What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to disclose the financial and operating performance measures and goals that Rockwell Automation's Compensation and Management Development Committee has adopted for the fiscal year 2007. These measures will directly influence the cash incentive compensation payable to officers and employees under the company's incentive plans.

How will executive and employee bonuses be determined for fiscal year 2007?

Bonuses will be determined by adjusting an incentive compensation target (a percentage of base salary) based on a formula. This formula includes a financial performance factor (up to 200%) derived from company-wide and business group metrics like EPS, sales, ROIC, and free cash flow, and an operating goals performance factor based on individual and strategic achievements.

Are there any specific financial conditions that must be met for incentive payments?

Yes, generally, the company's earnings per share (or, for Power Systems employees, their EBITDA) must exceed a minimum threshold for any incentive payments to be made under the ICP for fiscal year 2007. Additionally, payments under the Senior ICP are capped at 1% of the company's applicable net earnings.

What financial metrics are being used to assess performance?

The key financial metrics used for performance assessment include earnings per share (EPS), sales, return on invested capital (ROIC), and free cash flow. For employees within the Power Systems business group, earnings before interest, taxes, depreciation, and amortization (EBITDA) will be used instead of EPS.

ROK 8-K: Leadership Changes

Summary

This Form 8-K filing from Rockwell Automation, Inc. (ROK) on December 12, 2006, details the financial and operating performance measures adopted by the Compensation and Management Development Committee for the 2007 fiscal year. These measures will be used to determine cash incentive compensation for participants under the company's Incentive Compensation Plan (ICP) and the Senior Incentive Compensation Plan for Senior Executive Officers (Senior ICP). The primary objective is to align executive compensation with key company performance indicators, ensuring that incentive payouts are directly linked to the achievement of specific financial and operational goals. This framework is designed to drive shareholder value by incentivizing management to focus on critical metrics such as earnings per share, sales, return on invested capital, and free cash flow.

Key Highlights

1Rockwell Automation established financial and operating performance measures for fiscal year 2007 incentive compensation.
2These measures will be used to determine payouts under the Incentive Compensation Plan (ICP) and the Senior Incentive Compensation Plan (Senior ICP).
3The compensation structure links incentive targets to a formula incorporating financial, operating, and individual performance.
4Key financial performance measures include earnings per share (or EBITDA for Power Systems), sales, return on invested capital, and free cash flow.
5The financial performance factor can adjust incentive targets up to a maximum of 200%.
6An operating goals performance factor, determined by the CEO or Committee, further adjusts the incentive compensation.
7A minimum threshold for earnings per share (or Power Systems' EBITDA) must be met for any ICP payments.
8Senior ICP payments are capped at 1% of the company's applicable net earnings.

ROCKWELL AUTOMATION, INC 8-K Report, Executive Changes (Dec 12, 2006)

Summary

Key Highlights

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