Johnson Controls Cuts CEO Bonus On Failure To Comply With Firm's Ethics Policy

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) said its Compensation Committee decided to reduce chief executive Alex Molinaroli's fiscal year 2014 Annual Incentive Performance Program or AIPP payment by 20 percent, following reports of a personal relationship between Molinaroli and a principal in a consulting firm that provided services for the company relating to talent management and organizational development.

Johnson Controls said in a regulatory filing that its Executive Committee and the Board determined that Molinaroli had failed to comply with the company's Ethics Policy, which required him to timely alert the Audit Committee to a situation that could be perceived to raise issues of conflict of interest.

However, the Executive Committee concluded that there had been no misuse of corporate assets. It also believed that the assignments given to the consulting firm, which had served the company for about 30 years, and related compensation to that firm had not been improperly influenced by Molinaroli.

It was also concluded that the principal of the consulting firm had no input to the Board of Directors regarding the Board's decision in 2013 to promote Molinaroli to the position of CEO.

The company also said in the filing that its engagement of the outside consulting firm was terminated under an agreement dated September 30.

Molinaroli's AIPP was $3.92 billion for the year, which the company says was 20 percent less than what he could have earned.

JCI fell 2.3 percent to close at $46.80 on Wednesday, and rose 1.5 percent in the extended trade.