Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers.
Pursuant to the Liberty Global, Inc. 2014 Incentive Plan, as amended (the “Incentive Plan”), on February 16, 2021, the Compensation Committee (the “Committee”) of Liberty Global plc’s Board of Directors approved performance goals for the fiscal year ending December 31, 2021, in respect of annual performance awards to its executive officers (the “2021 Performance Awards”) who will participate in the program like other Company employees. In the following text, the terms “we”, “our”, “our company” and “us” refers to Liberty Global plc. The 2021 Performance Award is one component of an executive’s compensation, together with cash salary and long term equity incentive programs and other benefits. The 2021 Performance Award program is based on the fiscal year performance and is paid in cash or equity or a combination thereof as described below.
After completion of the fiscal year ending December 31, 2021, the target 2021 Performance Award is determined using the following performance metrics for the fiscal year ending December 31, 2021: the achievement of annual revenue and operating free cash flow budgets, the achievement of a target average customer relationship net promoter score and the achievement of respective department goals and objectives. Based on the achievement of these performance metrics, the actual payout is determined; if the targets are met, the payout is 100%. A payout of up to an additional 50% of the target bonus amount is available for over-performance against budget for each of the revenue, operating free cash flow and net promoter score metrics, however the maximum payout for the department metric will be limited to 100% of its weighted portion. As a result, the maximum payout under the 2021 Performance Award related to these company performance metrics is 145%. In special circumstances, the Committee can further increase the 2021 Performance Award to up to 1.5 times the achieved bonus amount to recognize exceptional individual performance and special contributions. The Committee can also reduce the 2021 Performance Award for an individual officer to reflect under-performance. The Committee may decide whether to pay the 2021 Performance Award in cash or shares of the company.
The terms of the 2021 Performance Award allow employees and executive officers to elect to receive up to 100% of their 2021 Performance Awards in ordinary shares of our company (such shares received, the “bonus shares”). An employee who elects to receive bonus shares will also receive an illiquidity premium in restricted share units of 12.5% of the gross number of bonus shares earned under the 2021 Performance Award. The “illiquidity premium” restricted share units will vest after 12 months only if the employee holds the bonus shares for the 12 month period; if the holding period is not met, these units will lapse.
Our CEO and the four executive officers of our company who we currently anticipate will be among our five most highly compensated executive officers for fiscal year 2021 (the “2021 NEOs”) will participate in the 2021 Performance Awards along with other employees. The personal performance objectives for the 2021 NEOs consist of qualitative measures, which include individual strategic, financial, transactional, organizational and/or operational goals for each officer.