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.