Outgoing Kraft Foods Group CEO Tony Vernon will be paid his annual base salary for two years after he leaves and will be subject to a two-year non-compete agreement, the food maker said Friday.
Chairman John Cahill is taking on the role of CEO late this month.
Vernon, 58, is retiring as CEO as of Dec. 27, and will remain as a senior adviser through March 31, 2015.
Cahill, 57, will keep his role as chairman.
Vernon’s salary remained at $1 million in 2013, according to a March filing with U.S. regulators. It was not immediately clear whether Vernon’s salary increased after that time. According to the March filing, the board’s compensation committee reviews salaries annually and any changes are made April 1.
Vernon’s total 2013 compensation was nearly $9.2 million including his salary, stock awards, option awards and other compensation.
Cahill’s new annual base salary will be $1.1 million, Kraft said in Friday’s filing. Cahill will have an annual cash incentive target of 160 percent of that salary, as well as an annual long-term incentive target of $6.64 million.
In 2013, Cahill’s annualized salary was $750,000 and his total compensation was nearly $6 million.
Vernon will be subject to a non-compete restriction until March 31, 2017, among other details of his retirement agreement.
Vernon will receive separation benefits, including his base salary, for 24 months after he leaves Kraft. He will also receive his 2014 annual cash incentive award, which will be based on this year’s performance.
Vernon will also get a prorated portion of his Kraft and Mondelez International restricted stock, restricted stock units and performance shares. Vernon’s unvested stock options will still vest on their original vesting dates, and he will have the remaining time of the option term to exercise those options.
Cahill will be eligible to receive severance benefits, including 24 months of salary, if he is terminated by Kraft without cause.