What is the purpose of the new Executive Severance Plan?

The Executive Severance Plan was implemented to align with current compensation practices and trends, moving from individual severance agreements to a standardized plan for certain key executives. This plan also eliminates excise tax gross-ups on severance and change-of-control payments for the participating executives.

Who is covered by the new Executive Severance Plan?

The Executive Severance Plan covers several key executive officers, including Messrs. John M. Partridge, Byron H. Pollitt, Joshua R. Floum, and William M. Sheedy. The CEO, Joseph W. Saunders, has his own amended and restated employment agreement which also reflects similar changes regarding severance and change-of-control payments.

What is the significance of eliminating excise tax gross-ups?

Eliminating excise tax gross-ups means that executives will no longer receive additional compensation from Visa to cover taxes on certain severance or change-of-control payments. This reduces potential future liabilities for the company and aligns the compensation structure with common market practices.

V 8-K: Leadership Changes

Q: What are the key changes to the CEO's employment agreement?

The key changes include a revised compensation structure with a minimum base salary of $950,000, target annual cash incentive of at least 250% (up to 500%) of base salary, and a target annual long-term incentive of at least 500% of base salary. The agreement also has a fixed term until March 31, 2013, and removes excise tax gross-ups on severance and change-of-control payments.

Summary

This 8-K filing by Visa Inc. (V) announces significant updates to the employment agreement of its Chief Executive Officer and Chairman, Joseph W. Saunders, and the implementation of a new Executive Severance Plan. The amended employment agreement for Mr. Saunders, effective December 1, 2010, outlines specific compensation terms including a minimum annual base salary of $950,000, a target annual cash incentive of 250% (up to 500%) of base salary, and a target annual long-term incentive of 500% of base salary. The agreement also specifies benefits and perquisites, and potential severance payments under certain termination conditions. Additionally, Visa has established an Executive Severance Plan, replacing individual agreements for several key executives, including Messrs. Partridge, Pollitt, Floum, and Sheedy. Both the CEO's agreement and the new severance plan eliminate excise tax gross-ups on severance and change-of-control payments, reflecting a shift in compensation practices. These changes are important for investors to understand regarding executive compensation structures and potential future payout scenarios.

Key Highlights

1Visa Inc. entered into an Amended and Restated Employment Agreement with CEO and Chairman Joseph W. Saunders, effective December 1, 2010.
2Mr. Saunders' new agreement sets a minimum annual base salary of $950,000.
3Mr. Saunders is eligible for annual cash incentives (target 250%, max 500% of base salary) and long-term incentives (target 500% of base salary).
4The agreement includes provisions for employee benefits, fringe benefits, and potential severance payments.
5A new Executive Severance Plan was approved, transitioning away from individual agreements for certain executives, including John M. Partridge, Byron H. Pollitt, Joshua R. Floum, and William M. Sheedy.
6Both the CEO's agreement and the Executive Severance Plan eliminate excise tax gross-ups for change-of-control payments.
7The CEO's employment agreement has a fixed term ending on March 31, 2013, and does not automatically renew.

VISA INC. 8-K Report, Executive Changes (Dec 3, 2010)

Summary

Key Highlights

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