Business Context and Reporting Period
This Form 8-K was filed by Assurant, Inc. on February 15, 2006. The report details the approval of performance criteria for the 2006 short-term and long-term incentive awards for executive officers by the Compensation Committee of the Board of Directors.
Key Financial Metrics
The filing does not provide specific financial results such as revenue, profit, cash flow, margins, debt, or liquidity figures. It focuses exclusively on the methodology for calculating executive compensation.
Material Changes and Performance Criteria
The Compensation Committee established the following weighted factors to determine the final value of 2006 incentive awards:
- Company Growth Performance (40%): Measured as a weighted average of results for emphasized lines of business, based on new sales measures and/or GAAP revenue.
- Earnings Per Share (25%): Determined using net operating income (normalized for acquisitions, divestitures, and accounting changes).
- Return on Equity (15%): Calculated using net operating income and estimated equity excluding accumulated other comprehensive income.
- Sarbanes-Oxley Section 404 Compliance (10%): Based on the amount of new deficiencies and progress in remediating prior deficiencies.
- General Business Compliance (10%): Based on milestones related to corporate compliance and fraud deterrence.
Net operating income will be normalized for significant events. The Committee retains discretion to increase or reduce actual payable amounts regardless of performance criteria achievement.
Guidance, Outlook, and Risks
The filing contains no forward-looking financial guidance, market outlook, or discussion of general business risks. The primary contingency noted is the Compensation Committee's discretionary authority to adjust award amounts.
Key Facts for Investor Verification
- The 2006 executive incentive plan heavily weights growth performance (40%) over profitability metrics (40% combined for EPS and ROE).
- Compliance with Sarbanes-Oxley Act Section 404 and general business compliance collectively account for 20% of the incentive calculation.
- Net operating income used for calculations is subject to normalization for acquisitions, divestitures, and accounting policy changes.
- The Compensation Committee maintains the right to override calculated award amounts based on discretion.