Directorate Change

RNS Number : 1960X

BAE SYSTEMS PLC

17 December 2019

 

       17 December 2019

BAE SYSTEMS PLC - NOTICE OF DIRECTORATE CHANGE

Jerry DeMuro will retire from the Company on 31 December 2020.  He will step down from the BAE Systems plc Board and from his role as Chief Executive Officer of BAE Systems, Inc. on 31 March 2020 and undertake the role of Executive Vice President until the end of the year, remaining on the BAE Systems Inc. Board. In this capacity he will have responsibility for the delivery of a number of strategic assignments across our US and other businesses, including a governance review of global shipbuilding.

Tom Arseneault will succeed Jerry DeMuro as President and Chief Executive Officer of BAE Systems, Inc. and will join the BAE Systems plc Board on 1 April 2020. Tom Arseneault has been President & Chief Operating Officer (COO) of BAE Systems, Inc. since May 2019 and will continue as a member of the BAE Systems, Inc. Board and the BAE Systems plc Executive Committee.  

Commenting on today's announcement, Sir Roger Carr, Chairman of BAE Systems plc said, "I would like to thank Jerry for his outstanding leadership since his appointment in 2014, both as a highly effective member of the Executive team and a valuable contributor to Board discussion and decision making. 

In addition, I look forward to Tom joining the Board in 2020 knowing that his skills, industry experience, and expertise will be important to the delivery of our operational performance and strategic objectives in the years ahead."

Tom Arseneault has no details to disclose under Listing Rule 9.6.13.

Notes:

Tom Arseneault background

Tom Arseneault is currently President & Chief Operating Officer of BAE Systems, Inc., responsible for driving business and functional performance and delivering key business objectives across the enterprise.

BAE Systems, Inc. is the company's US-based division with more than 33,000 employees and sales of approximately $10.8 billion in 2018. As President & COO, Tom Arseneault serves as deputy to CEO Jerry DeMuro. Tom Arseneault is an officer director on the BAE Systems, Inc. Board of Directors, and he is also a member of the Executive Committee of BAE Systems plc, on which he leads the Program Management Cross Enterprise Council and shares leadership duties in overseeing the global supply chain.

Throughout his career, Tom Arseneault has consistently demonstrated his ability to lead complex organisations responsible for fulfilling critical and technologically challenging missions. Most recently he served as COO for the Inc. organisation and was integral to its return to profitable growth. Before serving as COO, he was president of the company's Electronic Systems sector, responsible for the segment's operations spanning commercial and defense electronics markets, and its broad portfolio of vehicle and mission critical electronic systems. Previously, he was Executive Vice President of BAE Systems' Product Sectors, responsible for articulating and executing a vision that drove optimal business performance across the Electronic Systems and legacy Land & Armaments businesses.

Prior to his senior leadership appointments, he managed various organisations and programmes for Sanders, a Lockheed Martin Company, and he remained with the unit when it was acquired by BAE Systems in 2000. Earlier in his career, he held a variety of engineering and programme management positions with General Electric, The Analytic Sciences Corporation (TASC), and Weather Services International.

He holds bachelor's and master's degrees in electrical engineering from Worcester Polytechnic Institute and an MBA from Boston University.

Remuneration of Tom Arseneault

Remuneration arrangements are in line with the Company's Remuneration Policy approved by shareholders.

-     Base salary of $980,000.00. (Note Tom Arseneault has been appointed with a base salary of c.10% below his predecessor.  Consideration will be given to close this differential in the first two years, dependent on performance in the new role.)         

-     Eligible for participation in the BAE Systems plc Annual Incentive and Long Term Incentive Plan.

-     Minimum Shareholding Requirement of 425% of base salary.

Retirement of Jerry DeMuro     

The following arrangements will apply in relation to Jerry DeMuro when he retires as a director of BAE Systems plc on 31 March 2020 and ceases employment on 31 December 2020. The arrangements are in accordance with the Company's Remuneration Policy, approved by shareholders and contained in the 2018 Annual Report:

(a)  For retirement benefit and share plan purposes, Jerry DeMuro will separate from the Company with the Company's consent on 31 December 2020 and:

(i)         he will be entitled to receive his accrued retirement savings plan benefit in accordance with the Rules of the Inc 401K Plan. 

(ii)        under the Rules of the BAE Systems Long Term Incentive Plan, any unvested share awards will, subject to the discretion of the Remuneration Committee, vest on 31 December 2020 or, if later, as soon as practicable after the first opportunity when any relevant performance conditions can be determined, and subject to time pro-rating.  Awards will be reduced pro-rata for time based on the period from grant date to 31 December 2020 (calculated on the basis of actual days employed).  The applicable performance conditions will be tested at the end of the normal performance period.

(iii)       bonus shares under the BAE Systems Deferred Bonus Plan will continue to be deferred and will be released on the normal release dates.

(iv)       any share awards held by him, which have vested on or before 31 December 2020 but have not been exercised at that date will lapse unless exercised in the six month period from 31 December 2020 or, if earlier, the date on which such award normally lapses.

(v)        following termination of employment, he will be subject to a minimum shareholding requirement equivalent to 300 % of salary for a period of  one year from leaving employment.

(vi)       he will remain eligible to receive an annual incentive payment for 2019 in accordance with the Company's Remuneration Policy. Any bonus will be subject to compulsory deferral of one third of the net amount under the BAE Systems Deferred Bonus Plan in the normal way with the balance being paid at the normal bonus payment date in March 2020.

(vii)      he will be eligible for an annual incentive payment for 2020, determined by the Remuneration Committee, subject to an assessment of performance and pro-rated for three months of service during 2020.  Any bonus will be paid at the normal bonus payment date following the end of the 2020 financial year and subject to compulsory deferral of one third of the net amount under the BAE Systems Deferred Bonus Plan in the normal way.

(viii)     for the period from 1 April 2020 in his future role as Executive Vice President, his annual salary will remain at the current level until his retirement date of 31 December 2020. In addition, he will remain eligible to receive an on-target bonus payment equivalent to 112.5% of base salary, pro-rata for the actual number of months worked.

(ix)       he will not be eligible to receive any future awards under the Company's long term incentive plan.

(x)        he will continue to be covered by the Company's D&O insurance policy and his current director's indemnification arrangements will remain in place.

(xi)       he will continue to be bound by the terms of his service contract which continue to apply following cessation of employment including post-termination restrictive covenants and confidentiality provisions.

(xii)      No payment in lieu of notice or other termination payment will be payable.

(xiii)     Benefits comprising the use of a chauffeur-driven car, medical and dental benefits and insured life and disability benefits will cease from 31 December 2020.

BAE SYSTEMS plc

London

 

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