Summary
Pfizer Inc. (PFE) filed an 8-K on December 14, 2021, detailing amendments to its Global Performance Plan, effective for the 2021 and 2022 performance years. The primary change for the 2021 performance year is an increase in the maximum percentage of an individual's target annual bonus that can be earned, raising it from 200% to 250%. This adjustment aims to better differentiate compensation based on individual performance, while the overall bonus pool funding remains capped at 200% of aggregate target bonuses. For the 2022 performance year, Pfizer is standardizing the bonus target calculation methodology for all participants. Previously, executive officers and a select group of other executives calculated their bonus targets as a percentage of their salary midpoint, whereas most other participants used a percentage of their actual salary earned. The amendment will align all participants to calculate their bonus targets as a percentage of salary earned during the year. These changes are intended to strengthen the alignment between executive pay and company performance.
Key Highlights
- 1Maximum individual annual bonus potential increased to 250% of target for the 2021 performance year.
- 2The overall bonus pool funding remains capped at 0% to 200% of aggregate target bonuses.
- 3Changes are designed to enhance the link between executive pay and individual performance.
- 4For the 2022 performance year, bonus target calculations will be standardized for all participants.
- 5All participants will calculate bonus targets based on a percentage of salary earned during the year, effective 2022.
- 6Prior to 2022, executive officers used a salary midpoint for bonus calculations, which will now be aligned with others.