Keycorp /New/ 8-K, filed May 1, 2020
Keycorp /New/ (KEY)
About this 8-K
Keycorp /New/ filed this 8-K on May 1, 2020, reporting on events of April 28, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 1, 2020, Beth E. Mooney retired from KeyCorp (the “Company”) as Chief Executive Officer and Chairman. The Company’s Board of Directors appointed Christopher M. Gorman as Chief Executive Officer and Chairman effective that same day.
Mr. Gorman, 59, was appointed President and Chief Operating Officer of KeyCorp in September 2019. Prior to that, he served as President of Banking and Vice Chairman of the Company starting in 2017. From 2016 to 2017, he served as Merger Integration Executive responsible for leading the integration efforts related to the Company’s merger with First Niagara Financial Group. Prior to that, Mr. Gorman was the President of Key Corporate Bank from 2010 to 2016. He previously served as a KeyCorp Senior Executive Vice President and head of Key National Banking during 2010. Mr. Gorman was an Executive Vice President of KeyCorp from 2002 to 2010 and also served as President of KeyBanc Capital Markets from 2003 to 2010.
On April 28, 2020, in connection with his promotion to Chief Executive Officer, the Compensation and Organization Committee of the Company’s Board of Directors approved an increase in Mr. Gorman’s base salary, effective May 1, 2020, to $1,000,000 and an increase to his short-term incentive target to $2,000,000 and long-term incentive target to $4,500,000. Mr. Gorman will continue to be provided with executive benefits consistent with those provided to the Company’s other executive officers, including a periodic executive physical, tax and financial planning, as well as executive security that includes access to a car and trained driver when conducting business on behalf of or representing Key. Additional information about KeyCorp’s executive compensation program can be found in its 2020 Proxy Statement.
There is no arrangement or understanding with any person pursuant to which Mr. Gorman was appointed as Chief Executive Officer and Chairman. There are no family relationships between Mr. Gorman and any director or executive officer of the Company, and he is not a party to any transaction requiring disclosure under Item 404(a) of Regulation S-K.
In connection with Ms. Mooney’s retirement and in recognition of her performance in 2020, including with respect to the successful transition of the role of Chief Executive Officer to Mr. Gorman, on April 28, 2020, the Compensation and Organization Committee approved payment of a pro-rata portion of Ms. Mooney’s target 2020 incentives through May 1, 2020. This payment consists of (i) $833,000 in cash; and (ii) $2,100,000 in restricted stock units, which will continue to vest ratably over the next four years following Ms. Mooney’s retirement. In light of recent unprecedented market volatility, the number of restricted stock units granted on May 1, 2020 was calculated based on a 120-day average of the KeyCorp share price through April 30, 2020. For specified periods following her retirement, Ms. Mooney also will remain eligible for payment of or reimbursement for the following benefits that she previously received during her tenure as Chief Executive Officer: an executive physical through December 31, 2020; tax and financial planning services through December 31, 2023; and access to an administrative assistant and IT support through December 31, 2025. The Company also will continue to provide Ms. Mooney with executive security services following her retirement when Ms. Mooney is representing the Company or attending an event on the Company’s behalf at the Company’s request (or as such services otherwise may be reasonably necessary). The foregoing payment and benefits are set forth in more detail in the Letter Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| 10.1 |
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| 104 |
Cover Page Interactive Data File (embedded within in the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| KEYCORP | ||||||
| Date: May 1, 2020 |
/s/ Craig T. Beazer | |||||
| By: Craig T. Beazer | ||||||
| General Counsel and Secretary | ||||||
Exhibit 10.1
May 1, 2020
Ms. Beth Mooney
Chairman and CEO
KeyCorp
127 Public Square
Cleveland, Ohio 44114
Dear Beth:
On behalf of the entire team at Key, I want to thank you for your significant contribution over the last fourteen years. Under your transformational leadership, we have built an award-winning culture of diversity, inclusion and transformative philanthropy that attracts, develops, and retains talent; delivered value for all of our stakeholders; and created an unprecedented blueprint for community investment. Your capstone accomplishments include ensuring Key navigated the financial crisis; overseeing the acquisition of First Niagara; and delivering a $16.5B community benefits plan.
On a personal note, I want to thank you for your careful planning and assistance as I transition into my new role as Chairman and CEO of KeyCorp. I have heard you say that one of the things a CEO must get right is identifying and transitioning to a viable successor at the right time. You have deliberately and thoughtfully planned this transition to the benefit of all of us, but especially to me, and I am grateful for it.
It is not lost on me that I step into my new role during a time of unprecedented uncertainty, just as you did when you became Key’s Chairman and CEO. Although the circumstances are very different, the challenges to a new CEO are not. I am fortunate to have had the benefit of your guidance and counsel over the years. I will be a better leader because of it.
Finally, I want to summarize the terms and conditions applicable to your retirement from Key. Effective as of May 1, 2020 (the “Retirement Date”), you will resign from employment with Key and from service as the Chairman of the Board of Directors of Key (the “Board”) and as a member of the governing board of Key and any affiliates of Key, except that you will remain a director and serve on the Board through the date of Key’s Annual Meeting, May 21, 2020.
Pro-rata Pay for 2020
In consideration of your efforts to make this transition a smooth one, and for services performed in fiscal 2020 through and including your Retirement Date, the Compensation and Organization Committee of the Board has approved payment of a pro-rata portion of your target 2020 incentives through May 1, 2020. This payment will be made as of May 1 as follows: (i) $833,000 in cash and (ii) $2,100,000 in restricted stock units, which will continue to vest ratably over the next 4 years, notwithstanding your retirement on May 1, 2020, and will be subject to our standard risk-balancing mechanisms as well as covenants regarding the protection of confidential information and prohibiting the solicitation of Key clients and employees. Recognizing that we are in a period of unprecedented market volatility, the number of restricted stock units granted will be calculated based on a 120-day average of our share price through April 30, 2020.
Other Benefits
Additionally, to assist you with your transition to retirement and recognizing that your personal tax and financial situation remains complex, you remain eligible for payment of or reimbursement for: (i) an executive physical (completed during calendar year 2020) that is consistent with the benefit provided to Key’s executive officers as of the Retirement Date, and (ii) the reasonable costs of tax and financial planning services through Dec. 31, 2023 and consistent with the benefit provided to Key’s executive officers as of the Retirement Date. Key will provide you with access to a dedicated administrative assistant, who will be provided office space at Key’s facilities, and will also provide you with ongoing IT support, in each case through Dec. 31, 2025. For the avoidance of doubt, you will be responsible for providing your own office space and equipment. Finally, Key will provide you with access to executive security services when you may be representing Key or attending an event on Key’s behalf at Key’s request, or as such services are as otherwise reasonably necessary.
I wish you the very best in your retirement. I look forward to seeing what retirement looks like, “Beth Mooney-style.”
Very truly yours,
/s/ Christopher M. Gorman
Christopher M. Gorman
Director, KeyCorp Board of Directors