8-KLeadership Changes

Aon plc 8-K Report, Executive Changes (Mar 12, 2010)

Filed March 12, 2010For Securities:AON

Summary

This 8-K filing from Aon Corporation, filed on March 11, 2010, details significant decisions made by the Organization and Compensation Committee regarding executive compensation for the 2010 performance year. The Committee established budgeted pre-tax income from continuing operations as the key corporate performance measure for 2010 under the Aon Senior Officer Incentive Compensation Plan, with a minimum threshold of 85% of planned pre-tax income required for any payout. This filing also outlines the specific target incentive percentages for Named Executive Officers, with the CEO, Gregory C. Case, eligible for up to 200% of his base salary. Furthermore, the filing announces the approval of performance-based long-term incentive awards for certain Named Executive Officers under a newly adopted Leadership Performance Program, a sub-plan of the Aon Stock Incentive Plan. These awards are structured as performance share units, earned based on cumulative adjusted earnings per share (EPS) targets over a three-year period (2010-2012). This program aims to drive overall company success and enhance employee retention by aligning executive rewards with long-term financial performance.

Key Highlights

  • 1Established budgeted pre-tax income from continuing operations as the primary corporate performance measure for 2010 annual incentive awards.
  • 2Set a minimum performance threshold of 85% of planned pre-tax income for annual incentive payouts.
  • 3Designated specific target incentive percentages for Named Executive Officers, with CEO Gregory C. Case at 200% of base salary.
  • 4Maximum annual incentive payout for Named Executive Officers is capped at 300% of their target incentive, with an overall cap of $5 million.
  • 5Approved performance-based long-term incentive awards under the new Leadership Performance Program.
  • 6Long-term incentives are structured as performance share units tied to cumulative adjusted EPS over a three-year performance period (2010-2012).
  • 7Gregory C. Case received a significant long-term award, with a target value of $7 million as an annual award and an additional $10 million pursuant to his employment agreement.

Frequently Asked Questions

This filing primarily concerns the establishment of executive compensation plans and awards for Aon Corporation for the 2010 performance year. It details the corporate performance metrics for annual incentives and the structure and grant of long-term performance-based awards to key executives.

The corporate performance measure for the 2010 annual incentive awards is budgeted pre-tax income from continuing operations. A minimum threshold of 85% of the planned pre-tax income must be achieved for any incentive payout to occur.

The long-term incentives are granted as performance share units under the new Leadership Performance Program. These units are earned based on Aon's performance relative to a cumulative adjusted earnings per share (EPS) target over a three-year period, from January 1, 2010, to December 31, 2012.

Named Executive Officers are eligible to receive up to 300% of their target incentive, which is set as a percentage of their base salary. However, there is an overall cap of $5 million on the maximum incentive payable to each executive under this plan.