8-KLeadership ChangesExhibits & Filings

AT&T INC. 8-K Report, Executive Changes (Dec 17, 2019)

Filed December 17, 2019For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. (T) filed an 8-K on December 16, 2019, reporting an amendment to its 2005 Supplemental Employee Retirement Plan (AT&T SERP). This amendment specifically impacts the retirement benefit distribution for key executives, namely John Stankey (President and COO) and John Stephens (CFO). Previously, both executives had elected to receive their SERP benefits as a lump sum. The amendment converts their accrued benefits into interest-bearing cash balance accounts with a fixed 3.7% interest rate, effective December 31, 2019. This change effectively locks in the value of their benefits, removing the impact of future interest rate fluctuations and future compensation/service from their SERP benefit calculation. This move provides certainty regarding their retirement payouts under this specific plan.

Key Highlights

  • 1Amendment to AT&T 2005 Supplemental Employee Retirement Plan (SERP) approved by the Human Resources Committee.
  • 2Impacts retirement benefit distribution for President & COO John Stankey and CFO John Stephens.
  • 3Executives previously elected lump-sum distribution for their SERP benefits.
  • 4Accrued benefits converted to interest-bearing cash balance accounts.
  • 5Fixed interest rate of 3.7% applied to these cash balance accounts, effective December 31, 2019.
  • 6Change eliminates the impact of interest rate fluctuations on lump-sum calculations for these executives.
  • 7Future compensation and years of service will no longer affect their SERP benefit amounts.

Frequently Asked Questions

The amendment converts the accrued retirement benefits of John Stankey and John Stephens from their previous lump-sum election into fixed interest-bearing cash balance accounts. This action aims to provide certainty for these executives by eliminating the impact of future interest rate fluctuations and future service/compensation on their SERP benefit amounts.

The amendment directly affects two senior executives: John Stankey, who holds the positions of President and Chief Operating Officer, and John Stephens, the Chief Financial Officer.

The amendment establishes a fixed interest rate of 3.7% for the cash balance accounts. This rate is equivalent to the discount rate used for calculating lump-sum distributions for participants retiring in 2019, ensuring the interest rate is set at a known value.

The amendment converts the method of calculating the benefit into a more stable structure. While it fixes the interest rate and removes the influence of future variables, it does not inherently change the *accrued* value of the benefits as of the conversion date. The primary effect is on how that value will grow and be determined going forward, making it less susceptible to market interest rate changes.