Business Context and Reporting Period
This Form 8-K Current Report was filed by Corning Incorporated on February 6, 2008. The filing addresses Item 5.02 regarding the adoption of performance metrics for 2008 variable compensation and performance shares by the Compensation Committee of the Board of Directors.
Key Financial Metrics
The filing does not report specific revenue, profit, cash flow, margin, debt, or liquidity figures for the company. Instead, it establishes the financial metrics used to determine executive compensation for the 2008 fiscal year:
- Variable Compensation Metric: Adjusted net profit after taxes.
- Performance Shares Metric: Adjusted earnings per share and adjusted operating cash flow.
Material Changes and Compensation Details
The Compensation Committee adopted specific metrics and target awards for named executive officers (NEOs) effective February 6, 2008.
Variable Compensation (Payable in 2009)
Target percentages of base salary and potential cash awards at target levels for 2008 performance are as follows:
| Executive Officer | Target % of Base Salary | Target Cash Award ($) |
|---|---|---|
| Wendell P. Weeks (CEO) | 100% | 1,030,000 |
| Peter F. Volanakis (COO) | 85% | 737,800 |
| James B. Flaws (CFO) | 80% | 656,800 |
| Kirk P. Gregg (EVP, CAO) | 75% | 433,500 |
| Joseph A. Miller, Jr. (EVP, CTO) | 75% | 457,500 |
GoalSharing awards for these executives will be determined as the average of all employees receiving awards under the company's 140+ GoalSharing plans.
Incentive Stock Plan (Performance Shares)
Target grants of performance shares (restricted stock) for 2008 were awarded to approximately 190 employees, including the following NEOs:
- Wendell P. Weeks: 129,000 shares
- Peter F. Volanakis: 86,000 shares
- James B. Flaws: 60,000 shares
- Kirk P. Gregg: 43,000 shares
- Joseph A. Miller, Jr.: 49,000 shares
Award opportunities range from 0% to 150% of the target based on actual performance against adjusted EPS and operating cash flow goals. Earned shares are restricted and subject to forfeiture until February 1, 2011.
Guidance, Outlook, and Risks
The filing does not provide general business guidance, outlook, or risk factors. The primary contingency noted is that the actual number of performance shares earned and the cash variable compensation payable in 2009 are contingent upon the company meeting the established 2008 performance metrics (adjusted net profit after taxes, adjusted EPS, and adjusted operating cash flow).
Investor Verification Checklist
- Verify the final 2008 adjusted net profit after taxes, adjusted EPS, and adjusted operating cash flow to determine actual executive payouts.
- Confirm the vesting status of the 2008 performance shares in early 2009 and their subsequent restriction period through February 2011.
- Review the company's 2008 annual report to compare actual financial results against the metrics established in this filing.