Summary
Lam Research Corporation (LRCX) filed an 8-K on March 19, 2008, detailing actions taken by its Board of Directors on March 14, 2008, regarding executive compensation for calendar year 2008. The most significant information for investors pertains to the establishment of performance goals and incentive structures for CEO Stephen G. Newberry. Key details include the adoption of performance goals under the 2004 Executive Incentive Plan for 2008, encompassing financial (revenue, gross margin, cash generation, operating profit), operating, and marketing objectives. The CEO's target incentive is set at 125% of base salary, with potential awards ranging from zero to 2.25 times the target, contingent on both corporate and individual performance. Crucially, no incentive awards will be paid if predetermined minimum financial performance targets are not met. Furthermore, the report outlines the adoption of performance goals and award amounts for two Multi-Year Incentive Programs (MYIPs): the 2007/2008 MYIP and the 2008/2009 MYIP. These programs link awards to company performance over two-year periods (2007-2008 and 2008-2009, respectively), with payouts in subsequent years. Accruals are based on ongoing operating income, with potential enhancements tied to stock price performance. The structure allows for awards to range from zero up to 2.5 times the target, subject to Board discretion.
Key Highlights
- 1Lam Research Corporation (LRCX) established performance goals for its 2004 Executive Incentive Plan for CEO Stephen G. Newberry for calendar year 2008.
- 2The 2008 Executive Incentive Plan includes financial, operating, and marketing objectives, with specific targets for revenue, gross margin, cash generation, and operating profit.
- 3CEO's annual incentive target is 125% of base salary, with potential payouts ranging from 0% to 225% of the target based on performance.
- 4A critical condition for any incentive award payout is the achievement of predetermined minimum financial performance targets.
- 5The Company adopted performance goals and award amounts for the 2007/2008 Multi-Year Incentive Program (MYIP) and the new 2008/2009 MYIP.
- 6MYIP awards are tied to company performance over two-year periods (2007-2008 and 2008-2009) and are payable in the following years (2009 and 2010, respectively).
- 7MYIP accruals can be enhanced by a stock price performance factor, with potential awards ranging from zero up to 2.5 times the target amount, subject to Board discretion.