01—Abstract
Summary
Summary of the 8-K filed December 18, 2019. Cited figures are marked; the original filing is the authoritative source.
CME Group Inc. (CME) filed an 8-K on December 18, 2019, to disclose an amended and restated employment agreement with its Chairman and Chief Executive Officer, Terrence A.
Duffy. The agreement extends Mr. Duffy's employment term by one year, from December 31, 2022, to December 31, 2023. Key changes to Mr. Duffy's compensation include an increase in his target annual incentive bonus opportunity from 175%a to 200% of his base salary, commencing January 1, 2020.
Furthermore, his target grant date value opportunity under the omnibus stock plan will significantly increase from 350%b to 600% of his annual base salary. The amended agreement also outlines specific conditions for bonus and equity award vesting upon completion of his extended term, contingent on a general release. The base salary and other terms of the employment agreement remain unchanged.
02—Key points
Key Highlights
- CEO Terrence A. Duffy's employment term extended by one year to December 31, 2023.
- Target annual incentive bonus opportunity increased from 175% to 200% of base salary, effective January 1, 2020.
- Target grant date value opportunity for stock plan awards increased significantly from 350% to 600% of base salary.
- No change to Mr. Duffy's minimum annual base salary.
- Specific provisions for 2023 bonus and equity vesting upon completion of extended term, subject to general release.
- The amended agreement does not alter other terms of Mr. Duffy's prior employment contract.
03—Questions
Frequently Asked Questions
What is the main purpose of this 8-K filing?
The main purpose of this 8-K filing is to announce an amendment to the employment agreement for CME Group's Chairman and CEO, Terrence A. Duffy, extending his term and adjusting his incentive compensation structure.
How does the CEO's compensation change under the new agreement?
The CEO's minimum annual base salary remains unchanged. However, his target annual bonus opportunity increases from 175% to 200% of his base salary, and his target stock award value opportunity significantly rises from 350% to 600% of his base salary, both effective January 1, 2020.
What happens to Mr. Duffy's equity awards at the end of his extended term?
If Mr. Duffy is employed through December 31, 2023, he will be entitled to a bonus for the 2023 plan year. Additionally, unvested time-vesting equity awards granted after December 31, 2022, will vest, and performance-based equity awards will vest based on actual performance, provided he executes a general release.
Are there any other significant changes to the employment terms?
No, the filing specifies that the terms of Mr. Duffy's employment agreement otherwise remained the same, with the primary adjustments being the extension of the employment term and the changes to his incentive and equity award opportunities.
04—Continue