8-KLeadership ChangesExhibits & Filings

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Executive Changes (Aug 30, 2007)

Filed August 30, 2007For Securities:LHX

Summary

This 8-K filing from Harris Corporation reports on the approval of compensatory arrangements for its named executive officers, including Chairman, President and CEO Howard L. Lance. Key actions include the payout of fiscal year 2007 cash annual incentives and performance share awards, the establishment of base salaries and incentive targets for fiscal year 2008, and the granting of new stock options, performance shares, and restricted stock awards. These actions reflect the company's performance-based compensation philosophy and its strategy for retaining and motivating key leadership. Investors should note the significant payouts for fiscal year 2007, reflecting company performance over that period. The filing also details the structure and performance metrics for fiscal year 2008 incentives and equity awards, providing insight into management's future performance expectations and the alignment of executive compensation with shareholder value creation. The specific details on stock options and performance share awards offer a look into the potential future equity value for these executives based on company performance.

Key Highlights

  • 1Fiscal year 2007 cash incentive payouts were approved for named executive officers, with CEO Howard L. Lance receiving $1,550,000.
  • 2Performance share awards for the three-year period ending June 29, 2007, were paid out, with CEO Howard L. Lance receiving 60,000 shares.
  • 3Fiscal year 2008 base salaries were set, with CEO Howard L. Lance's salary increasing to $1,000,000.
  • 4Fiscal year 2008 cash annual incentive plan target levels and performance criteria (including EPS, EBIT, and revenue) were approved for executive officers.
  • 5Stock options were granted to named executive officers with an exercise price of $58.95, vesting over three years.
  • 6Performance share and performance share unit awards for fiscal years 2008-2010 were granted, with payouts tied to cumulative EBIT and return on invested capital.
  • 7A grant of 6,000 restricted shares was made to Gary L. McArthur, Vice President and CFO, vesting on August 24, 2010.

Frequently Asked Questions

The filing indicates that performance-based cash incentives and performance share awards were paid out for fiscal year 2007. The specific amounts and share payouts, particularly to the CEO and other named executive officers, suggest that the company met or exceeded certain pre-established performance criteria related to earnings per share, revenue, segment operating income, and return on invested capital during that fiscal year.

For fiscal year 2008, Harris Corporation has set new base salaries for its named executive officers and established target levels for cash annual incentive plans. These incentives, along with new grants of stock options and performance shares/units, will be tied to key performance metrics such as Earnings Per Share (EPS), Earnings Before Interest and Taxes (EBIT), and revenue, aligning executive compensation with company financial performance and strategic objectives.

The grants of stock options and performance shares represent a significant portion of executive compensation and are designed to incentivize long-term value creation. Stock options provide executives the right to buy company stock at a set price, benefiting from stock price appreciation. Performance shares and units are contingent on achieving specific financial targets over a multi-year period. These awards align executive interests with those of shareholders by tying a substantial part of their potential compensation to the company's future stock performance and financial results.

Yes, for fiscal year 2008 cash incentives, performance will be measured by the Company's EPS (for maximum payout for CEO), EBIT, and revenue, along with individual objectives. For the fiscal years 2008-2010 performance share/unit awards, the key metrics are cumulative EBIT and average return on invested capital, with potential adjustments based on relative performance against S&P 500 and Midcap 400 indices.