Business Context and Reporting Period
This Form 8-K Current Report was filed by NetApp, Inc. on June 3, 2020, covering events that occurred on June 1, 2020. The filing addresses Item 5.02 regarding the approval of fiscal year 2021 (FY 21) compensation terms for named executive officers and the revision of restricted stock unit agreements.
Key Financial Metrics
The filing does not provide financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes and Compensation Details
The Compensation Committee approved the following FY 21 cash compensation terms. Salaries and target incentive compensation percentages remain unchanged from fiscal year 2020:
- George Kurian (CEO and President): $950,000 salary; 170% target incentive.
- Michael Berry (EVP and CFO): $600,000 salary; 110% target incentive.
- Bradley Anderson (EVP, Hybrid Cloud Group): $550,000 salary; 110% target incentive.
- Matthew K. Fawcett (SVP, General Counsel and Secretary): $548,000 salary; 80% target incentive.
Additionally, the Committee approved revised terms for Performance-Based Restricted Stock Units (PBRSUs) and standard Restricted Stock Units (RSUs) expected to be granted on July 1, 2020. Key changes include:
- PBRSUs: Vesting is based on a three-year performance period tied to the Company's Total Stockholder Return (TSR) percentile ranking against benchmark peers. Pro-rating applies for approved leaves of absence of 6 months or more.
- RSUs: A new provision allows for accelerated vesting upon retirement, calculated based on the time elapsed since the last vesting date.
Guidance, Outlook, and Risks
The filing contains no financial guidance, outlook, or management commentary regarding business operations. The primary contingency noted is that the full text of the PBRSU and RSU agreements will be filed as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ending July 31, 2020.
Investor Verification Checklist
- Verify the full text of the PBRSU and RSU agreements in the upcoming Form 10-Q for the quarter ending July 31, 2020.
- Confirm the specific benchmark peers used for the Total Stockholder Return (TSR) performance metric.
- Review the specific performance levels required to achieve maximum achievement for the revised PBRSU metrics.