The Staples board of directors has adopted a policy that limits severance benefits for senior executives.
Under the new policy, Staples will not pay any severance benefits under existing or future executive employment or severance agreements that exceeds 2.99 times the sum of the executive’s base salary plus target annual cash incentive award, without seeking shareholder approval.
According to the company, Ron Sargent, Staples chairman and CEO, will amend his severance agreement to align with the new policy terms.
At the company’s annual meeting in June, a shareholder proposal regarding future senior executive severance agreements received a majority of votes cast, Staples noted, prompting the board action.
“Our board is committed to responding to shareholder feedback and ensuring that the company’s executive compensation program aligns with best practices,” said Paul Walsh, compensation committee chairman. “This new policy is in the best interests of Staples’ shareholders.”