Business Context and Reporting Period
This Form 8-K filing by Comtech Telecommunications Corp. (Delaware) was submitted on September 23, 2009, reporting events occurring on September 22, 2009. The filing addresses Item 5.02(e) regarding the approval of compensatory arrangements for certain named executive officers by the Executive Compensation Committee.
Key Financial Metrics
The filing does not provide general company financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to specific executive compensation awards:
- Fred Kornberg (CEO/Chairman): Total cash bonus of $2,366,026 for fiscal 2009.
- Robert L. McCollum: Total cash bonus of $682,113 for fiscal 2009.
- Daniel S. Wood: Total cash bonus of $224,681 for fiscal 2009.
- Michael D. Porcelain (CFO): Total cash bonus of $270,000 for fiscal 2009.
All awards include cash-incentive components under the 2000 Stock Incentive Plan. A portion of Mr. Kornberg's award is payable under his employment agreement.
Material Changes and Performance Measures
The filing details the establishment of fiscal 2010 performance measures and bonus goals. Specific bonus goal amounts are not disclosed as they are considered confidential business information. The structure for fiscal 2010 bonuses is as follows:
- Mr. Kornberg and Mr. Porcelain: Performance measures are based on a percentage of the Company's fiscal 2010 pre-tax profit (adjusted for certain items). Mr. Porcelain's goals also include personal goals.
- Other Named Executive Officers (McCollum and Wood): Goals are based on subsidiary pre-tax profits and additional measures.
For Messrs. McCollum and Wood, the weighting of performance measures is distributed equally:
| Executive | Operating Profit | New Orders | Cash Flow | Personal Goals | Total |
|---|---|---|---|---|---|
| Robert L. McCollum | 25% | 25% | 25% | 25% | 100% |
| Daniel S. Wood | 25% | 25% | 25% | 25% | 100% |
Performance Factors: Except for personal goals, the percentage factor for each measure can range from 0% (if achievement is less than 70%) to 150% (maximum achievement), scaling proportionally between 70% and 150% achievement.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on market conditions, or specific risk factors beyond the standard disclosure that the performance measures are intended to qualify as "performance-based" under Section 162(m) of the Internal Revenue Code. No unusual items or contingencies are reported in this document.
Investor Verification Checklist
- Verify the total cash outflow for fiscal 2009 executive bonuses ($3,542,820 total for the four named officers).
- Confirm the specific "certain items" used to adjust pre-tax profit for CEO and CFO bonus calculations, as these are not detailed in the filing.
- Review the 2000 Stock Incentive Plan to understand the equity component included in the cash-incentive awards.
- Monitor future filings for the actual fiscal 2010 performance results against the 70%-150% payout scale.