Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On July 7, 2022, Voya Financial, Inc. (the "Company") announced that, effective
as of such date, Heather Lavallee has been appointed President and Chief
Executive Officer-Elect ("CEO-Elect") and that, effective January 1, 2023, Ms.
Lavallee will succeed Rodney O. Martin, Jr., as the Company's next Chief
Executive Officer. Ms. Lavallee has also been appointed to the Board of
Directors of the Company (the "Board") effective immediately. Mr. Martin will
continue to serve as Chief Executive Officer and Chairman of the Board until
December 31, 2022 and, commencing January 1, 2023, will transition to the role
of Executive Chairman of the Board.
Ms. Lavallee, age 52, has been employed by the Company for the past 14 years.
Since March 2021, Ms. Lavallee has served as Chief Executive Officer of the
Company's Wealth Solutions business. Prior to her appointment to that position,
Ms. Lavallee had served as President of Tax-Exempt Markets for the Company, and
earlier was President of the Company's Employee Benefits business. Ms.
Lavallee's appointment as President and CEO-Elect and as a director of the
Company has been made in light of Ms. Lavallee's extensive experience as an
executive in two of the Company's principal businesses, and her successful
career in the retirement, employee benefits, and insurance industries. There are
no arrangements or understandings between Ms. Lavallee and any other persons
pursuant to which Ms. Lavallee has been appointed as the Company's President and
CEO-Elect or to the Board of Directors of the Company. There is no family
relationship between Ms. Lavallee and any director, executive officer, or person
nominated or chosen by the Company to become a director or executive officer of
the Company. The Company has not entered into any transactions with Ms. Lavallee
that would require disclosure pursuant to Item 404(a) of Regulation S-K under
the Exchange Act.
In connection with the foregoing, the Company has entered into an amended and
restated employment agreement, dated as of July 6, 2022 (the "Restated
Agreement") with Mr. Martin, which replaced and superseded Mr. Martin's
Employment Agreement with the Company, dated December 11, 2014, as subsequently
amended (the "Original Agreement").
Pursuant to the Restated Agreement, the term of Mr. Martin's employment as Chief
Executive Officer of the Company will continue to run through December 31, 2022,
unless terminated earlier (the "CEO Term"). The term of Mr. Martin's employment
in the position of Executive Chairman of the Board will run from January 1, 2023
until February 29, 2024, unless terminated earlier (the "Executive Chairman
Term"). Mr. Martin's current annual rate of base salary of $1,200,000 will
continue for the remainder of the CEO Term; and during the Executive Chairman
Term, such annual base salary will be reduced to an annual rate of $1,025,000,
representing a 15% decrease. Mr. Martin's target bonus opportunity under the
Company's Annual Cash Incentive Plan (or "ACIP") will continue to be 225% of his
base salary in effect for the applicable fiscal year; however, his ACIP bonus
for fiscal year 2024 will be prorated based on the number of days employed under
the Executive Chairman Term in such fiscal year. The target value of Mr.
Martin's long-term incentive award will continue to be 750% of his base salary
in effect for each of fiscal years 2022 and 2023.
The Restated Agreement continues to provide that Mr. Martin is entitled to
participate in each of the Company's employee benefit and welfare plans,
including plans providing retirement benefits and medical, dental,
hospitalization, and life or disability insurance, on a basis that is at least
as favorable as that provided to other senior executives of the Company
generally. Mr. Martin's severance benefits as provided for under the Original
Agreement will remain unchanged and will continue to apply between the CEO Term
and the Executive Chairman Term.
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In connection with her appointment as President and CEO-Elect, the Company made
immediate changes to Ms. Lavallee's compensation arrangements. The changes
include an increase in Ms. Lavallee's annual rate of base salary to $835,000; an
increase in her target ACIP opportunity to $1,878,750; and an increase in her
target long-term incentive opportunity to $4,801,250. In addition, Ms. Lavallee
will receive a one-time grant of long-term incentive awards with a grant value
of $5,000,000, consisting of eighty percent (80%) of performance stock units
("PSUs") and twenty percent (20%) of restricted stock units ("RSUs"). The RSU
portion cliff-vests on July 1, 2025. The PSU portion uses the Company's stock
price as vesting hurdles over a three-year period. The PSUs have six vesting
hurdles, ranging from $69.10 to $119.10 in $10 increments, with each hurdle
providing for vesting of 25% of the PSU grant, with a maximum vesting into 150%
of the initial PSU grant if all price targets are achieved. No vesting of the
PSUs can occur in the first year of the performance period. To the extent any
portion of the PSU vests in the second year, Ms. Lavallee will not be entitled
to receive delivery of the shares until the end of the three-year performance
period. To the extent any portion of the PSU vests in the third year, shares
will be delivered one year from vesting. If Ms. Lavallee's employment with the
Company is terminated without "cause", she will be eligible to receive a
pro-rata portion of the unvested RSUs and her unvested PSUs will remain eligible
to vest in full based on actual performance.
Ms. Lavallee will continue to be covered by the Company's Senior Manager
Severance Plan, with her status moving from a "Tier One" participant under such
plan to the "Principal Executive Officer" tier effective January 1, 2023.
In connection with the transition, the Company has awarded a one-time long-term
incentive award to its other Executive Committee members, including Michael
Smith, Charles Nelson, and Christine Hurtsellers, each of whom is a named
executive officer of the Company. The grant value of each Executive Committee
member's award will be $1,000,000. The award structure consists seventy percent
(70%) of PSUs with performance conditions based on share price hurdles and
thirty percent (30%) of time-based RSUs. The terms and conditions of such RSUs
and PSUs are generally the same as the RSUs and PSUs held by Ms. Lavallee;
except that RSU grants to Executive Committee members will vest ratably in three
annual tranches over three years, and PSU grants to Executive Committee members
that vest in the second year of the three year performance period will be
subject only to the one-year holding period from the vesting date. In addition,
if an Executive Committee member's employment with the Company is terminated
without "cause", he or she will be eligible to receive a pro-rata portion of the
unvested RSUs only to the extent such termination occurs following the first
anniversary of the grant date.
Item 7.01 Regulation FD Disclosure
On July 7, 2022, the Company announced that, effective as of such date, Heather
Lavallee has been appointed President and CEO-Elect and, that effective January
1, 2023, Ms. Lavallee will succeed Rodney O. Martin, Jr., as the Company's next
Chief Executive Officer. In addition, Ms. Lavallee has been appointed to the
Board of the Company, effective immediately. The press release announcing Ms.
Lavallee's appointment is furnished as Exhibit 99.1 to this Current Report on
Form 8-K.
As provided in General Instruction B.2 of Form 8-K, the information provided
pursuant to this Item 7.01 shall not be deemed to be "filed" for purposes of the
Securities Exchange Act of 1934, as amended, or incorporated by reference in any
filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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