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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
At a meeting held on February 23, 2021, the Compensation and Organization Committee of the Board of Directors of the
registrant (the “Committee”) established corporate performance criteria that will be used to determine the amount of 2021 incentive compensation awards under the Executive Incentive Compensation Plan (the “Plan”). The Committee set specific Adjusted Earnings Per Share and Adjusted Operating Cash Flow metrics for the 2021 Plan corporate performance criteria. In addition to these quantitative goals, the Committee may also consider other performance factors in determining final awards. These include, but are not limited to, performance versus profit plan goals, performance versus that reported for the Company’s peers, and progress toward the execution of the Company’s growth strategies. The Plan participants consist of the Executive Officers
of Eaton Corporation and approximately 2,800 other salaried employees. At the same meeting, the Committee established 2021 incentive target amounts. The individual incentive targets for the current executive officers who were named in the summary compensation table of the registrant’s 2020 Proxy Statement (the “Named Executive Officers”) range from 100% to 160%.
At the meeting, the Committee also established individual targets and approved grants for the Company’s long-term performance-based incentive program (“ESIP”) 2021-2023 award period. The 2021-2023 award period opportunities for the Named Executive Officers took the form of performance share units (“PSUs”) and grants at the target level range from 7,335 PSUs
to 40,735 PSUs. The actual number of PSUs earned will depend upon the registrant’s total return to shareholders, assuming reinvestment of dividends (“TSR”), relative to that of a group of 16 peers approved by the Committee at the same meeting. Consistent with historical practices, participants can earn 0% to 200% of the target number of PSUs.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
