Lumen Keeps CEO Kate Johnson's 2.5x Change-Of-Control Payout, Drops Her Non-Compete
Lumen moved its top executives into one severance plan and restated the CEO's agreement, saying benefits are not materially changed.
Lumen Technologies, which sells network services to businesses, restated CEO Kate Johnson's change-of-control agreement on Thursday. It still pays 2.5 times her base salary plus target annual bonus if she is fired without cause or quits for good reason within 24 months after a takeover, according to an 8-K filed Friday.
One plan for the executive suite
Lumen amended its Executive Severance Plan on Thursday, renamed the old version the Lumen Severance Plan, and removed Johnson and its other named executive officers from it. With each officer's consent, it terminated their individual change-of-control agreements and signed participation agreements under a newly adopted executive plan.
The company said the aim was to simplify administration of its executive and broad-based severance programs, and that the changes did not materially alter the benefits the officers already had.
Outside a change in control, a named officer who is fired without cause or quits for good reason gets 52 weeks of base salary, a prorated target bonus, a 12-month COBRA health-premium subsidy and outplacement help. If the termination falls from three months before to 24 months after a change in control, the cash payment is two times the sum of base salary and the average annual bonus for the three prior fiscal years. That tier also carries a 24-month COBRA subsidy.
Benefits require a signed release and continued compliance with restrictive covenants. Payments may be cut back if that leaves the officer better off after the excise tax on golden parachutes, and the plan provides no excise tax gross-up.
Johnson's richer terms stay
Johnson's restated agreement replaces the one that took effect November 7, 2022. Her cash severance outside a change in control remains 104 weeks of base salary plus her target annual bonus, double the 52 weeks for other officers' base salary.
In a takeover scenario she also receives a prorated bonus, two years of continued life, disability, medical, dental and hospitalization benefits at company expense, and a year of outplacement help. The agreement defines a change of control to include any person acquiring 30% or more of Lumen's shares or voting power.
Two terms did change. Her definition of "good reason" now matches the new plan's, and her non-competition covenant is gone to comply with Washington Engrossed Substitute House Bill 1155, which takes effect June 30, 2027. Her non-solicitation and confidentiality duties remain.
Retention is the stated purpose
The board said in the agreement that the benefits are meant to keep Johnson in her job and focused "free from personal distraction" if a termination or change of control is pending.
Lumen's fiber-to-the-home business in 11 states was sold to AT&T for $5.75 billion in gross cash proceeds on February 2, 2026, leaving a Business segment serving enterprises and government agencies.
Johnson's agreement renews each January 1 unless either side gives notice by June 30 of the prior year, and runs 24 months past any change of control.
Sources
- 8-K Filing — Lumen Technologies, Inc. (LUMN) — SEC EDGAR
- Exhibit ceokatejohnsonarchangeofco.htm — Lumen Technologies, Inc. 8-K exhibit — SEC EDGAR
