8-KLeadership ChangesExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Executive Changes (Sep 15, 2014)

Filed September 15, 2014For Securities:DHR

Summary

This Form 8-K filing by Danaher Corporation (DHR) reports on significant changes in executive compensation and employment arrangements following the promotion of Thomas P. Joyce, Jr. to President and Chief Executive Officer, effective September 9, 2014. The key changes include an increase in his annual base salary, a revised bonus structure for 2014 reflecting his new role, and substantial equity awards designed to align his incentives with long-term company performance. Investors should note the specific performance conditions attached to the vesting of Mr. Joyce's new performance-based RSUs, which require sustained Adjusted EPS growth and positive net income. Additionally, the filing details enhanced severance provisions if his employment is terminated without cause, including continued base salary, a pro-rata bonus based on a three-year average, and accelerated vesting of equity awards. This information provides insight into the company's approach to incentivizing and retaining key leadership during a period of executive transition.

Key Highlights

  • 1Thomas P. Joyce, Jr. was promoted to President and Chief Executive Officer effective September 9, 2014.
  • 2Mr. Joyce's annual base salary was increased from $825,000 to $1,000,000.
  • 3His 2014 target bonus opportunity was adjusted to reflect his new role, with a portion based on his previous role and a portion on his new CEO role with a higher target bonus percentage (200%) and new salary.
  • 4Mr. Joyce was awarded $2,330,000 in equity compensation, split equally between stock options and performance-based RSUs.
  • 5Vesting of performance-based RSUs is contingent upon achieving specific Adjusted EPS growth (110% of prior year) and positive net income over four consecutive fiscal quarters post-grant.
  • 6Severance provisions were amended to include a Three-Year Average Annual Bonus payment and pro-rata accelerated vesting of equity upon termination without cause.
  • 7Relocation benefits and personal usage of company aircraft, capped at $125,000 annually, were approved for Mr. Joyce.

Frequently Asked Questions

Following his promotion to President and CEO, Mr. Joyce's annual base salary increased to $1,000,000. His 2014 bonus structure was modified to reflect his new role, and he received a significant equity award of $2,330,000 in stock options and performance-based RSUs. Enhanced severance terms were also put in place.

The performance-based RSUs will vest only if Danaher achieves two conditions within four consecutive fiscal quarters starting after the grant date and ending within ten years: (1) the Company's Adjusted EPS exceeds 110% of its Adjusted EPS for the four fiscal quarters ended June 27, 2014, and (2) the Company reports positive net income.

If Danaher terminates Mr. Joyce's employment without cause, he will receive his prior 12 months of base salary, plus an additional amount equal to the average of his annual cash incentive compensation from the three preceding calendar years. He will also receive a pro-rata portion of this bonus for the year of termination and pro-rata accelerated vesting of his outstanding equity awards.

Yes, Mr. Joyce was approved for relocation benefits in accordance with the company's policy for management employees, and for personal usage of the company aircraft, capped at $125,000 per year.