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SEC Filings
6-K
ELBIT SYSTEMS LTD filed this Form 6-K on 03/01/2018
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If the New Compensation Policy is approved by the Company's shareholders by the Special Uninterested Majority as required pursuant to the Companies Law, then, according to the Companies Law, the New Compensation Policy will be in effect for a maximum period of three (3) years thereafter. If the New Compensation Policy is not so approved by the shareholders, the Compensation Committee and the Board may nonetheless approve the New Compensation Policy, following re-discussion of the matter and for specified reasons, provided such approval is in the best interest of the Company.
The New Compensation Policy includes, inter alia, the following main provisions:
Monthly Base Salary: The New Compensation Policy sets forth a ceiling amount for the monthly gross base salary payable to the Company's CEO of two hundred thousand shekels (NIS 200,000) (equal to approximately fifty-seven thousand dollars ($57,000), linked to the increase in the Israeli Consumer Price Index (the "CPI"), which is in line with the Approved Employment Terms of the CEO. With respect to the EVPs, the monthly gross salary payable to an EVP is and will be individually determined taking into account the prior vocational experience, qualifications, role, business responsibilities and past performance of the respective EVP, but will not exceed one hundred sixty thousand shekels (NIS 160,000) (equal to approximately forty-six thousand dollars ($46,000), linked to the CPI.
Benefits: The following customary benefits may be granted to the Executive Officers: vacation days, sick days and convalescence pay in accordance with market practice and applicable law, monthly remuneration for a study fund as allowed by applicable tax law and with reference to the Company's policies and procedures as well as common market practice; contribution by the Company on behalf of the Executive Officer to an insurance policy, a pension fund and work disability insurance, as allowed by applicable tax laws and with reference to the Company's policies and procedures and common market practice; car, communication and other customary benefits including their gross-up for tax purposes and reimbursement for work-related expenses incurred as part of his/her activities, such as travel expenses, in accordance with the Company's policies and procedures.
Cash Bonuses: The New Compensation Policy introduces ceiling amounts for the cash bonuses that may be paid to the Company's Executive Officers, as follows:
To the CEO - The Compensation Committee and the Board have determined that with respect to the CEO, the most appropriate quantitative financial objective, which most aligns the interests of the CEO with the long-term performance of the Company, is the Company's Non-GAAP net profit. Accordingly, and in line with the Approved Employment Terms of the CEO, the Company will pay to the Company's CEO an annual bonus in an amount equal to four tenths of a percent (0.4%) of the Non-GAAP net profit of the Company, as reflected in the Company's annual financial results for the relevant fiscal year. Also, and in line with the Approved Employment Terms of the CEO, the New Compensation Policy sets forth a ceiling amount for the annual bonus payable to the CEO, which shall not exceed one million five hundred thousand dollars ($1,500,000). Except for the annual bonus as aforesaid, the CEO is not entitled to payment of any other cash bonuses.
To an EVP - The cash bonuses that the Company may pay to an EVP may be comprised of the following payments:
Annual Bonus - For each EVP there shall be determined a target annual bonus, which shall be paid for achieving one hundred percent (100%) of his or her personally tailored performance measures, comprised of financial, business, operating and other objectives. An EVP may be paid an amount exceeding the annual target bonus if such EVP's achievement exceeds one hundred percent (100%) of his or her performance measures. The maximum annual bonus amount payable to an EVP will not exceed nine (9) monthly base salaries.
Managerial Evaluation Bonus - A managerial evaluation bonus may be granted to an EVP, in addition to the annual bonus, on the grounds, among others, of non-financial qualitative individual performance measures and may not exceed three (3) monthly base salaries.
Special Bonus - A special bonus may be granted to an EVP for extraordinary achievements and be based on quantitative measures. The amount payable as a special bonus may not exceed, for an individual EVP, the higher of (i) one percent (1%) of the added value generated to the Company in light of the EVP’s contribution as reflected from a valuation conducted by the Company or (ii) twelve (12) monthly base salaries.
Maximum Amount of Cash Bonuses - The amount of all cash bonuses payable to an EVP in a respective financial year will not exceed fifteen (15) monthly base salaries.
Pre-Conditions for the Payment of Annual Bonuses: The New Compensation Policy strengthens the pre-conditions for payment of the annual bonuses to the Company's Executive Officers for any particular fiscal year, by abolishing the condition set forth in the Former Compensation Policy that enabled payment of a certain portion of the annual bonuses in the event that the two main pre-conditions set forth therefor were not fulfilled. As the result, pursuant to the New Compensation Policy payment of annual bonuses to the Company's Executive Officers is subject to the Non-GAAP net profit attributable to shareholders of the Company for that fiscal year, as reflected in the Company's published full-year financial results, being at least eighty percent (80%): (i) of


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