Compensation Discussion and
Analysis
Inducement Awards to
Mr. Whitmore
At the time he was hired in March 2021, as an inducement to join the Company, Mr. Whitmore received a one-time sign-on grant of RSUs with a value of $2,500,000, vesting over five years with 25% vesting on each of the second, third, fourth and fifth anniversaries of the grant.
Mr. Whitmore also became eligible to participate in the Elite Investment Program, pursuant to which he elected to invest $3,000,000. As a result, the Company granted Mr. Whitmore $3,000,000 of Matching RSUs in March 2021, which will vest
on the fifth anniversary of his enrollment in the Elite program.
Additionally, Mr. Whitmore received a one-time cash sign-on bonus of $2,000,000 in recognition of unvested short- and long-term incentives from his prior employer. In the event that Mr. Whitmore resigns from KDP prior to the second anniversary of his date of
hire, 100% of this sign-on bonus is repayable to KDP.
Inducement Awards to Mr. Milikin
At the time he was hired in September 2021, Mr. Milikin received a one-time sign-on grant of RSUs with a value of $5,000,000 intended to replace certain equity incentives which were forfeited by Mr. Milikin upon leaving his prior employer. This award vests over five years with 60%
vesting on the third anniversary of the grant, and 20% vesting on each of the fourth and fifth anniversaries. Mr. Milikin also became eligible to participate in the Elite Investment Program, pursuant to which he elected to invest $5,000,000. As
a result, the Company granted Mr. Milikin $5,000,000 of Matching RSUs in September 2021, which will vest on the fifth anniversary of his enrollment in the Elite program, subject to Mr. Milikins purchase of sufficient shares to fulfill his
Commitment Amount. Mr. Milikin will have until September 14, 2022 to purchase sufficient shares.
2022
Succession Plan
As discussed on page 2, in April
2022 KDP announced its succession plan pursuant to which the Board has appointed Mr. Dokmecioglu as the Companys next CEO and Mr. Gamgort has committed to serve as Executive Chairman for two years. All changes will be effective
July 29, 2022 (the Transition Date), at which time Mr. Dokmecioglu will also join the Board.
Mr. Dokmecioglus Compensation Arrangements
In connection with his appointment as Chief Executive Officer and effective on the Transition Date, Mr. Dokmecioglu will receive an annual base salary of $1,250,000
and will be eligible to receive an annual bonus at a target level of 150% of his base salary. He will be granted two long-term incentive awards: (i) in September 2022, an award of RSUs with a grant date value of $900,000, which will vest 60% on
the third anniversary of the date of grant and 20% on each of the fourth and fifth anniversaries of the date of grant, and (ii) on or around the Transition Date, an award of RSUs with a grant date value of $14,000,000, which RSUs will vest in one-third installments on each of the third, fourth and fifth anniversaries of the date of grant, subject to his continued employment, maintenance of shareholdings at an amount equal to the award, and other vesting
conditions.
Mr. Gamgorts Compensation Arrangements
In connection with his transition, the Company entered into a letter agreement with Mr. Gamgort (the Letter Agreement) with an employment term commencing
on the Transition Date and ending on July 26, 2024 (the Term). Pursuant to the Letter Agreement, Mr. Gamgort will receive an annual base salary of $1,000,000 and will be eligible to receive an annual bonus at a target level of
100% of his base salary. Mr. Gamgort will also be granted a long-term incentive award on or around the Transition Date with a grant date value of $5,000,000 in the form of RSUs that will fully vest at the end of the Term, subject to his
continued employment and other vesting conditions.
Mr. Gamgort commits in the Letter Agreement that he will continue to hold, and not sell, at least 50% of the
number of shares of the Companys common stock that he holds as of April 5, 2022 through the end of the Term. Mr. Gamgort further commits that, during the Term, he will (i) not engage in any other business, profession or
occupation for compensation or which would conflict or interfere with his duties as Executive Chairman, and (ii) serve on no more than one other public company board of directors in addition to the Company.
Other Matters
General Benefits and Perquisites
Our NEOs participate in the same benefit plans generally available to our employees. These benefit plans include health, dental and vision insurance,
life insurance and disability coverage. NEOs receive the same coverage as the rest of our employees.
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Keurig Dr Pepper Inc. |
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2022 PROXY STATEMENT |
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29 |