8-KLeadership ChangesExhibits & Filings

Philip Morris International Inc. 8-K Report, Executive Changes (Aug 19, 2010)

Filed August 19, 2010For Securities:PM

Summary

Philip Morris International Inc. (PM) filed an 8-K on August 19, 2010, reporting a new time-sharing agreement between its CEO, Louis C. Camilleri, and a subsidiary, PMI Global Services Inc. This agreement addresses the CEO's personal use of corporate aircraft, requiring him to reimburse the company for such usage. This arrangement is primarily driven by security and personal safety concerns, a common consideration for senior executives of large corporations. The key financial aspect for investors is the reimbursement structure. Mr. Camilleri will lease the corporate aircraft for personal use and cover the associated expenses. Critically, he will reimburse PM for the aggregated incremental cost of his personal flights only if that cost exceeds $200,000 per fiscal year. This policy aims to align the CEO's personal expenses with company policy while ensuring fair compensation for corporate resource use.

Key Highlights

  • 1CEO Louis C. Camilleri to reimburse Philip Morris International (PM) for personal use of corporate aircraft.
  • 2A time-sharing agreement was entered into on August 18, 2010, between Mr. Camilleri and PMI Global Services Inc.
  • 3The reimbursement obligation is triggered when the aggregated incremental cost of personal flights exceeds $200,000 annually.
  • 4The primary reason cited for this policy is security and personal safety requirements for the CEO.
  • 5Mr. Camilleri will lease the corporate aircraft for personal use and pay associated expenses.
  • 6Either party can terminate the agreement with 30 days' written notice.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose a new time-sharing agreement between Philip Morris International's CEO, Louis C. Camilleri, and a company subsidiary regarding his personal use of corporate aircraft. This agreement outlines the terms under which the CEO will reimburse the company for such personal travel.

The CEO is required to reimburse the company for the incremental costs of personal aircraft use that exceed $200,000 per fiscal year. This policy is implemented due to security and personal safety requirements, ensuring that the company is fairly compensated for the personal use of its assets beyond a certain threshold.

For investors, the financial impact is primarily related to the cost recovery for the CEO's personal use of corporate aircraft. The company will be reimbursed for incremental costs exceeding $200,000 annually, mitigating potential costs to the company from personal executive travel. This is a standard practice for ensuring executive benefit policies are managed efficiently and transparently.

The 'aggregated incremental cost' refers to the direct, additional expenses incurred by the company specifically for the CEO's personal flights. This typically includes fuel, landing fees, and other variable costs directly attributable to those personal trips, as determined by the company in accordance with SEC regulations (Regulation S-K, Item 402).