Summary
Teradyne, Inc. (TER) filed an 8-K on January 28, 2005, disclosing material changes related to executive compensation and director pay. The Board of Directors approved amendments to the 1996 Non-Employee Director Stock Option Plan to significantly increase the annual stock option grant and cash retainer for the non-employee Chairman of the Board, recognizing the expanded responsibilities of the role. Furthermore, the Company adopted a Variable Compensation Plan (VC Plan) for 2005, designed to provide performance-based variable compensation to executive officers and key senior employees. Payouts under the VC Plan are contingent upon overall corporate and individual business group performance, with the Compensation Committee evaluating factors such as profitability, return on net assets, market share, and strategic positioning. This plan aims to incentivize performance tied to strategic and financial objectives.
Key Highlights
- 1Teradyne increased the annual cash retainer for its non-employee Chairman of the Board from $45,000 to $90,000.
- 2The annual stock option grant for the non-employee Chairman was doubled from 15,000 to 30,000 shares.
- 3The Board adopted a Variable Compensation Plan (VC Plan) for 2005 for executive officers and eligible senior employees.
- 4VC Plan payouts are based on a percentage of base salary, determined by overall corporate and individual business group performance.
- 5Performance metrics for the VC Plan include profitability, return on net assets, market share, and strategic business group results.
- 6The Compensation Committee has the discretion to adjust, modify, or terminate the VC Plan.
- 7The filing includes the Variable Compensation Plan for 2005 as Exhibit 99.1.