Business Context and Reporting Period
This Form 8-K Current Report was filed by Associated Banc-Corp on March 10, 2021. The filing primarily addresses Item 5.02 regarding the appointment of a new Chief Executive Officer and Item 7.01 regarding Regulation FD disclosure of a press release.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on executive compensation and appointment details.
Material Changes
The material change reported is the appointment of Andrew J. Harmening as President and Chief Executive Officer and a member of the Board of Directors, effective April 28, 2021. Mr. Harmening will also serve as President and CEO of Associated Bank, N.A. and President of Associated Trust, N.A.
Compensation and Management Commentary
Management, represented by Chairman Jay Williams, highlighted Mr. Harmening's 25+ years of banking experience and expertise in digital transformation as key drivers for future profitable growth. The employment agreement includes the following compensation terms:
- Base Salary: $1,000,000 annually, subject to future adjustment.
- Incentive Bonus: Target of 150% of base salary. A guaranteed minimum bonus of $750,000 is provided for 2021 only.
- Long-Term Equity: Annual awards with a grant date fair value of 250% of base salary ($2,500,000 target). The 2021 award is valued at $1,875,000, with 75% performance vesting over 3 years and 25% time-vesting over 4 years.
- Sign-On Award: Restricted stock units valued at $7,300,000 (less value of vested Huntington awards). Vesting occurs 25% after 30 days and 25% annually for the next three years.
- Severance: If terminated without cause within the first two years, Mr. Harmening receives 24 months of base salary and continued vesting of the sign-on award, subject to a general release and non-compete covenants.
Investor Verification Checklist
- Verify the exact start date of April 28, 2021, and the transition plan for the outgoing CEO.
- Confirm the calculation of the sign-on award value, specifically the deduction for any awards vested at Huntington Bancshares.
- Review the full text of the Offer Letter (Exhibit 10.1) for specific performance metrics tied to the 75% performance-vested equity portion.
- Assess the impact of the $7.3 million sign-on award and $750,000 guaranteed bonus on near-term compensation expenses.