LTI AT THERMO FISHER

PERFORMANCE-BASED RSUs

Performance-based restricted stock units (performance RSUs) reward senior executives for delivering on specific predetermined metrics that drive company share price. Depending on how well the company delivers on those metrics, you can earn more (or less) performance RSUs than were originally issued to you. Currently, colleagues in Bands 11-13 receive performance RSUs as part of their LTI vehicle mix for annual awards.

Awarded based on
company performance.

HOW IT WORKS

1

You receive an LTI grant that includes performance RSUs and you accept the grant.

3

Once performance measures are confirmed, total shares are distributed in equal amounts over three years based on how well performance measures were reached. Once performance has been confirmed, the shares vest over three years: one-third upon certification, one-third one year after certification, and the final one-third two years after that certification date.

Note: Performance RSUs result in taxable income when the shares are distributed, so you should talk with an experienced tax professional to understand your options.

HOW LTI VESTS

Performance RSUs vest when the Company achieves predetermined performance measures.

If performance measures are met, the vesting process begins for earned shares. If the performance measures are unmet, the shares do not vest.

  • FOR
    EXAMPLE

    Example for education purposes only. Fictional past performance is no guarantee of future results.

    You accept a 50,000 LTI grant delivered as a performance-based RSUs. The company stock price was $100 per share so the grant was equal to 500 shares.

  • One year later, the company’s organic revenue growth and adjusted EPS exceeded the predetermined measures. You receive 125% of the grant amount (625 shares), and 1/3 of those shares are vested and deposited into your personal Fidelity account.

  • Two years after the grant date, 1/3 of the granted shares are deposited into your personal fidelity account. The remaining 1/3 of the granted shares are deposited three years after the grant date.

  • In this example, a $50,000 LTI grant increased by $75,000 (+150% change) when fully vested.

    Once all 625 shares are vested and distributed three years from when you accepted the grant, the market price is now $200. Multiply the number of shares (625) by the market price ($200) for a total value of $125,000, minus taxes.

RESOURCES & LINKS

Videos

Tip Sheets