FLEX LTD. (NASDAQ:FLEX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e) Executive Compensation
Annual Incentive Bonus Plan for Fiscal 2018
On June 29, 2017, the Board of Directors (the “Board”) of Flex Ltd. (the “Company”) approved the Company’s Annual Incentive Bonus Plan for fiscal year 2018. The plan provides its executive officers with the opportunity to earn annual cash bonuses based upon the achievement of pre-established performance goals. Total bonus opportunities will be based on achievement of annual targets. The plan provides for 50% of the bonus to be based on the achievement of quarterly objectives and 50% to be based on the achievement of annual objectives. Performance goals under the plan will be: revenue growth, earnings per share, operating profit, and return on invested capital targets at the Company level; and, additionally for certain executives, total sales, operating profit and new business wins and other business-specific business unit targets at the business unit level. The plan allows awards to provide for different metrics, target levels and weightings for different executives.
Under the Annual Incentive Bonus Plan, target award opportunities are set at various percentages of base salary, which will be: 200% of base salary in the case of the Chief Executive Officer; 110% of base salary in the case of the Chief Financial Officer; and between 80% and 110% of base salary in the cases of other officers. Actual payout opportunities for each bonus component will range from a threshold of 50% of target to a maximum of 200% of target for the quarterly payouts and 300% of target for the annual bonuses, in each case based on achievement of the performance measures. If the Company or business unit fails to achieve the threshold level for any performance measure, no payout is awarded for that measure. For purposes of determining achievement of award opportunities, the incentive bonus plan uses adjusted, non-GAAP measures.
Performance Long Term Incentive Plan for Fiscal 2018
On June 29, 2017, the Board approved the Company’s Performance Long Term Cash Incentive Plan for fiscal year 2018. The plan provides the Company’s executive officers (other than the Chief Executive Officer) with the opportunity to earn long term cash bonuses based upon the achievement of pre-established long term performance goals. The plan provides for 50% of the bonus to be based on the achievement of a cumulative three-year objective. For fiscal year 2018 grants, the performance goals under the plan are based on increases to the free cash flow of the Company. Actual payout opportunities will range from a threshold of 50% of target to a maximum of 200% of target based on achievement of the performance goals. Cash payments under the Performance Long Term Cash Incentive Plan will occur on the third anniversary of the initial grant date if the performance targets are met or exceeded. For purposes of determining achievement of award opportunities, the Performance Long Term Cash Incentive Plan uses free cash flow as an adjusted, non-GAAP measure. For purposes of this Plan, the Company defines free cash flow as net cash flows from operating activities less purchases of property and equipment, net of dispositions.
