Business Context and Reporting Period
Company: Corning Incorporated
Filing Type: Form 8-K (Current Report)
Date of Report: February 6, 2006
Event Date: February 1, 2006
Subject: Entry into a Material Definitive Agreement regarding the adoption of 2006 performance metrics for variable compensation and incentive stock plans.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on executive compensation structures and performance metrics.
Material Changes and Compensation Details
The Compensation Committee adopted specific performance metrics for 2006, payable in 2007, under two primary plans:
- Variable Compensation Plan:
- Covers over 3,000 eligible employees under the main plan and nearly all 26,000 employees under 79 goalsharing plans.
- Corporate Metric: Adjusted net profit after taxes.
- Executive Targets (as % of base salary):
- James R. Houghton: 50%
- Wendell P. Weeks: 100%
- Peter F. Volanakis: 85%
- James B. Flaws: 80%
- Joseph A. Miller, Jr.: 75%
- Incentive Stock Plan (2005 Employee Equity Participation Program):
- Covers approximately 186 employees, including executive officers.
- Corporate Metrics: Adjusted earnings per share and operating cash flow for 2006.
- Restrictions: Earned shares are restricted and subject to forfeiture until February 1, 2009.
- 2006 Restricted Awards (at target level):
- James R. Houghton: 62,000 shares
- Wendell P. Weeks: 130,000 shares
- Peter F. Volanakis: 89,000 shares
- James B. Flaws: 62,000 shares
- Joseph A. Miller, Jr.: 47,000 shares
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or management commentary on market conditions. The primary contingency noted is that the performance shares awarded are subject to forfeiture if the company fails to meet the established metrics for adjusted earnings per share and operating cash flow.
Investor Verification Checklist
- Verify the definition of "adjusted net profit after taxes" and "adjusted earnings per share" in the referenced proxy statements (Exhibit 2 of 2003 14A and Exhibit 1 of 2005 14A).
- Confirm the vesting schedule and forfeiture conditions for the restricted stock awards granted in December 2005 for 2006 performance.
- Review the total number of eligible employees (26,000) to assess the breadth of the goalsharing plans.
- Monitor future filings for the actual 2006 performance results against the established metrics to determine final payout amounts.