8-KLeadership ChangesExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Executive Changes (Feb 2, 2007)

Filed February 2, 2007For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K on February 2, 2007, detailing compensation actions taken by its Compensation Committee on January 31, 2007. The report outlines the grant of deferred stock awards to key executive officers, with vesting occurring three years from the grant date. Additionally, it announces new base salaries effective May 1, 2007, and details annual and long-term incentive awards for 2006 that were approved and will be paid in cash. The filing also establishes formulas for determining maximum award amounts for 2007 annual incentives, 2007-2009 long-term incentives, and 2008 deferred stock awards. These formulas are designed to align with Section 162(m) of the Internal Revenue Code, aiming for tax deductibility of compensation. Investors should note that these are primarily compensation-related disclosures, with further details to be provided in the company's proxy statement.

Key Highlights

  • 1Grant of deferred stock awards under the 2005 Performance Incentive Plan to five named executive officers, vesting in three years.
  • 2Approval of new base salaries for four executive officers, effective May 1, 2007.
  • 3Approval of 2006 annual incentive awards (cash bonuses) for five executive officers, based on a percentage of adjusted net earnings.
  • 4Approval of 2006 long-term incentive awards (cash bonuses) for five executive officers, tied to three-year cumulative adjusted net earnings.
  • 5Establishment of formulas for maximum award amounts for 2007 annual incentive and 2007-2009 long-term incentive programs.
  • 6Establishment of a formula for maximum award amounts for 2008 deferred stock awards.
  • 7Compensation formulas are designed to qualify for tax deductibility under Section 162(m) of the Internal Revenue Code.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose executive compensation actions taken by Altria Group's Compensation Committee on January 31, 2007. This includes grants of deferred stock, new base salaries, and the approval of annual and long-term incentive awards for past performance, as well as formulas for future incentive awards.

The deferred stock awards granted on January 31, 2007, will vest three years from the grant date.

Both the annual and long-term incentive awards are tied to the company's 'adjusted net earnings'. Specifically, a performance incentive pool is calculated as a percentage (0.25% for annual and long-term, 0.5% for deferred stock in 2008) of adjusted net earnings. Individual awards are then determined based on formulas and are subject to shareholder-approved maximums outlined in the 2005 Performance Incentive Plan.

Yes, the filing states that the formulas for determining maximum award amounts for future incentives (2007 annual, 2007-2009 long-term, and 2008 deferred stock) are designed to qualify, to the extent possible, for tax deductibility under Section 162(m) of the Internal Revenue Code.