Summary
McDonald's Corporation filed an 8-K on February 20, 2008, reporting on compensation arrangements for its executive officers. The Compensation Committee approved grants of restricted stock units (RSUs) to key named executive officers on February 13, 2008. These RSUs are subject to a three-year cliff vesting period and a performance-based condition tied to the company's compounded annual growth in diluted earnings per share (EPS). The performance condition is structured with specific thresholds. A minimum compounded annual EPS growth of 2% is required for any vesting to occur. If the company achieves growth at or above 2% but below a target of 7%, a pro-rata portion of the RSUs will vest. This performance metric highlights management's focus on sustained earnings growth as a key driver of executive compensation.
Key Highlights
- 1McDonald's Compensation Committee approved grants of Restricted Stock Units (RSUs) to named executive officers on February 13, 2008.
- 2The RSUs are granted under the Amended and Restated 2001 Omnibus Stock Ownership Plan.
- 3Vesting for these RSUs is contingent on a three-year cliff vesting period.
- 4A key performance metric for vesting is compounded annual growth in diluted Earnings Per Share (EPS).
- 5A minimum 2% compounded annual EPS growth is required for any RSUs to vest.
- 6RSUs will vest proportionally if EPS growth is between 2% and the 7% target.
- 7The target for full vesting of RSUs is 7% compounded annual EPS growth.