8-KLeadership ChangesExhibits & Filings

Liberty Media Corp 8-K Report, Executive Changes (Dec 19, 2019)

Filed December 19, 2019For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) filed an 8-K on December 19, 2019, detailing a new five-year employment agreement for its President and CEO, Gregory B. Maffei, effective January 1, 2020, through December 31, 2024. The agreement outlines a base salary of $3 million, a significant annual cash performance bonus target of $17 million, and substantial annual equity awards with a grant date fair value of $17.5 million. A notable component is the "Upfront Awards" totaling $90 million in grant date fair value, to be granted in two tranches, incentivizing long-term commitment. The filing also clarifies the allocation of Mr. Maffei's compensation across Liberty Media and its subsidiaries (Qurate Retail, GCI Liberty, Liberty Broadband, and Liberty TripAdvisor Holdings) through amended services agreements. This structure ensures that components of his compensation, including bonuses and equity, are paid either directly by the service companies or reimbursed to Liberty Media based on defined "Executive Percentages." Generous severance packages are detailed for termination without cause or by Mr. Maffei for good reason, including multi-year salary continuation, full vesting of awards, and significant cash payments, reflecting a strong retention and compensation strategy for its top executive.

Key Highlights

  • 1New five-year employment agreement for CEO Gregory B. Maffei, running from January 1, 2020, to December 31, 2024.
  • 2Annual base salary of $3 million, with no contracted increases.
  • 3Annual target cash performance bonus of $17 million, subject to performance metrics.
  • 4Annual equity awards with a grant date fair value of $17.5 million, comprising stock options and/or performance-based RSUs.
  • 5Significant "Upfront Awards" totaling $90 million in grant date fair value, granted in two tranches, with specific vesting schedules.
  • 6Detailed severance package for termination without cause or for good reason, including salary continuation, full vesting of equity awards, and substantial cash payouts.
  • 7Amended services agreements clarify the allocation of Mr. Maffei's compensation costs among Liberty Media and its subsidiaries, using defined "Executive Percentages."

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and detail the new employment agreement between Liberty Media Corporation and its President and CEO, Gregory B. Maffei, which sets forth his compensation, term of employment, and severance arrangements.

Mr. Maffei's compensation is allocated based on amended Services Agreements. Portions of his base salary, bonuses, and equity awards will be paid directly by or reimbursed to Liberty Media by its subsidiaries (Qurate, GCI Liberty, Liberty Broadband, Liberty TripAdvisor Holdings) according to defined "Executive Percentages," which are detailed for 2020 and will be adjusted annually thereafter.

The agreement outlines specific provisions for termination. Termination without cause or by Mr. Maffei for good reason triggers a comprehensive severance package including continued salary, full vesting of awards, and cash payments. Termination due to death or disability also results in severance benefits. Termination for cause leads to forfeiture of unvested awards and only payment of accrued salary and reimbursements. Voluntary termination without good reason results in pro-rata vesting of certain awards and a partial cash payment.

The "Upfront Awards" are a significant component of Mr. Maffei's total compensation, totaling $90 million in grant date fair value. These are designed to incentivize long-term commitment and retention, granted in two tranches with specific vesting schedules, with the first tranche tied to continued employment until December 31, 2023 (or the anniversary of the grant for TripCo) and the second tranche vesting by December 31, 2024.