8-KLeadership ChangesExhibits & Filings

SCHWAB CHARLES CORP 8-K Report, Executive Changes (Mar 13, 2012)

Filed March 13, 2012For Securities:SCHWSCHW-PDSCHW-PJ

Summary

This 8-K filing by The Charles Schwab Corporation reports on the departure of Mr. Benjamin L. Brigeman, Executive Vice President—Investor Services, effective March 7, 2012. The company has entered into a Separation Agreement with Mr. Brigeman, outlining terms for his transition and departure. The agreement includes a six-month transition period with continued employment at his current salary, followed by a termination date of August 15, 2012. Key financial aspects of the separation include cash payments totaling approximately $3.8 million, encompassing his salary during the transition, COBRA premiums, and a significant lump-sum payment that accounts for his target bonus and unvested equity awards. The agreement also includes standard provisions such as a non-compete clause, a release of all claims by Mr. Brigeman in favor of the company, a non-disparagement clause, and confirmation of his existing confidentiality and intellectual property obligations. Investors should note that these payments represent a one-time expense related to executive transition.

Key Highlights

  • 1Mr. Benjamin L. Brigeman, EVP of Investor Services, is stepping down as of March 7, 2012.
  • 2A Separation Agreement has been executed, covering his departure and transition.
  • 3Mr. Brigeman will remain employed for a six-month transition period, ending August 15, 2012.
  • 4The separation agreement includes cash payments totaling approximately $3.8 million.
  • 5A substantial portion of the cash payment accounts for target bonus and unvested equity.
  • 6The agreement includes a 12-month non-compete clause post-termination.
  • 7Mr. Brigeman has provided a general release of all claims against the company.

Frequently Asked Questions

The primary financial impact is the aggregate cash payment of approximately $3.8 million, which includes his continued salary during the transition period, COBRA premiums, and a lump-sum payment for his bonus and unvested equity. This represents a one-time expense related to executive severance.

The payment is structured to compensate Mr. Brigeman for his transition period, continuation of health benefits (COBRA), and importantly, it includes a payment related to his target bonus and unvested equity awards. This is common practice in executive separations to account for expected compensation and incentivize cooperation during the transition.

Mr. Brigeman is subject to a 12-month non-compete agreement following his termination date of August 15, 2012. This agreement restricts him from working for competitors as defined in the agreement. He also agreed to a non-disparagement clause and reaffirmed his existing confidentiality and intellectual property obligations.

The total severance of approximately $3.8 million will be disbursed over a period of time. A portion covers his transition salary and COBRA, with the remainder paid in installments. Specifically, $2,966,804.25 will be paid in three lump-sum installments on December 30, 2012, March 15, 2013, and August 20, 2013.