01—Abstract
Summary
Summary of the 8-K filed August 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Sysco Corporation's Form 8-K filed August 5, 2024 reports that on July 31, 2024, the Compensation and Leadership Development Committee of the Board approved an annual cash-based incentive program (the AIP) for fiscal year 2025 for executive officers, including the named executive officers Kevin P.
Hourican (Chair and CEO), Kenny K. Cheung (EVP and CFO), Greg D. Bertrand (EVP, Global Chief Operating Officer), Thomas R.
Peck, Jr. (EVP, Chief Information and Digital Officer), and Neil Russell, II (SVP, Corporate Affairs and Chief Administrative Officer). AIP payouts are weighted 70%a to financial measures (50% operating income, 20% sales revenue) and 30% to strategic business objectives (10% USBL cost per piece, 10% local case growth, 10% employee engagement). Each component pays out from 0% to 200% of target, and the overall award may be adjusted by the Committee for individual performance, capped at 200% of target opportunity.
The same committee also approved fiscal 2025 long-term incentive plan awards under the Sysco Corporation 2018 Omnibus Incentive Plan. LTIP mix is 50%b performance share units with a three-year performance period, 30% restricted stock units, and 20% stock options. PSUs are tied to adjusted earnings per share growth (37.5%), return on invested capital growth (37.5%), and revenue growth (25%), with a relative total shareholder return modifier of plus or minus 25% of target against S&P 500 companies.
02—Key points
Key Highlights
- AIP for fiscal 2025 approved July 31, 2024, covering executive officers and named executive officers
- AIP weighting: 70% financial measures (50% operating income, 20% sales revenue) and 30% strategic objectives (10% USBL cost per piece, 10% local case growth, 10% employee engagement)
- AIP payout range of 0% to 200% of target per component, with overall maximum of 200% of target opportunity after individual performance adjustment
- Fiscal 2025 LTIP mix: 50% PSUs (three-year performance period), 30% RSUs, and 20% stock options of target LTIP opportunity
- PSU metrics: adjusted EPS growth (37.5%), ROIC growth (37.5%), and revenue growth (25%), payable from 0% to 200% of target
- PSU relative TSR modifier adjusts shares earned by 25% of target up or down versus S&P 500 companies
- Stock options have a 10-year term and RSUs vest in three equal annual installments
03—Questions
Frequently Asked Questions
What incentive compensation did Sysco approve for fiscal 2025?
On July 31, 2024, the Compensation and Leadership Development Committee approved an annual cash-based incentive program (AIP) for fiscal 2025 for executive officers, along with fiscal 2025 long-term incentive plan awards consisting of PSUs, stock options, and RSUs under the 2018 Omnibus Incentive Plan.
How is the annual incentive plan payout determined?
Payouts are 70% based on financial measures (50% operating income and 20% sales revenue) and 30% on strategic business objectives (10% USBL cost per piece, 10% local case growth, and 10% employee engagement). Each component is calculated separately with a 0% to 200% payout range, and the Committee may adjust the total based on individual performance, up to a maximum of 200% of target.
How are the performance share units measured?
PSUs have a three-year performance period and are tied to adjusted earnings per share growth (37.5% of target), return on invested capital growth (37.5%), and revenue growth (25%). The earned shares can range from 0% to 200% of target and are further adjusted by up to 25% of target based on Sysco's total shareholder return relative to S&P 500 companies.
When do the restricted stock units and stock options vest?
Both RSUs and stock options vest in three equal annual installments. The stock options have a 10-year term.
04—Continue