This excerpt taken from the IFF 8-K filed Mar 13, 2009.
2009 Annual Incentive Plan
On March 9, 2009, the Compensation Committee of the Company's Board of Directors approved the criteria for the Company's 2009 Annual Incentive Plan ("AIP") under the Company's 2000 Stock Award and Incentive Plan (“2000 SAIP”). Under the AIP, each executive officer, including the Chief Executive Officer ("CEO"), has an annual incentive award target based on the achievement of a range of specific quantitative corporate and/or derivative business unit, regional and/or category financial performance goals and goals for non-financial strategic initiatives that are reviewed and approved by the Compensation Committee by the end of March of each year.
The financial objectives for 2009 under the AIP relate to increases in sales, earnings before interest and taxes, return on investment and working capital. The goals for non-financial strategic initiatives relate to: (i) customers, including sales, market share, service performance and product quality, (ii) workforce, including managing talent and development, and (iii) innovation, including research technology, supply chain and production planning innovation.
Under the AIP, each executive officer, including the executive officers who were named in the Company's Proxy Statement for its 2009 Annual Meeting of Shareholders and who are still employed by the Company (collectively, the "Named Executive Officers"), has a target award which is specified each year. The amount paid to each executive officer, including the CEO, following the end of the year will depend, in part, on the extent to which the performance goals are achieved. Each executive officer's AIP target award for 2009 is a stated percentage of his or her base salary. The Compensation Committee did not approve, nor in the case of the CEO did it recommend to the Board, any changes to either the AIP target percentage or base salary of any of the Named Executive Officers and the Board did not approve any changes to the CEO’s AIP target percentage or base salary.
Based on the specific quantitative financial and non-financial objectives, if threshold performance is achieved for the year, each executive officer may be paid 25% of his or her target award and if maximum performance is achieved for the year, each executive officer may be paid up to a ceiling of 200% of that officer's target award. Failure to meet threshold performance for both the financial objectives and non-financial strategic initiatives, based on the performance goals, will generally result in no AIP award to the executive officer for that year. However, in light of the current economic environment, the Compensation Committee decided that it may consider additional factors, such as the Company’s 2009 performance relative to other companies in the S&P 500 and the Company’s industry, in determining final 2009 AIP payouts. In addition, the Compensation Committee may conduct a mid-year review of goals to ensure their continued fairness. In making this determination to allow for the possible exercise of discretion in making 2009 AIP payouts, the Compensation Committee recognizes that the tax deductibility of certain compensation may be impacted.
Attached as Exhibit 10.1 are the corporate and derivative business unit, regional and/or category financial performance criteria and non-financial strategic initiatives for 2009 under the AIP.