Summary
Bank of New York Mellon Corporation (BK) filed an 8-K on July 15, 2010, to report significant changes in its executive compensation and severance policies. The company notified certain executive officers, including named executive officers, of its intent to terminate their existing change-in-control severance agreements. These officers are being offered the opportunity to waive their current agreements and participate in a new Executive Severance Plan. The new Executive Severance Plan, adopted on July 13, 2010, outlines severance benefits for eligible participants terminated by the Corporation without cause, or by the participant for good reason following a change in control. Additionally, the Board of Directors adopted a Policy Regarding Shareholder Approval Of Future Senior Officer Severance Arrangements, establishing a threshold for executive severance benefits that would require shareholder approval if exceeded. These changes signal a move towards standardized and potentially more scrutinized executive severance packages.
Key Highlights
- 1BK is terminating existing change-in-control severance agreements for certain executive officers.
- 2A new Executive Severance Plan has been adopted, effective July 13, 2010, detailing severance benefits.
- 3Executive officers must waive existing change-in-control agreements to participate in the new severance plan.
- 4The new plan provides severance payments generally equivalent to two times base salary and target bonus under specific termination scenarios (e.g., termination without cause or for good reason post-change in control).
- 5A Policy Regarding Shareholder Approval Of Future Senior Officer Severance Arrangements was adopted on July 12, 2010.
- 6This policy requires shareholder approval for future severance arrangements exceeding 2.99 times the sum of annual base salary and target bonus.
- 7The adoption of these policies indicates a strategic review and standardization of executive severance practices at BK.