8-KLeadership ChangesExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Executive Changes (Feb 25, 2010)

Filed February 25, 2010For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) filed an 8-K on February 25, 2010, detailing significant executive compensation adjustments and departures from the Board of Directors. The Compensation Committee approved the payout of 2009 cash bonuses, noting a discretionary reduction based on performance metrics. For 2010, new performance criteria for bonuses were established, focusing on Adjusted Operating Income and a mix of financial (revenue and earnings growth) and non-financial objectives, with target bonus percentages adjusted based on base salary. Additionally, the filing announces base salary increases for executive officers effective April 5, 2010, and revised target bonus percentages for key named executive officers. Amendments to severance arrangements were made to ensure compliance with IRS rulings and preserve the tax deductibility of performance bonuses, notably introducing pro-rata bonus eligibility contingent on overall company performance goals for involuntarily terminated executives. The report also notes the decision of two directors, Stephen P. Kaufman and Michael A. Bell, not to seek re-election at the upcoming annual meeting.

Key Highlights

  • 12009 cash bonuses for executive officers were approved, with the Compensation Committee exercising discretion to lower payouts based on supplemental performance metrics.
  • 2Performance criteria for 2010 bonuses were established, primarily based on Adjusted Operating Income, with a significant weighting towards financial measures (revenue and earnings growth) and non-financial contributions.
  • 3Base salaries for executive officers are set to increase effective April 5, 2010.
  • 4Revised target bonus percentages for named executive officers were approved.
  • 5Severance arrangements for executive officers were amended to ensure tax deductibility of bonuses and now require company-wide performance goal achievement for pro-rata bonus payouts in cases of involuntary termination without cause.
  • 6Two directors, Stephen P. Kaufman and Michael A. Bell, will not stand for re-election at the 2010 annual stockholders' meeting.

Frequently Asked Questions

The filing details the payout of 2009 bonuses, establishes new performance metrics for 2010 bonuses (focused on Adjusted Operating Income and a blend of financial/non-financial goals), announces base salary increases effective April 5, 2010, and adjusts target bonus percentages for executive officers. Severance policies were also amended regarding pro-rata bonus payments upon termination.

The severance arrangements were amended to comply with recent Internal Revenue Service rulings and to preserve the tax deductibility of the company's annual performance bonuses to executive officers. A key change is that pro-rata bonuses for involuntarily terminated executives will only be paid if company-wide performance goals are met.

Yes, two directors, Stephen P. Kaufman and Michael A. Bell, informed the company of their decision not to stand for re-election to the Board of Directors at the upcoming 2010 annual meeting.

The 2010 bonuses are tied to Adjusted Operating Income and a dual performance structure. 70% of the bonus potential is based on financial measures (revenue growth and adjusted earnings before interest, taxes, and amortization as a percentage of revenue), each weighted at 35%. The remaining 30% is based on non-financial measures reflecting executive officers' contributions to business objectives. Actual payouts will be subject to the Compensation Committee's discretion to reduce the bonus amount.