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Otis Worldwide Corp (NYSE:OTIS), a leading manufacturer of elevators and escalators, has formalized the appointment of Cristina Méndez as Executive Vice President and Chief Financial Officer, as per a recent 8-K filing with the Securities and Exchange Commission. The announcement follows a previous report on July 19, 2024, that introduced Ms. Méndez's promotion within the company.
Effective August 23, 2024, Ms. Méndez's new role comes with a revised compensation package that includes an annual base salary of $770,000. Her annual target opportunity under Otis's Short-Term Incentive Plan is set at 100% of her base salary, with a pro-rated target for 2024 to account for her promotion.
Moreover, on the day she assumed her new position, Ms. Méndez was granted a supplemental long-term incentive plan award valued at approximately $2,390,000. This award, part of the 2020 Long-Term Incentive Plan, includes performance share units, restricted stock units, and stock appreciation rights, with varying vesting schedules.
In addition to her salary and incentives, Ms. Méndez has entered into a letter of international assignment for her relocation from Switzerland to Farmington, Connecticut, where Otis is headquartered.
The company will provide her with a comprehensive benefits package to support the move, including allowances for housing, relocation, schooling for her children, and international health benefits. Tax preparation services and tax equalization to Switzerland are also part of the package.
Ms. Méndez's employment is further supported by inclusion in the company's Executive Leadership Group Severance Plan and Change in Control Severance Plan, and she is bound by a 2-year noncompetition and nonsolicitation agreement post-employment.
In other recent news, Otis Worldwide Corp's financial performance has been noteworthy, with the company posting solid second-quarter results. Net sales reached an impressive $3.6 billion, despite a decrease in New Equipment orders, particularly in the Americas and China.
However, the Services segment demonstrated promising growth, a testament to the resilience of its business model. Otis also declared a quarterly dividend of $0.39 per share, showcasing continued financial stability.
Morgan Stanley initiated coverage on Otis with an Equalweight rating and a price target of $97.00, recognizing the strength of Otis's service-led business. However, the firm also noted potential near-term risks, particularly in the New Equipment business, which faces potential extended declines.
The company raised its full-year adjusted earnings per share (EPS) outlook to a range of $3.85 to $3.90, projecting approximately 10% growth. Otis also anticipates savings of $175 million by mid-2025 from Project Uplift, a strategic initiative aimed at boosting efficiency.
Looking ahead, Otis forecasts 2024 sales to be between $14.3 billion and $14.5 billion, with organic sales growth of 1% to 3%. The adjusted operating profit is projected to increase by $135 million to $175 million.
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