SAN FRANCISCO, CA - The Gap, Inc. (NYSE:GPS) announced today the adoption of a Senior Executive Severance Plan set to take effect on July 1, 2024. The new plan, approved by the company's Board of Directors, outlines the severance benefits for certain named executive officers in the event of their termination.
The plan will cover executives Katrina O'Connell, Horacio Barbeito, Chris Blakeslee, and Mark Breitbard, excluding those with severance entitlements under existing employment agreements. This adoption comes as individual severance arrangements for these executives are set to expire on June 30, 2024.
Under the terms of the new plan, if an eligible executive's employment is terminated by the company other than for cause, and outside the 18-month period following a change in control, the executive will receive 18 months of post-termination salary payments. These payments will be adjusted based on any compensation from subsequent employment. Additionally, they will receive a prorated annual bonus for the fiscal year of termination, a 75% subsidy of healthcare premiums under COBRA, continuation of financial counseling benefits, six months of outplacement assistance, and accelerated vesting of certain restricted stock units.
In cases where termination occurs within 18 months after a change in control, the affected executive would receive a lump sum equal to twice the sum of their annual base salary and target annual bonus, along with the other benefits mentioned above.
The severance benefits are contingent upon the executive signing a release agreement, which includes a waiver of all claims against the company. The plan is scheduled to expire on June 30, 2029, unless it is extended or terminated earlier by the company.
InvestingPro Insights
As The Gap, Inc. (NYSE:GPS) prepares to implement its new Senior Executive Severance Plan, investors and stakeholders may find the following insights from InvestingPro valuable for a deeper understanding of the company's financial health and market performance. With a market capitalization of $8.93 billion and a P/E ratio that stands at 13.03, Gap Inc. presents a noteworthy investment profile. Notably, the company has managed to maintain dividend payments for an impressive 49 consecutive years, a testament to its financial resilience and commitment to shareholder returns.
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