8-KLeadership Changes

PayPal Holdings, Inc. 8-K Report, Executive Changes (Aug 4, 2015)

Filed August 4, 2015For Securities:PYPL

Summary

PayPal Holdings, Inc. has announced the appointment of John D. Rainey as its new Senior Vice President and Chief Financial Officer, effective August 24, 2015. Mr. Rainey brings extensive financial leadership experience from his previous role as CFO of United Continental Holdings, Inc. This appointment marks a significant addition to PayPal's executive team as the company navigates its path as an independent entity following its separation from eBay. The compensation package and equity awards for Mr. Rainey are substantial, reflecting his experience and the importance of the CFO role. These include a significant base salary, bonus opportunity, make-good payments to compensate for forfeited compensation from his prior employer, and a comprehensive suite of equity awards (RSUs and stock options). Additionally, substantial relocation assistance is provided to facilitate his move to the Bay Area. The details of his severance benefits in various termination scenarios have also been outlined.

Key Highlights

  • 1Appointment of John D. Rainey as SVP and CFO, effective August 24, 2015.
  • 2Mr. Rainey's prior experience includes serving as CFO for United Continental Holdings, Inc.
  • 3Mr. Rainey's annual base salary will be $650,000 with a target bonus of 100% of base salary.
  • 4Substantial 'make-good' cash payments totaling up to $6,150,000 to compensate for forfeited compensation from his previous employer.
  • 5Significant initial equity awards valued at $1.5 million (RSUs), $2.5 million (PBRSUs), and $1.0 million (stock options), plus a $4.5 million supplemental RSU award.
  • 6Relocation assistance includes a $1.0 million Real Estate Assistance payment and other benefits for relocation to the Bay Area.
  • 7Details provided on severance packages in case of termination without cause or resignation for good reason, including provisions for change in control scenarios.

Frequently Asked Questions

John D. Rainey, age 44, has been appointed as PayPal's new Senior Vice President and Chief Financial Officer. He joins PayPal from United Continental Holdings, Inc., where he served as executive vice president and chief financial officer for United Airlines. His prior experience includes financial planning and analysis roles at both United Airlines and Continental Airlines.

Mr. Rainey's compensation package includes an annual base salary of $650,000, with a target annual bonus of 100% of his base salary. He is also receiving significant 'make-good' cash payments up to $6,150,000 to offset compensation forfeited from his previous employer. Additionally, he will receive substantial equity awards including time-based RSUs ($1.5M), performance-based RSUs ($2.5M target), stock options ($1.0M), and a supplemental RSU award ($4.5M).

PayPal is providing Mr. Rainey with substantial relocation assistance. This includes a $1.0 million payment to help with the costs of purchasing a home in the Bay Area. He will also receive a housing allowance for temporary housing for up to six months and coverage for reasonable travel-related expenses during his initial six months with PayPal.

The agreement outlines severance benefits in the event of termination by PayPal without cause or resignation by Mr. Rainey for good reason. Outside of a change in control period, he would receive a lump sum payment equal to two times (or 1.5 times after two years) his base salary plus target bonus, unpaid make-good payments, and accelerated vesting of certain equity awards. During a change in control period, he would receive two times his base salary plus target bonus, unpaid make-good payments, and full accelerated vesting of all equity awards.