Business Context and Reporting Period
Company: FLOWSERVE CORP
Filing Type: Form 8-K (Current Report)
Date of Report: February 16, 2005
Event: Entry into a Material Definitive Agreement regarding executive compensation plans.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on the establishment of performance criteria for incentive plans.
Material Changes
On February 16, 2005, the Board of Directors finalized performance criteria for two cash bonus plans applicable to salaried employees, including executive officers:
- Long-Term Incentive Cash Plan: Performance period spans 2005 through 2007, with payouts in 2008. The primary measure is average return on invested capital (ROIC) over three years, benchmarked at the start of the period. Payouts range from 0% to 200% of target amounts.
- Annual Incentive Plan: Performance period is 2005, with payouts in 2006. Primary measures include operating income and cash flow, alongside local performance criteria. Payouts range from 0% to 200% of target amounts.
Guidance, Outlook, and Risks
The filing does not contain financial guidance, general outlook commentary, or specific risk factors beyond the inherent variability of the incentive plans. The payout amounts are contingent upon meeting or exceeding established performance targets.
Investor Verification Checklist
- Verify the specific ROIC benchmark targets set for the 2005-2007 period in subsequent disclosures.
- Review the definition of "operating income" and "cash flow" used for the 2005 Annual Incentive Plan to understand potential payout triggers.
- Monitor future filings for actual performance results against these targets to assess potential cash outflows in 2006 and 2008.