Staples Adopts Policy To Limit Executive Severance

Staples, Inc., with its world-wide headquarters in Framingham, announced the company’s board of directors has adopted a policy that limits severance benefits for senior executives.

Based on the terms of the new policy, the company will not pay any severance benefits under any existing or future employment agreement or severance agreement with an executive officer that exceeds 2.99 times the sum of the executive’s base salary plus target annual cash incentive award, without seeking shareholder approval.

In addition, Ron Sargent, Chair and Chief Executive Officer, has elected to amend his severance agreement to align with the terms of the new policy.

“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, chair of the Compensation Committee, in a statement.

“This new policy is in the best interests of Staples’ shareholders,“said Walsh.

At the company’s shareholders meeting in June 2015, a shareholder proposal regarding future senior executive severance agreements received support from a majority of votes cast.

The Board carefully considered the results of the vote, as well as various perspectives conveyed directly by shareholders as part of ongoing engagement.

As a result, the Board adopted a policy that is applicable to existing and future agreements.