Danaher has a new chief executive from 1 October, and the same filing grants each of its two founder chairmen options over 1,000,000 shares
Danaher will have a new chief executive on 1 October. Julie Sawyer Montgomery, most recently executive vice president with responsibility for the diagnostics platform, was appointed president and chief executive and a member of the board effective that date, and Rainer Blair will cease serving in the role and resign from the board and from its executive, finance and science and technology committees.
Her terms are set out in a letter dated 3 August and filed as an exhibit. Base salary of $1,500,000, a target bonus of 200 percent of it, a 2027 target equity award of $13,200,000, and a special long-term growth award with a target value of $20,000,000 in time-vesting options that vest half on the fourth anniversary of the grant date and half on the fifth. She also gets a $125,000 annual allowance for personal use of company aircraft and up to $15,000 a year for financial and tax planning, and the role is based at the Washington headquarters.
The grants that are not the chief executive's
Item 8.01 is the part of the filing that does not concern the incoming or the outgoing chief executive at all.
On 31 July a special committee of the board, made up solely of disinterested directors, recommended and the compensation committee approved special equity grants to Steven M. Rales, chairman of the board, and to Mitchell P. Rales, chairman of the executive committee. Each of the two co-founders receives non-qualified options over 1,000,000 shares and restricted stock units over 500,000 shares, on the same schedule as the chief executive's award, half vesting at four years and half at five. The options carry a ten-year term and an exercise price equal to the closing price on the grant date. Both men are expected to stay in their existing board and executive officer roles.
The company groups those grants with the awards to Sawyer Montgomery, to chief financial officer Matthew Gugino at a target value of $12,500,000, and to two other named executives at $8,000,000 and $2,625,000, and calls the whole thing the Long-Term Growth Program. The board's stated purpose, in its own words in the filing, is to align the interests of the two chairmen and the incoming chief executive with those of shareholders at what it calls a unique moment for the company, by rewarding upside and requiring a lengthy service period.
Then the sentence about adjusted earnings
Item 8.01 ends with two sentences that belong together. There is no change to previously communicated third quarter and full year guidance, and the company expects to exclude the stock-based compensation expense from the Long-Term Growth Program from Adjusted Diluted Net Earnings Per Share.
One further difference is worth recording, because the two documents in this filing do not describe the same arrangement in the same way. The press release says Blair will retire and serve as a senior advisor until 31 March 2027. The transition letter filed alongside it describes two arrangements rather than one: a non-officer employee role as senior advisor at his current base salary rate of $1,600,000 through 31 December 2026, and then a non-employee consultancy through 31 March 2027, paid monthly at the same rate, with no eligibility for bonuses or equity during that second period.
