Chindex International Inc. AnnualExecutive Management Incentive Program (EMIP) For the Fiscal Year Ending December 2013
Exhibit 10.4
Chindex International Inc.
Annual Executive Management Incentive Program (EMIP)
For the Fiscal Year Ending December 2013
Recognizing that the principal reason for the existence of a corporate entity is to increase shareholder wealth and that this generally translates into the maximization of financial return over time and is or should be the primary goal of a publicly held corporation, Chindex International Inc. (Parent Company) has adopted this Executive Management Incentive Program (EMIP) to help align remunerative management incentives with the interests of the companys shareholding public.
Enrollment
The executive Officers of the Parent Company are automatically enrolled in and are beneficiaries of this EMIP. They are the Chief Executive Officer (CEO), the Chief Operating Officer (COO), the Chief Financial Officer (CFO) and the Executive Vice President (EVP acting CML COO) in charge of the Chindex Medical joint-venture.
Weighting
The Plan is based on Annual Objective Performance Criteria (AOPC). Incentive payout is based on the achievement of financial growth objectives as defined in the AOPC. Additional payouts may be awarded individual executives at the discretion of the committee based on the achievement of non-financial goals or other criteria as explained below.
Annual Objective Performance Criteria
The metric of annual performance related to the Financial Objectives is weighted between the following components: 1) achievement of Chindex budgeted revenue, 2) achievement of Chindex budgeted adjusted EBITDA, and 3) achievement of budgeted Chindex level equity interest in CML earnings. Incentive payments to executives shall be calculated in accordance with the following table. Such incentive payments, if earned, shall be paid as soon as practical following the close of the Companys fiscal year. The incentive payments for each of the participants shall respectively be based on achievement of the 2013 budgeted Company objectives and the 2013 budgeted CML contribution as shown below:
Performance Weighting | ||||||||||||||||
Revenue | EBITDA | CML | Total | |||||||||||||
CEO | 45 | % | 45 | % | 10 | % | 100 | % | ||||||||
COO | 40 | % | 40 | % | 20 | % | 100 | % | ||||||||
CFO | 50 | % | 50 | % | 0 | % | 100 | % | ||||||||
CML-COO | 40 | % | 40 | % | 20 | % | 100 | % |
Performance Matrix | ||||||||||||
EMIP Performance | ||||||||||||
Performance Compared to Budget | Revenue | Ebitda | CML | |||||||||
110% | 140 | % | 140 | % | 140 | % | ||||||
100% | 100 | % | 100 | % | 100 | % | ||||||
90% | 60 | % | 60 | % | 60 | % | ||||||
Below 90% | 0 | % | 0 | % | 0 | % |
Calculation
The achievement levels (AIP Achievement) by metric are applied to the Performance Weighting by metric to calculate a percentage of target award earned. This percentage is applied to the target award to determine the award earned.
Non-financial Objectives, if any
Apart from the payouts based on the annual Objective Performance Criteria shown above, a cash payout may be granted to an individual at the discretion of the Compensation Committee based on achievement of agreed non-financial objectives, on extraordinary efforts or achievements during the relevant fiscal year or in acknowledgement of certain possible events altogether beyond the control of the executives which prevents complete achievement of quantified goals.
Non-financial Objectives | ||
Failure to timely complete | 0.0% | |
Partial Completion | 10% to 15% | |
All Timely Completed | 20% |
Compensation Committee Determination
The determination of meeting any annual performance criteria shall be made in the sole judgment of the compensation committee based on year-end financial information provided by management, which determination shall be made as soon as practical after the audited closing of the fiscal year. Entitlement to any payments under this EMIP shall be contingent on the participants being employed by the company on the date of such determination.
Target Award Levels as % of Salary* | ||||
CEO Roberta Lipson | 40 | % | ||
CFO Robert Low | 25 | % | ||
COO Larry Pemble | 40 | % | ||
COO Elyse Silverberg | 40 | % |
* | Total Actual Base Salary received during Fiscal Year 2013 |
Sample Calculation (excluding Non-Financial Objectives which would be additional)
Example Calculation for CEO | ||||||||||||||||
Revenue | EBITDA | CML | Total | |||||||||||||
a. Result | 140 | % | 100 | % | 60 | % | ||||||||||
b. Weighting | 45 | % | 45 | % | 10 | % | ||||||||||
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a x b (Weighted Result) | 63 | % | 45 | % | 6 | % | 114 | % | ||||||||
| Target Award as % Salary |
| 40 | % | ||||||||||||
114 | % | |||||||||||||||
| Award as % Salary |
| 45.6 | % |