John Furner, 42, will assume the role of Sam’s Club CEO on Wednesday (Feb. 1) and the retail giant will pay him a base salary of $780,000 for this first year subject to an annual adjustment. Details of the contract were filed with the U.S. Securities and Exchange Commission on Jan. 27.
Furner’s contract also includes his eligibility for an annual cash incentive based on performance. The performance bonus will be 180% of his base salary, with a maximum possible payout of 225% of his salary. Furner will also be eligible to receive an annual equity award that typically consists of restricted stock and performance-based restricted stock units. The board agreed to award Furner 22,506 restricted shares of company stock which will vest on the third anniversary they are granted. He must remain employed with the company through that vesting day to be receive the benefit.
There is another annual equity award approved for 76,519 shares of restricted stock units granted based on performance-based metrics. To receive this award Furner must remain employed by Wal-Mart Stores through Jan. 31, 2020. Lastly, Furner was granted an additional 70,945 performance-based shares in connection with his promotion to CEO. Those shares will vest on Jan. 31, 2018, provided certain performance goals are achieved.
At the current share price of $65.66, the equity-based stock awards vesting in 2018 have a potential value of $4.658 million, the larger stock awards vesting in three years have a potential value of $6.501 million at the current share price. The performance-based bonus after year one will range between $1.404 million to $1.755 million.
Furner has been with Wal-Mart Stores for 24 years and his base pay is slightly less than Rosalind Brewer’s starting base pay when she took over as Sam’s CEO in Feb. 2012. Brewer’s base pay was $800,000. That said, the performance bonus pay parameters for Furner are higher.