Annual Cash Incentive Compensation
Based on individual and Company performance, incentive compensation opportunities are available to a wide range of our employees. We believe that incentive compensation is effective in reinforcing both the overall values of our Company and our specific operating goals.
Incentive compensation programs are designed to focus employees attention on our key performance goals, to identify the expected levels of performance and to reward individuals who meet or exceed our expectations. The aggregate amounts available for incentive awards are determined by our overall financial performance. The actual awards paid to individual recipients, other than to executive officers, are formulated by management, generally payable on an annual basis and reviewed by the committee prior to payment. The committee formulates and determines incentive awards for Named Executive Officers. See Summary Compensation Table below.
For 2018, the Companys Chief Executive Officer, Chief Financial Officer, Chief Operating Officer–West and Chief Operating Officer-East (the Executive Participants) were eligible to receive cash bonus awards and/or shares of restricted common stock under the Companys Objective Cash/RSA Bonus Plan and Discretionary Cash/RSA Bonus Plan that amounted to a maximum of 125% of their respective base salaries. For a detailed description of these plans, see the Companys Current Report on Form 8-K filed with the SEC on April 12, 2018. Under the Objective Cash/RSA Bonus Plan, the Executive Participants were eligible to earn a bonus award, payable in cash and/or restricted common stock at the discretion of the Compensation Committee, having a value of up to 75% of their respective base salaries dependent upon the Company achieving pre-tax income in the range of $41,942,700 to $45,975,300 or more. In determining pre-tax income for purposes of the Objective Cash/RSA Bonus Plan, the Objective Cash/RSA Bonus Plan provides that such determination shall be made before charges or credits for changes in redeemable non-controlling interests and any extraordinary items and after the compensation expense required to be reported in 2018 related to the incentive plans applicable to the Executive Participants. Based on the pre-tax earnings of $44,541,077, as adjusted, for 2018, the Executive Participants received an Objective Cash/RSA Bonus award for 2018 equal to 46% of their respective base salaries, which the Compensation Committee determined would be payable entirely in cash. Under the Discretionary Cash/RSA Bonus Plan, the Executive Participants were awarded a bonus award of 42.5% of their respective base salaries, which the Committee determined would be paid in a combination of cash and shares of restricted common stock. The discretionary cash/RSA award was based upon a subjective determination of the committee utilizing certain performance criteria as detailed in the plan. However, the committee did not consider it practicable to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific performance criteria it considered in reaching its decision. In considering these performance criteria, the individual members of the committee may have given different weights to different performance criteria. The discretionary performance criteria were not intended to be rigid or formulaic but rather served as a framework under which the committee reviews the total compensation for each executive. The total cash award and award of shares of restricted common stock for the 2018 year pursuant to the Objective Cash/RSA Bonus Plan and Discretionary Cash/RSA Bonus Plan, were as follows: Mr. Reading - $575,000 in cash and 981 shares of restricted common stock; Mr. McAfee - $370,800 in cash and 636 shares of restricted common stock; Mr. McDowell - $370,800 in cash and 636 shares of restricted common stock; and Mr. Reeve - $347,000 in cash and 600 shares of restricted common stock. These cash bonuses were paid on March 8, 2019 and the shares of restricted common stock were granted on March 4, 2019.
Long-term Equity Incentive Awards
For the 2018 year, the Executive Participants were eligible to receive awards consisting of shares of restricted common stock under the Companys Objective Long-Term Incentive Plan and Discretionary Long-Term Incentive Plan. For a detailed description of these plans, see the Companys Current Reports on Form 8-K filed with the SEC on April 12, 2018. Under the Objective Long-Term Incentive Plan, Messrs. Reading, McAfee, McDowell and Reeve were eligible to earn up to 11,000, 5,500, 5,500 and 5,500 shares of restricted common stock, respectively, dependent upon the Company achieving pre-tax income in the range of $41,942,700 to $44,593,200 or more. In determining diluted earnings per share for purposes of the Objective Cash Bonus Plan, the Objective Cash Bonus Plan provides that such determination shall be made before charges or credits for changes in mandatorily redeemable non-controlling interests and any extraordinary items and after the compensation expense required to be reported in 2018 related to the incentive plans applicable to the Executive Participants. Based on the pre-tax earnings of $44,541,077, as adjusted, for 2018, Messrs. Reading, McAfee, McDowell and Reeve were awarded 10,120, 5,060, 5,060 and 5,060 shares of restricted common stock, respectively. Under the Discretionary Long-Term Incentive Plan, Messrs. Reading, McAfee and McDowell were eligible to earn up to 11,000, 5,500, 5,500 and 5,500 shares of