Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
New Compensation Arrangements for Brad D. Smith and Sasan Goodarzi
On August 23, 2018, Intuit announced that Brad D. Smith would step down as President and Chief Executive Officer, effective January 1, 2019, and would be appointed Executive Chairman of the Board of Directors on that date. At the same time, Intuit announced that Sasan Goodarzi, Executive Vice President and General Manager of Intuit’s Small Business and Self Employed Group, would succeed Mr. Smith as President and Chief Executive Officer of Intuit, effective January 1, 2019.
In connection with Mr. Smith’s new role, on October 31, 2018, Intuit’s Board of Directors approved the following changes to Mr. Smith’s compensation arrangement, effective January 1, 2019:
Salary and Bonus. Mr. Smith will be paid an annual base salary of $750,000. Mr. Smith will also be eligible to receive a target annual bonus of 100% of his base salary, prorated for Intuit’s 2019 fiscal year as of the date of his change of role.
Equity Awards. Mr. Smith will be granted the number of restricted stock units determined by dividing $3,000,000 by the closing price of the Intuit’s common stock on the date of grant. The date of grant for these restricted stock units will be Intuit’s regularly scheduled monthly grant date occurring in February 2019. The restricted stock units will vest and become issuable to Mr. Smith over approximately four years, with one fourth of the restricted stock units vesting on December 31, 2019, and 6.25% of the shares vesting on each April 1, July 1, October 1, and December 31 thereafter, until the shares under this award are fully vested. The restricted stock units will be subject to the terms of the Intuit Inc. 2005 Equity Incentive Plan.
In connection with Mr. Goodarzi’s new role, on October 31, 2018, Intuit’s Board of Directors approved the material terms of Mr. Goodarzi’s compensation as President and Chief Executive Officer, effective January 1, 2019, which terms will be reflected in an employment agreement to be finalized by the parties. The material terms approved by the Board of Directors are as follows:
Salary and Bonus. Mr. Goodarzi will be paid an annual base salary of $1,000,000. Mr. Goodarzi will also be eligible to receive a target annual bonus of 150% of his base salary, prorated for Intuit’s 2019 fiscal year as of his promotion date.
Separation Benefits. Under circumstances related to the termination of Mr. Goodarzi’s employment, and conditioned upon Mr. Goodarzi’s execution of a release and waiver of claims, Mr. Goodarzi will also be entitled to receive certain severance benefits. In the event of Mr. Goodarzi’s termination following a change
in control of Intuit, his involuntary termination or termination without cause, all as will be more fully set forth in his employment agreement, Mr. Goodarzi will be entitled to a single lump sum severance payment
equal to 12 months of his then current annual base salary and 100% of his target bonus for the then current fiscal year.
Additional information regarding Mr. Smith and Mr. Goodarzi and their roles is described in the Form 8-K the Company filed with the Securities and Exchange Commission on August 23, 2018.