Shares of Apollo Group (APOL) Trade Up 3.7% Following Release of New Incentive Performance Bonus Plan
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Shares of Apollo Group (Nasdaq: APOL) are trading up 3.67 percent on the day following the release of the Company’s Executive Officer Incentive Performance Bonus Plan. An analyst at BMO, Jeff Silber, highlights the new bonus plan offers proof of "achievable" FY12 guidance.
On November 22, 2011, the Compensation Committee of the Board of Directors of Apollo Group approved the terms of the 2012 fiscal year bonus plan under the Company’s Executive Officer Incentive Performance Bonus Plan. The key features of the 2012 Plan may be summarized as follows:
All of the Company’s executive officers will be eligible to participate in the 2012 Plan, including the following individuals, who are the named executive officers in the Company’s Shareholders Information Statement dated December 21, 2010 and filed on Schedule 14C with the Securities and Exchange Commission on December 21, 2010:
For Dr. Sperling (Executive Chairman of the Board) and Messrs. Edelstein, (Co-Chief Executive Officer) Cappelli (Co-Chief Executive Officer) and D’Amico (President and Chief Operating Officer), the target bonus opportunity was set at 100% of their annual base salary, and for Mr. Swartz (Senior Vice President and Chief Financial Officer) and Dr. Pepicello (President, University of Phoenix), the target bonus was set at 75%. Annual base salary will be weighted to reflect any salary adjustments effected during the 2012 fiscal year, but in no event will the bonus amount paid to any participant exceed Five Million Dollars ($5,000,0000).
The Compensation Committee established five separate performance goals under the 2012 Plan.
The first goal, weighted sixty percent (60%) for purposes of determining the potential cash bonus amount for each participant, is tied to the Company’s operating income for the 2012 fiscal year. The following levels of threshold ($661 million), target ($764 million), and maximum ($882 million) attainment of the operating income performance goal for the 2012 fiscal year have been set by the Compensation Committee.
The second performance goal, weighted ten percent (10%), is tied to the Company’s net revenue for the 2012 fiscal year. The following levels of threshold ($4.2 billion), target ($4.3 billion), and maximum ($4.4 billion) attainment of the net revenue performance goal for the 2012 fiscal year have been set by the Compensation Committee.
The third performance goal, weighted ten percent (10%), will be measured in terms of independently-conducted surveys of University of Phoenix (“UOPX”) students addressing a particular measure of student satisfaction. Actual goal attainment will be assessed in terms of the percentage of responding UOPX students who score the measured item favorably, as averaged on the basis of the responses submitted in each of the quarterly surveys conducted over the last three fiscal quarters of the 2012 fiscal year. The Compensation Committee has set specific percentages, as averaged over the three surveyed fiscal quarters, for purposes of measuring performance goal attainment at threshold, target and maximum levels.
The fourth performance goal, weighted ten percent (10%), will be measured in terms of independently-conducted surveys, one addressing three particular measures of UOPX faculty engagement at the University and the other addressing three particular measurers of Company-wide employee engagement. Actual goal attainment will be assessed in terms of the average of (i) the aggregated percentage of responding UOPX faculty members who score the three measured items favorably and (ii) the aggregated percentage of responding Company employees who score their three measured items favorably. The aggregated percentage of favorable responses received for the three measured items in the faculty engagement survey will be added to the aggregated percentage of favorable responses received for the three measured items in the employee engagement survey, and the combined aggregated percentages will then be divided by two to determine the average aggregated percentage of such favorable responses. The Compensation Committee has set specific threshold, target and maximum levels for such average aggregated percentage.
The fifth and final performance goal, weighted ten percent (10%), will be measured in terms of the improvement made by the individual UOPX campuses in (i) responding to student concerns on a timely basis at the campus point of origin and (ii) responding on a timely basis to external agents or agencies addressing individual student concerns and complaints. Specific levels of attainment have been set for threshold, target and maximum levels.
The actual bonus attributable to the attainment of the 2012 fiscal year performance goals will be paid to each participant who continues in the Company’s employ through the end of the 2012 fiscal year. In addition, pro-rated bonuses will be paid to participants who do not complete the applicable service requirement by reason of death or disability.
On November 22, 2011, the Compensation Committee of the Board of Directors of Apollo Group approved the terms of the 2012 fiscal year bonus plan under the Company’s Executive Officer Incentive Performance Bonus Plan. The key features of the 2012 Plan may be summarized as follows:
All of the Company’s executive officers will be eligible to participate in the 2012 Plan, including the following individuals, who are the named executive officers in the Company’s Shareholders Information Statement dated December 21, 2010 and filed on Schedule 14C with the Securities and Exchange Commission on December 21, 2010:
For Dr. Sperling (Executive Chairman of the Board) and Messrs. Edelstein, (Co-Chief Executive Officer) Cappelli (Co-Chief Executive Officer) and D’Amico (President and Chief Operating Officer), the target bonus opportunity was set at 100% of their annual base salary, and for Mr. Swartz (Senior Vice President and Chief Financial Officer) and Dr. Pepicello (President, University of Phoenix), the target bonus was set at 75%. Annual base salary will be weighted to reflect any salary adjustments effected during the 2012 fiscal year, but in no event will the bonus amount paid to any participant exceed Five Million Dollars ($5,000,0000).
The Compensation Committee established five separate performance goals under the 2012 Plan.
The first goal, weighted sixty percent (60%) for purposes of determining the potential cash bonus amount for each participant, is tied to the Company’s operating income for the 2012 fiscal year. The following levels of threshold ($661 million), target ($764 million), and maximum ($882 million) attainment of the operating income performance goal for the 2012 fiscal year have been set by the Compensation Committee.
The second performance goal, weighted ten percent (10%), is tied to the Company’s net revenue for the 2012 fiscal year. The following levels of threshold ($4.2 billion), target ($4.3 billion), and maximum ($4.4 billion) attainment of the net revenue performance goal for the 2012 fiscal year have been set by the Compensation Committee.
The third performance goal, weighted ten percent (10%), will be measured in terms of independently-conducted surveys of University of Phoenix (“UOPX”) students addressing a particular measure of student satisfaction. Actual goal attainment will be assessed in terms of the percentage of responding UOPX students who score the measured item favorably, as averaged on the basis of the responses submitted in each of the quarterly surveys conducted over the last three fiscal quarters of the 2012 fiscal year. The Compensation Committee has set specific percentages, as averaged over the three surveyed fiscal quarters, for purposes of measuring performance goal attainment at threshold, target and maximum levels.
The fourth performance goal, weighted ten percent (10%), will be measured in terms of independently-conducted surveys, one addressing three particular measures of UOPX faculty engagement at the University and the other addressing three particular measurers of Company-wide employee engagement. Actual goal attainment will be assessed in terms of the average of (i) the aggregated percentage of responding UOPX faculty members who score the three measured items favorably and (ii) the aggregated percentage of responding Company employees who score their three measured items favorably. The aggregated percentage of favorable responses received for the three measured items in the faculty engagement survey will be added to the aggregated percentage of favorable responses received for the three measured items in the employee engagement survey, and the combined aggregated percentages will then be divided by two to determine the average aggregated percentage of such favorable responses. The Compensation Committee has set specific threshold, target and maximum levels for such average aggregated percentage.
The fifth and final performance goal, weighted ten percent (10%), will be measured in terms of the improvement made by the individual UOPX campuses in (i) responding to student concerns on a timely basis at the campus point of origin and (ii) responding on a timely basis to external agents or agencies addressing individual student concerns and complaints. Specific levels of attainment have been set for threshold, target and maximum levels.
The actual bonus attributable to the attainment of the 2012 fiscal year performance goals will be paid to each participant who continues in the Company’s employ through the end of the 2012 fiscal year. In addition, pro-rated bonuses will be paid to participants who do not complete the applicable service requirement by reason of death or disability.
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