Summary
Microchip Technology Incorporated filed a Form 8-K on April 19, 2007, to report on its Executive Management Incentive Compensation Plan. This plan, approved in 2006 by the Board of Directors and stockholders, is designed to incentivize and reward executive officers based on the achievement of specific performance objectives. The plan outlines the structure for determining cash bonuses, with the Compensation Committee setting objectives and approving payouts. For fiscal year 2008, performance objectives are tied to key financial metrics such as quarterly sequential sales growth across different product divisions, gross margin percentage, operating expense percentage, operating profit percentage, and earnings per share. The aggregated targeted payout for the CEO and four other highly compensated executives is approximately $305,000 per quarter. While actual bonus amounts will vary based on performance, the plan includes a maximum annual payout of $2,500,000 per participant.
Key Highlights
- 1Microchip Technology implemented an Executive Management Incentive Compensation Plan approved in 2006.
- 2The plan aims to motivate and reward executive officers based on performance objectives.
- 3Performance objectives for fiscal year 2008 are linked to sales growth, gross margin, operating expenses, operating profit, and EPS.
- 4Cash bonuses will be determined quarterly by the Compensation Committee based on objective achievement.
- 5The aggregate targeted quarterly bonus payout for the CEO and four other top executives is approximately $305,000.
- 6There is a maximum annual payout limit of $2,500,000 per participant.
- 7The full Executive Plan document was previously filed as an exhibit to a Form 8-K on August 18, 2006.