MeadWestvaco Corporation Annual Incentive Plan under 2005 Performance Incentive Plan
MeadWestvaco Corporation's Annual Incentive Plan, part of its 2005 Performance Incentive Plan, provides annual cash awards to executive officers based on the achievement of specific financial and operational goals. The Compensation and Organization Development Committee sets these objectives and determines each executive's target award as a percentage of their base salary, reviewing targets annually for competitiveness. Awards are only paid if objectives are met, with payouts ranging from 50% to 200% of the target amount, depending on performance. The Committee may adjust awards based on actual results and discretion.
Exhibit 10.35
Summary of MeadWestvaco Corporation Annual Incentive Plan under 2005 Performance
Incentive Plan, as amended
Under the MeadWestvaco Corporation Annual Incentive Plan (the “Plan”), which is a part of the 2005 Performance Incentive Plan, the Compensation and Organization Development Committee (the “Committee”) of the Board of Directors annually awards each executive an annual incentive award that is payable in cash. The size of each executive officer’s annual award is determined by application of his or her annual incentive target expressed as a percentage of base salary, which the Committee examines annually to confirm that the target is reasonable when viewed against external competitive market data, peer group and general industry trends.
Annual cash incentives are payable only if designated objectives for key financial and/or operational metrics are met, unless they are reduced at the discretion of the Committee. These objectives for executive officers are set by the Committee, and generally include such targets as earnings before interest and taxes (“EBIT”), free cash flow, productivity, and general and administrative savings. Annual incentives are subject to a maximum payout of 200% of target performance with a minimum threshold equal to 50% of target, generally. In the event of below target performance, the Committee shall reduce award values to reflect proportional progress made towards target performance levels.
