LEUCADIA NATIONAL CORPORATION (NYSE:LUK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
The Compensation Committee of the Leucadia Board of Directors approved an executive compensation incentive bonus plan for fiscal year 2018 for the following executive officers:
| Executive: | Title: |
| TeresaS.Gendron | Vice President and Chief Financial Officer |
| Michael J. Sharp | Executive Vice President and General Counsel |
Under the plan for Ms.Gendron and Mr.Sharp, each executive’s 2018 bonus will be partly performance-based and partly discretionary.
Performance-based Bonus
To be eligible to receive targeted performance-based bonus, Leucadia will have to achieve 8% Return on Tangible Deployable Equity (ROTDE) during the year ending December31, 2018. 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 is the same performance metric currently used in respect of our CEO and President’s long-term cash bonus plan.
If Leucadia’s 2018 ROTDE is less than 5%, Ms.Gendron and Mr.Sharp will not receive any performance-based bonus. If Leucadia’s 2018 ROTDE equals 5%, each executive will be eligible to receive performance-based bonus equal to 20% of the executive’s 2017 bonus. If Leucadia’s 2018 ROTDE equals 8%, each executive will be eligible to receive performance-based bonus equal to 40% of the executive’s 2017 bonus. If Leucadia’s 2018 ROTDE equals 12% or more, each executive will be eligible to receive performance-based bonus equal to 60% of the executive’s 2017 bonus. 2018 ROTDE performance results falling between 5-8% or 8-12% will result in each executive being eligible to receive a performance-based bonus of between 20-40% or 40-60% of the of the executive’s 2017 bonus on an interpolated basis.
Discretionary-based Bonus
Each executive will also be eligible to receive on a discretionary basis up to approximately 50% of the amount of the executive’s 2017 bonus based on personal performance, effectiveness of non-revenue-generating activities, implementation of strategic initiatives and overall senior management skill and effectiveness.
Performance and discretionary-based bonuses will be subject to Compensation Committee approval following fiscal year 2018.
About LEUCADIA NATIONAL CORPORATION (NYSE:LUK)
Leucadia National Corporation (Leucadia) is a diversified holding company focused on return on investment and long-term value creation to maximize shareholder value. The Company’s financial services businesses include Jefferies Group LLC (investment banking and capital markets), Leucadia Asset Management (asset management), Berkadia (commercial mortgage banking and servicing), FXCM (a publicly traded company providing online foreign exchange trading), HomeFed Corporation (HomeFed) (a publicly traded real estate company) and Foursight Capital and Chrome Capital (vehicle finance). The Company also owns and has investments in an array of other businesses, including National Beef (beef processing), HRG Group (HRG), Vitesse Energy and Juneau Energy (oil and gas exploration and development), Garcadia (automobile dealerships), Linkem (fixed wireless broadband services in Italy), Conwed Plastics and Idaho Timber (manufacturing) and Golden Queen (a gold and silver mining project).