Summary
MetLife Inc. (MET) filed an 8-K on March 12, 2009, disclosing a modification to its Management Performance Share Agreement, effective February 24, 2009. This change primarily impacts future grants under the 2005 Stock and Incentive Compensation Plan by introducing a more restrictive performance condition related to Total Shareholder Return (TSR). The modification aims to align executive compensation more closely with shareholder value creation, particularly in challenging market environments. The key update is that if MetLife's TSR over the applicable three-year performance period is zero percent or less, the performance factor percentage (which can range from 0-200%) will be multiplied by a factor of 0.75. This means that even if the company achieves certain performance targets, the payout will be reduced if overall shareholder returns are negative or flat. TSR is calculated based on the change in average stock price over the performance period, including reinvested dividends.
Key Highlights
- 1MetLife modified its Management Performance Share Agreement for grants effective February 24, 2009, and subsequent grants.
- 2The modification introduces a more restrictive performance condition tied to Total Shareholder Return (TSR).
- 3If MetLife's TSR is zero percent or less over a three-year performance period, the performance factor for share payouts will be reduced by 25% (multiplied by 0.75).
- 4This change applies to grants made under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan.
- 5The modified agreement is substantially similar to the previous form, with the TSR condition being the primary alteration.
- 6TSR calculation includes the change in average stock price and reinvested dividends over the performance period.