Summary
Visa Inc. (V) filed an 8-K on November 9, 2010, to announce a significant change in its executive compensation structure, specifically regarding severance arrangements for its named executive officers. The company has transitioned from individual employment agreements to a new Executive Severance Plan (Severance Plan). This change aims to align with current compensation practices and trends, moving away from bespoke agreements for most executives, with the exception of the CEO. The Severance Plan outlines specific benefits for eligible executives if their employment is terminated without cause or by the executive for good reason within two years following a Change of Control. These benefits include lump-sum cash payments covering salary, prior incentive payments, accrued vacation, and unreimbursed expenses, as well as a significant severance payment equivalent to two times their annual base salary and target incentive. Additionally, executives are entitled to two years of continued health benefits. This move signifies a standardization of executive severance policies, providing a clear framework for potential future departures under specific circumstances.
Key Highlights
- 1Visa Inc. has established a new Executive Severance Plan (Severance Plan) replacing individual employment agreements for most Named Executive Officers.
- 2The change aims to align with current compensation practices and trends in the market.
- 3The CEO remains an exception to the new severance plan structure.
- 4The Severance Plan provides benefits triggered by termination without cause or for good reason within two years post-Change of Control.
- 5Key severance benefits include lump-sum salary continuation, prior incentive payments, accrued vacation, and unreimbursed expenses.
- 6A substantial severance payment equal to two times the sum of Annual Base Salary and Target Incentive Payment will be provided.
- 7Eligible executives and their dependents will receive two years of continued health care benefits.