Johnson Controls chief executive officer Alex Molinaroli will receive $20 million in cash and stock as a result of the company’s merger with Tyco International, according to filings with the Securities and Exchange Commission.
Molinaroli will receive a $10 million cash retention award and $10 million in restricted company stock with a vesting date 30 months from the closing of the merger under the terms of an amended change of control agreement he entered into with Johnson Controls.
Under his previous change of control agreement, Molinaroli would have been eligible for almost $39 million in severance compensation if his employment was terminated other than for cause, if he terminated it for good reason or if his employment ended due to death or disability.
The merger deal calls for Molinaroli to continue as chairman and CEO of the combined company for 18 months and then serve a one-year term as executive chair.
While the global headquarters for the combined company will be in Ireland, Milwaukee will remain the operational headquarters. Some positions currently based at Tyco’s New Jersey operational headquarters will be relocating to Milwaukee once the deal closes. That will include Tyco CEO George Oliver, who will become CEO of the combined company once Molinaroli becomes executive chair.
The $20 million that Molinaroli is eligible for because of the merger does not account for his annual salary or other bonuses.
He had a base salary of $1,575,000 in 2015, an increase of 12.5 percent from the previous year. The raise was the result of his performance and the company’s desire to have executives who are new to their positions move to the 50th percentile of the market within three years. He is set to have a base salary of $1,622,000 for this year, according to documents filed with the SEC.
He was also eligible for other stock awards and bonuses. In 2015, his total compensation was $21.7 million, up from $19.5 million the previous year and $9.8 million in 2013.
Molinaroli has undertaken a dramatic transformation of Johnson Controls since he took over in 2013. BizTimes detailed the transformation in a recent cover story. The moves have included spinning off the company’s automotive seating and interiors business into a new company, Adient, which will begin operations after the Tyco merger.
