8-KLeadership ChangesCorporate ChangesExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Executive Changes (Mar 2, 2017)

Filed March 2, 2017For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) filed an 8-K on March 2, 2017, detailing significant corporate governance and executive compensation changes. A key development is the appointment of Dion J. Weisler, CEO of HP Inc., to the Board of Directors and its Audit Committee, effective March 1, 2017. This move adds experienced leadership to the board, which investors may view positively as it brings in a CEO from a major technology company. The filing also outlines the Compensation Committee's decisions regarding executive compensation for 2016 and 2017. For 2016, cash bonuses were approved and paid out, with the committee exercising discretion to adjust amounts based on performance metrics. For 2017, the committee established performance criteria for annual cash incentives, focusing on "Adjusted Operating Income" and a weighted mix of financial (revenue growth, earnings, EPS, operating cash flow) and non-financial measures. Significant equity awards, including time-based and performance-based restricted stock units, along with stock options, were also granted to key executives, aligning their interests with long-term shareholder value.

Key Highlights

  • 1Dion J. Weisler, President and CEO of HP Inc., was elected to the Board of Directors and appointed to the Audit Committee, effective March 1, 2017.
  • 2The Compensation Committee approved 2016 cash bonuses for executive officers, with payouts adjusted based on performance metrics.
  • 3Criteria for 2017 annual cash incentive bonuses were established, based on "Adjusted Operating Income" and a combination of financial and non-financial performance measures.
  • 4New annual base salaries and revised target bonus percentages for 2017 were set for certain executive officers.
  • 5Significant grants of time-based and performance-based restricted stock units (RSUs) were awarded to key executives (Casper, Williamson, Stevenson, Loewald).
  • 6Stock options were also granted to Messrs. Casper, Williamson, Stevenson, and Loewald, vesting over four years.
  • 7The Company's By-Laws were amended to implement proxy access, allowing qualifying stockholders to nominate directors for inclusion in company proxy materials.

Frequently Asked Questions

Dion J. Weisler is the President and Chief Executive Officer of HP Inc. His election to Thermo Fisher Scientific's Board of Directors and appointment to the Audit Committee on March 1, 2017, brings additional leadership and expertise to the company's governance, particularly in financial oversight.

For 2016, cash bonuses were approved and paid out under the 2013 Annual Incentive Award Plan. The Compensation Committee exercised its discretion to lower bonus amounts based on its assessment of the achievement of applicable supplemental performance metrics and goals.

For 2017, the primary performance metric for bonuses is "Adjusted Operating Income." Additionally, a weighted mix of financial measures (revenue growth, earnings, EPS, operating cash flow) and non-financial measures related to business objectives will be used to determine the final payout.

Key executives received grants of both time-based restricted stock units (RSUs) and performance-based RSUs. Stock options were also granted. The vesting and payout of these awards are tied to continued employment and, for performance-based awards, the achievement of specific financial goals for 2017.

Proxy access, implemented through an amendment to the company's By-Laws effective March 1, 2017, allows qualifying stockholders or groups of stockholders (holding at least 3% continuously for at least three years) to nominate director candidates and have them included in the company's proxy materials for annual meetings. This provides shareholders with a greater ability to influence board composition.