8-KLeadership Changes

Howmet Aerospace Inc. 8-K Report, Executive Changes (Dec 20, 2019)

Filed December 20, 2019For Securities:HWM

Summary

This 8-K filing from Howmet Aerospace Inc. (then Arconic Inc.) on December 20, 2019, details significant changes to executive compensation related to the planned separation of the company into two independent entities. The Compensation and Benefits Committee amended the performance-based restricted share units (PRSUs) granted in 2018 and 2019 for named executive officers. The primary objective of these amendments was to adjust the vesting and performance criteria of these awards to align with the upcoming separation, ensuring they are unaffected by the corporate split and reflect achievements prior to the event. The key change involves shortening the performance period for 2018 PRSUs to conclude by December 31, 2019, converting them to time-based restricted share units vesting in 2021. Similarly, 2019 PRSUs have been converted directly to time-based restricted share units, with no performance goals, vesting in 2022. These adjustments ensure clarity and fairness in executive compensation amidst significant corporate restructuring, providing executives with defined outcomes for their long-term incentives.

Key Highlights

  • 1Amendment to performance-based restricted share units (PRSUs) for named executive officers due to planned company separation.
  • 2Performance period for 2018 PRSUs shortened to end December 31, 2019.
  • 32018 PRSUs converted to time-based restricted share units vesting in 2021.
  • 42019 PRSUs converted to time-based restricted share units with no performance goals, vesting in 2022.
  • 5Adjustments ensure compensation aligns with corporate separation and prior performance.
  • 6Specific grants for officers Kenneth J. Giacobbe, Timothy D. Myers, and Katherine H. Ramundo are detailed.
  • 7The filing is related to Arconic Inc.'s strategic decision to separate into two publicly traded companies.

Frequently Asked Questions

The PRSUs were amended to address the planned separation of Arconic Inc. into two independent publicly traded companies. The amendments ensure that the vesting and performance criteria of these awards are appropriately adjusted to reflect achievements before the separation and are not negatively impacted by the corporate split.

For the 2018 PRSUs, the performance period has been shortened to end on December 31, 2019, which is before the planned separation. The PRSUs that qualify for vesting based on performance during this shortened period will convert into time-based restricted share units that are scheduled to vest in 2021.

For the 2019 PRSUs, the target number of units granted has been converted directly into time-based restricted share units. These will vest in 2022 according to their time-based vesting terms, and importantly, no longer have performance goals associated with them.

The named executive officers whose grants were amended are Kenneth J. Giacobbe, Timothy D. Myers, and Katherine H. Ramundo. Specific numbers of 2018 and 2019 PRSUs granted to each of them are detailed in the filing.