Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 14, 2018, Santander Holdings USA, Inc. (“SHUSA”), the majority stockholder of Santander Consumer USA Holdings Inc. (individually and collectively with Santander Consumer USA Inc., the “Company”), entered into a letter agreement (the “Letter Agreement”) with Scott Powell, its President and Chief Executive Officer. As previously disclosed, Mr. Powell serves as the President and Chief Executive Officer of SHUSA, as well as the President and Chief Executive Officer of the Company and U.S. Country Head of the Santander Group.
The Letter Agreement sets forth the terms and conditions of Mr. Powell’s employment with SHUSA and the Company as follows.
| | • | | Effective as of January 1, 2018, Mr. Powell’s annual base salary is $3 million. |
| | • | | Mr. Powell’s discretionary annual bonus target for 2018 will be $4.25 million. Payment of Mr. Powell’s annual bonus will be subject to his continued employment through the payment date and the achievement of various performance objectives, as well as compliance with all applicable laws and regulatory requirements, including the European Union’s Capital Requirements Directives, Directive 2013/36/EU, which contains specific deferral and clawback requirements. Also, in accordance with these requirements, a portion of Mr. Powell’s annual bonus will be paid in Banco Santander, S.A. American Depositary Receipts (“ADRs”) and/or Company equity awards. |
| | • | | Mr. Powell will also continue to participate in SHUSA’s Special Regulatory Incentive Program (“SRIP”) at his initial targeted discretionary award value of $2 million, 25% of which was achieved in 2017 and paid in 2018 and 75% of which remains at risk, as described in the Company’s Definitive Proxy Statement on Schedule 14A, dated April 30, 2018 (the “Proxy Statement”). |
Mr. Powell’s compensation is allocated between SHUSA and the Company based on his relative time spent in service to each entity.
The Letter Agreement provides that if Mr. Powell is terminated without “Cause” or he terminates his employment for “Good Reason” (in each case, as defined in the Letter Agreement), he will be entitled to (i) a lump sum payment equal to 12 months of base salary, (ii) apro-rata bonus for time worked during the year of termination, subject to the performance terms and payment terms of the bonus plans then in effect, and (iii) continued vesting and payment of all deferred variable compensation on the same schedule as if he had remained employed through the deferral period.
Mr. Powell has also agreed to standard confidentiality and restrictive covenants, which include a perpetual confidentiality covenant and covenants prohibiting competitive activities and the solicitation of customers and employees during his employment and for 12 months thereafter.
The foregoing description is qualified by reference to the terms of the Letter Agreement, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
A description of the components of compensation for the Company’s named executive officers, the Company’s Senior Executive Annual Bonus Plan, the SRIP and the Company’s Omnibus Incentive Plan is set forth in the Proxy Statement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
