8-KLeadership ChangesShareholder MattersExhibits & Filings

UNITED PARCEL SERVICE INC 8-K Report, Executive Changes (May 10, 2022)

Filed May 10, 2022For Securities:UPS

Summary

This 8-K filing by United Parcel Service, Inc. (UPS) on May 9, 2022, primarily details the adoption of a new Key Employee Severance Plan and reports on the outcomes of the company's Annual Shareholder Meeting held on May 5, 2022. The severance plan is designed to provide compensation and benefits to named executive officers (NEOs) and other key employees in the event of specific terminations of employment, such as termination by the company without cause. It outlines cash severance, continued COBRA premium payments, career counseling, and provisions for restricted stock units and stock options under certain termination scenarios. The shareholder meeting saw the re-election of all 13 director nominees with strong support and the approval of the advisory resolution on executive compensation. Notably, all shareholder proposals, including those related to lobbying activities, climate change alignment, stock voting power, and diversity and inclusion efforts, did not pass.

Key Highlights

  • 1United Parcel Service (UPS) adopted a new Key Employee Severance Plan for its principal executive officer, principal financial officer, and other named executive officers (NEOs).
  • 2The severance plan provides for cash severance (1x or 2x salary for CEO), pro-rata performance awards, COBRA premium coverage for up to 18 months, and career counseling services upon termination without 'Cause,' 'Disability,' or death.
  • 3Specific provisions for restricted performance units and stock options are included, generally treating 'Qualifying Terminations' similarly to 'retirement' conditions.
  • 4All 13 director nominees were elected at the May 5, 2022 Annual Shareholder Meeting with significant majority votes.
  • 5Shareholders approved, on an advisory basis, the compensation of the company's named executive officers.
  • 6Deloitte & Touche LLP was ratified as UPS's independent registered public accounting firm for the year ending December 31, 2022.
  • 7All shareholder proposals, including those concerning lobbying, climate change, stock voting rights, and diversity, failed to gain majority support.

Frequently Asked Questions

The Key Employee Severance Plan is designed to provide severance compensation and benefits to the company's principal executive officer, principal financial officer, and other named executive officers (NEOs) in the event of specific types of employment terminations, primarily when the company terminates their employment other than for 'Cause,' 'Disability,' or death. This plan aims to offer a degree of financial security and support to key personnel during transitional periods.

Upon a 'Qualifying Termination' (termination by the company without Cause, Disability, or death), NEOs are eligible for: 1) a pro-rata portion of their annual performance incentive award, 2) a cash payment equal to one times (or two times for the CEO) their annual base salary plus target performance award, 3) payment of COBRA premiums for themselves and dependents for up to 18 months, and 4) reasonable career counseling services up to $30,000. The plan also includes provisions for restricted performance units and stock options.

No, all shareholder proposals presented at the May 5, 2022, Annual Shareholder Meeting failed to pass. These proposals covered various topics including lobbying activities, alignment of lobbying with the Paris Climate Agreement, reduction of stock voting power, greenhouse gas emissions targets, balancing climate measures with financial returns, and diversity and inclusion efforts.

All 13 nominees for the Board of Directors were elected with substantial 'FOR' votes, indicating strong shareholder confidence in the current board composition and leadership.