Business Context and Reporting Period
This Form 8-K was filed by TE Connectivity Ltd. on November 12, 2012. The report discloses the initial grant of performance stock units (PSUs) to named executive officers under the company's 2007 Stock and Incentive Plan.
Key Financial Metrics
The filing does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes
The material event reported is the grant of PSUs to four named executive officers on November 12, 2012. This represents the first award of PSUs under the SIP to the company's principal executive and financial officers.
- Thomas J. Lynch (CEO): 63,480 PSUs
- Robert W. Hau (EVP and CFO): 16,320 PSUs
- Terrence R. Curtin (EVP and President, Industrial Solutions): 20,860 PSUs
- Joseph B. Donahue (EVP, COO and President, Network Solutions): 20,860 PSUs
Guidance, Outlook, and Compensation Terms
The PSUs are tied to a three-year performance cycle based on the company's earnings per share (EPS) growth relative to the S&P 500 Non-Financial Companies Index.
- Vesting Schedule: One-third of the granted PSUs (the annual target amount) can be earned each year based on a predetermined schedule.
- Performance Thresholds: A minimum threshold must be met to earn any portion. If EPS growth falls within the 45th to 55th percentile of the index, the annual target amount is reserved. Performance above this range can result in up to 200% of the target amount being reserved. No PSUs are reserved if the threshold is not met.
- Dividends: Officers receive dividend equivalent stock units commensurate with the portion of PSUs reserved and vested.
Investor Verification Checklist
- Verify the specific EPS growth targets and percentile thresholds defined in the full 2007 Stock and Incentive Plan.
- Confirm the total number of shares available for issuance under the SIP to assess dilution impact.
- Review the company's historical EPS performance relative to the S&P 500 Non-Financial Companies Index to gauge the likelihood of vesting.
- Check subsequent filings for the actual vesting outcomes of these specific grants after the three-year cycle concludes.