8-K/ALeadership ChangesExhibits & Filings

Expedia Group, Inc. 8-K/A Report, Executive Changes (Sep 21, 2017)

Filed September 21, 2017For Securities:EXPE

Summary

This 8-K filing provides crucial updates regarding leadership changes and executive compensation at Expedia Group, Inc. following the departure of its former CEO, Dara Khosrowshahi. The company has formally appointed Mark D. Okerstrom as the new President and Chief Executive Officer and Alan Pickerill as the new Chief Financial Officer. This filing details the new long-term employment agreements and significant equity awards granted to both Mr. Okerstrom and Mr. Pickerill, outlining their base salaries, bonus potential, severance packages, and restrictive covenants. Furthermore, the filing clarifies the equity treatment for Mr. Khosrowshahi following his resignation as CEO, specifying which unvested options were forfeited and which remain subject to board service, along with their vesting and exercise terms. Investors should pay close attention to the details of these compensation packages and equity arrangements as they reflect the company's investment in its new leadership and its strategy for retaining key talent.

Key Highlights

  • 1Mark D. Okerstrom appointed President and CEO, with a new 4-year employment agreement effective Sept 15, 2017, including $1M base salary and significant equity awards.
  • 2Alan Pickerill appointed Executive Vice President and CFO, with a new 3-year employment agreement effective Sept 15, 2017, including $450K base salary and equity awards.
  • 3New compensation arrangements for Okerstrom include performance-based stock options targeting a $200 stock price and service-based RSUs tied to bookings or stock price.
  • 4Severance packages for both Okerstrom and Pickerill include continued base salary for up to 36 months (Okerstrom) or term of agreement (Pickerill), accelerated equity vesting, and extended stock option exercise periods.
  • 5Dara Khosrowshahi forfeited significant unvested stock options upon his CEO resignation but retains others tied to his board membership.
  • 6The equity treatment agreement for Khosrowshahi specifies forfeiture of options with higher exercise prices and performance hurdles while retaining some options vesting on original schedules.
  • 7The filing amends a previous 8-K to provide detailed compensation information, which is critical for understanding the financial implications of the leadership transition.

Frequently Asked Questions

Mark D. Okerstrom has been officially appointed President and CEO, and Alan Pickerill has been appointed Executive Vice President and CFO. Dara Khosrowshahi has resigned as CEO but remains on the Board of Directors.

Mr. Okerstrom's new employment agreement includes a base salary of $1,000,000, an annual discretionary bonus, and significant equity awards. These awards include service-based stock options, performance-based stock options with a $200 stock price target, and service-based RSUs tied to bookings or stock price performance.

Mr. Khosrowshahi has forfeited certain unvested stock options, including those with a $95 exercise price and performance hurdles. However, he retains other unvested stock options that will vest according to their original schedules, provided he continues to serve on the Board. His vested options can be exercised for one year after he leaves the Board.

Both Mr. Okerstrom and Mr. Pickerill are entitled to severance upon termination by the company without cause or resignation for good reason. This includes continued base salary payments for a specified period (up to 36 months for Okerstrom), accelerated vesting of certain equity awards, extended periods to exercise vested stock options, and continued health benefits coverage for 12 months.