metrics for 2014 bonuses include Earnings Per Share (EPS), Free Cash Flow (FCF), and Working Capital Turns (WCT).
  • 3Target EPS range for 2014 is $5.35 - $5.55, on a proforma basis excluding pension mark-to-market adjustments.
  • 4The 2014 Free Cash Flow target is set at $3.914 billion, with a specific definition excluding certain cash outflows.
  • 5The 2014 Working Capital Turns target is 7.2 turns, calculated using a 13-month rolling average and excluding current year acquisitions.
  • 6Bonus payouts are capped as a percentage of consolidated earnings, as outlined in the company's 2011 Incentive Compensation Plan.
  • 7Beyond financial targets, the Committee will consider qualitative factors like segment performance, industry conditions, and individual objectives for bonus determination.

Frequently Asked Questions

The primary purpose of this 8-K filing is to inform investors that Honeywell's Management Development and Compensation Committee has approved the 2014 corporate financial objectives that will be used to determine annual incentive compensation for executives. This impacts potential bonus payouts in the first quarter of 2015.

The executive bonuses for 2014 will be determined based on the achievement of three key financial metrics: Earnings Per Share (EPS), Free Cash Flow (FCF), and Working Capital Turns (WCT).

Yes, the filing specifies the following targets for 2014: a target EPS range of $5.35 to $5.55, a Free Cash Flow target of $3.914 billion, and a Working Capital Turns target of 7.2 turns.

Yes, the Compensation Committee will also consider other key performance measures and relevant factors. These include other financial metrics (like segment profit and revenue), quality of earnings, company and segment performance relative to industry and economic conditions, peer group performance, and the achievement of individual management objectives and leadership behaviors.