Summary
Ciena Corporation (CIEN) filed an 8-K on June 8, 2011, announcing significant executive leadership changes effective August 1, 2011. These changes involve key appointments within Global Government Solutions, Global Field Operations, and Global Products Group, reflecting a strategic realignment of responsibilities. The company is also detailing updated compensation packages for these executives, including adjustments to base salaries, bonus structures, and substantial awards of restricted stock units (RSUs) and performance stock units (PSUs). These compensation adjustments are designed to incentivize performance and retain key talent within Ciena's evolving product and solutions landscape.
Key Highlights
- 1Effective August 1, 2011, Ciena is appointing three new key executives: Michael G. Aquino (General Manager, Global Government Solutions), Philippe Morin (Senior Vice President, Global Field Operations), and François Locoh-Donou (Senior Vice President, Global Products Group).
- 2Michael G. Aquino's role shifts to focus on global government sales, with a revised compensation structure including a reduced base salary, eligibility for an annual target bonus up to 65% of base salary, and a significant RSU award valued at $875,000 vesting in September 2014.
- 3Philippe Morin, previously in Global Products, will now lead global sales and services, with an increased base salary (CAD 500,000), a reduced bonus target (75%), and substantial RSU ($500,000) and PSU ($500,000) awards vesting over three years (2013-2015) based on performance.
- 4François Locoh-Donou will lead engineering, supply chain, and product management, receiving an annual salary of $375,000, a bonus target of 75%, and similar RSU ($500,000) and PSU ($500,000) awards as Mr. Morin, with identical vesting schedules.
- 5All three executives are subject to Ciena's standard executive change in control severance agreements, with terms varying slightly based on their senior vice president or general manager titles, providing protection in case of termination following a change in control.
- 6The compensation adjustments include significant equity awards (RSUs and PSUs) designed to align executive interests with long-term shareholder value, with vesting periods ranging from 2013 to 2015 and performance metrics for PSUs.
Frequently Asked Questions
Ciena announced three key executive appointments effective August 1, 2011: Michael G. Aquino as General Manager, Global Government Solutions; Philippe Morin as Senior Vice President, Global Field Operations; and François Locoh-Donou as Senior Vice President, Global Products Group.
Mr. Aquino's base salary will decrease from $350,000 to $300,000. His commission eligibility is replaced by an annual target bonus of up to 65% of his base salary, contingent on corporate and individual performance. He will also receive a restricted stock unit (RSU) award valued at $875,000, vesting fully on September 20, 2014.
Philippe Morin will have his base salary increase to CAD $500,000, with a bonus target of 75% of base salary. François Locoh-Donou will receive an annual salary of $375,000 with a bonus target of 75% of base salary. Both will receive RSU and PSU awards valued at $500,000 each, with vesting and performance conditions detailed in the filing.
The standard severance agreements provide benefits in the event of termination without cause or resignation for good reason within one year following a change in control. Benefits include a lump sum payment (1x base salary + bonus for Vice Presidents like Aquino, 1.5x for Senior VPs like Morin and Locoh-Donou), 12-18 months of benefits continuation, and acceleration of unvested equity awards.