8-KLeadership Changes

Aon plc 8-K Report, Executive Changes (Mar 19, 2013)

Filed March 19, 2013For Securities:AON

Summary

Aon plc filed an 8-K on March 18, 2013, reporting on the approval of performance-based long-term incentive awards to certain executive officers. These awards, granted under the new Leadership Performance Program (LPP) and tied to Aon's 2011 Incentive Plan, are structured as performance share units. The vesting and settlement of these units are contingent upon Aon achieving a cumulative adjusted earnings per share target over a three-year performance period, from January 1, 2013, to December 31, 2015. This initiative underscores Aon's strategy to align executive compensation with long-term company performance and promote employee retention. The key focus for investors is the direct link between executive compensation and the achievement of specific, measurable financial goals (cumulative adjusted EPS). The LPP allows for a performance score ranging from 0% to 200% of the target, with the Committee retaining discretion to adjust results for extraordinary items. The filing also details the specific target number of performance share units granted to key executives, including the CEO, Gregory C. Case.

Key Highlights

  • 1Aon plc approved performance-based long-term incentive awards for certain executive officers on March 14, 2013, under the new Leadership Performance Program (LPP).
  • 2The LPP is a sub-plan of the Aon Corporation 2011 Incentive Plan, designed to drive company success and encourage employee retention.
  • 3Awards are structured as performance share units, to be earned and settled in Aon Class A Ordinary Shares.
  • 4Vesting and settlement are based on Aon's performance relative to a cumulative adjusted earnings per share (EPS) target over a three-year period (January 1, 2013 - December 31, 2015).
  • 5The LPP allows for a performance score from 0% to 200% of the target.
  • 6The Organization and Compensation Committee has discretion to adjust performance results or targets for extraordinary items.
  • 7Specific target performance share units were granted to named executive officers, with CEO Gregory C. Case receiving 143,990 units.

Frequently Asked Questions

The LPP is designed to align the compensation of Aon's executive officers with the company's long-term financial performance and to incentivize employee retention. Awards under the LPP are contingent on achieving specific cumulative adjusted earnings per share targets over a three-year period.

Executive compensation under the LPP is awarded as performance share units. The number of shares ultimately received depends on Aon's achievement of a cumulative adjusted earnings per share target between January 1, 2013, and December 31, 2015. The potential payout ranges from 0% to 200% of the target performance.

Yes, the Organization and Compensation Committee has the discretion to adjust Aon's performance results or the target itself to account for extraordinary or unusual items that may occur during the performance period. This allows for a more equitable assessment of executive performance in light of unforeseen circumstances.

The awards were granted to certain executive officers, referred to as Named Executive Officers. For example, CEO Gregory C. Case was granted 143,990 target performance share units. Other Named Executive Officers, including Christa Davies, Stephen P. McGill, Kristi Savacool, and Gregory J. Besio, also received awards with specific target unit amounts detailed in the filing.