8-KLeadership ChangesOther EventsExhibits & Filings

CARDINAL HEALTH INC 8-K Report, Executive Changes (Sep 6, 2012)

Filed September 6, 2012For Securities:CAH

Summary

This 8-K filing by Cardinal Health Inc. (CAH) primarily announces changes in its Board of Directors and a new employment agreement for its Chairman and CEO, George S. Barrett. The company has appointed Clayton M. Jones, CEO of Rockwell Collins, to the Board, effective September 13, 2012, and he is nominated for election at the upcoming annual meeting. Concurrently, long-serving director David W. Raisbeck will not seek re-election upon his term's expiration at the 2012 Annual Meeting. Investors will find the renewal of George S. Barrett's employment agreement significant. The new agreement extends his tenure as Chairman and CEO until at least mid-2015, superseding his prior 2009 contract. The Board's decision is attributed to Mr. Barrett's strong leadership and proven track record since the 2009 spin-off of CareFusion, highlighted by substantial growth in non-GAAP EPS, an 80% total shareholder return, and significant stock price appreciation. The terms of his compensation, including base salary, bonus targets, and long-term incentive awards, remain largely consistent with his previous agreement, with a target long-term incentive value of $8 million annually.

Key Highlights

  • 1Appointment of Clayton M. Jones to the Board of Directors, effective September 13, 2012.
  • 2Nomination of Clayton M. Jones for election at the 2012 Annual Meeting.
  • 3Director David W. Raisbeck will not stand for re-election at the 2012 Annual Meeting.
  • 4George S. Barrett enters into a new employment agreement to continue as Chairman and CEO until at least mid-2015.
  • 5The new Barrett Agreement acknowledges his contributions to company growth, shareholder return, and strategic initiatives since the 2009 spin-off.
  • 6Mr. Barrett's compensation structure, including a base salary of at least $1,285,000 and a target annual bonus of at least 130%, remains largely consistent.
  • 7A target annual long-term incentive award grant for Mr. Barrett has a value of $8,000,000.
  • 8A blackout period for the Cardinal Health 401(k) Savings Plan is scheduled from October 5, 2012, to the week of October 28, 2012, due to a transition to a new plan administrator.

Frequently Asked Questions

The filing announces the appointment of Clayton M. Jones to the Board of Directors and his nomination for the upcoming annual meeting. It also states that Director David W. Raisbeck will not seek re-election. Additionally, George S. Barrett has entered into a new employment agreement to continue as Chairman and CEO.

The new agreement extends Mr. Barrett's tenure as Chairman and CEO until at least mid-2015, ensuring leadership continuity. The Board cited his instrumental role in the company's significant growth, total shareholder return of 80%, and strategic initiatives since the 2009 CareFusion spin-off as reasons for renewing his contract.

The new agreement generally mirrors his prior contract. It includes an annual base salary of at least $1,285,000, a target annual bonus of at least 130% of base salary, and a target annual long-term incentive award grant valued at $8,000,000, comprising various equity and incentive instruments. He will also continue to receive personal use of corporate aircraft and has standard termination provisions.

A blackout period is scheduled for the Cardinal Health 401(k) Savings Plan from October 5 to October 28, 2012. This is necessary due to the transition to a new plan administrator. During this period, participants will be unable to make changes to contribution rates, investments, loan repayments, or process withdrawals/distributions.