Summary
This Form 8-K filing from The Williams Companies, Inc. (WMB) on February 25, 2009, primarily details executive compensation decisions for 2008 and 2009, made by the Compensation Committee. The report confirms that the company exceeded its 2008 Economic Value Added (EVA®) incentive target, leading to the approval of significant bonus awards for its named executive officers. These awards, totaling over $4.7 million, are scheduled for payment in March 2009. The filing also outlines the 2009 incentive programs, including a 2009 EVA®-based annual incentive plan and new equity awards. Notably, executive base salaries and incentive targets remain frozen at 2008 levels for 2009, reflecting the uncertain economic climate.
Key Highlights
- 1The Williams Companies, Inc. exceeded its 2008 Economic Value Added (EVA®) incentive target.
- 2Bonuses totaling $4,727,942 were approved for named executive officers for 2008 performance, payable on March 13, 2009.
- 3The CEO, Steven J. Malcolm, received the largest 2008 bonus at $1,817,942.
- 4The 2009 annual incentive program will be funded based on 2009 EVA® performance, with executive base salaries and target incentive percentages frozen from 2008.
- 5The Compensation Committee approved 2009 equity awards (stock options and restricted stock units) for the CEO and other named executive officers.
- 6The mix of equity compensation for executives (excluding the CEO) was adjusted, with an increased emphasis on stock options and time-based restricted stock units.
- 7Performance-based restricted stock units for 2009 awards are tied to Total Shareholder Return (TSR) over a three-year period, aligning management with shareholder interests.
Frequently Asked Questions
The primary focus of this 8-K filing is to report on decisions made by The Williams Companies' Compensation Committee regarding executive compensation for 2008 and the establishment of programs for 2009. This includes annual incentive awards and equity grants.
EVA® (Economic Value Added®) is a financial metric used by Williams to measure the value created by capital investments. The company's 2008 annual incentive program was based on exceeding an established EVA® target, which the company achieved, leading to the approved bonus payments for executives.
No, the filing states that executive base salaries and target incentive percentages for 2009 have been frozen and remain unchanged from 2008 levels. This decision was made in response to the uncertain economic environment.
For named executive officers other than the CEO, the mix of equity compensation changed. The allocation to stock options increased from 25% to 30%, time-based restricted stock units increased from 25% to 35%, and performance-based restricted stock units decreased from 50% to 35%. The CEO's equity mix remained at 50% stock options and 50% performance-based restricted stock units.