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

The primary purpose of this 8-K filing is to disclose the performance criteria established by Southern Company's Compensation and Management Succession Committee for executive compensation under its Omnibus Incentive Compensation Plan for fiscal year 2007 and for future performance-based dividend equivalent awards.

How will executive bonuses be determined for 2007?

Executive bonuses for 2007 will be based on the attainment of corporate performance goals (50% earnings per share, 50% subsidiary net income/return metrics) and operational goals (including capital expenditures, customer satisfaction, plant availability, etc.). The payout can range from 0% to 220% of target base pay.

Are there any conditions that would prevent executive compensation from being paid?

Yes, no annual performance-based compensation will be paid if performance falls below a minimum threshold level, if a minimum Southern Company net income level is not reached, or if the company's net income is not sufficient to fund the common stock dividend at the same level as the prior year.

What are performance-based dividend equivalents and how are they measured?

Performance-based dividend equivalents may be paid on stock options held by executives. These are based on total stockholder return over a four-year measurement period compared to a group of other utility companies. Payouts range from 3% to 100% of the dividend paid, depending on Southern Company's percentile rank in total stockholder return.

SOUTHERN CO 8-K: Leadership Changes

Summary

This Form 8-K filing from Southern Company (SO), dated February 5, 2007, details the establishment of performance criteria for executive compensation under its Omnibus Incentive Compensation Plan for fiscal year 2007 and future performance-based dividend equivalent awards. The company has outlined specific corporate performance goals, including earnings per share and subsidiary net income/return metrics, which will influence annual performance-based compensation. Furthermore, the filing specifies operational goal categories such as capital expenditures, customer satisfaction, and plant availability. Executive compensation can range significantly based on the achievement of these corporate and operational goals, with provisions for zero payout below certain thresholds and a cap on total annual performance-based compensation. The company has also set performance criteria for dividend equivalents on stock options, tied to total stockholder return over a four-year period compared to peer utilities.

Key Highlights

1Southern Company's Compensation Committee established performance criteria for fiscal year 2007 annual performance-based compensation.
2Corporate performance goals for 2007 include a 50% weighting for earnings per share and a 50% weighting for subsidiary companies' net income, return on equity, or return on capital.
3Operational goals for 2007 encompass areas like capital expenditures, customer satisfaction, plant availability, and reliability.
4Annual performance-based compensation can range from 0% to 220% of target base pay, depending on performance achievement.
5No annual performance-based compensation will be paid if performance falls below a threshold or if Southern Company's net income is insufficient to maintain the prior year's common stock dividend level.
6Performance-based dividend equivalents on stock options are tied to total stockholder return over a four-year period compared to peer utilities.
7Maximum annual performance-based compensation and dividend equivalents for executive officers are capped at 0.6% of Southern Company's net income or average net income for the relevant period.

SOUTHERN CO 8-K Report, Executive Changes (Feb 9, 2007)

Summary

Key Highlights

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