Summary
United Rentals, Inc. (URI) filed an 8-K on April 3, 2007, primarily detailing executive compensation plan determinations for 2007 and amendments to its corporate governance structure. The company's compensation committee established performance-based bonus criteria for its top four executive officers, linking payouts to metrics such as earnings per share, free cash flow, return on invested capital, and revenue growth. The structure aims to align executive incentives with key financial and operational objectives for the upcoming year, with specific weightings assigned to each executive and performance measure. Furthermore, the filing discloses significant changes to the company's board of directors' election process and structure. The board approved an amendment to its bylaws to adopt a majority vote standard for director elections in uncontested situations, which will require a nominee to receive more votes for than against. Additionally, the company plans to submit a proposal to eliminate the classified board structure for stockholder approval, which would move towards annual elections for all directors. These governance changes reflect a move towards increased shareholder accountability and responsiveness.
Key Highlights
- 1Executive bonus plans for 2007 set for CEO, CFO, COO, and General Counsel based on objective performance goals.
- 2Key performance metrics for executive bonuses include EPS, free cash flow, ROIC, and revenue growth, with varying weightings.
- 3Target bonus payouts are generally aligned with 2007 internal budgets and forecasts.
- 4Bylaws amended to require a majority vote for directors in uncontested elections.
- 5Directors failing to receive majority support in uncontested elections will offer their resignation.
- 6Proposal to eliminate classified board structure and move to annual director elections to be submitted to stockholders.
- 72006 Annual Report and a downloadable financial model for investors made available on the company website.