8-KLeadership Changes

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Executive Changes (Sep 2, 2015)

Filed September 2, 2015For Securities:LHX

Summary

This 8-K filing from Harris Corporation, filed on September 2, 2015, details compensatory arrangements for its named executive officers for fiscal year 2015 and includes a specific acquisition integration award for the CEO. The independent directors and the Compensation Committee approved payouts under the Annual Incentive Plan and the Equity Incentive Plan based on performance against established financial targets. These payouts reflect the company's performance in fiscal 2015 and the successful integration of the Exelis acquisition. For investors, the key takeaway is the confirmation of executive compensation tied to specific financial metrics and strategic objectives, such as synergy achievement from the Exelis acquisition. The filing provides transparency into how executive rewards are structured and earned, offering insight into management's alignment with shareholder value creation and the company's operational and strategic execution.

Key Highlights

  • 1Fiscal 2015 cash payouts under the Annual Incentive Plan were approved for named executive officers, based on consolidated revenue, operating income, and free cash flow performance.
  • 2William M. Brown, CEO, received a cash payout of $1,600,000 for fiscal 2015 under the Annual Incentive Plan.
  • 3Fiscal 2015 performance share unit award payouts under the Equity Incentive Plan were approved for the 2013-2015 performance period, based on cumulative operating income and average annual return on invested capital (ROIC).
  • 4William M. Brown received an acquisition integration success award related to the Exelis acquisition, including performance share units and stock options.
  • 5The performance share unit award for the Exelis acquisition integration is contingent on achieving full-year run rate net synergies, measured at the end of the three-year performance period ending June 29, 2018.
  • 6A stock option award was granted to William M. Brown, vesting on August 28, 2018, contingent on his continued employment with Harris.
  • 7Payouts under equity plans were subject to adjustments based on total shareholder return performance relative to a peer group.

Frequently Asked Questions

This filing discloses cash payouts under the Harris Corporation Annual Incentive Plan for fiscal 2015, performance share unit award payouts under the Harris Corporation Equity Incentive Plan for the 2013-2015 performance period, and a special acquisition integration success award for the CEO related to the Exelis acquisition.

For the CEO and other key executives, the fiscal 2015 cash payouts were based on company consolidated revenue, operating income, and free cash flow. For other named executive officers, a portion was based on their respective operating segment's performance, and another portion on company consolidated performance.

The award includes performance share units with a target of 22,700 shares (maximum 45,400 shares), tied to achieving full-year run rate net synergies from the Exelis acquisition by June 29, 2018. It also includes a stock option award to acquire 132,550 shares, vesting on August 28, 2018, provided Mr. Brown is still employed by Harris.

The payouts were based on the company's three-year cumulative operating income and average annual return on invested capital (ROIC) for the performance period, weighted equally. These could be adjusted up or down based on the company's total shareholder return performance relative to a defined peer group.