Business Context and Reporting Period
This Form 8-K Current Report was filed by Lucid Group, Inc. on September 15, 2021. The filing addresses Item 5.02 regarding the departure of directors or certain officers, election of directors, appointment of certain officers, and compensatory arrangements of certain officers. The company is an emerging growth company incorporated in Delaware.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation adjustments and severance policies.
Material Changes
The Compensation Committee approved revised compensation packages for Named Executive Officers (NEOs), effective retroactively as of August 2, 2021 for base salaries and for the 2022 fiscal year for target incentive compensation. Additionally, the Committee approved specific severance levels and adopted a new Vesting Acceleration Policy for Death and Disability.
- Base Salary Adjustments:
- Peter Rawlinson (CEO/CTO): $575,000
- Sherry House (CFO): $500,000
- Eric Bach (SVP, Product/Chief Engineer): $450,000
- Michael Smuts (VP, Finance): $360,000
- Target Incentive Compensation (2022):
- Peter Rawlinson: 100% of base salary
- Sherry House: 75% of base salary
- Eric Bach: 75% of base salary
- Michael Smuts: 50% of base salary
Guidance, Outlook, and Risks
The filing outlines specific severance entitlements under the Executive Severance Benefit Plan, distinguishing between terminations not in connection with a change of control and those in connection with a change of control.
| Executive | Severance (No Change of Control) | Severance (Change of Control) |
|---|---|---|
| Peter Rawlinson | 12 months | 18 months |
| Sherry House | 9 months | 12 months |
| Eric Bach | 9 months | 12 months |
| Michael Smuts | 6 months | 9 months |
Vesting Acceleration Policy: A new policy was adopted providing for the accelerated vesting of all outstanding unvested time-based and performance-based equity awards in the event of death or disability. This policy applies to all equity awards except those granted to Mr. Rawlinson prior to the adoption date.
Investor Verification Checklist
- Verify the retroactive effective date of base salary increases (August 2, 2021) and its impact on Q3 2021 compensation expenses.
- Confirm the specific terms of the "Executive Severance Benefit Plan" referenced in the filing to understand the full scope of liabilities.
- Review the exclusion clause regarding Mr. Rawlinson's pre-existing equity awards under the new Vesting Acceleration Policy.
- Assess the total potential cash outflow for severance in a "change of control" scenario based on the approved months of salary continuation.