8-KLeadership Changes

STRYKER CORP 8-K Report, Executive Changes (Feb 11, 2011)

Filed February 11, 2011For Securities:SYK

Summary

This Form 8-K filing from Stryker Corporation (SYK), filed on February 11, 2011, primarily reports on two key events. First, it announces the retirement of Director Donald M. Engelman, Ph.D., effective April 26, 2011, who will not seek re-election. This signals a change in the board's composition. Second, and more significantly for investors focused on executive compensation and future performance alignment, the filing details the equity awards granted to key executives on February 9, 2011. Notably, Performance Stock Units (PSUs) were included for the first time, alongside traditional stock options, under the 2006 Long-Term Incentive Plan. The vesting of these PSUs is directly tied to the company's financial performance over a three-year period (ending December 31, 2013), specifically focusing on adjusted earnings per share and relative sales growth, reinforcing executive incentive alignment with shareholder value creation.

Key Highlights

  • 1Director Donald M. Engelman, Ph.D. will retire from the Board of Directors effective April 26, 2011.
  • 2Stryker Corporation is introducing Performance Stock Units (PSUs) as part of executive equity awards for the first time.
  • 3PSUs were granted to key employees, including the CEO and CFO, on February 9, 2011.
  • 4The vesting of these PSUs is contingent on Stryker's financial performance over a three-year period (ending December 31, 2013).
  • 5Performance metrics for PSUs include three-year average adjusted earnings per share (EPS) goals and relative sales growth.
  • 6Stock options were also granted with an exercise price of $59.70, vesting over five years, and expiring in February 2021.

Frequently Asked Questions

The introduction of PSUs signifies Stryker's commitment to aligning executive compensation more closely with long-term company performance. The vesting of these units is directly tied to achieving specific financial targets (adjusted EPS and sales growth), which should incentivize executives to drive shareholder value creation over the defined performance period.

The stock options have an exercise price of $59.70 and will become exercisable gradually, with 20% vesting each year starting February 9, 2012, and expiring on February 8, 2021. The PSUs are tied to the company's financial performance during the three-year period ending December 31, 2013, and generally vest on March 21, 2014, provided the recipient remains employed.

Yes, Donald M. Engelman, Ph.D., a Director of the Company, notified the Board of his intention to retire. His retirement is effective April 26, 2011, and he will not be standing for re-election at the Annual Shareholders' meeting on that date.