Consistent with this change, the company is modifying its incentive plans to emphasize the importance of, and reward, TSR. Beginning in 2008, the company is introducing TSR-based performance incentives for senior executives and modifying business unit (BU) bonus calculations to include a return on assets element.
Portfolio Management:
Leggett will also manage its BUs as a portfolio, with different roles (Grow, Core, Fix, or Divest) for each BU based upon competitive advantages, strategic position, and financial health. The company is implementing a much more rigorous strategic planning process, in part to continually assess each BU's role in the portfolio.
Historically, Leggett managed its businesses fairly uniformly, with each expected to grow significantly; that will not be the case going forward. Those in the Grow category will provide avenues for profitable growth and investment in competitively advantaged positions.
Those in the Core category are charged with enhancing productivity, maintaining market share, and generating free cash flow while using minimal amounts of capital. BUs in the Fix category will be given limited time in which to rapidly and significantly improve performance.
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Leggett & Platt Incorporated
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