Summary
Colgate-Palmolive Company (CL) filed an 8-K on September 16, 2013, primarily to announce an amendment and renewal of its Executive Severance Plan. The Board of Directors extended the plan through September 30, 2018, with a key modification to the calculation of the bonus component of severance payments. This change impacts how potential severance packages for executives are determined in the event of termination. Specifically, the bonus calculation will now be based on the average of the last three years' annual bonus awards, a modification from the previous method which used a higher of two calculations involving the last five years' bonuses or the target bonus for the termination year. Investors should note that this amendment aims to standardize and potentially adjust the severance payouts for top executives. The full amended plan is attached as an exhibit to this filing.
Key Highlights
- 1Colgate-Palmolive Company renewed its Executive Severance Plan.
- 2The renewed plan extends the term to September 30, 2018.
- 3A key amendment was made to the bonus component of executive severance pay.
- 4The bonus calculation is now based on the average of the last three years' annual bonus awards.
- 5The previous bonus calculation method involved a more complex calculation using up to five years of bonuses or the target bonus.
- 6The full amended Executive Severance Plan is filed as Exhibit 10-A.
- 7The changes are effective as of September 12, 2013.