Summary
This 8-K filing from L3Harris Technologies (LHX) on September 1, 2016, details the compensation actions approved for its named executive officers following the close of fiscal year 2016. The Board of Directors and its Compensation Committee finalized payouts under the Annual Incentive Plan and the Equity Incentive Plan, reflecting the company's performance against pre-established financial targets. For investors, the key takeaway is the confirmation of significant cash bonuses and performance-based equity awards for senior leadership. These payouts are directly tied to the achievement of specific financial metrics such as operating income, free cash flow, and revenue for the annual plan, and cumulative operating income and return on invested capital (ROIC) for the long-term equity plan. The filing provides transparency into how executive compensation is linked to company performance, offering insight into management's incentives and the financial results that underpinned these awards.
Key Highlights
- 1Approval of fiscal year 2016 cash payouts under the Annual Incentive Plan for named executive officers.
- 2William M. Brown, CEO, received a cash payout of $2,000,000 for fiscal year 2016.
- 3Total cash payouts under the Annual Incentive Plan were based on achievement of consolidated operating income, free cash flow, and revenue targets.
- 4Approval of fiscal year 2016 performance share unit award payouts under the Equity Incentive Plan for the 2014-2016 performance period.
- 5William M. Brown received 58,302 shares under the Equity Incentive Plan.
- 6Equity payouts were based on three-year cumulative operating income and average annual ROIC, with potential adjustments based on total shareholder return.
- 7Miguel A. Lopez's cash payout was pro-rated due to his separation from the company.