8-KLeadership Changes

WESTERN DIGITAL CORP 8-K Report, Executive Changes (Aug 15, 2011)

Filed August 15, 2011For Securities:WDC

Summary

This Form 8-K filing from Western Digital Corporation (WDC) on August 15, 2011, primarily details adjustments to executive compensation and performance metrics for its incentive plan. The most significant information for investors concerns the salary increase for its Senior Vice President and Chief Financial Officer, Wolfgang U. Nickl, and the establishment of performance goals for cash bonus awards under the Incentive Compensation Plan (ICP) for the latter half of 2011. Specifically, Mr. Nickl's base salary was increased to $400,000 from $350,000. The company also outlined its bonus structure for executive officers, which will be tied to earnings per share (EPS) goals for a six-month performance period. The bonus payouts can range from 0% to 200% of the target bonus, depending on the achievement of these EPS targets and other strategic objectives, as well as individual and business group performance.

Key Highlights

  • 1Wolfgang U. Nickl, SVP and CFO, received a base salary increase from $350,000 to $400,000, effective August 10, 2011.
  • 2The Compensation Committee established performance goals for the Western Digital Corporation Incentive Compensation Plan (ICP) for the period July 2, 2011, to December 30, 2011.
  • 3Earnings per share (EPS) is the key financial performance metric for determining cash bonus awards under the ICP.
  • 4Bonus payouts under the ICP can range from 0% to 200% of the target bonus, based on EPS achievement.
  • 5The ICP payout is also influenced by non-financial and strategic operating objectives, as well as individual and business group performance.
  • 6Executive officers have target bonus percentages ranging from 75% to 150% of their semi-annual base salary.

Frequently Asked Questions

The filing indicates that the Compensation Committee of the Board of Directors approved an increase in the base salary for the Senior Vice President and Chief Financial Officer, Wolfgang U. Nickl, from $350,000 to $400,000. While the specific reasons for the increase are not detailed in this filing, such adjustments are typically based on factors like market compensation, increased responsibilities, and performance.

For the six-month period from July 2, 2011, to December 30, 2011, executive bonuses under the Incentive Compensation Plan (ICP) will be primarily determined by the company's achievement of specific earnings per share (EPS) goals. The potential payout ranges from 0% to 200% of the target bonus, interpolated based on EPS performance.

Yes, in addition to the primary financial metric of earnings per share, bonus payouts are also subject to the Compensation Committee's consideration of the company's overall achievement of key non-financial and strategic operating objectives. Individual and business group performance, along with changes in business and industry conditions, can also influence the final bonus amount awarded.