8-KLeadership Changes

Aon plc 8-K Report, Executive Changes (Mar 23, 2011)

Filed March 23, 2011For Securities:AON

Summary

This 8-K filing by Aon plc, dated March 23, 2011, reports on the approval of performance-based long-term incentive awards for certain executive officers. These awards, granted under the new Leadership Performance Program (LPP) and Aon Hewitt Performance Program (AHPP), are designed to align executive compensation with Aon's long-term financial performance and encourage employee retention. The LPP awards are tied to Aon's cumulative adjusted earnings per share, while the AHPP awards are linked to Aon Hewitt's cumulative adjusted segment pretax income, both over a three-year performance period from January 1, 2011, to December 31, 2013. Investors should note that these awards are structured as performance share units, which will be settled in Aon common stock based on the achievement of specific targets. The Committee retains discretion to adjust performance results or targets for extraordinary items. The filing also details the specific number of target performance share units granted to key Named Executive Officers, including Gregory C. Case and Christa Davies, with a notable mention of additional awards for Stephen P. McGill based on his employment agreement.

Key Highlights

  • 1Aon plc approved new performance-based long-term incentive awards for Named Executive Officers on March 17, 2011.
  • 2Awards are granted under two new programs: the Leadership Performance Program (LPP) and the Aon Hewitt Performance Program (AHPP).
  • 3The LPP is tied to Aon's cumulative adjusted earnings per share over a 2011-2013 performance period.
  • 4The AHPP is linked to Aon Hewitt's cumulative adjusted segment pretax income over a 2011-2013 performance period.
  • 5Awards are in the form of performance share units, settleable in Aon common stock.
  • 6The Committee has discretion to adjust performance results or targets for extraordinary items.
  • 7Specific target performance share units for key executives like Gregory C. Case and Stephen P. McGill are disclosed.

Frequently Asked Questions

The LPP and AHPP are designed to incentivize and retain key executives by aligning their compensation with Aon's long-term financial performance. The LPP focuses on overall company performance (adjusted EPS), while the AHPP targets the performance of the Aon Hewitt segment (adjusted segment pretax income).

The awards are granted as performance share units. They will be earned and settled in Aon common stock based on the achievement of specific cumulative adjusted earnings per share targets (for LPP) or cumulative adjusted segment pretax income targets (for AHPP) over the three-year performance period ending December 31, 2013.

The performance score under both the LPP and AHPP can range from a minimum of 0% to a maximum of 200% of the target number of performance share units granted. This means executives could potentially receive double their target award if performance metrics are significantly exceeded.

Yes, Stephen P. McGill received additional performance share units beyond the regular annual long-term incentive award, totaling $6 million in target value, as stipulated in his employment agreement dated December 7, 2010. This indicates a specific retention or performance commitment tied to his role.