2. Annual Incentive Cash Compensation
The Company maintains an annual incentive cash compensation plan to reward selected executive officers and other employees for their contributions to the performance of the Company by achieving specific safety and financial goals and Company and individual goals applicable to the individual STRIVE performance portion of the annual incentive cash compensation plan. Awards under the annual incentive cash compensation plan are determined based on specified performance standards, which we refer to as Key Performance Indicators (“KPIs”). For fiscal year 2018, these KPIs related specifically to safety, financial and individual STRIVE performance. The Compensation Committee monitors the target award levels and variances to assure their competitiveness and that they are consistent with compensation strategy for incentives and for total compensation without encouraging excessive risk-taking. Our KPIs typically incorporate certain metrics that are based on our publicly reported financial results. In fiscal year 2018, the Compensation Committee set KPI levels for the annual incentive awards shortly after the end of the prior fiscal year and after the budget for the next fiscal year was approved by our Board, and our Board and the Compensation Committee reviewed and approved quantitative and qualitative Company and individual goals applicable to the STRIVE performance portion of annual incentive awards at the beginning of fiscal year 2018 which served as an objective benchmark for purposes of measuring performance at the end of fiscal year 2018.
The Compensation Committee established on June 12, 2017 a minimum performance objective for officers of the Company set forth in the Supplement to the 2018 Plan (which was disclosed in our Form 8-K filed on June 16, 2017) (the “FY2018 STIP”), which objective was positive earnings before interest, taxes, depreciation, amortization and rent for any fiscal quarter during fiscal year 2018 beginning with the fiscal quarter commencing July 1, 2017. If the minimum performance objective was not satisfied, our officers would not have been entitled to any award under the FY2018 STIP.
The KPIs for our annual incentive awards are designed to support and reinforce how we act as a company and individuals and to align with our STRIVE strategy in furtherance of building the New Bristow. Threshold KPI levels and the minimum performance objective described above must be achieved in order to receive any payout under the annual incentive cash compensation plan. For fiscal year 2018, participants could have earned up to as much as 250% of their fiscal year 2018 annual incentive targets in the event of performance substantially exceeding the preset targets. Annual incentive compensation awards are paid in cash.
As part of the executive compensation plan redesign in June 2017, the Compensation Committee considered the relative weightings for the KPIs to be used for the FY2018 STIP. Given the increasingly dynamic market for the Company’s services combined with a need to incent management to improve the Company’s overall performance beyond just ROIC for financial performance and TRIR and AA for safety performance, the Compensation Committee decided to increase the relative weighting of the individual performance portion of the FY2018 STIP from 25% that was used for the Supplement to the 2017 Plan (which was disclosed in our Form 8-K filed on June 9, 2016) (the “FY2017 STIP”) to 50% for the FY2018 STIP. Consequently, the Compensation Committee agreed to decrease the relative weighting of ROIC for the FY2018 STIP to 25% from the 50% weighting that had previously applied to BVA for the FY2017 STIP.
BRISTOW GROUP INC. – 2018 Proxy Statement – 34