Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
(e) On January 21, 2020, the Personnel and Compensation Committee of Teledyne’s Board of Directors (the "Committee") took the following actions:
(1) The Committee authorized payment of Annual Incentive Plan (“AIP”) cash bonus awards under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (the “Plan”) to each of the Named Executive Officers identified in Teledyne’s 2019 Proxy Statement with respect to the 2019 fiscal year ended December 29, 2019. AIP award opportunities are expressed as a percentage of a participant’s base salary and are based on the achievement of pre-defined performance measures, with up to 200% of the target award eligible to be paid in the case of significant over-achievement. The majority of the award is based on Teledyne’s achievement of certain financial performance goals, with a smaller portion tied to the achievement of pre-established individual goals. For 2019, 40% of the award is tied to the achievement of predetermined levels of operating profit, 25% to the achievement of predetermined levels of revenue, 15% to the achievement of predetermined levels of managed working capital as a percentage of revenue and 20% to the achievement of specified individual performance objectives. These predetermined levels may vary by business unit. In addition, per the Committee's policy, downward (but not upward) discretionary adjustments are allowed with respect to awards to Named Executive Officers identified in the proxy statement filed in the award year. AIP awards are generally paid from a pool not to exceed 11% of operating profit, subject to modification by the Committee. No AIP bonus will be earned in any year unless operating profit is positive, after accruing for bonus payments, and operating profit is at least 75% of the operating plan, subject in each case to modification by the Committee.
The following table sets forth the AIP cash bonus payments for the 2019 fiscal year to the Named Executive Officers identified in Teledyne’s 2019 Proxy Statement:
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Name
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Position
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2019 AIP Award
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Robert Mehrabian
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Executive Chairman
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$1,526,800
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Aldo Pichelli
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President and Chief Executive Officer
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$1,125,300
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Susan L. Main
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Senior Vice President and Chief Financial Officer
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$450,400
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Melanie S. Cibik
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Senior Vice President, General Counsel, Chief Compliance Officer and Secretary
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$328,900
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Edwin Roks
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Vice President and Group President, Teledyne Digital Imaging
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$379,700
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(2) The Committee approved the 2020 goals for the AIP cash bonus awards to each of Teledyne’s Named Executive Officers under the Plan. AIP award opportunities are expressed as a percentage of a participant’s base salary and are based on the achievement of pre-defined performance measures, with up to 200% of the target award eligible to be paid in the case of significant over-achievement. The majority of the award is based on Teledyne’s achievement of certain financial performance goals, with a smaller portion tied to the achievement of pre-established individual goals. Generally, 40% of the awards are tied to the achievement of predetermined levels of operating profit, 25% to the achievement of predetermined levels of revenue, 15% to the achievement of predetermined levels of managed working capital as a percentage of revenue and 20% to the achievement of specified individual performance objectives.
In addition, per the Committee's policy, downward (but not upward) discretionary adjustments are allowed with respect to awards to Named Executive Officers identified in the proxy statement filed in the award year. AIP awards are generally paid from a pool not to exceed 11% of operating profit, subject to modification by the Committee. No AIP bonus will be earned in any year unless operating profit is positive, after accruing for bonus payments, and operating profit is at least 75% of the operating plan, subject in each case to modification by the Committee.
For 2020, subject to the performance measures and discretion of the Committee, as noted above, the following Named Executive Officers identified in Teledyne’s 2020 Proxy Statement are eligible for a target AIP cash bonus based on the following percentage of their annual base salary:
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Name
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Position
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2020 AIP Award
Eligibility as a Percentage of Base Salary
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Robert Mehrabian
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Executive Chairman
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120
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%
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Aldo Pichelli
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President and Chief Executive Officer
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110
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%
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Susan L. Main
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Senior Vice President and Chief Financial Officer
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75
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%
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Melanie S. Cibik
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Senior Vice President, General Counsel, Chief Compliance Officer and Secretary
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60
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%
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Edwin Roks
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Vice President and Group President, Teledyne Digital Imaging
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70
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%
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(3) The Committee established a Restricted Stock Award Program under the Plan for key employees, including the Named Executive Officers currently employed by the company. This program provides grants of restricted stock or restricted stock units, generally each calendar year, to key employees at an aggregate fair market value equal to a specified percentage of each recipient’s annual base salary as of the date of the grant, unless otherwise determined by the Committee. The percentage of base salary used to determine the amount of the grant is 100% for Dr. Mehrabian, 100% for Mr. Pichelli, 45% for Ms. Main, 45% for Miss Cibik, and 30% for Mr. Roks. The restrictions are subject to both a time-based and performance-based component. In general, the restricted period for each grant of restricted stock extends from the date of the grant to the third anniversary of such date, with the restrictions lapsing on the third anniversary. However, unless the Committee determines otherwise, if Teledyne fails to meet certain minimum performance goals for a multi-year performance cycle (typically three years) established by the Committee as applicable to a restricted stock award, then all of the restricted stock is forfeited. If Teledyne achieves the minimum established performance goals, but fails to attain an aggregate level of 100% of the targeted performance goals, then a portion of the restricted stock would be forfeited. The performance goal for 2020 is the price of Teledyne’s common stock as compared to the Russell 1000 Index. In order for a participant to retain the restricted shares, Teledyne’s three-year aggregate return to shareholders (as measured by Teledyne’s stock price) must be at least 35% of the performance of the Russell 1000 Index for the three-year period. If Teledyne’s stock performance is less than 35% of the Russell 1000 Index performance, all restricted shares would be forfeited. If it ranges from 35% to less than 100%, a portion of the restricted shares will be forfeited. If it is 100% or more than 100%, no shares are forfeited and the participant does not receive additional shares.