8-KLeadership ChangesExhibits & Filings

Johnson Controls International plc 8-K Report, Executive Changes (Sep 15, 2017)

Filed September 15, 2017For Securities:JCI

Summary

Johnson Controls International plc (JCI) filed an 8-K on September 15, 2017, detailing a significant executive compensation and retention arrangement for its Executive Vice President and Chief Financial Officer, Brian J. Stief. To ensure continuity in senior management and support post-merger integration and succession planning, JCI has entered into a comprehensive retention agreement with Mr. Stief, extending his commitment through December 2020. This agreement aims to incentivize him to forgo his rights under a prior Change of Control Executive Employment Agreement, which could have entitled him to approximately $12 million in severance following the 2016 merger with Tyco. The new arrangement includes substantial equity awards totaling $20 million in target value, comprising restricted share units (RSUs) and performance share units (PSUs). These awards are designed to vest by December 2020, with provisions for accelerated vesting upon certain events like death, disability, or involuntary termination. Furthermore, a separate letter agreement guarantees a minimum cash payout of $12 million related to the equity awards, ensuring Mr. Stief receives at least that amount upon vesting, regardless of share performance, and includes customary non-compete and non-solicitation clauses.

Key Highlights

  • 1JCI has secured the continued service of EVP and CFO Brian J. Stief through December 2020.
  • 2Mr. Stief's retention incentivizes him to waive potential severance benefits of approximately $12 million under his previous Change of Control agreement.
  • 3A new comprehensive retention package includes equity awards with a target value of $20 million ($12 million in RSUs/PSUs and $4 million in PSUs and $4 million in RSUs).
  • 4The retention equity awards are scheduled to vest on or about December 7, 2020, with accelerated vesting for death, disability, retirement, or involuntary termination.
  • 5Performance-based equity awards are tied to the company's Long-Term Incentive Performance Program, with potential payouts up to 200% of the target for top performance.
  • 6A supplemental letter agreement guarantees Mr. Stief a minimum cash value of $12 million from his retention equity awards upon vesting.
  • 7The agreement includes customary non-compete and non-solicitation covenants from Mr. Stief.

Frequently Asked Questions

JCI is securing the continued service of its EVP and CFO, Brian J. Stief, through December 2020. The company believes Mr. Stief's extended tenure is crucial for providing senior management continuity and supporting the successful integration of the company post-merger with Tyco, as well as for succession planning activities.

Mr. Stief is foregoing potential severance benefits of approximately $12 million under his previous Change of Control agreement. In exchange, he will receive retention equity awards with a target value of $20 million. Additionally, a separate agreement guarantees that the retention equity awards will have a minimum cash value of $12 million upon vesting, ensuring he receives at least that amount.

The retention package includes a total of $20 million in target value equity awards. This consists of 299,251 restricted share units/performance share units valued at $12 million, 99,750 performance share units valued at $4 million, and 99,750 restricted share units valued at $4 million. These awards are subject to vesting on or around December 7, 2020, with provisions for accelerated vesting under certain conditions. Some awards are also tied to company performance metrics.

Yes, Mr. Stief has agreed to the termination of his prior Change of Control agreement and to remain with the company through December 2020. The agreement also includes customary non-compete and non-solicitation covenants, which restrict him from competing with JCI or soliciting its employees for a certain period.