To achieve our plan for success, we need to reshape how we do business and how we reward you for your contributions. That means taking a fresh look at our old compensation and benefit plans. In 1996, the new "Owens-Corning Rewards and Resources Program" will be introduced.
This new program focuses on flexibility, ownership and responsibility. As you read this booklet, you'll see how our new program builds on these three concepts.
Here's how your Rewards and Resources work:
- You receive Rewards for your efforts in helping Owens-Corning achieve specific business results; and
- You use your Rewards to build and protect your wealth.
A portion of your Rewards is now variable. When Owens-Corning achieves certain performance measures, our Rewards expand—providing more potential for building personal wealth. You also have flexibility in how you use your Rewards and Resources.
Most of the changes you'll see in 1996 are designed to tie your Rewards and Resources more closely with company performance. The new Rewards and Resources also are more equitable. Here's how the program works:
You receive Rewards in three forms:
- Stock (savings plan match, new annual performance award and options, and profit sharing contribution)
- Credits (new Choice and cash balance credits)
- Dollars (same pay, overtime and incentives).
Your new Rewards and Resources include:
- Global Stock
- Savings and Profit Sharing
- Cash Balance
- Life Insurance
- Short Term Disability
- Long Term Disability
- Personal Accident Insurance
- Business Travel Accident Insurance
- Health Care Spending Account
- Dependent Care Spending Account
- Auto/Home Insurance
- Child and Dependent Care Referral
- Work/Life Information Resources
- Adoption Assistance
A portion of your Rewards (i.e., annual performance award and profit sharing) is based on certain company performance measures. Early each year the Board of Directors approves performance measures and goals. These measures are exactly the same as those used to determine annual corporate incentives. In 1995, those measures are:
Earning per share (EPS)—the company's net income for the year divided by the number of shares of stock outstanding. For example, if sales increase faster than costs increase, earnings per share are greater.
Cash flow —net cash from operations, financing and investments. Owens-Corning can reach its long-term goals through acquisitions and investments in our plants. To fund this, Owens-Corning needs to manage costs and increase cash flow.
Sales growth—total consolidated net sales compared to the previous year. Owens-Corning must reach its $5 billion sales goal through sales growth.
By using the same measures as those used to determine executives' annual incentive pay, we all share the same meaningful goals and are working together as one team toward reaching those goals. Keep in mind, these measurements may change each year.
You receive a percentage of your reward—along a continuum—based on company performance. You can use the following levels as guideposts:
- Maximum (performance level at which the maximum reward is paid)
- Target (midpoint between maximum and threshold)
- Threshold (minimum performance level at which reward is paid.
If Owens-Corning achieves or exceeds a maximum performance, you have the greatest potential for increasing your total wealth. Likewise, if Owens-Corning does not meet threshold performance, the annual performance award and profit sharing will not be awarded.
Over the years, the measures used to determine annual corporate incentives have proven to be an effective tool for evaluating overall company performance and rewarding contributions. In the last few years, Owens-Corning has exceeded target levels.
With these new initiatives your Rewards are linked to company performance. You also have more variability in your total wealth (upside potential when Owens-Corning achieves target and maximum performance levels and less opportunity at the threshold level).
SOURCE: Owens-Corning: "Reward and Resources Program: The Details"