PHINIA Inc. Form 8-K Summary
Reporting date: February 16, 2024. The filing was signed February 21, 2024, under Item 5.02 and reports approval of 2024 executive incentive compensation. It does not provide quarterly or annual financial statements.
Business Context and Reporting Period
PHINIA’s Compensation Committee approved annual cash incentive opportunities for fiscal 2024 and long-term equity incentive awards for the company’s executive officers, including the named executives. The stated objective is to align executive compensation with company performance and long-term shareholder interests.
Compensation and Key Metrics
| Named executive | 2024 target annual bonus | Target 2024 LTI award |
|---|---|---|
| Brady D. Ericson | 125% of base salary; $1,250,000 | $4,500,000 |
| Chris P. Gropp | 70% of base salary; $374,500 | $1,000,000 |
| Robert Boyle | 60% of base salary; $260,700 | $500,000 |
| Todd L. Anderson | 45% of base salary; $164,034 | $275,000 |
| Alisa Di Beasi | 55% of base salary; $224,538 | $415,000 |
Annual bonuses are based equally on economic value and adjusted free cash flow. Economic value is generally net operating profit after tax less capital invested multiplied by the cost of capital. Adjusted free cash flow generally reflects operating cash flow, adjusted for ongoing separation-related transaction effects, less capital expenditures including tooling outlays.
Annual bonus payouts range from 0% to 200% of target. Threshold achievement produces a 50% payout for each metric, while maximum achievement produces a 200% payout. The Committee may adjust final payouts by up to 10% positively or negatively based on strategic performance, subject to an overall cap of 200% of target.
Target long-term incentive awards comprise performance stock units weighted 60% and restricted stock weighted 40%. The PSUs have a 2024–2026 performance period and are generally based on PHINIA’s relative total shareholder return versus a peer group.
| TSR performance level | Company percentile rank | PSUs earned |
|---|---|---|
| Maximum | 75th percentile or above | 200% of target |
| Target | 50th percentile | 100% of target |
| Threshold | 25th percentile | 50% of target |
| Below threshold | Below 25th percentile | 0% |
PSU payouts are limited to 100% of target if absolute TSR is negative. Restricted stock generally vests in three equal installments on February 28, 2025, February 28, 2026, and February 28, 2027. Vesting generally requires continued service and remains subject to the applicable plan and award agreements.
Material Changes, Outlook, Risks, and Unusual Items
- The filing discloses 2024 compensation arrangements but does not report revenue, profit, margins, cash flow results, debt, liquidity, or other operating financial metrics.
- Management characterized the EV and adjusted free cash flow goals as challenging but achievable.
- Performance goals, actual results, and related bonus payouts are to be disclosed after the 2024 performance period.
- Compensation outcomes depend on financial performance, strategic-performance discretion, relative TSR, absolute TSR, and continued service.
- The filing includes the forms of Performance Stock Unit Award Agreement and Restricted Stock Agreement as Exhibits 10.1 and 10.2.
Investor Verification Items
- Verify the final 2024 EV and adjusted free cash flow goals, actual performance, and bonus payouts when subsequently disclosed.
- Review the PSU peer group, award agreements, and detailed treatment of termination, retirement, change-in-control, and other employment events.
- Monitor the 2024–2026 relative and absolute TSR performance that will determine PSU vesting.
- Confirm whether subsequent filings provide the company’s financial results, liquidity, debt, or guidance, none of which are presented in this 8-K.