Summary
This 8-K filing from Kraft Foods Inc. (now Mondelez International) on May 7, 2009, announces a significant change in executive compensation policy. Effective May 5, 2009, the company will cease reimbursing its executive officers for taxes incurred on realized earnings from specific trusts. These trusts were previously used to cover vested benefits under non-qualified supplemental retirement plans. Investors should note that these trusts were established solely to offset existing benefit obligations and were not intended to provide additional benefits to executives. Furthermore, no contributions have been made to these trusts since before January 1, 2005, and any prior contributions were already taxable to the executives without reimbursement from Kraft Foods. This policy change reflects a move towards greater transparency and a potential reduction in executive compensation costs.
Key Highlights
- 1Kraft Foods Inc. is discontinuing tax reimbursements for executive officers related to certain trusts.
- 2The change is effective May 5, 2009.
- 3The trusts were used to offset taxes on realized earnings from non-qualified supplemental retirement plans.
- 4The trusts were not intended to increase total promised benefits for participants.
- 5No contributions have been made to these trusts since prior to January 1, 2005.
- 6Prior contributions were taxable to executives and not reimbursed by Kraft Foods.