Cigna Corporation (NYSE:CI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On February 23, 2017, Cigna Corporation (the “Company”) filed a
Form 8-K disclosing the retirement of Thomas A. McCarthy,
Executive Vice President and Chief Financial Officer, in the
early summer of 2017. At that time, the Company also announced
that Eric P. Palmer would succeed Mr. McCarthy. Effective June
16, 2017, Mr. McCarthy retired and Mr. Palmer was appointed
Executive Vice President and Chief Financial Officer.
Mr. Palmer, 41, has been with the Company since 1998. He served
as the Company’s Deputy Chief Financial Officer from February
2017 through June 15, 2017; Senior Vice President, Chief Business
Financial Officer from November 2015 through February 2017; Vice
President, Business Financial Officer, Health Care from April
2012 through November 2015; and Vice President, Business
Financial Officer, U.S. Commercial Markets from June 2010 through
April 2012. Between 1998 when he joined Cigna and June 2010, Mr.
Palmer held various roles with increasing responsibility in areas
including pricing, reserves, underwriting and financial planning
and analysis. Mr. Palmer is a Fellow of the Society of Actuaries
and a Member of the American Academy of Actuaries.
In connection with Mr. Palmer’s appointment, as described in his
offer letter dated June 16, 2017 (the “Offer Letter”), he will
receive an annual base salary of $675,000 and transitional
strategic performance shares (“SPS”) for the 20172019
performance period with a grant date fair value of $568,750.
Further, he will be eligible for an annual cash incentive for
2017 with a target award value of $750,000 and annual long-term
equity incentives with a target award value of $2,100,000. Mr.
Palmer will continue to be eligible to participate in employee
benefit plans, in accordance with their terms.
On June 16, 2017, the Company and Mr. McCarthy executed an
Agreement and Release in connection with his retirement (the
“Agreement and Release”). The Agreement and Release includes
customary confidentiality, non-solicitation, non-competition,
non-disparagement and release provisions. In addition, the
agreement provides for benefits consisting of: (1) the payment of
Mr. McCarthy’s annual cash incentive for his service in 2017 at
50% of his annual target, subject to the Company’s attainment of
pre-established performance goals; and (2) payout of previously
awarded SPS for the 20152017, 20162018 and 20172019 performance
periods, prorated based on the number of months that Mr. McCarthy
would have been employed during each 36-month performance period
as if his employment continued through December 31, 2017. The
Agreement and Release confirms that, to the Cigna Long-Term
Incentive Plan (the “LTIP”) and the terms of the original
grants, Mr. McCarthy’s stock options will vest upon his
retirement. The estimated aggregate value of these benefits is
approximately $5.3 million, based on a stock price of $169.08 per
share, the closing price of Cigna’s common stock on June 16,
2017. The percentage of actual shares earned and timing of the
payment of the SPS awards will be determined by the People
Resources Committee of the Board of Directors in accordance with
the terms of the LTIP. Stock options awarded under the LTIP will
expire at their original term.
Mr. McCarthy and the Company have also entered into an Advisory
Services Agreement (the “Advisory Services Agreement”), to
which Mr. McCarthy will provide advice and counsel to senior
management on business planning and strategy. Mr. McCarthy will
be paid $30,000 per month during the term of the agreement, plus
$6,000 per day for each additional day Mr. McCarthy performs
services in excess of five days in a given month. The Advisory
Services Agreement expires on December 19, 2017.
A copy of Mr. Palmer’s Offer Letter and Mr. McCarthy’s
Agreement and Release and Advisory Services Agreement is attached
to this Form 8-K as Exhibits 10.1, 10.2 and 10.3, respectively,
and incorporated by reference herein. The descriptions of the
Offer Letter, Agreement and Release and the Advisory Services
Agreement contained in this Form 8-K are qualified in their
entirety by reference to the attached document.
(d) Exhibits.
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Exhibit No.
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Description
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10.1 |
Offer letter for Eric P. Palmer dated June 16, 2017. |
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10.2 |
Agreement and Release between the Company and Thomas A. McCarthy dated June 16, 2017. |
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10.3 |
Advisory Services Agreement between the Company and Thomas A. McCarthy dated June 16, 2017. |
CIGNA CORP ExhibitEX-10.1 2 ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 David M. Cordani President and CEO Routing W2SLT 900 Cottage Grove Road Bloomfield,…To view the full exhibit click here About Cigna Corporation (NYSE:CI)
Cigna Corporation (Cigna), together with its subsidiaries, is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company’s segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, Other Operations and Corporate. The Global Health Care segment aggregates the commercial and Government operating segments. The Global Supplemental Benefits segment offers supplemental health, life and accident insurance products primarily in Asia, Europe and the United States. The Company’s Global Supplemental Benefits segment offers supplemental health, life and accident insurance products primarily in Asia, Europe and the United States. Its products are offered through employers and other groups, such as Governmental and non-Governmental organizations, unions and associations. Cigna also offers commercial health and dental insurance, and Medicare and Medicaid products and health.