Crossroads Systems Inc (NASDAQ: CRDS) Tightens Executive Compensation


Crossroads Systems Inc (NASDAQ: CRDS) is trying to tie the bulk of the bonuses it pays out to executives to their contribution to the achievement of strategic and financial objectives. In a recent update, the company said that it had adopted what it termed as key employee incentive arrangements for its CFO and EVP of Corporate Development.

2016 bonus targets

For the full-year 2016, Crossroads Systems Inc (NASDAQ: CRDS) said that the bonus targets for CFO, Jennifer Crane, and EVP Corporate Development, Mark Hood, will remain at 40%of their base salaries. Of the bonus target, 60% will be weighed on achievement of the company’s strategic and financial objectives. The rest at 40% will be weighted on achievement of personal objectives.

2017 bonus targets

Crossroads Systems Inc (NASDAQ:CRDS) said that overall bonus targets for the CFO and EVP will remain the same as in 2016, but the proportions of the components of the bonuses will change. For example, achievement of company’s strategic and financial objectives will account for 75% of 2017 bonus as opposed to 60% in 2016. Similarly, the proportion of bonus tied to achievement of personal objective will drop to 25% from 40% in 2016.

Looking at the bonus adjustments, it seems Crossroads is trying to put more weight on the achievements that maximize value for shareholders.

Crossroads’ financials

Crossroads Systems Inc (NASDAQ: CRDS) reported F1Q2016 revenue of $2 million, which decreased from $2.2 million in the corresponding quarter a year ago. However, EPS for the quarter rose to $0.74 from $0.73 a year earlier, thanks principally to changes in product mix sales during the quarter. Perhaps the EPS figure would have been much better had it not been for the increase in operating expenses that hit $4.3 million as opposed to $3.6 million a year ago. Crossroads’ F1Q2016 results continued to demonstrate a need for cost curtailment.

Crossroads Systems Inc (NASDAQ: CRDS)’s balance sheet reflected cash and cash equivalents balance of $7.7 million.


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