8-KLeadership ChangesExhibits & Filings

Howmet Aerospace Inc. 8-K Report, Executive Changes (Dec 8, 2022)

Filed December 8, 2022For Securities:HWM

Summary

This 8-K filing from Howmet Aerospace Inc. (HWM) details amendments to the employment agreement for Executive Chairman and CEO John C. Plant, effective January 1, 2023. The changes primarily relate to his compensation and severance arrangements, providing clarity and potentially increased incentives for continued leadership. Investors should note the adjustments in bonus targets and the significant equity grant planned for 2024. The key takeaways for investors revolve around the increased bonus potential, the substantial long-term equity incentive awarded for 2024, and modifications to severance terms. While the specific details of the equity grant's performance metrics are not fully disclosed in this filing, the structure of restricted stock units (RSUs) and performance stock units (PSUs) indicates a focus on retention and value creation tied to Mr. Plant's continued service.

Key Highlights

  • 1CEO John C. Plant's employment terms amended via a December 2, 2022, letter agreement.
  • 2Effective January 1, 2023, Mr. Plant's target annual bonus increases to 175% of his base salary under the senior executive annual incentive plan.
  • 3A significant equity grant of $14.1 million is planned for 2024, subject to continued employment.
  • 4The 2024 equity grant will consist of 40% time-vesting RSUs and 60% performance-vesting PSUs.
  • 5Key provisions for RSUs/PSUs include continued vesting upon termination without cause or for good reason, extended retirement eligibility (9 months post-grant), and prorated vesting upon death or disability.
  • 6Existing severance provisions in Mr. Plant's agreement will be replaced by participation in the Company's Executive Severance Plan and Change in Control Severance Plan as a 'Tier I Employee'.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report amendments to the employment agreement of Howmet Aerospace Inc.'s Executive Chairman and CEO, John C. Plant. These amendments primarily concern his bonus structure, long-term equity incentives, and severance arrangements.

Starting January 1, 2023, Mr. Plant's target annual bonus will increase to 175% of his base salary, aligning him with the company's annual incentive plan for senior executives. Additionally, he is set to receive a significant equity grant in 2024.

The 2024 equity grant, valued at $14.1 million, will be awarded subject to Mr. Plant's continued employment. It will comprise 40% time-vesting RSUs and 60% performance-vesting PSUs. Notably, these awards will continue to vest upon termination without cause or for good reason, have extended retirement eligibility, and vest on a prorated basis in case of death or disability.

Effective January 1, 2023, Mr. Plant's existing severance provisions will be replaced by his participation as a 'Tier I Employee' in the Company's Executive Severance Plan and Change in Control Severance Plan. Termination by Mr. Plant for 'good reason' under the Letter Agreement will now be considered a severance event under these plans.