8-KLeadership ChangesCorporate ChangesExhibits & Filings

HONEYWELL INTERNATIONAL INC 8-K Report, Executive Changes (Dec 12, 2014)

Filed December 12, 2014For Securities:HONHONIV

Summary

Honeywell International Inc. (HON) filed an 8-K report on December 11, 2014, detailing two significant events: the election of William S. Ayer to the Board of Directors and the approval of a CEO Retention Agreement for David M. Cote. Mr. Ayer's appointment strengthens the board and includes his participation in key committees, Management Development and Compensation and Corporate Governance and Responsibility. This signals a continued focus on board oversight and executive compensation strategy. The CEO Retention Agreement is a crucial element for investors to note, designed to ensure Mr. Cote's continued leadership through a specific period and outline compensation terms tied to performance and retirement. Key aspects include a significant performance stock option grant tied to Total Shareholder Return (TSR) relative to a peer group over a three-year period, and provisions for accelerated vesting of future stock options and prorated incentive compensation upon retirement after December 31, 2017, contingent on meeting certain conditions. This agreement underscores the company's commitment to retaining its CEO and aligning executive incentives with long-term shareholder value creation.

Key Highlights

  • 1William S. Ayer was elected to Honeywell's Board of Directors on December 12, 2014, and will serve on the Management Development and Compensation Committee and the Corporate Governance and Responsibility Committee.
  • 2Honeywell entered into a CEO Retention Agreement with Chairman and CEO David M. Cote on December 11, 2014.
  • 3The CEO Retention Agreement includes a special grant of performance stock options with a target value of $5 million, tied to Honeywell's Total Shareholder Return (TSR) compared to its compensation peer group over a three-year period (January 1, 2015 - December 31, 2017).
  • 4The agreement outlines conditions for accelerated vesting of future stock options granted after April 1, 2015, for Mr. Cote upon retirement after December 31, 2017.
  • 5It also details provisions for prorated Annual Incentive Compensation and Growth Plan awards if Mr. Cote retires after December 31, 2017, contingent on meeting specific conditions.
  • 6Honeywell's By-laws were amended on December 12, 2014, to allow the independent lead director to call special meetings of the Board of Directors.

Frequently Asked Questions

The CEO Retention Agreement is designed to ensure Mr. Cote's continued leadership through a defined period and to align his compensation and potential retirement benefits with the company's performance and long-term shareholder value. It provides incentives for him to remain CEO and outlines specific terms should he retire after December 31, 2017.

The special grant of non-qualified performance stock options has an initial target value of $5 million. The actual number of options earned will be determined by comparing Honeywell's Total Shareholder Return (TSR) against the TSR of companies in its Compensation Peer Group over a three-year period starting January 1, 2015, and ending December 31, 2017.

William S. Ayer's election to the Board of Directors, and his appointment to the Management Development and Compensation Committee and the Corporate Governance and Responsibility Committee, indicates a continued focus on board oversight, executive compensation, and corporate governance. His experience is expected to contribute to the company's strategic direction and decision-making processes.

Honeywell amended its By-laws to grant the independent lead director the authority to call special meetings of the Board of Directors. This change enhances board governance by providing flexibility in convening meetings when necessary.