Summary
Rockwell Automation, Inc. (ROK) filed an 8-K on December 13, 2005, to report on the establishment of financial and operating performance measures for its fiscal year 2006 incentive compensation plans. The Compensation and Management Development Committee of the Board of Directors approved these measures to determine cash incentive payouts under the Incentive Compensation Plan (ICP) and the Annual Incentive Compensation Plan for Senior Executive Officers (Senior ICP). These measures are designed to align executive compensation with key company performance indicators. The payout structure incorporates a target incentive compensation based on base salary, which is then adjusted by financial performance, operating goals, and individual performance factors. Importantly, a minimum earnings per share threshold must be met for any payments to be made under the ICP for fiscal year 2006, and payouts under the Senior ICP are capped.
Key Highlights
- 1Rockwell Automation established financial and operating performance measures for its 2006 incentive compensation plans.
- 2These measures will determine cash incentive payouts under the Incentive Compensation Plan (ICP) and the Annual Incentive Compensation Plan for Senior Executive Officers (Senior ICP).
- 3Executive compensation is linked to Company-wide, operating segment, and business group financial performance.
- 4Key financial performance measures include earnings per share (EPS), sales, return on invested capital (ROIC), free cash flow, and operating cash flow.
- 5Incentive payouts will be adjusted based on achievement of specific operating goals and individual performance.
- 6A minimum EPS threshold is required for any ICP payments to be made for fiscal year 2006.
- 7Senior executive incentive payouts are capped at 1% of the Company's applicable net earnings.