Summary
Qualcomm Incorporated (QCOM) announced on September 20, 2018, the adoption of the Qualcomm Incorporated Executive Officer Severance Plan by its Compensation Committee. This plan is designed to retain key executive talent by providing severance benefits in the event of termination without cause or by the executive for good reason, provided such circumstances are not covered by the company's existing Change in Control Severance Plan. The intention is to mitigate the risk of executive departure and ensure continued dedication and availability for recruitment. The severance package includes a cash payment equivalent to 1.5 to 2 times the executive's annual base salary and target bonus (with the CEO receiving the higher multiplier), a pro-rata target bonus for the termination year, and continued COBRA health coverage. Additionally, the plan modifies outstanding equity awards, allowing for accelerated vesting of restricted stock units and performance stock units under specific termination conditions. The company retains the right to modify or terminate the plan, with limitations to protect existing participant rights.
Key Highlights
- 1Qualcomm adopted a new Executive Officer Severance Plan to enhance executive retention and recruitment.
- 2The plan provides severance pay of 1.5x (for most executives) to 2x (for CEO) annual salary and target bonus upon qualifying termination (without cause or for good reason).
- 3Includes pro-rata target bonus payment for the year of termination.
- 4Offers continued COBRA health premium payments for a duration tied to severance pay, capped by the COBRA period.
- 5Modifies outstanding equity awards (RSUs and PSUs) to allow for accelerated vesting under qualifying termination scenarios.
- 6The plan is designed to cover situations not already addressed by the Executive Officer Change in Control Severance Plan.
- 7Qualcomm can modify or terminate the plan, but cannot reduce a participant's rights within one year of such an action without their consent.