Summary
Colgate-Palmolive Company (CL) filed an 8-K on July 9, 2010, reporting on a key governance matter. The company's Board of Directors reviewed and renewed its Executive Severance Plan. This renewal extends the plan for an additional term expiring on July 31, 2013, maintaining most of its existing terms and conditions. The most significant change introduced in this renewal pertains to the calculation of the bonus component of severance payments. Previously, severance could include the highest annual bonus awarded in the last five years. The updated plan now replaces this with the average of the three highest annual bonus awards over the same five-year period. This modification represents a reduction in the potential severance payout for executives under specific bonus scenarios.
Key Highlights
- 1Colgate-Palmolive's Board of Directors renewed the Executive Severance Plan.
- 2The renewed plan has an expiration date of July 31, 2013.
- 3The terms and conditions of the plan remain largely unchanged from the previous version.
- 4A key modification was made to the bonus component of severance calculations.
- 5The bonus component is now based on the average of the three highest annual bonus awards in the last five years, down from the single highest award.
- 6This change effectively reduces the potential maximum bonus payout included in severance.
- 7The updated plan is filed as Exhibit 10-A to the 8-K.