Xylem Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Xylem Inc. on October 14, 2011. The filing relates to the appointment of Gretchen W. McClain as President and Chief Executive Officer, effective upon the consummation of the Company's spin-off from ITT Corporation.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation terms.
Material Changes and Executive Compensation
On October 14, 2011, Xylem Inc. entered into an employment letter with Gretchen W. McClain. Key compensation terms include:
- Base Salary: $900,000 annually.
- Annual Incentive: Target of 100% of base salary for 2012.
- Long-Term Incentive: Target opportunity of $3,400,000 for 2012.
- Founders' Grant: Nonqualified stock options and restricted stock units with an aggregate value of $5,100,000.
- Severance: If terminated without cause prior to normal retirement, Ms. McClain is entitled to severance equal to two times the sum of her annual base salary and target annual incentive, payable over 24 months.
Guidance, Outlook, and Risks
The filing contains no financial guidance, outlook, or discussion of general business risks. The primary contingency noted is the effectiveness of the employment terms upon the consummation of the spin-off from ITT Corporation.
Investor Verification Points
- Confirm the consummation date of the spin-off from ITT Corporation to determine the effective start date of the CEO's employment.
- Review the full text of the Employment Letter (Exhibit 10.1) for specific definitions of "cause," "normal retirement date," and conditions limiting severance eligibility.
- Verify the vesting schedule and performance criteria for the $3,400,000 long-term incentive and the $5,100,000 Founders' Grant.