LEUCADIA NATIONAL CORPORATION (NASDAQ:LUK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

LEUCADIA NATIONAL CORPORATION (NASDAQ:LUK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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Item5.02.Compensatory Arrangements of Certain Officers.

The Compensation Committee of the Leucadia Board of Directors
approved an executive-compensation plan (the 2017 Plan) for Rich
Handler, our CEO, and Brian Friedman, our President (together,
our Executives), for compensation year 2017 that is identical to
the plan that the Committee approved in 2016 and is based upon
performance metrics achieved over a three-year period from 2017
through 2019. As did the 2016 plan, the 2017 Plan aligns our
executive compensation with the interests of our long-term
shareholders. With the exception of base salaries, the 2017 Plan
is 50% performance based.

The Compensation Committee determined to eliminate cash incentive
bonuses for 2017 as it did in 2016. 50% of each of our CEO and
Presidents 2017 compensation beyond their base salaries will be
composed entirely of performance-based restricted stock units
(RSUs) to be granted in January 2017 that will vest at the
beginning of 2020. To further align executive compensation with
shareholder interests, any vested RSUs will be subject to a
post-vesting, three-year holding period such that no vested RSUs
can be sold or transferred until January 2023.

The Compensation Committee selected the 2017 Plans performance
criteria and vesting thresholds after taking into account, among
other things, Leucadias performance, the long-term nature of the
Companys strategy, our shareholders feedback, Leucadias peers,
the annual cash incentive and long-term equity grants that had
historically been awarded to our Executives at Leucadia and
Jefferies, the multiple roles fulfilled by our Executives, and
that our Executives do not have and have never had employment or
severance agreements.

When finally approved and granted in January 2017, the RSUs will
have the following performance conditions and required holding
period:

Performance Metrics: The equity incentive
under the Plan will be based equally on the compound growth
rates of Leucadias total shareholder return (TSR), which will
be measured from the close on the last trading day of
December 2016 and Leucadias Return on Tangible Deployable
Equity (ROTDE), the annual, two- and three-year results of
which will be used to determine vesting. TSR is the
annualized rate of return reflecting price appreciation plus
reinvestment of dividends and distributions to shareholders
and the compounding effect of dividends paid and
distributions on reinvested dividends and distributions over
each measurement period. ROTDE is net income adjusted for
amortization of intangible assets divided by tangible book
value at the beginning of the year adjusted for intangible
assets and deferred tax assets. ROTDE, an adjusted
return-on-equity measurement, was chosen to appropriately
measure our Executives performance against the actual
tangible equity that is or can be allocated and invested, and
from which earnings can be generated.

Performance Targets and Thresholds: If
Leucadias TSR and ROTDE annual growth rates are less than
4%, our Executives will not receive any 2017 incentive
compensation. If Leucadias TSR and ROTDE both grow by
between 4% and 8% on a compounded basis over the three-year
measurement period, each of our Executives will be eligible
to receive 2017 incentive compensation of between $12.5
million and $25 million in RSUs. If TSR and ROTDE growth
rates are greater than 8%, our Executives are eligible to

receive up to an additional 50% in incentive compensation
on a pro rata basis up to 12% growth rates. No additional
incentive compensation will be awarded for TSR or ROTDE
growth rates exceeding 12%.

Weighting: When determining whether RSUs
will vest, the calculation will be weighted equally between
TSR and ROTDE. For example, if TSR growth was below minimum
thresholds, but ROTDE growth was above minimum thresholds,
our Executives would still be eligible to receive some number
of vested RSUs based on ROTDE growth.
Performance Vesting Mechanism: Although no
RSUs will vest until the beginning of 2020, portions of the
overall awards may be banked for each executive each year
based upon that years TSR and ROTDE growth (for example, if
growth rates in both TSR and ROTDE equaled 8% in 2017, our
Executives would be eligible to bank one-third of their
targeted incentive compensation, but those RSUs would not
vest until the beginning of 2020). Any RSUs that have not
been banked during each measuring period over 2017 and 2018
will remain available to vest if two- or three-year growth
rates meet or exceed thresholds. The total potential vested
RSUs will equal the greater of (a)the sum of all banked RSUs
for each of 2017 and 2018 and (b)potential vested RSUs based
upon the three-year growth rates.
Holding Period Mandates No Sales or Transfers for Six
Years until 2023
: RSUs will not be eligible to vest
until the beginning of 2020 and will be subject to forfeiture
if the executive resigns or is terminated for cause. Our
Executives cannot sell or otherwise transfer vested RSUs
until January 2023.

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