Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
At a meeting held on February 23, 2021, the Compensation and Organization
Committee of the Board of Directors of the registrant (the "Committee")
established corporate performance criteria that will be used to determine the
amount of 2021 incentive compensation awards under the Executive Incentive
Compensation Plan (the "Plan"). The Committee set specific Adjusted Earnings Per
Share and Adjusted Operating Cash Flow metrics for the 2021 Plan corporate
performance criteria. In addition to these quantitative goals, the Committee may
also consider other performance factors in determining final awards. These
include, but are not limited to, performance versus profit plan goals,
performance versus that reported for the Company's peers, and progress toward
the execution of the Company's growth strategies. The Plan participants consist
of the Executive Officers of Eaton Corporation and approximately 2,800 other
salaried employees. At the same meeting, the Committee established 2021
incentive target amounts. The individual incentive targets for the current
executive officers who were named in the summary compensation table of the
registrant's 2020 Proxy Statement (the "Named Executive Officers") range from
100% to 160%.
At the meeting, the Committee also established individual targets and approved
grants for the Company's long-term performance-based incentive program ("ESIP")
2021-2023 award period. The 2021-2023 award period opportunities for the Named
Executive Officers took the form of performance share units ("PSUs") and grants
at the target level range from 7,335 PSUs to 40,735 PSUs. The actual number of
PSUs earned will depend upon the registrant's total return to shareholders,
assuming reinvestment of dividends ("TSR"), relative to that of a group of 16
peers approved by the Committee at the same meeting. Consistent with historical
practices, participants can earn 0% to 200% of the target number of PSUs.
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