8-KLeadership ChangesExhibits & Filings

Parker-Hannifin Corp 8-K Report, Executive Changes (Aug 18, 2009)

Filed August 18, 2009For Securities:PH

Summary

This 8-K filing by Parker-Hannifin Corporation, dated August 18, 2009, announces the adoption of a restated Volume Incentive Plan and a new "Claw-Back Policy" by the company's Board of Directors. The Claw-Back Policy is particularly significant for investors as it applies to all performance-based bonus plans tied to financial performance, with an effective date of July 1, 2009. This policy allows the company to recover previously awarded bonuses if they were based on financial results that are later restated or found to be inaccurate. The adoption of these policies reflects a move towards enhanced corporate governance and accountability, particularly in the wake of the 2008 financial crisis where "claw-back" provisions gained prominence. Investors should view this as a positive step, demonstrating the company's commitment to aligning executive compensation with actual, sustained financial performance and protecting shareholder value.

Key Highlights

  • 1Parker-Hannifin adopted a restated Volume Incentive Plan.
  • 2A new "Claw-Back Policy" was implemented by the Board of Directors.
  • 3The Claw-Back Policy applies to all performance-based bonus plans.
  • 4The policy is effective for compensation granted or paid on or after July 1, 2009.
  • 5This policy allows for the recovery of bonuses based on restated or inaccurate financial performance.
  • 6The adoption signals an increased focus on corporate governance and executive accountability.
  • 7Exhibits detailing the Volume Incentive Plan and Claw-Back Policy are filed with the report.

Frequently Asked Questions

The primary purpose of the Claw-Back Policy is to allow Parker-Hannifin to recover performance-based bonuses paid to executives if those bonuses were awarded based on financial results that are later restated or found to be inaccurate. This enhances accountability and aligns executive compensation with sustained company performance.

The Claw-Back Policy became effective for annual incentives or other performance-based compensation granted or paid on or after July 1, 2009.

These policy changes indicate a more stringent approach to executive compensation. The Claw-Back Policy means that bonuses are not guaranteed if underlying financial performance is later revised downwards, potentially reducing the total compensation for executives in certain circumstances.

Yes, the 8-K filing states that copies of the restated Volume Incentive Plan (Exhibit 10.1) and the Claw-Back Policy (Exhibit 10.2) are incorporated by reference and are available as exhibits to this filing.