Item 8.01. Other Events
For the last several years the Nominating and Governance Committee of the Board (the “N&G Committee”) and the Board, with the assistance of outside advisers, have been evaluating the appropriate size of the Board and its associated costs to the Company based on the Company’s strategic transformation plans. On February 5, 2015 the Board approved additional changes in director compensation that are expected to reduce director compensation expense by approximately 28% over 2014. As a result of these changes, combined with previous changes in director compensation and Board size since 2011, total annual director compensation expense will have been reduced since 2011 by approximately 40%.
As part of that process and as previously reported in Imation’s Current Report on Form 8-K filed November 25, 2014, on November 7, 2014, the Board of Directors, upon recommendation of the N&G Committee, made changes to director compensation to be effective May 2015 by reducing the annual equity grant of restricted stock to all members of the Board of Directors from a dollar value of $175,000 to a dollar value of $150,000, reducing the Non-Executive Chairman fee from $87,500 to $75,000 and reducing the annual equity grant to the Non-Executive Chairman from a dollar value of $87,500 to a dollar value of $75,000.
On February 5, 2015, the Board of Directors, upon recommendation of the N&G Committee approved the following additional changes to reduce Board of Director compensation effective May 2015: the elimination of Board and Committee meeting fees after the May meetings, the elimination of the matching gift and a further reduction of Non-Executive Chairman compensation (in addition to the reduction approved November 7, 2014) from $150,000 ($75,000 cash and $75,000 equity grant) to $100,000 ($50,000 cash and $50,000 equity grant). The changes to the Non-Executive Chairman compensation supersede the reductions made on November 7, 2014.
The N&G Committee’s consultant concluded that the reduced director compensation program would be at approximately the median for companies in a new peer group comprised of smaller, technology oriented companies.