8-K/ALeadership Changes

PayPal Holdings, Inc. 8-K/A Report, Executive Changes (Feb 16, 2023)

Filed February 16, 2023For Securities:PYPL

Summary

This 8-K/A filing from PayPal Holdings, Inc. provides an amendment to a previous report concerning the departure of a key executive, Mr. Britto, the former Chief Product Officer. The amendment clarifies the terms of his separation, which is now finalized with an effective date of February 28, 2023. His departure is in connection with an internal management restructuring, and his position has been eliminated. This filing details the financial and equity compensation Mr. Britto will receive as part of his separation agreement. For investors, the key takeaway is the financial settlement provided to Mr. Britto, which includes a significant cash payment, prorated bonus, accelerated vesting of certain RSUs, and continued COBRA premiums. The total value of these benefits, while substantial, is in line with the company's existing severance plans for executive departures. The filing also confirms the appointment of John Kim as the new Chief Product Officer, who took over in September 2022.

Key Highlights

  • 1Confirmation of former Chief Product Officer (CPO), Mr. Britto's, final separation date as February 28, 2023, following an internal restructuring.
  • 2Mr. Britto's position as CPO has been eliminated.
  • 3Separation agreement includes a cash payment of $2,531,250, equivalent to 1.5 times his base salary and target incentive.
  • 4Entitlement to a prorated annual bonus for 2023 based on company and individual performance.
  • 5Accelerated vesting of time-based RSUs granted before July 1, 2021, that would have vested in the year following his separation.
  • 6Provision for 12 months of COBRA continuation coverage premiums.
  • 7Potential for vesting of other RSUs and performance-based RSUs contingent upon Mr. Britto's adherence to restrictive covenants.

Frequently Asked Questions

The financial impact is primarily the severance package provided to Mr. Britto, which includes a cash payment of $2,531,250, a prorated bonus, accelerated equity vesting, and COBRA premium coverage. These amounts are in line with the company's executive severance plan and are considered part of normal executive transition costs.

Yes, Mr. Britto's role as Chief Product Officer was filled by John Kim, who was appointed effective September 26, 2022. Mr. Britto ceased to be an executive officer upon Mr. Kim's appointment.

Mr. Britto will receive accelerated vesting for time-based RSUs granted prior to July 1, 2021, that would have vested in the year following his separation. Additionally, other RSUs and performance-based RSUs may vest, subject to his execution of required attestations and compliance with restrictive covenants outlined in the company's plan.

This filing is an amendment (8-K/A) to a previous report (Original Report, filed in August 2022). It serves to provide updated and final details regarding Mr. Britto's separation agreement, specifically the terms of his severance and benefits that were agreed upon after the initial announcement of his intended departure.