Cree CEO Chuck Swoboda, who last week announced plans to step down as chairman, president and chief executive, will depart with a severance package worth more than $2.8 million.
The Durham-based LED lighting company disclosed Swoboda’s severance package, as well as the terms of his consulting agreement after he steps down, in a Securities and Exchange Commission filing.
Cree said last week that Swoboda, 50, was stepping down after a successor was named. Swoboda, who wasn’t available for comment at that time, said in the announcement that “my decision to change my work-life balance follows a recent medical issue, which was resolved, and which caused me to reevaluate my priorities.”
In the SEC filing, Cree further reported that Swoboda and the company “mutually agreed that the company would accelerate its succession plan and that he would resign as president, chief executive officer and chairman of the board of directors following a transition period.”
Swoboda will remain in his executive positions, as well as chairman of the board, until one of two things happen: The company “determines his services are no longer needed” and gives him 10 days notice; or, if a new CEO hasn’t been appointed by Jan. 2 and Swoboda himself terminates the transition period upon 30 days notice.
Swoboda’s severance includes 18 months of pay, which based on his annual salary of $785,000 amounts to $1,177,500, plus 1.5 times his annual bonus target, or $1,648,500. He’ll also receive a lump sum payment amounting to 18 times his COBRA premium for medical, dental and vision coverage.
Swoboda will be a consultant to the company until Sept. 30, 2019. His severance package also will serve as compensation for the first 18 months of his consulting services. Afterward, he’ll receive a monthly consulting fee of $5,000.
Swododa’s outstanding stock awards will continue to vest, but he isn’t eligible for any new awards.