Qualcomm executives to receive cash severances if company goes through change of control
Qualcomm Inc.’s top executives will be eligible to receive cash severances if they’re fired after a change in control of the firm, reversing a long-standing policy of not providing such payments for senior managers.
The policy mirrors the severance plan the San Diego-based chipmaker adopted in December for all employees below the rank of executive vice president as it faced a hostile takeover attempt by Broadcom Ltd. The plan, which said workers would get payouts based on their salary, rank and tenure if they were fired following a change in control, would make it more expensive for an acquirer to make sweeping changes.
In a regulatory filing on Friday, Qualcomm said that executive vice presidents and higher-ranked employees are entitled to 1.5 times their salary and annual bonus, and a payment to cover health benefits for a period of time. Chief Executive Officer Steve Mollenkopf would get twice his salary and bonus.
The executives would also receive any unvested equity awards, with some depending on the firm’s stock performance. Qualcomm’s previous termination terms for top bosses didn’t specifically include promises of severance payments.
The new plan will help ensure that Qualcomm has the “continued attention and dedication of these executive officers,” according to the filing.
While many large public U.S. companies give executives severance of as much as three times their annual salary and bonus if they’re terminated following an acquisition, many of the country’s biggest tech firms, including Apple Inc. and Alphabet Inc., don’t have such policies.
Broadcom’s bid for Qualcomm was blocked in March by an executive order from President Trump. But even with that win, Qualcomm faces a number of woes, including waning market share and costly legal battles with regulators and key customer Apple over its lucrative licensing business.
The company’s stock price is also far below the $80 range where it once traded. Qualcomm’s shares closed at $59.96 on Friday. Markets were closed on Monday.
