Sanmina-SCI’s board this week quietly changed the compensation plan of chairman and chief executive Jure Sola.
In an SEC 8-K filing, the board said Sola would be issued restricted shares in various amounts depending on the company’s stock price.
Sola gets 80,000 shares if Sanmina’s stock hits a 20 trading-day average closing price of $9, an additional 160,000 shares at $11, an additional 360,000 shares at $13, and an extra 400,000 shares (for a total of 1 million) if the average closing price reaches $15. Any shares that Sola doesn’t win get returned to the company’s stock pool.
I editorialized in our February issue (about to hit your in-boxes) that many EMS providers have shown a startling inability to provide returns for their shareholders, while at the same time enriching their executives. Sanmina had a stretch of 20 straight quarters of one-time (mainly restructuring) charges, and during a three-year stretch during which contract assemblers’ sales have done well as a whole, Sanmina-SCI has been one of the notable laggards — a problem for which I hold its management directly responsible. I’m glad to see Sanmina-SCI’s board is finally awakening to the need to hold its management accountable.