Summary
Rockwell Automation, Inc. (ROK) filed a Form 8-K on December 14, 2009, to disclose 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 2010. These measures are designed to guide the determination of cash incentive compensation for participants. The adopted framework outlines how individual incentive compensation targets, expressed as a percentage of base salary, will be adjusted based on both company-wide financial performance and individual operating goals. Key financial metrics for company performance include earnings per share (EPS), sales, return on invested capital, and free cash flow, with provisions for currency fluctuations and economic conditions. Importantly, a minimum EPS threshold must be met for any incentive payments to be made.
Key Highlights
- 1Adoption of financial performance measures for FY2010 incentive compensation plans (ICP and Senior ICP).
- 2Incentive compensation targets will be adjusted by a financial performance factor, with a maximum of 200%.
- 3Key financial performance measures include earnings per share (EPS), sales, return on invested capital, and free cash flow.
- 4The Compensation Committee has discretion to consider currency fluctuations and manufacturing economy impacts on performance.
- 5Individual performance and subjective assessments will further adjust incentive compensation via an operating goals performance factor.
- 6A minimum EPS threshold is generally required for any incentive payments to be made.
- 7Senior ICP payments are capped at 1% of the company's applicable net earnings.