US Postal Service 2011 Annual Report Download - page 60

2011 Report on Form 10-K United States Postal Service - 58 -
POTENTIAL PAYMENTS UPON TERMINATION
As described in the Compensation Discussion and
Analysis, in 2009 the Postal Service entered into an
employment agreement with Joseph Corbett, the Chief
Financial Officer, for recruitment and retention purposes.
Mr. Corbett’s agreement provides for deferred
compensation payable in installments commencing on the
date of his separation from the Postal Service or October
22, 2019, whichever is later. In 2010, the former
Postmaster General entered into an employment
agreement with Mr. Vegliante. That agreement was
amended on November 14, 2011. A copy of the
amendment is attached hereto as Exhibit 10.6. As
amended, the agreement clarifies that Mr. Vegliante’s
retention incentive is performance-based and provides for
his 2011 deferred compensation to be paid no sooner
than one year after his departure from the Postal Service.
The Postmaster General and all of the other named
executives are subject to the standard policies governing
the CSRS or FERS, as described in the Compensation
Discussion and Analysis. The present value of these
CSRS and FERS benefits are found in the Pension
Benefits table in the Compensation section of this report.
The information below describes and quantifies certain
compensation, in addition to that due pursuant to CSRS
or FERS, that would become payable under existing plans
and arrangements if the named executive officer’s
employment had terminated on September 30, 2011.
Additionally, pursuant to statutes and regulations
generally applicable to federal employees, the named
executives would be entitled to receive the federal
employer’s standard contribution toward retiree health
benefits, in the event they have qualifying service and
participated in the Federal Employees Health Benefits
Plan for the requisite period of time prior to retiring.
DEFERRED COMPENSATION
All federal employees, including Postal Service
employees, are subject to annual compensation limits
established pursuant to federal statutes and regulations.
When amounts earned by federal employees cannot be
paid because of these compensation limits, these
payments are deferred until a year in which their payment
would not cause total annual compensation paid to the
employee to exceed the compensation limit, or the year in
which an employee leaves federal service, whichever
occurs first. Named executive officers appearing in the
Nonqualified Deferred Compensation table in the
Executive Officer Compensation section of this report
have deferred compensation in the amounts indicated
therein. These amounts would have been paid to them in
a lump-sum or pursuant to their contract with the Postal
Service following their departure, had they ended their
Postal Service employment on September 30, 2011. Mr.
Corbett’s employment agreement provides for deferred
incentives linked in part to his performance. Mr. Corbett
began accruing deferred performance-based
compensation at the end of fiscal year 2010. When Mr.
Corbett concludes his Postal Service employment, or on
October 22, 2019, if that date is later than Mr. Corbett’s
departure from the Postal Service, his deferred
compensation will be paid to him in three approximately
equal annual installments. Mr. Vegliante’s 2011 deferred
compensation will be paid to him no sooner than one year
after his departure from the Postal Service.
SUPPLEMENTAL PENSION BENEFIT
The Governors have not authorized a supplemental
pension benefit for any executive officer at this time
SEVERANCE PAYMENT
Mr. Corbett is entitled to a severance payment of
$230,000, in the event the Postal Service terminates his
employment for any reason other than for cause or breach
of contract.
INSURANCE BENEFITS
The Governors have not authorized supplemental
insurance benefits for any executive officer at this time.
The insurance benefits to which all postal executives are
entitled are described above.
OUTPLACEMENT ASSISTANCE
The Governors have not authorized any outplacement
assistance for any executive officer at this time.
ACCRUED ANNUAL LEAVE
All Postal Service employees are entitled to receive and
accrue paid days off, known as annual leave. Upon their
separation from the Postal Service, all employees,
including the named executive officers, are entitled to be
paid, in a lump-sum, the value of all accrued annual leave.
The table below shows the accrued value of the annual
leave of the named executive officers, as of September
30, 2011.
Name Value of accrued
annual leave ($)
Patrick R. Donahoe 188,331
Joseph Corbett 30,335
Megan Brennan 77,166
Ellis Burgoyne 13,048
Anthony J. Vegliante 236,307
COMPENSATION COMMITTEE REPORT
The Compensation and Management Resources
Committee has reviewed and discussed the
Compensation Discussion and Analysis with management
and, based on such review and discussions, the
Compensation and Management Resources Committee
recommended to the Governors that the Compensation
Discussion and Analysis be included in this Report.