Summary
Republic Services, Inc. (RSG) filed an 8-K on December 23, 2005, primarily to disclose the acceleration of stock option vesting for its employees, including executive officers, effective December 30, 2005. This decision was made in anticipation of upcoming changes to the company's compensation programs in 2006. The company expects to record a non-cash charge of approximately $2 million in the fourth quarter of 2005 related to this acceleration. Furthermore, the filing addresses the anticipated impact of adopting Statement of Financial Accounting Standards No. 123(R) ("Share-Based Payments"), along with other changes to incentive and employee benefit plans. RSG projects that this adoption will reduce its earnings per share by approximately 5 cents, 6 cents, and 7 cents in 2006, 2007, and 2008, respectively. Investors should note these accounting changes and their potential effect on reported earnings, even though the option acceleration itself is a non-cash event.
Key Highlights
- 1Republic Services' Board of Directors approved the acceleration of all outstanding employee stock options, effective December 30, 2005.
- 2This acceleration includes options held by all executive officers.
- 3The company anticipates recording a non-cash charge of approximately $2 million in Q4 2005 due to the accelerated vesting.
- 4The decision to accelerate vesting is in anticipation of changes to compensation programs starting in 2006.
- 5Adoption of SFAS 123(R) ('Share-Based Payments') is expected to reduce EPS by approximately $0.05, $0.06, and $0.07 in 2006, 2007, and 2008, respectively.
- 6The reduction in EPS is also influenced by changes in the company's incentive and employee benefit plans.