8-KLeadership ChangesExhibits & Filings

TechnipFMC plc 8-K Report, Executive Changes (Jan 29, 2024)

Filed January 29, 2024For Securities:FTI

Summary

TechnipFMC plc (FTI) announced through an 8-K filing on January 29, 2024, that its Compensation Committee has approved the renewal and extension of Executive Severance Agreements for its Chief Executive Officer, Executive Vice President and Chief Technology Officer, and President, Subsea. Crucially, these agreements, along with new ones for other executive officers, now have no expiration date. This signals a commitment to retaining key leadership by providing enhanced financial security in the event of termination following a change in control. The severance packages are structured as "double trigger" benefits, meaning they are activated only if an executive's employment is terminated without cause or constructively terminated within 24 months after a change in control. The benefits include multiples of base salary and target cash bonuses, with higher multiples (three times) for the CEO and CFO and lower multiples (two times) for other executives. These agreements also cover accrued compensation, pro-rated bonuses, and continued health insurance for a specified period (24 or 36 months for CEO/CFO), subject to a release of claims and potential tax code limitations.

Key Highlights

  • 1Renewal and extension of Executive Severance Agreements for key executives, including the CEO, EVPs, and President, Subsea.
  • 2New Executive Severance Agreements approved for other executive officers.
  • 3All Executive Severance Agreements now have no expiration date, providing indefinite protection.
  • 4Severance benefits are "double trigger," requiring termination without cause or constructive termination within 24 months of a change in control.
  • 5Severance multiples for base salary and cash bonus are higher for the CEO and CFO (3x) compared to other executives (2x).
  • 6Severance includes continued health insurance coverage for 24 months (36 months for CEO/CFO).
  • 7Receipt of severance is contingent upon signing a release of claims and may be subject to Section 280G of the U.S. Internal Revenue Code.

Frequently Asked Questions

The primary purpose is to provide financial security and retain key executive talent by offering specific severance benefits in the event of a termination (without cause or constructive termination) within a defined period following a change in control of the company. The removal of an expiration date suggests a long-term commitment to these arrangements.

The severance benefits are triggered under a "double trigger" provision. This means that both an event of termination (without cause or constructive termination) and a "change in control" must occur. Specifically, the termination must happen within twenty-four months following a change in control.

The CEO and CFO receive higher multiples for their severance calculation. Their base salary and target cash bonus are multiplied by three, whereas other executive officers receive a multiple of two for these components. Additionally, the CEO and CFO are entitled to continued health insurance coverage for 36 months, while other executives receive coverage for 24 months.

Yes, there are two main conditions. First, the executive must sign a release of claims against the company. Second, the severance payments may be reduced if they would not be deductible for the company due to Section 280G of the U.S. Internal Revenue Code.