Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective July 14, 2021, the Compensation Committee of the Board of Directors
(the "Committee") of Alliance Data Systems Corporation (the "Company") approved
the compensation for Perry S. Beberman who joined the Company as Executive Vice
President, Chief Financial Officer on July 6, 2021 as previously announced. Mr.
Beberman, 55, served most recently as SVP and Finance Executive for Bank of
America's Consumer and Wealth Management Lending Products. In his 15+ years with
Bank of America, Mr. Beberman has served in leading roles for several business
units, including Consumer and Wealth Management Lending Products; U.S. Consumer
and GWIM Credit Card; and Personal Loans / Consumer Lending. Mr. Beberman joined
Bank of America following its acquisition of MBNA, where he had spent more than
17 years in finance leadership roles across strategic planning, forecasting and
P&L reporting. Relatives of both our executive officers and other associates are
eligible for hire by the Company and a relative of Mr. Beberman is currently
employed by us. Mr. Beberman does not have a direct or indirect material
interest in this employment arrangement. Upon review, this employment
arrangement was found to have been entered into in the ordinary course of
business and the compensation of such relative to be commensurate with similarly
situated associates and below the threshold for related party transactions.
The Committee set Mr. Beberman's annual base salary at $600,000, prorated from
his start date for 2021. Mr. Beberman's performance-based non-equity incentive
plan target payout percentage will be 150% of his annualized base salary, with
such amount guaranteed at 100% achievement ($900,000) for 2021 to be paid in the
first quarter of 2022. In addition, to the extent that the corporate
performance-based non-equity incentive plan (corporate balanced scorecard)
exceeds the target payout of 100% for 2021, then Mr. Beberman will be eligible
for a one-time cash award in an amount equal to 50% of the amount in excess of
100% achievement times $900,000, with such amount also paid in the first quarter
Mr. Beberman's long-term equity incentive compensation for 2022 will be based on
an award level of $1,100,000, all granted in time-based restricted stock units
vesting 33%/33%/34% on the first, second and third anniversary of the grant date
provided that Mr. Beberman remains employed by the Company on such dates.
Further, in recognition of the earned compensation forfeited upon termination of
Mr. Beberman's prior employment, the Committee approved a make-whole award in
the aggregate amount of $2,050,000 to be distributed as follows: (a) a one-time
cash bonus of $600,000 with 50% paid within 30 days of employment and the
remaining 50% paid in December 2021; (b) a one-time $1,100,000 grant of
time-based restricted stock units vesting 33%/33%/34% on the first, second and
third anniversary of the grant date provided that Mr. Beberman remains employed
by the Company on such dates; and (c) a $350,000 grant of performance-based
restricted stock units consistent with that granted to executives in February
2021 that are subject to an annual return on equity ("ROE") metric with
threshold, target and maximum goals for each of 2021, 2022 and 2023 and then
modified by a relative Total Shareholder Return ("rTSR") metric at the
conclusion of the three-year period ended December 31, 2023. For the ROE metric,
threshold, target and maximum goals from 50% to 150% achievement may be
calculated on a scale interpolated between the fixed threshold, target and
maximum goal amounts, with the average of such achievement adjusted +/- 20% by
the rTSR modifier measurement, for a 30% to 170% payout (the "PBRSU award").
Following any such adjustment, restrictions will lapse with respect to 100% of
the PBRSU award on the third anniversary of the grant date, or July 15, 2024,
provided that Mr. Beberman remains employed by the Company on such date.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Document Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
The information contained in this report shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, except as expressly set forth by specific reference in such a filing.
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