8-KLeadership Changes

WILLIAMS COMPANIES, INC. 8-K Report, Executive Changes (Apr 3, 2009)

Filed April 3, 2009For Securities:WMB

Summary

This 8-K filing from The Williams Companies, Inc. (WMB) on April 2, 2009, details adjustments to the company's 2009 Annual Incentive Program for its named executive officers. The Compensation Committee revised the program on March 31, 2009, to significantly reduce the maximum achievable bonus payout. The funding for bonuses will now be based on the company's 2009 EVA® performance, capped at 250% of the target, down from a previous maximum of 400%, and a reserve account has been eliminated. The target incentive opportunities, expressed as a percentage of base salary, remain the same for each executive, with specific targets set for the CFO (75%) and CEO (100%), and 65% for other named executive officers. Base salaries and target incentive levels are unchanged from 2008.

Key Highlights

  • 1Williams Companies adjusted its 2009 Annual Incentive Program for named executive officers.
  • 2The maximum potential bonus payout under the program was significantly reduced.
  • 3The maximum bonus is now capped at 250% of target performance, down from 400%.
  • 4The program's funding is tied to the company's 2009 EVA® (Economic Value Added) performance.
  • 5A previously existing reserve account for incentive payouts has been eliminated.
  • 6Base salaries and target incentive opportunities remain consistent with 2008 levels.
  • 7The Compensation Committee retains discretion over incentive award payouts and individual performance adjustments.

Frequently Asked Questions

The primary change is a significant reduction in the maximum bonus percentage that named executive officers can achieve. The payout is now capped at 250% of target performance, a decrease from the previous 400% maximum, and a reserve account has been removed.

The incentive bonus funding is based on Williams' 2009 EVA® (Economic Value Added) performance. The Compensation Committee also reviews individual performance and has discretion over the final payout amount, ensuring it does not exceed the new maximum funding level.

No, the base salaries and the target incentive opportunities (expressed as a percentage of base salary) for the named executive officers remain unchanged from 2008 levels. The targets are 65% for most officers, 75% for the CFO, and 100% for the CEO.

The filing does not explicitly state the reason for the reduction, but it was made by the Compensation Committee on March 31, 2009, in the midst of the 2009 fiscal year. This action suggests a more conservative approach to executive compensation, potentially in response to economic conditions or to align executive incentives more closely with company performance under potentially challenging circumstances.