Business Context and Reporting Period
This Form 8-K Current Report was filed by Colony Capital, Inc. on December 21, 2018, covering events occurring on December 18, 2018. The filing details the execution of a Separation Agreement and Release of Claims with Richard B. Saltzman, who ceased serving as the Company's President, Chief Executive Officer, and Board member.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation and separation terms.
Material Changes
The primary material change is the departure of Richard B. Saltzman from his executive and director roles at Colony Capital, Inc. Key terms of the separation include:
- Severance Payment: A lump sum cash payment equal to three times the sum of his base salary and average annual bonus over the three prior calendar years.
- Bonus: A pro-rated target bonus for the year of termination.
- Benefits: Continued medical, dental, and vision benefits at active employee rates for 24 months following the separation date (November 5, 2018).
- Equity: Full vesting of all unvested equity-based awards, carried interests, and similar compensation held by Mr. Saltzman.
- Board Compensation Make-Whole: If Mr. Saltzman does not receive compensation from NorthStar Realty Europe Corp. (NRE) for his board service between the separation date and the earlier of November 5, 2021, or his departure from the NRE board, the Company will pay cash substantially equivalent to the compensation received by other NRE board members.
- Share Grant: The Company agreed to grant Mr. Saltzman NRE shares equal to his unvested NRE shares held immediately prior to the separation date if those shares are forfeited.
Outlook, Risks, and Contingencies
Contingencies: The separation benefits are contingent upon Mr. Saltzman not revoking the Separation Agreement by December 25, 2018. Additionally, the make-whole compensation for NRE board service is contingent on him not receiving such compensation from NRE directly.
Management Commentary: The filing notes that Mr. Saltzman will continue to serve as a director of Colony Credit Real Estate, Inc. (CLNC) and NRE, though he does not currently qualify as an independent director. He has agreed to resign from these boards upon the Company's written request prior to November 5, 2021.
Risks: The filing incorporates a general release of claims by Mr. Saltzman against the Company in consideration for the benefits provided.
Investor Verification Checklist
- Verify the specific base salary and average annual bonus figures for the three prior calendar years to calculate the exact lump sum severance.
- Review the definitive proxy statement on Schedule 14A filed on April 3, 2018, for the full details of the employment agreement referenced.
- Confirm the status of Mr. Saltzman's unvested equity awards and carried interests to assess the total value of the full vesting provision.
- Monitor future filings regarding Mr. Saltzman's continued service on the boards of CLNC and NRE and any potential resignation requests by the Company.