Business Context and Reporting Period
This Form 8-K Current Report was filed by Applied Materials, Inc. on February 7, 2009. The report addresses executive compensation adjustments implemented in response to deteriorating global economic and industry conditions.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. The primary financial data disclosed relates to executive compensation reductions.
Material Changes
Effective February 9, 2009, the company implemented a 10% reduction in the annual base salaries of all Named Executive Officers (NEOs). This action follows a previous 10% reduction, resulting in a cumulative 20% decrease in base salaries compared to the prior year. Additionally, all NEOs agreed to forgo their annual incentive bonuses for fiscal year 2009, regardless of performance goal achievement, unless business conditions improve significantly.
Adjusted Annual Base Salaries as of February 9, 2009
| Named Executive Officer | Reduced Base Salary |
|---|---|
| Michael R. Splinter, President and CEO | $784,000 |
| Franz Janker, Executive VP, Sales and Marketing | $475,200 |
| Mark R. Pinto, SVP, CTO and GM Energy and Environmental Solutions | $440,000 |
| Thomas St. Dennis, SVP, GM Silicon Systems Group | $411,280 |
| George S. Davis, SVP, CFO | $410,400 |
| Manfred Kerschbaum, SVP, GM Applied Global Services | $403,520 |
Outlook, Risks, and Management Commentary
Management cites deteriorating global economic and industry conditions as the driver for these cost-reduction measures. The forgoing of bonuses is contingent on significant improvements in business conditions and financial results; otherwise, the waiver remains in effect for fiscal 2009.
Key Facts for Investor Verification
- Confirm the cumulative 20% reduction in executive base salaries relative to the prior year.
- Verify the total number of executives affected by the bonus forfeiture policy.
- Monitor subsequent filings for updates on whether business conditions have improved sufficiently to reinstate bonuses.
- Review the company's broader cost-cutting initiatives beyond executive compensation.