Summary
Thermo Fisher Scientific Inc. (TMO) filed an 8-K on March 2, 2012, detailing executive compensation adjustments approved by its Compensation Committee on February 28, 2012. Key actions include the approval of 2011 cash bonuses for executive officers, with the committee exercising discretion to adjust payouts based on performance metrics. The filing also outlines the criteria and target bonus structure for 2012, emphasizing Adjusted Operating Income as a primary performance metric. Significant base salary increases for executive officers, effective April 2, 2012, were also approved, along with the establishment of 2012 target bonus percentages based on these new salaries.
Key Highlights
- 1Approval of 2011 cash bonus payouts for executive officers, with adjustments made based on performance metrics.
- 2Establishment of 2012 performance goals for annual cash bonuses, centered on Adjusted Operating Income and other financial/non-financial measures.
- 3Approval of base salary increases for executive officers, effective April 2, 2012.
- 4Determination of 2012 target bonus percentages as a proportion of the new base salaries, ranging from 85% to 140% for named executive officers.
- 5Granting of performance-based restricted stock units (RSUs) to key executives with vesting tied to 2012 organic revenue and adjusted earnings per share performance.
- 6Granting of time-based restricted stock units to key executives, vesting over a three-year period.
- 7Details provided for the compensation of named executive officers, including CEO Marc N. Casper, CFO Peter M. Wilver, and others.
Frequently Asked Questions
The Compensation Committee approved the payout of 2011 cash bonuses for executive officers, established performance criteria and targets for 2012 bonuses, approved base salary increases for executives effective April 2, 2012, and granted both performance-based and time-based restricted stock units (RSUs) to key officers.
For 2012, executive compensation is based on a combination of base salary, target cash bonuses, and long-term incentives in the form of restricted stock units. The cash bonus payout will be determined by performance against Adjusted Operating Income and other financial and non-financial metrics, while RSUs will vest based on achievement of organic revenue and adjusted earnings per share targets for 2012.
The primary performance metric for the 2012 bonus is 'Adjusted Operating Income,' which excludes various items like restructuring charges, acquisition costs, and non-recurring items. Performance will be measured against the company's internal operating plan for 2012.
The performance-based restricted stock units granted to executives are tied to the achievement of two key performance measures for 2012: organic revenue growth and adjusted earnings per share (EPS). The vesting of these RSUs depends on the company's performance relative to its internal operating plan for these metrics.