Avon Will Triple McCoy Payout on Exit After Change of Control
Avon Products Inc. (AVP)’s new Chief Executive Officer Sherilyn McCoy stands to gain three times her salary and target bonus, rather than two times under normal severance conditions, if she leaves after a change of control.
McCoy, 53, who is set to join Avon on April 23 following the ouster of former CEO Andrea Jung, also will retain benefits for three years if she is terminated without cause or leaves “for good reason” in the two years following a change, the New York-based company said today in a regulatory filing.
McCoy is joining Avon, the world’s largest door-to-door cosmetics seller, as Coty Inc. tries to persuade Avon shareholders to pressure management to accept a $10 billion takeover bid. The increased payout for McCoy if she leaves after a change of control underscores Avon’s rejection of the offer. Coty Chairman Bart Becht said last week that it “would not be helpful” for Avon to hire a new CEO.
McCoy will be paid a base salary of $1.2 million, plus a cash bonus with a target of $1.8 million, according to today’s regulatory filing. She also will be paid a signing bonus of $1.91 million and will participate in a three-year, long-term incentive program with an annual target of $7.2 million.
McCoy, who previously was vice chairman of Johnson & Johnson (JNJ)’s pharmaceutical and consumer division, will be working at Avon to reverse three years of profit declines and complete an investigation into the company’s overseas business practices.
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