8-KLeadership Changes

SHERWIN WILLIAMS CO 8-K Report, Executive Changes (Dec 15, 2009)

Filed December 15, 2009For Securities:SHW

Summary

This 8-K filing from Sherwin-Williams Company (SHW) on December 15, 2009, announces a significant change to its executive compensation and retirement benefit structure. The company's Compensation Committee approved the termination of its grantor trust program, effective December 31, 2009. This program, established in 2003, was designed to provide financial security for executives with substantial benefits in the deferred compensation plan, mirroring benefits from qualified retirement plans. Concurrently, Sherwin-Williams amended its 2005 Deferred Compensation Savings and Pension Equalization Plan (Deferred Compensation Plan) to allow these executives to participate starting January 1, 2010. This move effectively shifts how certain executive retirement benefits will be managed, aligning them more directly with the company's primary deferred compensation plan. Investors should note this change in executive benefit structure and its potential implications for long-term compensation and employee retention.

Key Highlights

  • 1Sherwin-Williams is terminating its grantor trust program for executive benefits effective December 31, 2009.
  • 2The grantor trust program was established in 2003 to provide financial security for executives with large deferred compensation benefits.
  • 3All of the company's executive officers participated in the grantor trust program.
  • 4Amendments have been approved for the 2005 Deferred Compensation Savings and Pension Equalization Plan.
  • 5Executives previously in the grantor trust program will be eligible to participate in the amended Deferred Compensation Plan starting January 1, 2010.
  • 6The Deferred Compensation Plan is a nonqualified plan that provides employer contributions that would have been received under qualified plans but for federal tax limitations.
  • 7Amounts deferred in the plan are credited with market earnings based on investment choices available in qualified plans.

Frequently Asked Questions

The company is terminating the grantor trust program to align its executive benefits structure. The program provided financial security for executives with significant deferred compensation benefits, and its termination is being accompanied by amendments to the primary deferred compensation plan to allow these executives to participate in it.

This change directly affects all of Sherwin-Williams' executive officers, as they were the participants in the grantor trust program. They will now be eligible to participate in the amended Deferred Compensation Plan starting January 1, 2010.

The Deferred Compensation Plan is a nonqualified plan that provides participating employees with employer contributions they would have received under Sherwin-Williams' qualified retirement plans, if not for federal tax limitations. The deferred amounts are credited with market earnings based on investment choices similar to those available in the company's qualified retirement plans.

The filing indicates that the amendments to the Deferred Compensation Plan are intended to provide eligible executives with benefits equivalent to what they would have received under qualified plans, but for tax limitations. The grantor trust program was initiated to provide financial security equal to qualified plans, suggesting the shift aims to maintain a similar level of benefit, albeit through a different vehicle.