Summary
Cardinal Health, Inc. (CAH) has filed an 8-K report detailing the adoption of a new Senior Executive Severance Plan, effective October 1, 2018. This plan is designed to provide specific severance benefits to a select group of senior executives, including the CEO, CFO, CEO of the Medical Segment, and Chief Legal and Compliance Officer, in the event of a qualifying termination of employment. The plan outlines compensation packages triggered by termination without cause, or resignation for good reason during a change of control period, offering multiples of salary and target bonus, prorated bonuses, and continued health insurance premiums.
Key Highlights
- 1Cardinal Health established a Senior Executive Severance Plan effective October 1, 2018.
- 2The plan covers key named executive officers, including the CEO, CFO, CEO of the Medical Segment, and Chief Legal and Compliance Officer.
- 3Severance benefits are triggered by termination without cause, or by resignation for good reason during a change of control period.
- 4Benefits include cash severance calculated as a multiple of annual base salary and target annual bonus (ranging from 1.5x to 2.5x).
- 5The plan also includes prorated annual bonuses, unpaid prior year bonuses, and up to 18 months of health insurance premium payments.
- 6Eligible executives are subject to restrictive covenants, including confidentiality, non-disparagement, and for named executive officers, non-competition and non-solicitation for two years post-termination.
Frequently Asked Questions
The primary purpose of this filing is to announce the adoption of the Cardinal Health, Inc. Senior Executive Severance Plan, which outlines the severance benefits provided to certain senior executives upon a qualifying termination of employment.
The plan specifically covers named executive officers: Michael C. Kaufmann (CEO), Jorge M. Gomez (CFO), Jon L. Giacomin (CEO — Medical Segment), and Craig S. Morford (Chief Legal and Compliance Officer).
Severance payments are triggered if an eligible executive is terminated by the company without 'cause', or if the executive resigns for 'good reason' during the two-year period following a 'change of control'.
The cash severance is calculated as a multiple of the executive's annual base salary plus their target annual bonus. For the CEO, this multiple is 2.0x or 2.5x during a change of control period. For other eligible executives, it's 1.5x or 2.0x during a change of control period.