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Title: |
Annual Incentive Plan |
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Date: |
2006 |
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Size: |
18KB total |
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Price: |
$31 |
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ID: |
#2503399 |
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ANNUAL INCENTIVE PLAN
PROGRAM DESCRIPTION FOR FISCAL YEAR 2007
Purpose
The objective of the Annual Incentive Plan (the AIP) is to advance the interests of Sara Lee Corporation (SLC) by:
| a) | Rewarding financial performance that contributes to increased shareholder value; |
| b) | Measuring the effectiveness of SLC operating performance and capital management; |
| c) | Basing a significant portion of all executives incentives on operating plan results; |
| d) | Continuing to provide significant rewards for exceptional performance. |
Incentive Opportunity & Standards of Performance
Attachment 1 shows the FY07 AIP Target and Maximum payout levels at the various salary grades. The following applies to the Plan goals:
| Financial and Individual Standards of Performance are established at the beginning of the Incentive Plan Year. The Financial Standards of Performance for Corporate Staff Participants and the Plan parameters applicable to all Plan Participants are approved by the Compensation and Employee Benefits Committee of the SLC Board of Directors (the Committee). |
| Business Segment executive management will develop the financial goals within their respective business. The SLC Chief Executive Officer (CEO) will approve the Business Segment financial goals for each business. |
| The FY07 Performance Measures are: |
| Operating Profit (Operating Income will be used for Corporate Staff positions)35% of Target Bonus Opportunity |
| Sales - 25% of Target Bonus Opportunity |
| Cash Flow - (Free Cash Flow for Corporate Staff positions; Operating Cash Flow for Business Segment positions) - 20% of Target Bonus Opportunity |
| Individual Objectives 20% of Target Bonus Opportunity |
| Beginning in FY07, business segment CEOs will have the discretion to approve different weightings of the Performance Measures to allow better alignment and line of sight of the performance measures with certain executives responsibilities, e.g. executives in a Sales function may have an increased weighting of the Sales Performance Measure and a reduction in another Performance Measure. |
| When expressed as a percentage of Target bonus opportunity, the weighting of each performance measure is approximately the same for each salary grade. A summary of FY07 Performance Measures and the corresponding incentive opportunities for Participants are shown in Attachment 2. Where applicable, similar Attachments for Participants in countries other than the U.S. are available from the appropriate Business Segment Human Resources representative. |
| It is recommended that Individual objectives be limited in number to provide focus on the major objectives for the year. These same objectives should be reflected in PMP. |
| At the end of the fiscal year, the Participants manager will make an overall assessment of performance results for each of the specific individual objectives as well as any other accomplishments or criteria deemed relevant in determining the payout level. |
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