Summary
Lam Research Corporation (LRCX) filed an 8-K on August 21, 2006, to announce the establishment of performance goals for its Executive Incentive Plan for the second half of calendar year 2006. These goals are crucial for determining executive bonuses and are set for the Chief Executive Officer, Stephen G. Newberry, by the Board of Directors upon recommendation from the Compensation Committee. The performance metrics encompass a mix of financial, operating, and marketing objectives. Specifically, financial targets include revenue, gross margin, operating profit, and cash generation. Non-financial objectives relate to market position. The CEO's target incentive is 100% of his salary, with the potential to earn between zero and 2.55 times this target based on corporate and individual performance. The plan includes provisions for reduced awards if performance falls below targets and no awards if minimum financial targets are unmet, providing a clear link between executive compensation and company performance.
Key Highlights
- 1Establishment of performance goals for the second half of calendar year 2006 under the 2004 Executive Incentive Plan.
- 2Performance goals set for CEO Stephen G. Newberry by the Board of Directors, on recommendation from the Compensation Committee.
- 3Incentive plan performance metrics include financial (revenue, gross margin, operating profit, cash generation), operating, and marketing objectives.
- 4CEO's target incentive award is 100% of his salary.
- 5Potential incentive payout ranges from 0% to 2.55 times the target amount, contingent on corporate and individual performance.
- 6Provisions for reduced awards if performance is below targets, and no awards if minimum financial performance targets are not met.
- 7Existing performance goals for other named executive officers (excluding CEO and Executive Chairman) from February 2006 remain in effect for the second half of 2006.