8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Nov 14, 2006)

Filed November 14, 2006For Securities:WDC

Summary

This Form 8-K filing from Western Digital Corporation (WDC) details adjustments and clarifications to executive compensation and incentive plans. The Compensation Committee has established specific performance goals for two significant cash awards previously granted to John F. Coyne, which are tied to the company's financial operating metrics over distinct performance periods extending into fiscal year 2008. These awards can range from 0% to 200% of the target amount, offering substantial upside potential contingent on company performance. Additionally, the filing outlines the performance goals and funding mechanism for the Western Digital Corporation Incentive Compensation Plan (ICP) for the second half of fiscal year 2007. The ICP's funding is also linked to predetermined financial operating metrics, with potential payouts ranging from 0% to 200% of target bonus amounts for executive officers. The report also discloses an increase in the annual base salary of Stephen D. Milligan to $450,000, effective November 9, 2006. Investors should note these actions as they provide insight into management's performance incentives and the company's strategic focus on achieving financial targets.

Key Highlights

  • 1Compensation Committee finalized performance goals for two $1,000,000 performance cash awards for John F. Coyne, spanning July 2006 - June 2007 and July 2006 - June 2008.
  • 2Performance awards for Mr. Coyne are contingent on achieving specific financial operating metrics, with payouts ranging from 0% to 200% of the target amount.
  • 3Performance goals established for the Western Digital Corporation Incentive Compensation Plan (ICP) for the second half of fiscal year 2007.
  • 4ICP funding for H2 FY2007 will be based on predetermined financial operating metrics.
  • 5Executive officers' target bonuses under the ICP range from 75% to 100% of base salary, with potential payouts from 0% to 200% of target.
  • 6Stephen D. Milligan's annual base salary was increased from $400,000 to $450,000, effective November 9, 2006.

Frequently Asked Questions

This filing details the establishment of performance goals for two significant cash awards granted to John F. Coyne, and the performance goals for the Incentive Compensation Plan (ICP) for the second half of fiscal year 2007. It also reports an increase in Stephen D. Milligan's annual base salary.

Two performance cash awards, each valued at $1,000,000 at target, have performance goals set by the Compensation Committee. Payouts are tied to the company's accomplishment of specific financial operating metrics over two distinct periods (FY2007 and FY2008) and can range from 0% to 200% of the target amount.

The ICP for the second half of fiscal year 2007 is now tied to specific financial operating metrics. Executive officers have target bonuses set as a percentage of base salary, with the potential payout ranging from 0% to 200% of that target, depending on the company's performance against the set goals. This means executive bonuses are directly linked to achieving financial objectives.

The increase in Stephen D. Milligan's annual base salary from $400,000 to $450,000 became effective on November 9, 2006.