8-KLeadership ChangesExhibits & Filings

Aon plc 8-K Report, Executive Changes (Aug 4, 2009)

Filed August 4, 2009For Securities:AON

Summary

This Form 8-K filing by Aon plc on August 4, 2009, primarily details an amendment to the employment agreement for Stephen P. McGill, Chairman and CEO of Aon Risk Services Worldwide. The key change involves the extension of his U.S. assignment until January 1, 2013, aligning with his existing employment term. This amendment also introduces adjustments to his compensation and benefits structure to manage foreign exchange rate fluctuations and transitional changes related to his expatriate status. The modifications include fixing his base salary at $1,100,000 annually to mitigate FX risks, ceasing his participation in the tax equalization policy and tax gross-up on allowances from January 2010, and ending company contributions to his UK pension plan from July 2009. In partial replacement of pension benefits, a new annual cash lump sum payment will commence in January 2010.

Key Highlights

  • 1Aon Limited (a subsidiary) amended the employment agreement of Stephen P. McGill, Chairman and CEO of Aon Risk Services Worldwide.
  • 2Mr. McGill's overseas assignment to U.S. operations has been extended from June 30, 2009, to the end of his employment term on January 1, 2013.
  • 3Effective May 1, 2009, Mr. McGill's base salary was fixed at US$1,100,000 per annum to mitigate foreign exchange rate impacts.
  • 4Mr. McGill will no longer participate in the Company's tax equalization policy for expatriates effective January 1, 2010.
  • 5The Company's obligation to provide a tax gross-up on Mr. McGill's annual expatriate allowance will cease effective January 1, 2010.
  • 6Company contributions to Mr. McGill's UK personal pension plan (25% of base salary) ceased effective July 1, 2009.
  • 7An annual cash lump sum payment, equivalent to GB£45,000, will be made to Mr. McGill starting January 1, 2010, as a partial replacement for pension benefits.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose an amendment to the employment agreement of Stephen P. McGill, a key executive at Aon. The amendment extends his assignment in the U.S. and modifies his compensation and benefits structure.

The extension of Mr. McGill's U.S. assignment ensures continuity in leadership for Aon Risk Services Worldwide's U.S. operations until his employment contract ends in January 2013. The associated compensation adjustments are designed to manage financial risks, particularly foreign exchange rate volatility.

Mr. McGill's base salary is now fixed at $1,100,000 annually to avoid fluctuations due to currency exchange rates. Additionally, starting January 1, 2010, he will no longer be part of the expatriate tax equalization policy or receive tax gross-ups, and company contributions to his UK pension will cease, replaced by a new annual cash payment.

Some changes are effective retroactively or at different times. The U.S. assignment extension is effective until January 1, 2013. The fixed base salary was effective May 1, 2009. The cessation of pension contributions was effective July 1, 2009. Changes related to tax equalization and the new cash lump sum payment will be effective January 1, 2010.