Anyone here able to explain this:
https://www.streetinsider.com/dr/news.php?id=15383840&gfv=1
7 replies (most recent on top)
This 8K changes Johnn V's bonus payments/investiments from single trigger to double trigger.
Single trigger: If there is a change in control, Johnny V get's his bonus, even if he quits.
Double trigger: If there is a change in control AND Johnny V is terminated, he gets his bonus.
Single trigger is unpopular with investors who generally want to position the company for acquisition. This is because they largely want to ensure continuity of the leadership.
A double trigger acceleration clause empowers the buyer to fine-tune their selection of people they want to keep or to terminate without cause.
Because Johnny V's hiring was in the midst of FujiFilm merger at the time, it was assumed that Fuji would buy Xerox, so any new CEO would want a single trigger with acquisition imminent. Now that Fuji deal is off the table, double trigger makes a more attractive to buyer.
Ohh JohnV as the next CEO of Conduent. That's an interesting thought. That is exactly how Icahn works. When he finds people he likes he moves them around from company to company.
As noted by others, this basically 1) frees Icahn’s pet from any long-term commitments to Xerox 2) reinforces Icahn’s and Deason’s intent to sell Xerox and 3) frees-up Johnny to either count his cash once Xerox is sold and/or makes him a free agent for Icahn’s next plunder. I would laugh if Johnny became the next CEO of Conduent in 6 months. The only part I am not clear on is how much of Xerox would have to be sold to create the double-trigger should Xerox be sold-off in pieces and many expect.
Sure looks like a sale of Xerox is on the horizon!
This is an interesting change in Johnny V's employment.
This is the key line:
"As a result, after May 14, 2020 (or the 2-year anniversary of employment), in the change in control context, cash payments and benefits and all future equity awards will require a qualifying termination of employment following a change in control of Registrant (i.e., a “double trigger”) in order to be paid and/or vest."
So, in other words, Johnny V. was given a large amount of Restricted Stock at the time of employment, but he could not access the stock unless he hit certain performance targets or the company was sold. If either of these things happened, he got 100% access tot he full vested value of the incentives.
With this new change, it creates a "Double Trigger", which means he only gets access to the money if the company has a "change in control" (i.e. Sold to someone) AND he is terminated.
So, in this scenario, if Johnny V. sells Xerox to Fuji, but stays on as an executive in the new company, he doesn't get his money. He only gets it if he sells the company and is subjected to a "qualifying termination of employment".
In other words, they are making this change to incentivize Johnny V. to exit stage left after the company is sold. I'm assuming the buyer isn't interested in keeping him on long term, so any delusions of grandeur he has to stay on as CEO of the new company are now squashed.
His new marching orders: Sell the company, take your money and leave.
Phew! I'm sure glad Vas---ne is getting all that money for... for... um... uhhhh... being a...
I got nothin'.
A lot of mumbo jumbo, think it makes sure Johnny Vas---ne gets every dime he has coming to him.