Severance / Change-in-Control
Qualifying-termination and CIC packages with double-trigger detail, 280G gross-up flags, and walk-away exposure.
Inventory each NEO's severance and change-in-control package — base multiple, bonus multiple, LTI treatment, benefits continuation, double-trigger status — and surface ISS / Glass Lewis flags.
Executive employment agreements, CIC severance plan, LTI plan acceleration provisions, year-end share price.
Per-NEO QT and CIC multiples, LTI treatment, benefits continuation, gross-up flags, and walk-away dollar exposure.
Walk-away values assume year-end share price and last completed AIP cycle. Real-world payout depends on trigger timing.
Total CIC walk-away exposure is $51.6M. One NEO has a 280G gross-up (legacy GC contract) which is an ISS Quality of Compensation veto. Cleanup is the top priority before the next proxy.
Drive the gross-up removal to closure; document in the next 8-K if a side-letter amendment is executed.
- 280G gross-up is in legacy contract — flagged by ISS.
One legacy 280G gross-up (GC contract) is the single ISS Quality of Compensation veto in the executive population. All other CIC structures are clean: double-trigger across the board, no excise-tax gross-ups, market-standard 2-3× CIC multiples.
A 280G gross-up — even legacy — drives a 'Medium concern' or 'High concern' rating in ISS Quality of Compensation. Paired with otherwise-clean program design, the gross-up is a single-issue fix worth pursuing.
Negotiate gross-up removal in next GC contract renewal; consider one-time consideration (a single PSU grant) to facilitate the amendment if necessary.
If the GC contract has anti-amendment language, removing the gross-up requires negotiated consideration. Model the cost of consideration vs the expected payout — usually consideration is cheaper.
- When does the GC contract come up for amendment, and what's the comp committee's posture on legacy benefits?
- Should the comp committee adopt a formal 'no new gross-ups' policy and disclose it in the CD&A?
Walk-away values are aggregate and assume year-end share price. Real-world payout depends on trigger timing and AIP cycle status.
Open Director Compensation to round out the executive-comp review.