What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to disclose details regarding the compensation awarded to McDonald's named executive officers for the 2013 performance year and a multi-year performance cycle, including incentive plans and stock awards.

What are the key performance indicators for the new Cash Performance Unit Plan (CPUP)?

The key performance indicators for the 2013-2015 CPUP are consolidated three-year compounded annual growth in operating income (weighted 75%) and three-year return on incremental invested capital (ROIIC) (weighted 25%). The final payout may also be adjusted by a multiplier based on the company's total shareholder return versus the S&P 500.

Are there any conditions for the executive officers to receive payouts under these plans?

Yes, for the 2013 TIP, named executive officers are generally not eligible to receive a payout if the company does not achieve growth in operating income in 2013. For the CPUP and RSUs, payouts are contingent on achieving specific performance thresholds related to operating income growth, ROIIC, and EPS growth.

What is the maximum potential payout for executives under these incentive plans?

Under the 2013 TIP, the maximum award is 250% of the target award. For the 2013-2015 CPUP, the maximum final payout is 230% of the target award. The vesting of RSUs is tied to achieving the EPS growth targets, with no explicit maximum multiplier mentioned for those.

MCD 8-K: Leadership Changes

Summary

This 8-K filing by McDonald's Corporation, dated February 20, 2013, primarily details the compensation arrangements for its named executive officers for the upcoming performance year and a multi-year performance cycle. The Compensation Committee approved the payout structure for the 2013 Target Incentive Plan (TIP), with award percentages tied to base salary ranging from 160% for the CEO to 85% for a former US President. Payouts are contingent on achieving operating income growth, with a maximum potential award of 250% of the target. Furthermore, the filing introduces the new Cash Performance Unit Plan (CPUP) for the 2013-2015 performance cycle, with target awards set in dollar amounts for key executives. CPUP payouts will be based on compounded annual growth in operating income (75% weight) and return on incremental invested capital (25% weight) over the three-year period. The filing also outlines grants of Restricted Stock Units (RSUs) that vest after three years, subject to achieving a cumulative 6% compounded annual EPS growth target. A special one-time RSU grant is also detailed, linked to the transition to overlapping CPUP cycles and subject to similar performance measures.

Key Highlights

1McDonald's Compensation Committee approved the 2013 Target Incentive Plan (TIP) payout structure for named executive officers.
2TIP awards are tied to base salary percentages, with the CEO receiving 160% and other officers receiving lower percentages.
3TIP payouts are conditional on achieving operating income growth in 2013, with a maximum payout of 250% of the target.
4A new Cash Performance Unit Plan (CPUP) for the 2013-2015 performance cycle was adopted, with target awards structured in dollar amounts.
5CPUP performance metrics include consolidated three-year compounded annual growth in operating income (75%) and three-year return on incremental invested capital (25%).
6Restricted Stock Units (RSUs) were granted, with vesting tied to a cumulative 6% compounded annual EPS growth target over the 2013-2015 period.
7A special one-time RSU grant was approved, linked to the transition of CPUP cycles and subject to specific performance conditions.

MCDONALDS CORP 8-K Report, Executive Changes (Feb 20, 2013)

Summary

Key Highlights

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