01—Abstract
Summary
Summary of the 8-K filed July 24, 2023. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies (LHX) filed an 8-K on July 24, 2023, detailing two significant board-level actions taken on July 21, 2023.
Firstly, the company amended its Executive Change in Control Severance Plan to include the Chief Executive Officer position with a severance multiple of three times base salary and target bonus. This update is particularly relevant as the previous change-in-control benefits for the current CEO, Mr. Kubasik, expired in late June 2023. Secondly, L3Harris approved adjustments to the annual compensation for its non-employee directors, effective January 1, 2024.
These adjustments include modest increases to the annual cash retainer for board membership, the cash retainer for the Compensation Committee Chair, and the annual equity retainer in the form of director share units. These changes aim to align director compensation with market practices and reflect the responsibilities associated with their roles.
02—Key points
Key Highlights
- L3Harris amended its Executive Change in Control Severance Plan to include the CEO position.
- The CEO's severance multiple under the plan is set at three times base salary and target bonus.
- This update follows the expiration of prior change-in-control benefits for CEO Mr. Kubasik.
- Annual compensation for non-employee directors will increase effective January 1, 2024.
- The annual cash retainer for board members will rise from $140,000 to $150,000.
- The annual equity retainer for board members will increase from $170,000 to $190,000 in director share units.
- The annual cash retainer for the Compensation Committee Chair will increase from $20,000 to $25,000.
03—Questions
Frequently Asked Questions
What is the significance of the amendment to the Executive Change in Control Severance Plan?
The amendment officially designates the Chief Executive Officer position as a participant in the plan, ensuring the CEO receives specific severance benefits in the event of a change in control at L3Harris. This is important for executive retention and provides a clear framework for compensation in such scenarios, especially as prior specific provisions for the current CEO had expired.
What are the new compensation levels for L3Harris's non-employee directors?
Effective January 1, 2024, non-employee directors will receive an increased annual cash retainer of $150,000 (up from $140,000), an increased annual equity retainer of $190,000 in director share units (up from $170,000), and the Compensation Committee Chair will receive an increased annual cash retainer of $25,000 (up from $20,000).
Why are director compensation levels being increased?
The filing indicates these changes were made upon the recommendation of the Nominating and Governance Committee, suggesting they are intended to align director compensation with market standards, acknowledge the scope of responsibilities, and ensure competitive remuneration for service on the Board and its committees.
Does this filing indicate any changes in L3Harris's leadership or ongoing business operations?
This particular 8-K filing primarily addresses updates to executive severance plan participation and adjustments to director compensation. It does not report any departures of officers or directors, nor does it announce material business events, financial results, or strategic shifts.
04—Continue