8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Sep 17, 2007)

Filed September 17, 2007For Securities:WDC

Summary

This Form 8-K filing from Western Digital Corporation (WDC) on September 17, 2007, primarily details changes and confirmations related to executive compensation. The Compensation Committee approved an increase in the target bonus percentage for CEO John F. Coyne, raising it from 100% to 125% of his semi-annual base salary, effective for the second half of fiscal year 2007. This adjustment signals confidence in the CEO's performance and incentivizes continued success for the remainder of the fiscal year. Additionally, the filing outlines the establishment of long-term performance cash awards for named executive officers, including CFO Timothy M. Leyden. These awards, tied to specific operating income and revenue goals over a two-year performance period (June 2007 - June 2009), can range from 0% to 200% of the target amount based on achievement. The company is clearly focused on aligning executive pay with significant corporate performance metrics, aiming to drive both short-term and long-term value for shareholders.

Key Highlights

  • 1CEO John F. Coyne's target bonus percentage increased from 100% to 125% of semi-annual base salary for the performance period ending December 28, 2007.
  • 2The increase in CEO's bonus target is effective for the current 6-month performance period.
  • 3Long-term performance cash awards established for named executive officers for a period of June 30, 2007, to June 26, 2009.
  • 4Payment of long-term awards is contingent on achieving specified operating income and revenue goals.
  • 5Potential payout for long-term awards ranges from 0% to 200% of the target amount based on performance.
  • 6Performance goals for CFO Timothy M. Leyden's previously awarded long-term cash award were set for the performance period of June 30, 2007, to June 27, 2008.
  • 7The company utilizes performance-based incentive plans to align executive compensation with financial targets.

Frequently Asked Questions

This 8-K filing primarily reports on decisions made by Western Digital's Compensation Committee regarding executive compensation, specifically an increase in the CEO's bonus target and the establishment of long-term performance-based cash awards for key executives.

The increase in CEO John F. Coyne's target bonus from 100% to 125% of his semi-annual base salary indicates management's belief in the company's performance and incentivizes continued achievement. It suggests that the company expects to meet or exceed performance benchmarks, potentially leading to higher overall compensation for the CEO.

The long-term performance cash awards for named executive officers are conditioned upon the company achieving specific operating income and revenue goals. The payout, which can range from 0% to 200% of the target amount, will be determined after the end of the respective performance periods (ending in 2008 and 2009) based on the degree to which these financial targets are met.

By tying a significant portion of executive compensation to operating income and revenue goals, Western Digital aims to directly align the interests of its top executives with the financial success of the company and, by extension, the creation of shareholder value. This ensures that executive rewards are earned through demonstrable improvements in key financial metrics.