8-KLeadership Changes

ROCKWELL AUTOMATION, INC 8-K Report, Executive Changes (Dec 9, 2008)

Filed December 9, 2008For Securities:ROK

Summary

This 8-K filing from Rockwell Automation, Inc. (ROK) on December 9, 2008, details the adoption of financial performance measures and goals for its Incentive Compensation Plan (ICP) and Annual Incentive Compensation Plan for Senior Executive Officers (Senior ICP) for fiscal year 2009. The company's Compensation and Management Development Committee has established a framework for determining cash incentive compensation, which will be a percentage of an employee's base salary, adjusted by financial and operating performance factors. Key to investors is understanding how executive compensation will be tied to company performance in the upcoming fiscal year. The plan includes adjustments based on earnings per share, sales, return on invested capital, and free cash flow, taking into account currency fluctuations and manufacturing economy impacts. These financial metrics are further adjusted by individual performance and leadership assessments, aligning executive rewards with both company-wide and individual achievements. This approach aims to incentivize management to drive profitable growth and operational efficiency.

Key Highlights

  • 1Adoption of financial performance measures and goals for fiscal year 2009 incentive compensation plans (ICP and Senior ICP).
  • 2Incentive compensation targets will be a percentage of base salary.
  • 3Targets will be adjusted by a financial performance factor, up to a maximum of 200%.
  • 4Financial performance factor will be based on Company-wide, operating segment, and/or regional metrics: earnings per share, sales, return on invested capital, and free cash flow.
  • 5Consideration of currency fluctuations and manufacturing economy impacts on financial performance.
  • 6Second adjustment based on an operating goals performance factor, determined by CEO or Committee based on individual performance and leadership assessments.
  • 7Maximum incentive compensation under the Senior ICP is capped at 1% of applicable net earnings.

Frequently Asked Questions

The main purpose of this 8-K filing is to inform investors about the financial performance measures and goals that Rockwell Automation has established for its executive incentive compensation plans for fiscal year 2009.

Executive bonuses will be determined by first establishing an incentive compensation target (a percentage of base salary), which will then be adjusted by a financial performance factor (based on metrics like EPS, sales, ROIC, and free cash flow) and an operating goals performance factor (based on individual performance and leadership). Actual payments can be higher or lower than the target, with a maximum financial performance factor of 200%.

The key financial metrics used are earnings per share (EPS), sales, return on invested capital (ROIC) or operating segment earnings, and free cash flow. The company also considers the impact of currency fluctuations and the manufacturing economy on these metrics.

Yes, the financial performance factor can adjust the target up to a maximum of 200%. Additionally, incentive compensation payments under the Senior ICP for senior executives are capped at 1% of the Company's applicable net earnings.