Form 8K January 24 2007
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
________________________
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported): January 24, 2007
________________________
McDONALD'S
CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
|
Delaware
|
1-5231
|
36-2361282
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
____________________________
One
McDonald's Plaza
Oak
Brook, Illinois
(Address
of Principal Executive Offices)
60523
(Zip
Code)
_______________________________
(630)
623-3000
(Registrant's
Telephone Number, Including Area Code)
_______________________________
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain
Officers.
On
January 24, 2007, the Compensation Committee of the Board of Directors approved
the payout structure for 2007 under the Company’s annual broad-based incentive
plan, which is referred to as the Target Incentive Plan or “TIP,” as well as the
parameters for determining final awards.
The
target TIP award for 2007 for the Company’s CEO, James A. Skinner, is 120% of
base salary as in effect on December 31, 2007. The target award for Ralph
Alvarez, a “named executive officer” for whom disclosure was required in the
Company’s most recent proxy statement, is 100% of base salary as in effect on
December 31, 2007. The target award for Matthew H. Paull, the Company’s CFO, is
75% of base salary as in effect on December 31, 2007. The maximum TIP award
that
each of Messrs. Skinner, Paull and Alvarez can earn in 2007 is 250% of the
target award. These executives, like all other employees, are generally not
eligible to receive a TIP award if the Company does not have growth in Brand
McDonald’s operating income in 2007. The Compensation Committee may exercise
discretion in special circumstances to make TIP awards when there is no growth
in Brand McDonald’s operating income.
TIP
payouts are determined by a combination of a team factor, which in the case
of
the executives identified above relates to corporate performance, and an
individual performance factor. For 2007, the team factor is primarily determined
by growth in Brand McDonald’s operating income, determined on a consolidated
basis. The corporate team factor can be adjusted upwards or downwards by
as much
as 15% based on “modifiers” reflecting other measures of corporate performance,
as described below. The final TIP award is determined first by multiplying
the
target award by a percentage representing the corporate team factor, then
by
multiplying the result by a percentage representing the individual performance
factor.
Team
factor
The
team
factor for 2007 is determined as follows:
Brand
McDonald’s operating income.
The
principal performance measure reflected in the corporate team factor that
applies to the executives named above is annual consolidated Brand McDonald’s
operating income growth. This measure reflects growth in income from all
company-operated and franchised restaurants, excluding non-McDonald’s brands.
In
determining Brand McDonald’s operating income for TIP purposes, certain income
and/or expense items that are not indicative of ongoing results may be excluded.
Such items may include, generally: “strategic” items (charges or credits related
to the high-level strategic direction of the Company, such as restructurings,
acquisitions and divestitures); “regulatory” items (charges or credits due to
changes in tax or accounting rules); and “external” items (charges or credits
due to external events such as natural disasters).
The
maximum level of consolidated Brand McDonald’s operating income growth taken
into account in determining 2007 TIP awards for the executives named above
is
approximately 6.5 percentage points greater than the target level.
Modifiers.
The
Company refers to the other performance measures reflected in the team factor
that applies to the executives named above as “modifiers.” Modifiers are each
weighted within a range of plus or minus 5% and relate to the following
performance measures for the executives named above:
| · |
Corporate
General and Administrative Expenses
|
| · |
Consolidated
Comparable Guest Count Growth
|
Individual
performance factor
Individual
performance is measured against various qualitative performance factors,
including setting and achieving goals that are in line with McDonald’s strategic
focus.
SIGNATURES
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.
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McDONALD'S
CORPORATION
(Registrant)
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|
|
|
| Date:
January 30, 2007 |
By: |
/s/
Denise A. Horne |
| |
Denise
A. Horne |
| |
Corporate
Vice
President -
Associate
General
Counsel and Assistant Secretary
|
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