8-KLeadership ChangesRegulation FDExhibits & Filings

T-Mobile US, Inc. 8-K Report, Executive Changes (Nov 18, 2019)

Filed November 18, 2019For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) filed an 8-K on November 18, 2019, primarily announcing a significant leadership transition and detailing executive compensation arrangements. The most critical information for investors is the planned succession of John Legere as Chief Executive Officer by G. Michael Sievert, effective May 1, 2020. Mr. Legere will continue to serve as CEO until April 30, 2020, and remain on the Board thereafter. This transition has been part of a multi-year succession planning process. The filing also outlines the updated employment agreements and compensation structures for key executives, including Mr. Sievert as the incoming CEO, J. Braxton Carter as CFO, and Neville Ray as President, Technology. These agreements detail base salaries, incentive targets (short-term and long-term), equity awards, and severance provisions, reflecting the company's strategy to retain and incentivize its leadership team during this pivotal period of transition, especially in light of the pending merger with Sprint.

Key Highlights

  • 1G. Michael Sievert appointed as Chief Executive Officer (CEO), effective May 1, 2020, succeeding John Legere.
  • 2John Legere to step down as CEO on April 30, 2020, but will remain on the Board of Directors.
  • 3Detailed compensation packages for G. Michael Sievert include escalating base salary, significant short-term (STI) and long-term (LTI) incentive targets, and a substantial one-time 'Special PRSUs' award tied to T-Mobile's total shareholder return.
  • 4J. Braxton Carter's employment agreement amended to extend his term as CFO through July 1, 2020, with specific separation benefits outlined.
  • 5Neville Ray's compensation structure updated through a new Term Sheet, including a two-year initial term as President, Technology, and specific incentive targets.
  • 6Severance and termination provisions are detailed for key executives, including provisions for 'qualifying terminations' and 'best pay cap' adjustments for excise taxes.
  • 7The filing confirms the upcoming leadership change aligns with the company's long-term leadership development and succession planning.

Frequently Asked Questions

G. Michael Sievert will succeed John Legere as Chief Executive Officer (CEO) of T-Mobile, effective May 1, 2020. Mr. Legere will continue to serve as CEO until April 30, 2020.

Mr. Sievert's compensation includes an escalating base salary, an annual short-term incentive (STI) targeted at 250% of his base salary (with a maximum of 200% of target), and annual long-term incentive (LTI) awards with a target grant-date value of at least $13,500,000 for 2020, allocated between performance-based and time-based restricted stock units. He is also eligible for a $3,500,000 one-time retention payment and a special PRSU award valued at $20,000,000 tied to total shareholder return.

J. Braxton Carter's employment agreement has been amended to extend his term as Executive Vice President and Chief Financial Officer through July 1, 2020. He will receive specific separation benefits upon continued employment through December 31, 2019, including accelerated vesting of equity and a cash payment equivalent to two times his base salary plus target STI. He is also eligible for a $7,525,000 special bonus, payable after the expiration date, and has a repurchase right for vested shares during a specific window post-10-K filing.

Yes, Neville Ray's compensation has been updated. He will serve as President, Technology, for an initial two-year term. His compensation includes an annual base salary of $900,000, an annual STI targeted at 200% of his base earnings, and an annual LTI award with a target grant-date value of no less than $6,750,000, starting in calendar year 2020.