Design Highlights
- Aon’s CEO pay increased to $1.75 million, reflecting a significant raise in the amended employment agreement.
- The new employment agreement extends through December 31, 2030, replacing the previous contract ending in April 2028.
- The CEO’s annual bonus target is set at a minimum of 250% of the base salary, based on performance evaluations.
- Performance share units grant of $50 million varies between 0% and 200% based on metrics like revenue growth and operating margin.
- Contractual restrictions include non-competition and non-solicitation clauses effective for two years, protecting company interests.
Aon just gave its CEO a staggering pay hike to $1.75 million. Yes, you read that right. A hefty bump in base salary that’s supposed to make everyone feel good about the decision. This new pay structure kicks in with an amended employment agreement that extends through December 31, 2030. That’s right—Aon is locking in their top dog for at least another seven years. Talk about commitment!
The previous agreement was set to end in April 2028. But why not keep the gravy train rolling a bit longer? Under the new terms, not only is the salary up, but the annual bonus structure is also eye-popping. With a target of at least 250% of that base salary, there’s a lot on the table. And guess what? The actual bonus is determined by independent board members, so it’s not like anyone’s just handing out checks. Performance evaluations will dictate how much cash flows into the CEO’s pocket. No cap mentioned, though. That’s a bold move.
And let’s not forget about the performance share units. A whopping target of $50 million is on the line, issued under Aon‘s 2011 Incentive Plan. The catch? They can earn between 0% and 200% of that amount based on performance metrics like organic revenue growth and adjusted operating margin. If the total shareholder return is negative, they could cap it at 100%. A bit of a safety net for the company, perhaps? The grant of performance share units is a key part of the compensation structure. Additionally, this extension of employment agreement reflects Aon’s confidence in Mr. Case’s leadership.
The deal comes with a sprinkle of additional incentives too. Long-term incentive plans? Check. Participation in the Leadership Performance Program? Double check. They even get customary nomination provisions. It reflects a vote of confidence in leadership, which is nice. But it does raise eyebrows. Are we really sure this is the way to inspire growth?
Of course, there are restrictive covenants, because what’s a contract without a few strings attached? Non-competition for two years, non-solicitation for two years, and a confidentiality clause. These are all standard but add a layer of complexity to an already generous deal. Much like how landlords can legally require certain protections in lease agreements, companies use restrictive covenants to safeguard their interests.
