8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Aug 25, 2009)

Filed August 25, 2009For Securities:WDC

Summary

This 8-K filing from Western Digital Corporation (WDC) on August 24, 2009, primarily concerns the establishment of performance goals for cash bonus awards under the Company's Incentive Compensation Plan (ICP) for the six-month period from July 4, 2009, to January 1, 2010. These performance goals are designed to align executive compensation with key company achievements and strategic objectives. For investors, the key takeaway is the structure of executive incentive compensation. The Compensation Committee has set earnings per share (EPS) as the primary financial metric, with specific EPS targets corresponding to bonus payout percentages ranging from 0% to 200% of the target bonus. The plan also allows for discretionary adjustments based on non-financial objectives, industry conditions, and individual performance, providing flexibility but also introducing a degree of subjectivity in the final bonus determination.

Key Highlights

  • 1Western Digital Corporation (WDC) established performance goals for its Incentive Compensation Plan (ICP) for the six-month period from July 4, 2009, to January 1, 2010.
  • 2The primary financial performance goal for executive bonuses is Earnings Per Share (EPS).
  • 3Specific EPS targets will determine bonus payouts, with potential achievement ranging from 0% to 200% of the target bonus.
  • 4Target bonuses for executive officers are set as a percentage of their semi-annual base salary, ranging from 75% to 150%.
  • 5Bonus payouts will be based on an interpolated percentage between EPS achievement and consideration of non-financial strategic objectives.
  • 6Discretionary factors, including business and industry conditions, and individual/business group performance, can influence final bonus amounts.
  • 7The filing details the structure of executive compensation incentives rather than announcing significant operational or financial results.

Frequently Asked Questions

The main purpose of this 8-K filing is to inform investors that Western Digital Corporation's Compensation Committee has established the performance goals and payout structure for its executive and employee incentive compensation plan (ICP) for the six-month period ending January 1, 2010.

The primary financial performance metric is earnings per share (EPS). The Compensation Committee has set specific EPS targets that will dictate bonus payouts, with a potential range of 0% to 200% of the target bonus. Non-financial and strategic operating objectives are also considered.

Target bonuses for executive officers are predetermined as a percentage of their semi-annual base salary, with these percentages typically ranging from 75% to 150%.

No, while EPS is the primary financial goal, the final bonus payout is determined by an interpolation between the company's EPS performance and its achievement of key non-financial and strategic operating objectives. The Compensation Committee also retains discretion to adjust bonuses based on overall business and industry conditions, as well as individual and business group performance.