DEF 14A of Sysco Corp
Filed Oct 3, 2024 · FY20240000096021-24-000175
CONTENTS
| DIRECTOR COMPENSATION | 33 | | Overview of Non-Employee Director Compensation | 33 | | Directors Deferred Compensation Plan | 33 | | Equity-Based Awards to Non-Employee Directors | 34 | | Stock Ownership Guidelines | 35 | | Fiscal Year 2024 Director Compensation | 35 | | Certain Relationships and Related Person Transactions | 37 | | GLOBAL CODE OF CONDUCT | 38 | | EXECUTIVE OFFICERS | 39 | | Management Development and Succession Planning | 42 | | STOCK OWNERSHIP | 43 | | Security Ownership of Officers and Directors | 43 | | Security Ownership of Certain Beneficial Owners | 44 | | Policies and Practices for Granting Certain Equity Awards | 45 | | Delinquent Section 16(a) Reports | 45 | | EQUITY COMPENSATION PLAN INFORMATION | 46 |
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| | Name | Age | Director since | Experience | Independent | Committee Memberships(1) | Other Public Company Boards | | | Daniel J. Brutto | 68 | September 2016 | Former President, UPS International and Senior Vice President, United Parcel Service, Inc. | Yes | CGN Executive Sustainability* | •Illinois Tool Works Inc. | | | Francesca DeBiase | 59 | November 2023 | Former Executive Vice President Chief Global Supply Chain Officer at McDonald’s Corporation | Yes | Audit Sustainability | •Norfolk Southern Corporation | | | Ali Dibadj | 49 | January 2022 | Chief Executive Officer Janus Henderson Group plc | Yes | Audit Sustainability | •Janus Henderson Group plc | | | Larry C. Glasscock(2) | 76 | September 2010 | Former Chairman of the Board of Directors, CEO and President of WellPoint, Inc. (now Elevance, Inc.) | Yes | CLD CGN Executive | •Simon Property Group, Inc. | | | Jill M. Golder | 62 | January 2022 | Former Senior Vice President and Chief Financial Officer Cracker Barrell Old Country Store, Inc. | Yes | Audit CLD Technology | •ABM Industries, Inc. | | | Bradley M. Halverson | 64 | September 2016 | Former Group President, Financial Products and Corporate Services and Chief Financial Officer of Caterpillar Inc. | Yes | Audit* CLD Executive | •Constellation Energy Corporation •Lear Corporation | | | John M. Hinshaw | 54 | April 2018 | Former GMD Chief Operating Officer, HSBC Group Management Services, Ltd. | Yes | CGN* CLD Executive Technology | | | | Kevin P. Hourican(3) | 51 | February 2020 | Chair of the Board and Chief Executive Officer, Sysco Corporation | No | Executive | •Tapestry, Inc. | | | Roberto Marques | 59 | August 2024 | Former Director, Executive Chairman and CEO of Natura & Co. Holdings SA | Yes | Audit Sustainability | •Alcoa Corporation | | | Alison Kenney Paul | 66 | January 2022 | Managing Director, Global Alliances Google, Inc. | Yes | CGN CLD* Executive | | | | Sheila G. Talton | 71 | September 2017 | President and Chief Executive Officer of Gray Matter Analytics | Yes | CGN Sustainability Technology* Executive | •Deere & Company •OGE Energy Corp. |
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(1)Full committee names are as follows: “Audit” – Audit Committee |“CGN” – Corporate Governance and Nominating Committee |“Executive” – Executive Committee “CLD” – Compensation and Leadership Development Committee |“Sustainability” – Sustainability Committee |“Technology” – Technology Committee. (2)Mr. Glasscock currently serves as Lead Independent Director. For more details, see page 27. (3)Mr. Hourican currently serves as the Chair of the Board. For more details, see page 30. *Denotes committee chair
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PROXY STATEMENT SUMMARY Director Nominees Director Nominee Tenure and Diversity
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| INDEPENDENT DIRECTOR NOMINEE TENURE | INDEPENDENT DIRECTOR NOMINEE DIVERSITY | | | |
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Director Qualifications The Board believes every director should have one or more of the following qualifications because they are particularly relevant to the Company’s strategic priorities. These qualifications were all considered by the Board in connection with this year’s director nomination process:
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| | Accounting/ Audit/ Financial Reporting | | | | | 8 | | | Business Operations | | | | | 10 | | | Distribution/ Supply Chain | | | | | 7 | | | Executive Leadership/ Management | | | | | 11 | | | Finance | | | | | 10 | | | Foodservice Industry Experience | | | | | 4 | | | HR/ Human Capital Management/ Large Workforce | | | | | 9 | | | International/ Global | | | | | 9 |
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| | M&A/ Integration | | | | | 7 | | | Marketing/ Sales/ Merchandising | | | | | 6 | | | Public Company Board Service | | | | | 10 | | | Risk Oversight/ Management | | | | | 10 | | | Strategy Development | | | | | 10 | | | Sustainability/ Responsible Growth | | | | | 6 | | | Digital Technology/ Cybersecurity | | | | | 5 |
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Corporate Governance Facts
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| | Lead Independent Director | | | 15-year limit on director tenure | | | Annual Board and committee self-evaluations | | | Periodic 360-degree individual director performance evaluations | | | 90.9% of the Board nominees are independent | | | Annual election of all directors | | | No director may serve on more than four other boards and no audit committee member may serve on more than two other audit committees |
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| | Independent directors meet regularly without management present | | | Proxy access right | | | Stockholder right to call a special meeting | | | Significant stock ownership requirements for all directors and executive officers | | | Single class of voting stock | | | Regular engagement with stockholders | | | Majority voting standard |
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PROXY STATEMENT SUMMARY Director Nominees Sustainability Highlights Sysco is committed to caring for people, sourcing products responsibly, and protecting the planet. Program highlights from the last fiscal year include:
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| PEOPLE | •Donated millions of meals to support communities globally in need and continued to make progress toward our global good goal to generate $500 million worth of good by 2025. •Invested in enhanced safety programs for all colleagues; with a focus on our front line warehouse and driver personnel; making safety a top priority for all leaders in the organization. | | PRODUCT | •Launched One Planet. One Table. product offering, featuring the U.S. Foodservice Industry’s largest assortment of certified and sustainably focused products. •Published our first Sustainable Packaging Guidelines for Suppliers and held the inaugural Sysco One Planet. One Table. Sustainable Packaging Contest for suppliers focusing on reducing plastic in product packaging by substituting more sustainable packaging materials. | | PLANET | •Advanced the Company’s fleet decarbonization program by introducing an additional 111 electric vehicles across North America and Sweden and using renewable diesel to significantly reduce emissions in California and Oregon. •Waste: We have made progress on our waste goal, improving diversion from 67% to 83% from fiscal year 2023 to June 2024 while reducing the costs of waste haulage. |
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For further discussion of Sysco’s sustainability (“Sustainability”) strategy and long-term goals, see our website at www.sysco.com in the “Sustainability” section.
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PROXY STATEMENT SUMMARY Executive Compensation Highlights
EXECUTIVE COMPENSATION HIGHLIGHTS
EXECUTIVE COMPENSATION HIGHLIGHTS Fiscal Year 2024 Compensation Design In July 2023, the Compensation and Leadership Development Committee (the “CLD Committee”) established the framework of the executive compensation program for fiscal year 2024. The CLD Committee acknowledged that in fiscal year 2023, Sysco successfully achieved record-breaking financial results. Notably, we recorded an increase in annual sales of 11.2% to more than $76.3 billion on a comparable 52-week basis. Additionally, we achieved the highest full-year adjusted operating income in our history. For more details, please refer to the reconciliation in Annex I - Non-GAAP Reconciliations. The CLD Committee is steadfast in its commitment to fostering a pay-for-performance culture, ensuring that our executive compensation programs are not only responsive to stockholder feedback, but also provide clear, quantifiable pre-established metrics that are aligned with our financial goals. For fiscal year 2024, the CLD Committee implemented financial and non-financial measures, incorporating rigorous financial performance metrics for our Annual Incentive Plan ("AIP") and Long-Term Incentive Program ("LTIP"). Annual Incentive Program: The AIP for fiscal year 2024 has been designed to provide an incentive opportunity tied to financial measures, Strategic Business Objectives ("SBOs") aligned to the highest priority initiatives under our Recipe for Growth strategic plan and our Responsible Growth SBOs. This alignment ensures that the AIP drives financial performance and also promoted responsible and sustainable growth. Long-Term Incentive Program: The LTIP includes a diversified mix of compensation elements: (i) performance share units ("PSUs") with a three-year performance period focused on achieving benchmarks related to return on invested capital, earnings per share and targeted revenue growth; (ii) restricted stock units ("RSUs"); and (iii) stock options
EXECUTIVE COMPENSATION HIGHLIGHTS
| Pay Element | Description | Fiscal Year 2024 Performance Process | | Base Salary | Cash | A fixed, competitive base salary intended to reflect the Named Executive Officer's ("NEO’s") position and responsibilities. Base salary helps to contribute to an overall competitive pay mix with an appropriate balance between fixed and variable pay elements. | | Annual Incentive Program | Cash | Variable component aimed at rewarding the achievement of annual performance objectives, consisting of the following performance measures: 70% Financial Measures, 20% Recipe for Growth SBOs; and 10% Responsible Growth SBOs. | | Long-Term Incentive Program | Performance Share Units 50% of LTIP opportunity | Enhance longer-term performance and compensation alignment by linking payouts to the achievement of financial goals and based 37.5% upon EPS, 37.5% upon ROIC and 25% on targeted revenue growth. The total number of shares earned by each NEO as a result of the Company’s performance with regard to these performance targets will be subject to adjustment based on the Company’s total shareholder return (“TSR”) during the performance period as compared to the S&P 500 companies. | | | Restricted Stock Units 30% of LTIP opportunity | Strengthens retention over relevant time periods to help ensure consistency and execution of long-term strategies. | | | Stock Options 20% of LTIP opportunity | Closely align the executives’ interests with those of our stockholders, with realized value based on post-grant share price appreciation. Also, fosters retention through time vesting requirements. |
RISK OVERSIGHT
| BOARD OF DIRECTORS •Oversees Sysco’s enterprise risk management process to ensure it is consistent with the Company’s short- and long-term goals. •Considers enterprise risk in evaluating the Company’s strategy, including specific strategies, and emerging risks. •Monitors specific enterprise risks it has chosen to retain oversight, such as risks related to competitive threats, senior leadership succession planning, cybersecurity and business continuity. |
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MATTERS (ITEM 1)
MATTERS (ITEM 1)
BOARD REFRESHMENT AND DIRECTOR
BOARD REFRESHMENT AND DIRECTOR
ORIENTATION AND EDUCATION
ORIENTATION AND EDUCATION Our Board recognizes the importance of consistent, deliberate Board refreshment and succession planning to ensure that the directors collectively have the skills, experience, and qualifications necessary for the Board to successfully establish and oversee management’s execution of the Company’s strategic priorities. In order to promote thoughtful Board refreshment, in 2016 our Board adopted a Board refreshment plan, pursuant to which the Board has elected most of the current independent, non-employee directors. The Governance Committee is responsible for developing a succession plan for the Board and making recommendations to the Board regarding director succession. Director Recruitment The Governance Committee is responsible for identifying and evaluating candidates for election to Sysco’s Board of Directors. Since the adoption of our Board refreshment plan in 2016, our Board has periodically engaged the services of third- party search firms to assist with identifying and recruiting appropriate director candidates. In 2024, the Governance Committee again engaged the services of third-party search firms to identify candidates possessing the skills, experience and other qualifications in the context of the Board’s composition and the Company’s strategic priorities. Following consideration of the candidates presented upon the unanimous recommendation of the Governance Committee, the Board appointed one new independent director to fill a vacancy arising from Mr. Shirley's resignation. As our incumbent directors retire from the Board from time to time, we will continue our director recruitment efforts to help ensure that the size of the Board is maintained at an appropriate level.
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ORIENTATION AND EDUCATION
BOARD OF DIRECTORS MATTERS (ITEM 1) Election of Directors Director Tenure Policy Our director tenure policy provides that no non-employee director who will have served on the Board for 15 years as of the date of a Board election may be nominated for election or re-election. Since we adopted this policy in 2016, the average tenure of our independent director nominees has declined from nine years to five years. Director Orientation and Continuing Education All new directors participate in the Company’s Orientation Program, which is conducted within six months of the meeting at which new directors are elected. This orientation includes presentations by senior management that familiarize new directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, its ethics and compliance program, its Global Code of Conduct, its principal officers, and its internal and Independent Auditors. In addition, the Orientation Program includes visits to the Company’s headquarters and to at least one of the Company’s operating sites. The Company may develop continuing education programs sponsored by the Company from time to time, including programs addressing legal, financial, regulatory and industry specific topics. In addition, we encourage directors to attend director education seminars at the Company’s expense. The Board recommends that directors use their reasonable best efforts to complete eight hours of director education seminars every two years.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Election Requirements The Company’s bylaws provide for majority voting in uncontested director elections, meaning that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. The Company does not permit cumulative voting. Any incumbent director who is not re-elected in an uncontested election is required to tender the director’s resignation to the Governance Committee. The Governance Committee will consider the tendered resignation and recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. The Board must act on the recommendation within 120 days following certification of the stockholders’ vote and will promptly disclose its decision regarding whether to accept the director’s resignation offer. The director who tenders a resignation may not participate in these deliberations of the Governance Committee or the Board. In contested elections, where there are more nominees than seats on the Board, directors are elected by a plurality vote, meaning that the nominees who receive the most votes of all the votes cast for directors will be elected. Director Candidates Identified by the Board and Management In identifying candidates for election to the Board, the Governance Committee will determine which of the incumbent directors has an interest in being nominated for re-election at the next annual meeting of stockholders. The Governance Committee will also identify and evaluate new candidates for election to the Board for the purpose of filling vacancies. To that end, the Governance Committee generally engages a professional search firm to assist in identifying qualified candidates and may solicit recommendations for nominees from current members of the Board and Sysco’s management. When engaging a search firm, the Governance Committee will determine its fees and scope of engagement. Director Candidates Recommended by Stockholders The Governance Committee will consider candidates recommended by stockholders, and will evaluate such candidates using the same criteria it uses to evaluate other candidates from other sources. Stockholders can recommend individuals for consideration by the Governance Committee by writing to the Corporate Secretary, 1390 Enclave Parkway, Houston, Texas 77077, and including the following information: •the name and address of the stockholder; •the name and address of the person to be nominated; •a representation that the stockholder is a holder of the Sysco stock entitled to vote at the meeting to which the director recommendation relates;
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BOARD OF DIRECTORS MATTERS (ITEM 1) Election of Directors •a statement in support of the stockholder’s recommendation, including a description of the candidate’s qualifications; •information regarding the candidate as would be required to be included in a Proxy Statement; and •the candidate’s written, signed consent to serve if elected. The Governance Committee will consider, in advance of Sysco’s next annual meeting of stockholders, if we receive by June 5, 2025, a recommendation of a director candidate from one or more stockholders who have beneficially owned at least 5% of our outstanding Common Stock for at least one year, then we will disclose in our next proxy materials relating to the election of directors the identity of the candidate, the identity of the nominating stockholder(s) and whether the Governance Committee determined to nominate such candidate for election to the Board. However, we will not provide this disclosure without first obtaining written consent from both the nominating stockholder and the proposed candidate. The Governance Committee has not received any recommendations for director nominees for election at the Annual Meeting from any stockholders beneficially owning at least 5% of Sysco’s outstanding Common Stock. Proxy Access Director Candidates Our “proxy access” bylaw provisions permit an eligible stockholder (or a group of up to 20 eligible stockholders), who has continuously owned, for a period of three years, at least 3% of the aggregate of our outstanding Common Stock, to nominate a number of director nominees equal to the greater of 20% (rounded down) of the total number of directors constituting our Board or two directors. These nominees will be included in our Proxy Statement for the relevant annual stockholders meeting if the nominating stockholder(s) and the respective nominee(s) comply with all applicable eligibility, procedural and disclosure requirements set forth in our bylaws. How We Evaluate Director Candidates In evaluating all incumbent and new director candidates that the Governance Committee determines merit consideration, the Governance Committee will: •cause to be assembled information concerning the candidates background and qualifications, including information required to be disclosed in a Proxy Statement, and any relationship between the candidate and the person or people recommending the candidate; •determine if the candidate demonstrates the characteristics that we require of all directors, described below; •consider the candidate’s skills, experience and qualifications in the context of the composition of the Board as a whole and the Company’s strategic priorities; •consider the absence or presence of material relationships with Sysco that might impact the candidate’s independence; •consider the contribution the candidate can be expected to make to the overall functioning of the Board; •consider the candidate’s capacity to be an effective director in light of the time required by the candidate’s primary occupation and service on other boards; •consider the extent to which the membership of the candidate on the Board will promote diversity among the directors; and •consider, with respect to an incumbent director, whether the director satisfactorily performed his or her duties as a director during the preceding term, including attendance and participation at Board and committee meetings, and made other contributions as a director. In its discretion, the Governance Committee may designate one or more of its members, or the entire Governance Committee, to interview any proposed candidate. Based on all available information and relevant considerations, the Governance Committee will recommend to the full Board for nomination those candidates who, in the judgment of the Governance Committee, are most appropriate for membership on the Board based on each candidate’s characteristics, skills and qualifications.
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BOARD OF DIRECTORS MATTERS (ITEM 1) Election of Directors Inclusion Sysco aspires to create a global culture that is decidedly diverse, equitable and inclusive – one where we foster belonging as we care for one another and connect the world through food and trusted partnerships. By advancing diversity, equity and inclusion (“DEI”) across our talent lifecycle and procurement practices, we can ensure a workplace and marketplace that is highly competitive, innovative, sustainable and socially equitable. Consistent with this commitment, the Board values all dimensions of diversity among nominees. We know that differences in background and professional and life experiences yield innovation, enhanced perspective, and higher-quality decision-making. With this in mind, four of our Board nominees are women and three are ethnic minorities. DEI Highlights While DEI are not new concepts at Sysco, we have intentionally and thoughtfully accelerated our focus on these principles and are entering the third year of our three-year "Better Together" DEI roadmap. Highlights from the last fiscal year include:
NOMINEES FOR ELECTION AS DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS AT THE ANNUAL MEETING:
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 68 Director since: September 2016 Committees: •Corporate Governance & Nominating Committee •Sustainability Committee (Chair) •Executive Committee | DANIEL J. BRUTTO | | | Executive Experience: •Mr. Brutto served as President of UPS International and Senior Vice President of United Parcel Service, Inc. (“UPS”), from January 2008 until his retirement in June 2013. •Previously, he served as President, Global Freight Forwarding, for UPS from 2006 to 2007, and corporate controller from 2004 to 2006. •Mr. Brutto served as Executive Chairman of Radial, Inc., a privately held global fulfillment, customer care and technology company, from 2016 to 2017. | | | Additional Leadership Experience and Service: •Served on the board of the US-China Business Council from 2008 until 2013. •Served on the Guangdong Economic Council from 2010 until 2013. •Served on the Turkey Economic Advisory Council from 2008 until 2013. •Delegate to the World Economic Forum, Davos, Switzerland, from 2009 to 2013. •Served on the board of UNICEF from 2009 until 2020. | | | Other Public Company Board Experience: •Director of Illinois Tool Works Inc. since February 2012. | | | Key Director Qualifications and Board Contributions: •During his close to 40-year career at UPS, Mr. Brutto held several leadership roles with increasing levels of responsibility. Through these roles, he garnered significant experience across strategy development, business operations, marketing and finance that allows him to offer valuable insight to the Board regarding the operation and oversight of a major global company. •Mr. Brutto’s experience at UPS provides him with significant knowledge of supply chain management and associated risk oversight, which brings an invaluable perspective to the Sysco Board as the Company navigates a complex global distribution network. •Through his tenure as a public company director at both Illinois Tool Works and Sysco, Mr. Brutto has gained valuable experience overseeing sustainability and Responsible Growth matters, positioning him well as the Chair of our Sustainability Committee. |
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BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
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| Age: 59 Director since: November 2023 Committees: •Audit Committee •Sustainability Committee | FRANCESCA DEBIASE | | | Executive Experience: •Ms. DeBiase served as Corporate Executive Vice President, Chief Global Supply Chain Officer of McDonald’s Corporation (“McDonald’s”) from October 2020 until she retired in August 2022. •Previously, she served as McDonald’s Executive Vice President, Chief Global Supply Chain and Sustainability Officer from April 2018 to September 2020 and as Senior Vice President, Chief Global Supply Chain and Sustainability Officer from April 2015 to April 2018. •Prior to these roles and since joining McDonald’s in 1991, Ms. DeBiase held several management roles in McDonald’s supply chain and finance organizations in the U.S. and internationally. •Ms. DeBiase began her career as an Auditor in the retail and consumer products industry with Ernst & Young in 1988. | | | Additional Leadership Experience and Service: •Member of the Board of Advisors of AWESOME (Achieving Women’s Excellence in Supply Chain Operations, Management and Education) since 2020. •Board member of The Chicago Network since 2021. •Member of The Belizean Grove since 2018. •Member of the Board of Governors of the Metropolitan Planning Council, Chicago, Illinois, from 2018 to 2022. •Member of the Board of Advisors, Quinlan School of Business at Loyola University Chicago from 2018 to 2021. •Executive Sponsor to McDonald’s Women’s Leadership Network from 2015 to 2021. •Advisory Board member for the Loyola University Supply and Value Chain Center from 2014 to 2017. •Member of the Board of The Chicago council on Global Affairs from 2020 to the end of 2023. •Member of the Board of Directors of Hephzibah Children’s Association, Oak Park, Illinois, from 2010 to 2018. | | | Other Public Company Board Experience: •Director of Norfolk Southern Corporation (a transportation company) since July 2023. | | | Key Director Qualifications and Board Contributions: •During her more than 30-year career at McDonald’s and her time with Ernst & Young, Ms. DeBiase accumulated significant experience in accounting and auditing and corporate finance, culminating in her service as McDonald’s Senior Director of European Finance from 2002 to 2005. •Through her experience at McDonald’s, Ms. DeBiase also developed deep expertise in supply chain and sustainability, pioneering the development of a combined supply chain/sustainability operation, and garnered significant experience with international business through residing in Europe during her service in roles of increasing responsibility from 1996 to 2006, including: Chief European Supply Chain Officer; Senior Director, Europe Finance; Director, Central & Eastern Europe, Finance, Franchising and Human Resources; and Chief Finance Director and Head of IT and Supply Chain (McDonald’s Poland). •Ms. DeBiase gathered significant board room experience, serving for five years as management’s representative for the Sustainability and Corporate Responsibility Committee of the McDonald’s board of directors and regularly attending meetings of the board to present on strategic plans and lead discussions of supply chain, enterprise risk and sustainability matters. |
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BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
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| Age: 49 Director since: January 2022 Committees: •Audit Committee •Sustainability Committee | ALI DIBADJ | | | Executive Experience: •Mr. Dibadj has served as the CEO of Janus Henderson Group plc (“Janus”) since June of 2022. •Previously, he served as the CFO and/or Head of Finance and then as CFO and Head of Strategy from April 2020 until June 2022 at AllianceBernstein Holding L.P. (“AB”). •Prior to this role, Mr. Dibadj held several roles with AB since 2006, including Senior Research Analyst, where he was ranked #1 12 times for his coverage of consumer companies. •Before joining AB, Mr. Dibadj spent almost a decade in management consulting, including roles at McKinsey & Company and Mercer Oliver Wyman (now known as Oliver Wyman). | | | Other Public Company Board Experience: •Director of Janus since June 2022, when he was selected as the new CEO. | | | Key Director Qualifications and Board Contributions: •Mr. Dibadj has substantial experience in finance and accounting, executive leadership, communications, investor relations, risk management, mergers and acquisitions and strategy development gained through his tenure as CEO of Janus Henderson and as CFO and Head of Strategy at AB. •From his role as CEO at Janus, and through his prior role as CFO and Head of Strategy of AB, Mr. Dibadj has extensive background in overseeing the strategic direction and overall day-to-day management of global asset management businesses. These responsibilities have allowed him to bring an invaluable perspective to his role on the Sysco Board and the Audit and Sustainability Committees, including on matters related to corporate governance, sustainability and executive compensation. •Mr. Dibadj’s familiarity with the consumer sector gained through his time as a highly recognized consumer research analyst provides a unique skillset to the Board and improves its oversight capabilities with regard to corporate strategy. |
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 76 Director since: September 2010 Lead Independent Director since: April 2024 Committees: •Corporate Governance and Nominating Committee •Compensation and Leadership Development Committee •Executive Committee | LARRY C. GLASSCOCK | | | Executive Experience: •Mr. Glasscock formerly served as the Chairman of WellPoint, Inc. (now Elevance Health, Inc.), a healthcare insurance company, from 2005 to 2010. He served as the President and CEO of WellPoint, Inc. from 2004 to 2007. •Prior to WellPoint, Inc., he was the President and CEO of Anthem, Inc. (now Elevance Health, Inc.) from 2001 to 2004, and also served as the Chairman from 2003 to 2004. •Mr. Glasscock previously served as COO of CareFirst, Inc., President and CEO of Group Hospitalization and Medical Services, Inc., President and COO of First American Bank, N.A., and President and CEO of Essex Holdings, Inc. | | | Other Public Company Board Experience: •Director of Simon Property group since 2010, including in the role of Lead Independent Director since March 2014. •Director of Zimmer Biomet Holdings from 2001 until May 2021, including in the role of Independent Chairman from May 2013 to May 2021. •Director of Sprint Corporation from August 2007 to July 2013. •Chairman of WellPoint, Inc. (now Elevance, Inc.) from November 2005 to March 2010 (served as Chairman and CEO from November 2004 to June 2007). •Chairman of Anthem, Inc. (now Elevance, Inc.) from May 2003 to November 2004 (served as CEO from July 2001 to November 2004). | | | Key Director Qualifications and Board Contributions: •Mr. Glasscock brings insightful experience to the Board regarding customer-focused, successful growth strategies gained through his time at Elevance, Inc., where he played a major role in transforming the company from a regional health insurer into a national healthcare leader. •Throughout his career, he has developed expertise in understanding the successful integration of corporate cultures and the associated team building and human capital development, a vital perspective for the Board when evaluating acquisition targets. •Through his executive experiences, he has built a strong understanding of effective team building and human capital development, which are extremely valuable to Sysco, as management development and succession planning remain top priorities of executive management and the Board. •Mr. Glasscock also brings considerable financial experience, gained during his time supervising the CFOs of major corporations and earlier in his career, serving as a bank officer lending to major corporations. •Mr. Glasscock has significant experience as a public company director and as a member of various committees related to important board functions, including audit, finance, governance and compensation. |
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BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 62 Director since: January 2022 Committees: •Audit Committee •Compensation and Leadership Development Committee •Technology Committee | JILL M. GOLDER | | | Executive Experience: •Ms. Golder served as Senior Vice President and CFO of Cracker Barrel Old Country Store, Inc. (“Cracker Barrel”) from June 2016 to December 2020. •Previously, she served in finance leadership roles at Ruby Tuesday, Inc. (“Ruby Tuesday”), including as Executive Vice President and CFO from June 2014 to April 2016. •Prior to that, Ms. Golder spent 23 years at Darden Restaurants, Inc., where she served in finance positions of increasing responsibility for several Darden brands, including Senior Vice President of Finance for Olive Garden, Smokey Bones, Specialty Restaurant Group and Red Lobster. | | | Additional Leadership Experience and Service: •Director on the Board of MOD Superfast Pizza Holdings, LLC, a private company from April 2021 through March 2024. | | | Other Public Company Board Experience: •Director on the Board for ABM Industries, Inc. since September 2019. •Director for IZEA Worldwide, Inc. from May 2015 to September 2019 and March 2021 to December 2021. | | | Key Director Qualifications and Board Contributions: •Through her roles at both Cracker Barrell and Ruby Tuesday, Ms. Golder has significant executive leadership experience within the foodservice industry, enabling her to provide expert insight to the Board and guidance to our management team. •Ms. Golder’s deep expertise in the areas of accounting, audit and financial reporting are integral to her role on the Audit Committee, and her experience across investor relations, distribution, supply chain and risk management enables her to provide invaluable insight to the Board on the Company’s strategic focus areas. |
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 64 Director since: September 2016 Committees: •Audit Committee (Chair) •Compensation and Leadership Development Committee •Executive Committee | BRADLEY M. HALVERSON | | | Executive Experience: •Mr. Halverson spent the majority of his nearly 30-year career at Caterpillar, Inc. (“Caterpillar”), most recently serving as Group President, Financial Products and Corporate Services and CFO from January 2013 until his retirement in May 2018. •From 1998 until 2012, Mr. Halverson served in various leadership roles at Caterpillar, including Corporate Controller (2007-2010) and Vice President, Financial Services Division (2010-2012). •Prior to these roles, Mr. Halverson spent some time outside of the United States from 1993 to 1996 with Caterpillar Overseas, S. A., where he was a strategy and planning consultant and then a controller in Europe. •Before joining Caterpillar in 1988, Mr. Halverson gained experience working for PricewaterhouseCoopers LLP. | | | Additional Leadership Experience and Service: •Mr. Halverson currently serves as a member of the Board of Trustees of the Easterseals Central Illinois Foundation. •Served as Chairman of the Board of Directors of Easterseals Central Illinois and as Treasurer of the Easterseals Central Illinois Foundation. •Served on the OSF St. Francis Medical Center Community Foundation Board. •Served as a member of the Executive Committee of the U.S. Chamber of Commerce. | | | Other Public Company Board Experience: •Director for Constellation Energy Corporation since February 2022. •Director for Lear Corporation since June 2020. •Director and Chair of the Audit Committee for Satellogic, Inc. from January 2022 until September 2024. | | | Key Director Qualifications and Board Contributions: •During the course of his nearly 30-year career with Caterpillar and his time with PricewaterhouseCoopers LLP, Mr. Halverson developed deep expertise in accounting, financial reporting and corporate finance, which equips him to bring his valuable perspective to the Board, particularly through his role as Audit Committee Chair. •Mr. Halverson’s significant experience in the areas of executive leadership and management, corporate strategy development, mergers and acquisitions, risk management, information technology systems oversight and international business, gained through his senior roles at Caterpillar, allow him to exercise effective oversight of Sysco’s management team’s strategic execution, as well as the Company’s human capital management initiatives. |
NOMINEES FOR ELECTION AS DIRECTORS
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NOMINEES FOR ELECTION AS DIRECTORS
BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 54 Director since: April 2018 Committees: •Corporate Governance & Nominating Committee (Chair) •Compensation and Leadership Development Committee •Executive Committee •Technology Committee | JOHN M. HINSHAW | | | Executive Experience: •Mr. Hinshaw served as Group Chief Operating Officer of HSBC Group Management Services, Ltd. from February 2020 until September 2024. •Previously, Mr. Hinshaw served as the Executive Vice President, Technology and Operations, of Hewlett Packard Company (“Hewlett Packard”) from November 2011 to November 2015, at which time he joined Hewlett Packard Enterprise Company (spun-off from Hewlett Packard) as the Executive Vice President, Technology and Operations and Chief Customer Officer, serving in such capacity until October 2016. •Prior to joining Hewlett-Packard, Mr. Hinshaw served as Vice President and General Manager for Boeing Information Solutions at The Boeing Company (“Boeing”) from 2010 to 2011, and before that, as Chief Information Officer from 2007 to 2010, leading Boeing’s companywide corporate initiative on information management and information security. •Mr. Hinshaw also spent 14 years at Verizon Communications where, among several senior roles of increasing responsibility, he served as Senior Vice President and Chief Information Officer of Verizon Wireless, overseeing the IT function of the wireless carrier. | | | Additional Leadership Experience and Service: •Member of the Board of Directors of Illumio, Inc. (a cyber security company) since October 2018 and a member of the Board of Directors of Single Store, Inc. (a private database company) since September 2024. •Mr. Hinshaw is also the Proprietor of Blackbird Vineyards LLC (a wine company). | | | Other Public Company Board Experience: •Director of DocuSign, Inc. from December 2014 to May 2020 (publicly listed in April 2018). •Director of The Bank of New York Mellon Corporation (“The Bank of New York Mellon”) from September 2014 to December 2019. | | | Key Director Qualifications and Board Contributions: •Mr. Hinshaw’s tenure in leadership roles with global public companies in industries deeply rooted in technology provides him with insight and hands-on experience with the operations of large, complex organizations and expertise in both information technology and management, enabling him to effectively oversee Sysco management, especially with regard to the execution of business technology initiatives that are vital to maintaining our global distribution and supply chain network. •Mr. Hinshaw also gained extensive public company board experience through his service as a member of the Board of Directors of The Bank of New York Mellon from September 2014 to December 2019 and DocuSign, Inc. from December 2014 to May 2020 (publicly listed in April 2018), providing him with valuable insight into corporate governance, sustainability and executive compensation matters. |
NOMINEES FOR ELECTION AS DIRECTORS
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NOMINEES FOR ELECTION AS DIRECTORS
BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 51 Director since: February 2020 Chair of the Board since: April 2024 Committees: •Executive Committee (Chair) | KEVIN P. HOURICAN | | | Executive Experience: •Mr. Hourican has served as Sysco’s Chair of the Board and CEO since April 2024, and previously served as President and CEO and a member of Sysco’s Board from February 2020 until April 2024, leading the Company’s large-scale, customer-focused and growth-related transformation, aimed at further improving the way Sysco supports its customers and accelerating profitable sales growth. Since Mr. Hourican joined Sysco, the Company’s focus on elevating customer experience, expanding our specialty distribution reach, and penetrating new international markets has resulted in consistent market share gains and record-breaking financial performance. •Prior to Sysco, he served as Executive Vice President of CVS Health Corporation, a premier health innovation company, and President of CVS Pharmacy, overseeing CVS Health’s $85 billion retail business, including 9,900 retail stores and over 200,000 employees, as well as merchandising, marketing, supply chain, real estate, front store operations, pharmacy growth, pharmacy clinical care and pharmacy operations. •Prior to joining CVS Health, Mr. Hourican held executive leadership roles at Macy’s | | | Key Director Qualifications and Board Contributions: •Through these various operations and management positions within CVS and Macy’s, Mr. Hourican has acquired extensive experience and knowledge in the areas of executive leadership and management, corporate strategy development, distribution and supply chain management, merchandising and marketing. •The Corporate Governance and Nominating Committee and the Board believe that it is appropriate and beneficial to Sysco to have its CEO serve as management’s voice on the Board. | | | Other Public Company Board Experience and Business Organizations: •Director of Tapestry, Inc. since February 2024 •Member of the Wall Street Journal CEO Council since 2020 •Member of the Business Roundtable since 2020 |
NOMINEES FOR ELECTION AS DIRECTORS
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NOMINEES FOR ELECTION AS DIRECTORS
BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 59 Director since: August 2024 Committees: •Audit Committee •Sustainability Committee | ROBERTO MARQUES | | | Executive Experience: •Mr. Marques served as a director, then Executive Chairman and CEO of Natura & Co. Holdings SA, a Brazilian global personal care cosmetic company, from 2016 until 2022. •Prior to that he served as Executive Vice President and President, North America at Mondelēz International Inc. from 2015 to 2017. •Mr. Marques served for over 25 years at Johnson & Johnson in various global and senior executive positions in Latin America, North America and European regions. | | | Additional Leadership Experience and Service: •Serves on the board of We Mean Business Coalition, a global non-profit organization supporting businesses on climate change actions. •Serves on the Board of the United States Tennis Association Foundation. •Served on the board of the United Nations Global Compact Board. •Served as Senior Advisor of the Carlyle Group. •Served as a director of the Grocery Manufacturing Association. •Served as a director for the Brazil-U.S. Business Council in the U.S. Chamber of Commerce. | | | Other Public Company Board Experience: •Director of Alcoa Corporation since July 2023. | | | Key Director Qualifications and Board Contributions: •During his tenure at Natura, a purpose-driven cosmetic group, Mr. Marques established a unique direct to customer, omnichannel experience with a strong digital/e-commerce platform in a relationship selling model. Mr. Marques gained deep expertise in sustainability while at Natura and through his service on the board of the We Mean Business Coalition as well as past roles with the United Nations Global Compact Board and the World Economic Forum. •As Executive Vice President and President for North America at Mondelēz International, a company that globally markets snacking brands from Kraft, Nabisco, Cadbury, among others, Mr. Marques gained deep, global foodservice experience. •During his more than 25 years at Johnson & Johnson, Mr. Marques gained deep expertise mainly in Consumer Global managing roles, with sales, marketing, and supply chain operations. |
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 66 Director since: January 2022 Committees: •Compensation and Leadership Development Committee (Chair) •Corporate Governance & Nominating Committee | ALISON KENNEY PAUL | | | Executive Experience: •Ms. Paul has served as Managing Director, Global Alliances of Google, Inc. since August 2021. •Previously, she served Deloitte as Vice Chairman and Leader of the U.S. Retail and Wholesale Distribution practice from August 2008 to June 2021, and as a Senior Manager in the Consumer and Retail Industry focusing on Strategy and Operations from 2002 to August 2008. | | | Additional Leadership Experience and Service: •Member of the National Board of Girls, Inc., since October 2017. Girls, Inc. is a not-for-profit organization serving over 150 thousand girls ages 6 to 18 each year. •Member of the International Women's Forum, SoCal Membership Committee. •Served as a member of Deloitte's Nominating Committee. •Served as a member of the National Retail Federation Board of Directors. •Co-Founder and President of the CPG/Retail industry organization Network of Executive Women (Now NextUp). | | | Key Director Qualifications and Board Contributions: •Throughout her career at both corporations and professional services firms, as well as early- and mid-stage startups, Ms. Paul has developed extensive experience in the areas of executive leadership, finance, human resources, talent management, global operations, marketing, sales and merchandising, strategy development and digital technology and cybersecurity. •Ms. Paul’s leadership of a global technology-driven team and her years of experience advising leading consumer product industry companies on business development, strategic, and marketing initiatives position her to deliver insightful guidance to the Board and management team on Sysco’s strategic growth initiatives. |
NOMINEES FOR ELECTION AS DIRECTORS
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NOMINEES FOR ELECTION AS DIRECTORS
BOARD OF DIRECTORS MATTERS (ITEM 1) Nominees for Election as Directors at the Annual Meeting
NOMINEES FOR ELECTION AS DIRECTORS
| Age: 71 Director since: September 2017 Committees: •Corporate Governance and Nominating Committee •Sustainability Committee •Executive Committee •Technology Committee (Chair) | SHEILA G. TALTON | | | Executive Experience: •Ms. Talton currently serves as the President and CEO of Gray Matter Analytics, a firm focused on data analytics consulting services in the healthcare industry. •Previously, she served as President and CEO of SGT Ltd., a firm that provides strategy and technology consulting services in the financial services, healthcare and technology business sectors, from 2011 to 2013. •From 2008 to 2011, Ms. Talton served as Vice President, Office of Globalization, for Cisco Systems, Inc. •Prior to that time, she held other leadership positions at Cisco Systems, Inc., Electronic Data Systems Corporation and Ernst & Young, LLP. | | | Additional Leadership Experience and Service: •Congressional appointee on the U.S. White House Women’s Business Council. •Board member of Chicago’s Northwestern Hospital Foundation. •Board member of the Chicago Shakespeare Theater. •Board member of the Chicago Urban League. | | | Other Public Company Board Experience: •Director of Deere & Company since 2015. •Director of OGE Energy Corp. since 2013. •Director of Wintrust Financial Corporation from 2012 to 2019. •Director of ACCO Brands Corporation from 2010 to 2015. | | | Key Director Qualifications and Board Contributions: •Ms. Talton has extensive experience in executive leadership roles within the information technology system and cybersecurity industries, providing her with a valuable perspective on Sysco’s business technology initiatives and the Board’s approach to privacy and cybersecurity risk oversight. This experience is particularly impactful in Ms. Talton’s role as Chair of Sysco’s Technology Committee. •Ms. Talton has served as an independent director for multiple public companies since 2010, which has provided her with extensive experience in executive compensation, corporate governance, risk management and audit and finance matters. |
NOMINEES FOR ELECTION AS DIRECTORS
How to Contact the Board Stockholders and other interested parties may communicate with the Chair of the Board, the Lead Independent Director, the independent directors as a group, and the other individual members of the Board by confidential online submission or by mail. All appropriate correspondence will be delivered to the parties to whom they are addressed. Items unrelated to the duties and responsibilities of the Board, such as product inquiries and complaints, job inquiries, business solicitations, and junk mail will not be forwarded. You may access the form to communicate by confidential online submission on Sysco’s website at www.sysco.com under “Investors — Corporate Governance — Contact the Board.” You may contact any of our directors by mail in care of the Corporate Secretary, Sysco Corporation, 1390 Enclave Parkway, Houston, Texas 77077.
NOMINEES FOR ELECTION AS DIRECTORS
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Semler Brossy Consulting Group LLC (“Semler Brossy”) advised the Governance Committee with respect to non- employee director compensation. At the Governance Committee’s request, Semler Brossy provided data regarding the amounts and types of compensation paid to non-employee directors at the companies in Sysco’s peer group and identified trends in director compensation. All decisions regarding non- employee director compensation are recommended by the Governance Committee and approved by the Board. In addition to providing background information and written materials, Semler Brossy representatives attended meetings when the Chair of the Governance Committee believed their expertise would be beneficial to the committee’s discussions. Sysco uses a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board. Directors who are also Sysco employees, such as Mr. Hourican, do not receive additional compensation for serving on the Board or any of its committees. Non-employee directors receive the following amounts: •Annual cash retainer — $110,000, paid in quarterly installments; •Additional cash retainer for committee chairs (paid in quarterly installments): •Audit Committee — $30,000; •CLD Committee — $20,000; •Governance Committee — $20,000; •Sustainability Committee — $20,000; and •Technology Committee — $20,000; •Annual grant of restricted stock — valued at $205,000 and vests in full on the first anniversary of the grant date; •Lead Independent Director additional cash retainer - $100,000; and •Chair of the Board additional cash retainer — $250,000 (paid in quarterly installments). Mr. Hourican did not receive separate compensation for his service as Chair of the Board in fiscal year 2024. See “Equity- Based Awards to Non-Employee Directors” below for a description of the plan under which the restricted stock was granted, and the “Fiscal Year 2024 Director Compensation” table below for detailed compensation information for fiscal year 2024 for each person who served as a non-employee director. Reimbursement of Expenses Non-employee directors are entitled to reimbursement of expenses related to their service as a director, including committee participation or special assignments. Travel reimbursements may include reimbursement of a portion of the cost of non-commercial air travel in connection with Sysco business, subject to specified maximums. Non-employee directors may not be reimbursed for amounts related to the purchase price of an aircraft or fractional interest in an aircraft, and any portion of the reimbursement that relates to insurance, maintenance and other non-incremental costs is subject to an annual cap. Non-employee directors also receive discounts on products carried by the Company and its subsidiaries comparable to the discounts offered to all Sysco employees.
NON-EMPLOYEE DIRECTORS
NON-EMPLOYEE DIRECTORS As of September 16, 2024, the non-employee directors held shares of restricted stock and elected shares (as described below), all of which were issued under the Sysco Corporation 2018 Omnibus Incentive Plan, which we refer to as the “2018 Omnibus Incentive Plan.” Below is a description of the relevant provisions of the 2018 Omnibus Incentive Plan. Election to Receive a Portion of the Annual Retainer in Common Stock Under the 2018 Omnibus Incentive Plan, a non-employee director may elect to receive between 10% and 100% (in 10% increments) of his or her annual retainer fee, including any additional retainer paid to the Chair of the Board, Lead Independent Director and the committee chairs, in Common Stock rather than in cash. During fiscal year 2024, if a director made this election, on the date that we made each quarterly payment of the annual retainer fees, we credited the director’s stock account with the number of shares of Common Stock that the director could have purchased with the portion of the cash retainer that the director chose to receive in stock, assuming a purchase price equal to the closing price of a share of Common Stock on the last business day before that date. We refer to the shares credited in this manner as “elected shares.” The elected shares vest as soon as they are credited to the director’s account, but we do not issue them until the end of the calendar year. Annual Awards of Restricted Stock Pursuant to the 2018 Omnibus Incentive Plan, the Board may grant to non-employee directors, among other things, shares of restricted stock, in the amounts and on such terms as it determines, but no such grant may vest earlier than one year following the grant date. A restricted stock award is denominated in shares of Common Stock and is subject to transfer restrictions and the possibility of forfeiture. The equity grant to the non-employee directors for fiscal year 2024 was issued in November 2023. If a director leaves the Board after serving his or her term, or for any reason after reaching age 71, his or her restricted stock will remain outstanding and continue to vest as originally scheduled. All unvested restricted stock will automatically vest upon a director’s death. A director who ceases to serve as a director of Sysco under any other circumstances will forfeit his or her unvested restricted stock. Deferral of Shares A non-employee director may elect to defer receipt of any or all shares of Common Stock issued under the 2018 Omnibus Incentive Plan, whether such shares are to be issued as a grant of restricted stock or as elected shares. Generally, the receipt of Common Stock may be deferred until the earliest to occur of the death of the non-employee director, the date on which the non-employee director ceases to be a director of the Company, or a change of control of Sysco. All such deferral elections must be made in accordance with the terms and conditions set forth in the Sysco Corporation 2009 Board of Directors Stock Deferral Plan (the "2009 Stock Deferral Plan"). Change in Control Under the 2018 Omnibus Incentive Plan and the applicable grant agreements, any unvested awards of restricted stock will vest immediately upon the occurrence of certain terminations of service within the 24-month period following a specified change in control.
FISCAL YEAR 2024 DIRECTOR COMPENSATION
FISCAL YEAR 2024 DIRECTOR COMPENSATION The following table provides compensation information for fiscal year 2024 for each of our directors who served for any part of the fiscal year, other than Mr. Hourican, who did not receive any compensation for his fiscal year 2024 Board service, other than the compensation for services as an employee that is disclosed elsewhere in this Proxy Statement. See “Executive Compensation – Summary Compensation Table” below for details regarding the executive officer compensation earned by Mr. Hourican for fiscal year 2024:
FISCAL YEAR 2024 DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3)(4) | Non-Qualified Deferred Compensation Earnings ($)(5) | Other Compensation ($)(6) | Total ($) | | Daniel J. Brutto | 127,500 | 204,943 | — | — | 332,443 | | Francesca DeBiase(7) | 82,500 | 204,943 | — | — | 287,443 | | Ali Dibadj | 107,500 | 204,943 | — | — | 312,443 | | Larry C. Glasscock(8) | 147,500 | 204,943 | — | — | 352,443 | | Jill M. Golder | 107,500 | 204,943 | — | — | 312,443 | | Bradley M. Halverson | 136,250 | 204,943 | — | — | 341,193 | | John M. Hinshaw | 112,500 | 204,943 | — | — | 317,443 | | Hans-Joachim Koerber(9) | 52,500 | — | — | — | 52,500 | | Alison Kenney Paul | 127,500 | 204,943 | — | — | 332,443 | | Edward D. Shirley(10) | 357,500 | 204,943 | — | — | 562,443 | | Sheila G. Talton | 127,500 | 204,943 | — | — | 332,443 |
FISCAL YEAR 2024 DIRECTOR COMPENSATION
(1)Includes retainer fees, including any retainer fees for which the non-employee director has elected to receive shares of Common Stock in lieu of cash and fees for the fourth quarter of fiscal year 2024 that were paid at the beginning of fiscal year 2025. Although we credit shares to a director’s account each quarter, the elected shares are not actually issued until the end of the calendar year, unless the director’s service as a member of the Board terminates earlier. The number of shares of Common Stock actually credited to each non-employee director’s account in lieu of cash during fiscal year 2024, which are reported in the column entitled “Stock Awards” above, was as follows: 660 shares for Mr. Brutto; 1,468 shares for Mr. Dibadj; 1,109 shares for Mr. Glasscock; 375 shares for Dr. Koerber; 143 shares for Ms. Paul; and 1,280 shares for Mr. Shirley. Messrs. Halverson and Hinshaw and Mses. DeBiase, Golder and Talton did not elect to receive any shares in lieu of their cash retainer fees. Directors may choose to defer receipt of the elected shares described in this footnote under the 2009 Stock Deferral Plan. The number of elected shares of Common Stock deferred by each non-employee director during fiscal year 2024 (which are included in the elected shares described above) was as follows: Mr. Glasscock (1,109 shares). To the extent that cash dividends are paid on our Common Stock, each non-employee director also receives the equivalent amount of the cash dividend credited to his or her account with respect to all elected shares that are deferred. If the director has chosen to defer the receipt of any shares, such shares will be credited to the director’s account and issued on the earliest to occur of the “in-service” distribution date elected by the director (which will be at least one year following the end of the plan year in which the shares would otherwise have been distributed to the director), the death of the director, the date on which the director ceases to be a director of the Company, a change of control of Sysco, or the date on which the director applies and qualifies for a hardship withdrawal.
FISCAL YEAR 2024 DIRECTOR COMPENSATION
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FISCAL YEAR 2024 DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Fiscal Year 2024 Director Compensation (2)For fiscal year 2024, the Board, upon the recommendation of the Governance Committee, determined that it would grant approximately $205,000 in equity incentives to each of the non-employee directors. Therefore, on November 17, 2023, the Board granted to each of the non-employee directors 2,900 shares of restricted stock valued at $70.67 per share, the closing price of Common Stock on the NYSE on November 16, 2023. These awards were granted under the 2018 Omnibus Incentive Plan and vest in full on the first anniversary of the grant date. The amounts in this column reflect the grant date fair value of the awards computed in accordance with ASC 718, “Share-Based Compensation — Non-Employee Director Awards”. See Note 18 of the consolidated financial statements in Sysco’s Annual Report on Form 10-K for the fiscal year ended June 29, 2024, regarding assumptions underlying valuation of equity awards. The value of any elected shares is included in the column entitled “Fees Earned or Paid in Cash,” as described in footnote (1) above. See “Equity-Based Awards to Non- Employee Directors” above for a more detailed description. Although we credit elected shares to a director’s account each quarter, the shares are not actually issued until the end of the calendar year, unless the director’s service as a member of the Board of Directors terminates. Pursuant to the 2009 Stock Deferral Plan, non-employee directors may choose to defer receipt of the shares to be issued in connection with the annual restricted stock award. Messrs. Glasscock and Hinshaw and Ms. DeBiase deferred receipt of the 2,900 shares of restricted stock. To the extent that cash dividends are paid on our Common Stock, each non-employee director also receives the equivalent amount of the cash dividend credited to his or her account with respect to all deferred restricted stock awards in the form of stock units. A director may elect an “in-service” distribution date for deferrals that is at least one year following the end of the plan year in which the shares would otherwise have been distributed to the director. Otherwise, distributions occur upon the earlier of the death of the director, the date on which the director ceases to be a director of the Company, or a change of control of Sysco, unless the director applies and qualifies for a hardship withdrawal. (3)The aggregate number of unvested stock awards held by each director listed in the table above, as of June 29, 2024, was as follows, and none of the directors shown in the table had options outstanding as of June 29, 2024:
FISCAL YEAR 2024 DIRECTOR COMPENSATION
| | Aggregate Unvested Stock Awards Outstanding as of June 29, 2024 | | Daniel J. Brutto | 2,900 | | Francesca DeBiase | 2,900 | | Ali Dibadj | 2,900 | | Larry C. Glasscock | 2,900 | | Jill M. Golder | 2,900 | | Bradley M. Halverson | 2,900 | | John M. Hinshaw | 2,900 | | Hans-Joachim Koerber | — | | Alison Kenney Paul | 2,900 | | Edward D. Shirley | 2,900 | | Sheila G. Talton | 2,900 |
FISCAL YEAR 2024 DIRECTOR COMPENSATION
The unvested stock awards for each non-employee director listed in the table immediately above relate to restricted stock awards granted in November 2023 that vest in November 2024. (4)None of the directors shown in the table received option grants with respect to his or her service as an independent director during fiscal year 2024. (5)We do not provide a pension plan for the non-employee directors. (6)The total value of all perquisites and personal benefits received by each of the non-employee directors was less than $10,000. (7)Ms. DeBiase joined the Board on November 17, 2023. (8)Mr. Glasscock was elected Lead Independent Director effective April 30, 2024. (9)Dr. Koerber retired from the Board at the conclusion of Sysco’s Annual Meeting of Stockholders held on November 17, 2023. (10)Mr. Shirley resigned from the Board for health reasons effective April 30, 2024.
FISCAL YEAR 2024 DIRECTOR COMPENSATION
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FISCAL YEAR 2024 DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Certain Relationships and Related Person Transactions
AND DIRECTORS
(*)Less than 1% of outstanding shares. (1)Includes shares underlying options that are presently exercisable or will become exercisable within 60 days after September 16, 2024. Shares subject to options that are presently exercisable or will become exercisable within 60 days after September 16, 2024 are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, but are not deemed outstanding for purposes of computing the percentage ownership of any other persons. (2)Includes shares underlying RSUs that will vest and settle within 60 days after September 16, 2024 and are deemed outstanding for purposes of computing the percentage ownership of the person holding such RSUs, but are not deemed outstanding for purposes of computing the percentage ownership of any other persons. It is expected that approximately one-third of the shares underlying these RSUs will be withheld to pay taxes related to the RSUs as they vest and settle. (3)Applicable percentage of beneficial ownership at September 16, 2024 is based on 491,237,936 shares outstanding. (4)Includes shares that were elected to be received in lieu of non-employee director retainer fees during the first half of calendar 2024 under the 2018 Omnibus Incentive Plan. For Mr. Brutto, this includes 214 shares; for Mr. Dibadj, this includes 717 shares; and for Mr. Glasscock, this includes 591 shares. Unless the director has chosen to defer the shares under the 2009 Stock Deferral Plan, these shares will be issued on December 31, 2024 or within 60 days after a non-employee director ceases to be a director, whichever occurs first. Directors may choose to defer receipt of these shares related to director retainer fees, as well as shares awarded pursuant to restricted stock grants, and these deferred amounts are also included in this line item. To the extent cash dividends are paid on our Common Stock, each non- employee director also receives the equivalent amount of the cash dividend credited to his or her account with respect to all deferred restricted stock awards, and all elected shares that are deferred. The number of shares in each non-employee director’s deferred stock account, including related dividend equivalents, is as follows: Mr. Brutto (6,541), Ms. DeBiase (2,960); Mr. Dibadj (none); Mr. Glasscock (90,412); Ms. Golder (none); Mr. Halverson (none); Mr. Hinshaw (20,094); Mr. Marques (none); Ms. Paul (none); and Ms. Talton (12,985).
CERTAIN EQUITY AWARDS
CERTAIN EQUITY AWARDS The CLD Committee approves all equity award grants to our NEOs on or before the grant date, except to the extent the CLD Committee or the Board has delegated to management the authority to grant such awards to certain employees. The CLD Committee’s general practice is to complete its annual executive compensation review and determine performance goals and target compensation for our NEOs. Accordingly, annual equity awards are typically determined, reviewed and approved at the first CLD Committee meeting of the fiscal year. These grants are then made effective shortly thereafter during a scheduled open trading window. On occasion, the CLD Committee may grant equity awards outside of our annual grant cycle for new hires, promotions, recognition, retention or other purposes. While the CLD Committee has discretionary authority to grant equity awards to our NEOs outside of the cycle described above, the CLD Committee does not take into account material non-public information when determining the timing or terms of equity awards, nor do we time disclosure of material non-public information for the purpose of affecting the value of executive compensation. During fiscal year 2024, the Company did not grant stock options (or similar awards) to any NEO during any period beginning four business days before and ending one business day after the filing of any Company periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of any Company Form 8-K that disclosed any material non- public information.
EQUITY COMPENSATION
EQUITY COMPENSATION
LONG-TERM
LONG-TERM
INTERESTS
| WHAT WE DO | | | | Pay for performance – Link a significant percentage of total compensation to company-wide and individual performance. | | | Annual “Say on Pay” – Seek an advisory vote from stockholders on our executive compensation programs on annual basis. | | | Independent compensation consultant – Selection and engagement by the CLD Committee of an independent compensation consultant to advise on our executive compensation programs. | | | Risk assessment – Perform an annual risk assessment of our executive compensation programs to identify practices that may encourage employees to take unnecessary or excessive risk. | | | Clawback policies – Recover erroneously awarded incentive-based compensation to NEOs following a financial restatement or for NEOs who engage in misconduct that results in either material financial or reputational harm to Sysco. | | | Double trigger change-in-control – LTIP awards include a double-trigger that requires both a change in control and an involuntary termination within 24 months for accelerated vesting of awards. | | | Robust Stock ownership guidelines – Require stock ownership equal to 7x base salary for CEO, 4x base salary for executive vice presidents, 2x base salary for senior vice presidents and 5x annual cash retainer for our directors. | | | Limited trading windows – Require our executive officers to conduct all transactions in shares of Sysco Common Stock through pre-approved Rule 10b5-1 trading plans. |
INTERESTS
| WHAT WE DON’T DO | | | | No repricing or exchange of underwater stock options without stockholder approval. | | | No excise tax gross ups upon a change in control. | | | No unearned dividends paid. Pay dividend equivalents on our PSUs and RSUs only if and when the underlying awards are earned and delivered. | | | No excessive perquisites. | | | No stock hedging or pledging by our NEOs, directors, or other specified “insiders.” |
HOW EXECUTIVE PAY IS ESTABLISHED
HOW EXECUTIVE PAY IS ESTABLISHED The CLD Committee, composed exclusively of independent, non-employee directors, possesses the sole authority and responsibility to determine all aspects of executive compensation for our senior officers, including the NEOs. Working closely with its independent compensation consultant, the CLD Committee is dedicated to ensuring that our executive compensation programs are aligned with our pay-for- performance philosophy while enhancing stockholder value. During fiscal year 2024, the CLD Committee decided to issue a Request for Proposal ("RFP") process to solicit bids for independent compensation consultant services. By soliciting proposals, the CLD Committee aimed to identify a consultant whose expertise resonated with the core principles of our executive compensation programs. The RFP process evaluated the consultants on experience, cost-effectiveness, methodology, and actionable results. The CLD Committee's current consultant, Semler Brossy, was invited to participate in the RFP process along with several other independent compensation consultants. After a thorough review process, the CLD Committee renewed its engagement with Semler Brossy. In formulating Sysco’s pay-for-performance policies, the CLD Committee collaborates with its independent compensation consultant and members of our Human Resources ("HR") department to evaluate base salaries and the structure of annual and long-term incentive awards compared against a carefully selected executive compensation peer group. Although the CLD Committee uses the median compensation levels of this peer group as a reference point during its decision-making process, it does not aim for a specific market position for any individual compensation element. Instead, the CLD Committee takes a more holistic approach by considering a range of factors, including role, relevant experience, and current and expected contributions to Sysco.
HOW EXECUTIVE PAY IS ESTABLISHED
| Independent Compensation Consultant | Semler Brossy serves as an independent advisor to the CLD Committee, offering expert insights into the evaluation of our executive compensation programs and policies. Their assistance extends to the redesign and enhancement of various program components whenever deemed necessary. The CLD Committee has conducted a thorough review of Semler Brossy’s independence and confirmed that Semler Brossy operates independently from Sysco with no conflicts of interest arising from their advisory services provided to the CLD Committee. Throughout fiscal year 2024, representatives from Semler Brossy participated in six CLD Committee meetings, providing valuable input on a range of executive compensation decisions for both fiscal years 2024 and 2025. Their contributions included guidance on executive compensation peer group selection, the structuring of annual and long-term incentive plans, and the provision of market data concerning compensation for the CEO and other NEOs. Specifically, Semler Brossy undertook several critical evaluations and analyses, including: •Reviewed the ongoing relevance and suitability of the peer group utilized for benchmarking executive compensation, as detailed in the section titled “Executive Compensation Peer Group;” •In June 2023 and June 2024, prepared comprehensive studies that compared base salaries and estimated total direct compensation for our NEOs against those in the peer group, ensuring that our executive compensation remains competitive and aligned with industry standards; •Conducted an in-depth analysis of our pay-for-performance metrics, assessing the correlation between the actual realizable pay for our NEOs and the TSR relative to that of the peer group. This analysis is critical for validating the effectiveness of our executive compensation structure in driving performance; •Compared our overall equity compensation practices with those of the peer group; •Offered strategic advice on the design of incentive plans, including design changes aimed at addressing stockholder feedback and aligning incentives with long-term stockholder interests; and •Provided ongoing updates regarding changes in regulatory requirements and governance standards, keeping the CLD Committee informed about the evolving landscape that could impact our executive compensation practices. | | Sysco’s Human Resources | Sysco’s Executive Vice President and Chief Human Resources Officer along with HR play a crucial role in delivering additional analysis and support regarding the executive compensation of our NEOs. Sysco’s HR leadership supports the CLD Committee in making well-informed decisions regarding executive compensation, ensuring alignment with both company performance and internal equity considerations. Their contributions included the following key responsibilities: •Assisted the CEO in formulating initial recommendations for base salary ranges, the design of annual and long-term incentive programs, and the establishment of target award levels for the NEOs, other than the CEO. This collaborative effort ensures that compensation structures are competitive and aligned with organizational goals; •Provided the CLD Committee with projections of expected payment levels for annual and long-term incentive awards. These projections were based on anticipated performance outcomes relative to established performance measures, allowing for informed decision-making; and •Supplied the CLD Committee with data that evaluates the internal equity of compensation awarded within Sysco. This analysis helped ensure that executive compensation practices are fair and equitable across the organization, fostering a culture of transparency and trust amongst employees. |
HOW EXECUTIVE PAY IS ESTABLISHED
Executive Compensation Peer Group The CLD Committee routinely assesses the appropriateness of the executive compensation peer group by utilizing key criteria such as revenue, market capitalization, and earnings before interest and taxes. Based upon both quantitative and qualitative evaluations, and with insight from Semler Brossy, the CLD Committee determined that relevant companies for executive compensation include: (i) two U.S. public company foodservice distribution competitors; and (ii) companies in other sectors that share a similar business size and complexity, competing with us for top executive talent. Specifically, we focus on companies in the logistics, distribution, consumer products, and retail industries that fall within a defined range of Sysco’s revenue and market capitalization. For fiscal year 2024, the CLD Committee approved the addition of Dollar General Corporation, Loblaw Companies and Yum! Brands, Inc.
HOW EXECUTIVE PAY IS ESTABLISHED
| Fiscal Year 2024 Peer Group | | | | | •Aramark •Archer Daniels Midland Company •Bunge Global SA •Costco Wholesale Corp. •Dollar General Corporation | •Dollar Tree, Inc. •FedEx Corp. •Kimberly-Clark Corporation •The Kroger Co. •Loblaw Companies | •Lowe’s Cos. Inc. •Performance Food Group •Target Corp. •Tyson Foods, Inc. •United Parcel Service Inc. | •US Foods Holding Corp. •Walgreens Boots Alliance, Inc. •Yum! Brands, Inc. |
NEOs other than CEO
(1)Base salary effective August 29, 2021. (2)Base salary effective August 28, 2022, except for Mr. Cheung, whose base salary was effective on his start date of April 17, 2023. (3)Base salary effective August 27, 2023. (4)Messrs. Bertrand, Peck and Phillips' base salaries were increased effective September 1, 2023. For discussion on base salary adjustments, refer to the “Compensation Arrangements for Messrs. Bertrand, Peck and Phillips” section above. Annual Incentive Plan We believe that the AIP component of the total compensation of our NEOs serves as a direct connection between recent performance and compensation. This enables the CLD Committee to adjust an NEOs total compensation in accordance with the achievement of financial measures and strategic business objectives aligned with our overall business strategy for that fiscal year. In July 2023, the CLD Committee established the AIP for fiscal year 2024 (the “2024 AIP”) to incentivize and reward our NEOs for meeting annual financial targets, delivering on our Recipe for Growth strategic priorities, and executing on our responsible growth initiatives. The AIP is structured to reward our NEOs when they meet the defined metrics within each of these categories, ensuring competitive annual incentive payments. For the NEOs, AIP targets, expressed as a percentage of base salary, did not change for fiscal year 2024 with the exception of Mr. Bertrand as outlined in the "Compensation Arrangements for Messrs. Bertrand, Peck and Phillips" section above and for Mr. Hourican. However, the dollar value of the 2024 target award opportunity increased from fiscal year 2023 as a result of the base salary increases described above. The following table shows the fiscal year 2024 AIP target opportunity for each of the NEOs.
NEOs other than CEO
| Named Executive Officer | AIP Target (% of Base Salary) | AIP Target Opportunity(1) | | Kevin P. Hourican | 175%(2) | $2,349,038 | | Kenny K. Cheung | 100% | 784,462 | | Greg D. Bertrand | 150%(3) | 1,205,947 | | Thomas R. Peck, Jr. | 100% | 726,642 | | Ronald L. Phillips | 100% | 682,631 |
NEOs other than CEO
COMPENSATION DISCUSSION AND ANALYSIS What We Paid At the beginning of fiscal year 2024, the CLD Committee established specific performance metrics for the AIP, along with performance targets for the threshold, target and maximum payout levels. The NEOs were eligible to receive incentive payments based on each performance metric, which were measured independently from the other metrics throughout the fiscal year. For the financial measures, the threshold levels for the 2024 AIP were set above the actual financial results for fiscal year 2023, and were adjusted sufficiently to deliver value to our stockholders. Target performance levels were set to the anticipated level of performance based upon our internal projections and established in the context of our announced expectations for financial performance while maximum performance levels were set at aspirational levels. In developing the performance targets, the CLD Committee worked closely with Semler Brossy and members of HR, taking into account industry benchmarks, historical performance data, and market expectations. The CLD Committee concluded that the AIP performance targets should strike a balance between being achievable, measurable, and results-oriented to encourage desired behaviors and aid in talent retention, while also being challenging enough to meet stockholder expectations and support the execution of our Recipe for Growth strategic initiatives. The CLD Committee established the 2024 AIP with the following performance metrics, weighting and payout opportunities:
Financial Measures
Financial Measures In the formulation of the 2024 AIP, the CLD Committee made a strategic decision to place a greater emphasis on Sysco’s financial performance, with 70% of the AIP target opportunity tied to financial measures. The CLD Committee recognized that emphasizing financial performance is essential for maximizing stockholder value. Also, financial measures provide a robust framework for benchmarking Sysco's performance against our executive compensation peer group. This benchmarking process allows the CLD Committee to gain valuable insight into how Sysco is positioned within the broader market. The CLD Committee believes that this enhanced focus on financial performance within the AIP will incentivize our NEOs to achieve and surpass financial objectives and continue to contribute to the long-term sustainability and growth of Sysco.
Financial Measures
COMPENSATION DISCUSSION AND ANALYSIS What We Paid The table set forth below shows the threshold, target and maximum levels established for each financial measure, as well as the actual result. For each financial measure, achievement of the threshold, target and maximum amounts would result in the payment of 50%, 100% and 200%, respectively, of the target payout level.
Diverse Candidate Pool
Diverse Candidate Pool Sysco remains deeply committed to creating a workplace where everyone feels welcomed and respected, regardless of their race or ethnicity, sexual orientation, religious affiliation or any other dimension of diversity. In short, everyone is welcome at our table. We are driven to ensure our workforce reflects the customers and communities we serve. The CLD Committee acknowledged that having a diverse candidate pool would help to achieve a more diverse workforce by increasing the number of diverse candidates. Also, expanding the candidate pool allows us to identify more candidates with a broader range of skills and abilities than might otherwise be identified when relying on more traditional recruitment strategies. The performance measures set forth below show the threshold, target and maximum levels established for each responsible growth SBO, together with the actual result. For each responsible growth measure, except for renewable energy that had a maximum payout of 100%, achievement of the threshold, target and maximum amounts would result in the payment of 50%, 100% and 200%, respectively, of the target payout level. For fiscal year 2024 AIP, the CLD Committee established the following responsible growth goals and payouts:
Diverse Candidate Pool
| Performance Measures | Weight | Percentage of Target | Weighted Payout | | Financial Measures | | | | | Operating Income | 40% | 88.8% | 35.5% | | Sales Revenue | 30% | 80.3% | 24.1% | | Recipe For Growth SBOs | | | | | Digital | 10% | 125% | 12.5% | | Products and Solutions | 10% | 110% | 11.0% |
Diverse Candidate Pool
| Performance Measures | Weight | Percentage of Target | Weighted Payout | | Responsible Growth SBOs | | | | | Carbon Reduction | 6% | 118.3%(1) | 7.1% | | Diverse Candidate Pool | 4% | 109.1% | 4.4% | | Fiscal Year 2024 Payout | | | 94.6% |
Diverse Candidate Pool
| Named Executive Officer | AIP Target Opportunity | Fiscal Year 2024 Achievement | Individual Modifier | Fiscal Year 2024 AIP Payment(1) | | Kevin P. Hourican | $2,349,038 | 94.6% | 1.00 | $2,221,000 | | Kenny K. Cheung | 784,462 | 94.6% | 1.00 | 742,000 | | Greg D. Bertrand | 1,205,947 | 94.6% | 1.00 | 1,141,000 | | Thomas R. Peck, Jr. | 726,642 | 94.6% | 1.00 | 687,000 | | Ronald L. Phillips | 682,631 | 94.6% | 1.00 | 646,000 |
Diverse Candidate Pool
(1)Due to rounding, the AIP Target Opportunity and Fiscal Year 2024 Achievement do not add precisely to the Fiscal Year 2024 AIP Payment. Long-term Incentive Plan Each year, we provide equity-based, long-term incentive compensation to our NEOs through the 2018 Omnibus Incentive Plan. These long-term incentives are specifically designed to offer competitive incentive opportunities that align with the compensation practices of our executive compensation peer group, while also reflecting our overall executive compensation philosophy. In July 2023, the CLD Committee approved the fiscal year 2024 Long-Term Incentive Program awards (the “Fiscal Year 2024 LTIP Awards”) for participants in the management incentive program, which included the NEOs. For discussion on Messrs. Bertrand, Peck and Phillips' Fiscal Year 2024 LTIP Awards, refer to the “Compensation Arrangements for Messrs. Bertrand, Peck and Phillips" section above. For each NEO, a target LTIP award was established as a percentage of their respective base salaries. In determining these target amounts, the CLD Committee engaged in discussions with Semler Brossy as well as members of management and HR. They carefully considered various factors, including external industry benchmarks, internal pay equity and market expectations. The Fiscal Year 2024 LTIP Awards were structured to include a diverse mix of equity components, PSUs (50% of target), RSUs (30% of target) and stock options (20% of target). This balanced approach is intended to align with our compensation philosophy and also incentivize our NEOs to drive long-term value creation for our stockholders. Fiscal Year 2024 LTIP Components
Diverse Candidate Pool
| Named Executive Officer | Target LTIP Award | Target LTIP Award (% of base salary) | PSUs | RSUs | Stock Options | | Kevin P. Hourican | $12,000,000 | 889%(1) | $6,000,000 | $3,600,000 | $2,400,000 | | Kenny K. Cheung | 2,561,000 | 325% | 1,280,500 | 768,300 | 512,200 | | Greg D. Bertrand | 2,544,750 | 325% | 1,272,375 | 763,425 | 508,950 | | Thomas R. Peck, Jr. | 2,130,000 | 300% | 1,065,000 | 639,000 | 426,000 | | Ronald L. Phillips | 1,812,250 | 275% | 906,125 | 543,675 | 362,450 |
Diverse Candidate Pool
(1)Mr. Hourican’s target LTIP Award opportunity increased from 846% to 889% for fiscal year 2024 due to his: (a) increased tenure in role; (b) performance in role; and (c) pay positioning compared to the market. To determine the number of stock options to be awarded to the NEOs as part of their Fiscal Year 2024 LTIP Award, the CLD Committee employed the Black-Scholes pricing model. This model is widely recognized for its effectiveness in valuing stock options based on various factors, including stock price volatility, time until expiration, and the risk-free interest rate. For the Fiscal Year 2024 LTIP Awards, the stock options granted were valued at $19.22 per option. Additionally, the grant price for PSUs and RSUs was set based on the ten- trading-day average closing price of Sysco's Common Stock immediately preceding the grant date of the Fiscal Year 2024 LTIP Awards. This average closing price was determined to be $74.85 per share. PSUs The PSUs constituted 50% of the total value attributed to the Fiscal Year 2024 LTIP Awards. The CLD Committee prefers granting PSUs as they create a robust incentive for the NEOs to enhance stockholder value and drive Sysco’s stock price upward. These PSUs provide the NEOs the opportunity to receive shares of Common Stock based on performance metrics evaluated over a three-year performance period. The performance assessment involves three variably weighted performance metrics, ensuring a balanced approach to measuring NEO effectiveness. At the outset of the three-year performance period, the CLD Committee established specific performance goals, including threshold, target, and maximum levels for each of the performance metrics. Progress against these goals will be evaluated at the conclusion of each fiscal year, with the final payout for the Fiscal Year 2024 LTIP Awards reflecting the average performance outcomes over the entire three-year performance period. For each financial measure, achieving the threshold, target or maximum levels will yield payouts equivalent to 50%, 100% and 200% of the target payout level, respectively. PSUs are designed to vest at the end of the three-year performance period following a cliff vesting structure. The CLD Committee determined that a three-year performance period is appropriate as it effectively measures the impact of NEO performance on stockholder value. During the performance period, PSUs will accrue dividend equivalents as of each dividend payment date and will be paid when, and only to the extent that, the related PSUs are ultimately earned. For fiscal year 2024, the CLD Committee established that the PSUs granted will be contingent upon the achievement of three key performance metrics with performance assessed from fiscal years 2024 through 2026. •Earnings Per Share: 37.5% of the PSUs will vest based on the achievement of targeted incremental growth in Sysco's adjusted earnings per share. •Return on Invested Capital: 37.5% of the PSUs will vest based on the achievement of targeted return on invested capital. •Revenue: 25% of the PSUs will vested based on the achievement of targeted revenue growth. Once the CLD Committee evaluates the extent of achievement for the PSU metrics, the total number of shares earned by each NEO will be subject to an adjustment based on Sysco’s TSR during the three-year performance period as compared to performance of the S&P 500 companies. This adjustment will be applied to the target number of shares awarded, potentially decreasing the total number of shares received by 25% for underperformance relative to TSR expectations, or increasing the total number of shares received by 25% of target for superior performance based on the table below. However, the total shares awarded cannot exceed 200% of an NEO's PSU target opportunity. If Sysco’s TSR is negative on an absolute basis at the end of the three-year performance period, the maximum number of PSUs that can be earned will be capped at 100% of target, irrespective of whether the Company’s Relative TSR percentile is ranked at or above the 55th percentile. The CLD Committee believes the TSR modifier serves as a valuable indicator for evaluating success in delivering value to stockholders because it measures performance against alternative investment opportunities available to stockholders. Furthermore, the choice of the S&P 500 as a benchmark is intentional; the companies within this index are comparable in size to Sysco and provide a broad representation of industry peers, ensuring that the outcomes are not disproportionately influenced by any single company. This comprehensive approach underscores the CLD Committee's commitment to aligning executive compensation with long-term stockholder interests and performance outcomes.
Diverse Candidate Pool
| | Performance | TSR Payout Modifier(1) | | Threshold | 25th Percentile | -25% | | Target | 50th – 55th Percentile | 0% (no modifier) | | Maximum | 75th Percentile | +25% |
Diverse Candidate Pool
(1)The payout modifier for performance between the 25th and 75th percentiles will be interpolated on a straight-line basis. RSUs The RSUs comprised 30% of the overall value of the Fiscal Year 2024 LTIP Awards. Each RSU grants the holder to receive one share of Common Stock upon vesting. Similar to stock options, the RSUs will vest ratably over a three year period. The vesting of these RSUs is also subject to the NEO’s ongoing employment with Sysco through the applicable vesting dates. The number of RSUs granted was determined based on a 10-day average closing price of Common Stock leading up to the date of the grant. Furthermore, dividend equivalents will be paid out in cash whenever the underlying RSUs vest, providing an additional incentive tied to the performance of Common Stock. Stock Options Stock options account for 20% of the total value of the Fiscal Year 2024 LTIP Awards. These stock options come with a 10- year expiration period and are designed to vest ratably over three-year period, starting from the first anniversary of the Fiscal Year 2024 LTIP Award date. It is important to note that the vesting of these stock options is contingent upon continued 0 employment of the NEO with Sysco through the respective vesting date. The exercise price for the stock options is set at $73.53 which corresponds to the closing price of Common Stock on August 9, 2023, the last trading day before the Fiscal 2024 LTIP Award date. Payout under Fiscal Year 2022 PSU Awards In July 2021, the CLD Committee approved PSU awards to eligible NEOs pursuant to the 2018 Omnibus Incentive Plan. Each of these PSUs represented an NEO’s right to receive one share of Common Stock, at target levels, but the ultimate number of shares of Common Stock earned was determined based on performance during the three-year performance period (i.e., fiscal year 2022 through fiscal year 2024). The performance measures for the fiscal year 2022 PSU awards were: •Earnings Per Share: The achievement of targeted incremental growth in Sysco’s earnings per share, representing 50% of the target PSU opportunity; and •Market Share Growth: The achievement of targeted market share growth in U.S. markets (measured by total U.S. sales), representing 50% of the target PSU opportunity.
Diverse Candidate Pool
| Performance Measures | Weight (%) | Threshold (50% payout) | Target (100% payout) | Maximum (200% payout) | Results | Payout | | Earnings Per Share(1) | 50% | $3.72 | $4.65 | $5.58 | $4.31 | 63.5% | | Market Share Growth(2) | 50% | 1.15x | 1.35x | 1.55x | 1.42x | 133.3% |
Diverse Candidate Pool
(1)Earnings Per Share (calculated on an adjusted basis) represents a non-GAAP measure; see reconciliation in Annex I - Non-GAAP Reconciliations. (2)The market share growth percentages for each fiscal year in the performance period were averaged to yield an average market share growth measure for the three year performance period. Further, the total number of shares earned by each NEO was subject to adjustment based on Sysco’s TSR during the performance period as compared to the S&P 500 companies. This adjustment was applied to the target number of shares granted to each participant and had a range from decreasing the total number of shares received by 25% of target (for relative TSR below expectations) to increasing the total number of shares received by 25% of target (for superior relative TSR) based on the table below.
Diverse Candidate Pool
| | Threshold | Target | Maximum | Results | | Relative TSR Percentile Rank Versus S&P 500 | 35th Percentile | 50th - 55th Percentile | 75th Percentile | 36.7th Percentile | | Payout Modifier | -25% | 0% (No modifier) | +25% | (22.2%) |
Diverse Candidate Pool
For the performance period, the sum of the weighted performance measure payouts with the relative TSR modifier yielded an aggregate PSU payout of 76.2% of the number of PSUs held by the NEOs.
FISCAL YEAR 2025 EXECUTIVE COMPENSATION
FISCAL YEAR 2025 EXECUTIVE COMPENSATION Annual Incentive Plan On July 31, 2024, the CLD Committee approved AIP targets for executive officers, including our NEOs, for fiscal year 2025 and established the performance metrics. Incentive payments earned under the AIP will be based on the following components: (i) 70% on financial measures (i.e., 50% tied to operating income and 20% tied to sales revenue); and (ii) 30% on SBOs (i.e., 10% tied to U.S. broadline ("USBL") cost per piece, 10% tied to local case growth and 10% measured by employee engagement). The AIP components offer a payout range from 0% to 200%, based on the achieved performance compared to the pre-established targets. Overall, the maximum fiscal year 2025 incentive opportunity under the AIP is 200% of an NEO’s target opportunity, with adjustments based on each NEOs’ individual performance. The AIP payment for each component will be calculated based on performance compared to the targets. If a component falls below the threshold level, no payment will be made for that component. The overall payout will be adjusted based on each NEO’s performance against their individual objectives for fiscal year 2025. This adjustment, determined by the CLD Committee, can range from reducing the AIP payout to zero for performance well below target, to increasing the total payout to no more than the maximum fiscal year 2025 incentive opportunity of 200%. The adjusted incentive payment for the AIP will be paid at the end of fiscal year 2025. Long-Term Incentive Plan The CLD Committee also approved our fiscal year 2025 long- term incentive plan awards to be issued to the NEOs pursuant to the 2018 Omnibus Incentive Plan. The Company’s fiscal year 2025 LTIP awards will consist of PSUs, RSUs and stock options. For fiscal year 2025, PSUs with a three-year performance period will represent 50% of the target LTIP opportunity, with RSUs representing 30% and stock options representing the remaining 20% of the target LTIP opportunity. PSUs. The PSUs provide the opportunity for participants to receive shares of Common Stock based on performance aggregated over the three fiscal year performance period with respect to the following performance measures established by the CLD Committee, subject to a modifier tied to Sysco's TSR: •Earnings Per Share: The achievement of targeted incremental growth in Sysco’s adjusted earnings per share, representing 37.5% of the target PSU opportunity; •Return on Invested Capital: The achievement of targeted return on invested capital growth, representing 37.5% of the target PSU opportunity; and •Revenue Growth: The achievement of targeted revenue growth representing 25% of the target PSU opportunity. The number of shares, if any, earned with respect to each of the performance measures will be calculated based on performance (as compared to such measures) and awarded to the NEO independently from the other measures. Further, the total number of shares earned by each NEO will be subject to adjustment based on Sysco’s TSR during the performance period as compared to the S&P 500 companies. This adjustment will be applied to the target number of shares granted to each participant and will range from decreasing the total number of shares received by 25% of target (for relative TSR below expectations) to increasing the total number of shares received by 25% of target (for superior relative TSR). Each PSU granted to participants represents the right to receive one share of Common Stock based on target performance, but the ultimate number of shares of Common Stock to be earned with respect to a participant’s PSUs will be determined at the end of the three-year performance period and could range from 0% to 200% of the target number of PSUs offered to the participant. Dividend equivalents accrue during the performance period and are paid either in shares or in cash, in the discretion of the CLD Committee, based on the number of PSUs earned following certification of the Company’s performance. RSUs. Each RSU represents the right to receive one share of Common Stock, and the RSUs vest in three equal, annual installments. Stock Options. The stock options have a 10-year term and vest in three equal, annual installments.
STOCK-RELATED POLICIES
These thresholds established within the stock ownership guidelines are thoughtfully calibrated based on the NEO's respective salaries and level of responsibility. To further validate the effectiveness of these stock ownership guidelines, Semler Brossy has conducted a review and affirmed that our stock ownership expectations position us as a leader among our executive compensation peer group. To monitor adherence to these guidelines, the Board receives regular updates on the stock ownership status of each NEO during all regularly scheduled meetings. This oversight ensures that compliance with the holding requirements is maintained. Should an NEO fail to meet the requisite ownership level, they are obligated to retain a minimum of 25% of the net shares obtained through the exercise of stock options, as well as 100% of the net shares acquired from the vesting of RSUs and PSUs. This policy is designed to further incentivize NEOs to build and maintain their investment in Sysco. Trading Restrictions Sysco has adopted the Securities Trading Policy (“Trading Policy”) to promote compliance with insider trading laws, rules and regulations, and any listing standards. The Trading Policy prohibits trading in Sysco securities while in possession of material non‐public information (“MNPI”). The Trading Policy applies to all directors, officers and employees of the Company (including its subsidiaries), anyone who lives in their household and family members whose transactions in Sysco securities are directed by (or subject to the influence or control of) any such director, officer or employee. This Trading Policy also applies to any corporation, partnership, trust or other legal entity controlled by a director, officer or employee of the Company and any contractors or consultants who may have access to MNPI concerning Sysco. In addition, the Trading Policy prohibits our directors, executive officers, and certain other employees from buying or selling company securities during certain periods, referred to as “Blackout Periods,” and from entering into certain hedging transactions. In accordance with the Trading Policy, all executive officers, including NEOs are required to conduct purchases and sales of Common Stock exclusively through a Rule 10b5-1 trading plan. This plan can only be adopted during an approved quarterly trading window and when the NEO is not in possession of material non-public information, with certain limited exceptions, including “net exercises” of stock options that do not involve an open market sale of shares. The quarterly trading windows are strategically structured to open two business days following Sysco’s release of our quarterly earnings report. These windows typically remain open for two weeks, closing prior to the last day of each fiscal quarter, thus providing a defined timeframe for executive officer trading activities. Before any executive officer can adopt a Rule 10b5-1 trading plan or engage in other transactions involving Common Stock, pre-approval is required from a designated committee. This committee consists of the Chair of the Board, the Chair of the Governance Committee, and the Chief Legal Officer. The pre- approval process includes a thorough review of the proposed transaction’s amount and timing, as well as a confirmation that the executive officer does not possess any material non-public information concerning Sysco at the time the plan is adopted. Additionally, any trades executed under a Rule 10b5-1 trading plan may not commence until after the “cooling off” period mandated by SEC Rule 10b5-1 has elapsed. This cooling-off period is designed to further mitigate any potential concerns regarding insider trading. For any proposed transaction involving a director, prior approval from the Chief Legal Officer is also required, ensuring a comprehensive oversight mechanism is in place for all trading activities by executive officers and directors. The foregoing summary of the Trading Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Sysco Securities Trading Policy, a copy of which can be found as an exhibit to our Annual Report on Form 10-K for the fiscal year ended June 29, 2024.
AND OTHER INFORMATION
AND OTHER INFORMATION Employment and Severance Agreements Each of our NEOs is entitled to receive specific compensation under certain circumstances following the termination of their employment. While a significant portion of their compensation is tied to performance metrics that reflect both the achievement of company-wide goals and individual performance targets, the CLD Committee has determined that offering severance and change in control benefits is appropriate to: (i) attract and retain executive talent in a highly competitive market; (ii) avoid lengthy and contentious negotiations or disputes; and (iii) ensure, in the event of an actual or threatened change in control of Sysco, that personal concerns do not interfere with strategic decisions that may be in the best interests of our stockholders. The severance benefits outlined below are contingent upon the NEO: (i) executing a legally enforceable general release and waiver of claims in favor of Sysco; and (ii) complying with the Protective Covenants Agreement, which includes stipulations regarding confidentiality, non-disparagement, and restrictions on competition and solicitation of Sysco employees, vendors, and customers for a period of two years following the NEO's departure from Sysco. Mr. Hourican Pursuant to the letter agreement dated January 10, 2020, between Sysco and Mr. Hourican (the “CEO Offer Letter”), Mr. Hourican is eligible to receive severance payments and benefits in the event of his employment being terminated without “Cause” or he resigns for “Good Reason” (as such terms are defined in the CEO Offer Letter). Non-Change in Control Termination. If Mr. Hourican’s termination of employment does not occur upon, or within two years following, the effectiveness of a “Change in Control” (as defined in the 2018 Omnibus Incentive Plan), Mr. Hourican will be entitled to receive the following benefits: •An amount equal to two times the sum of his annual base salary and his target AIP opportunity; •A pro-rata award under the AIP for the performance period in which the termination is effective, calculated based on the actual attainment of Sysco's performance goals for such performance period. This award will be payable at the time such incentives are paid to other Sysco executives; and •Continuation of health, dental, and vision coverage at active employee rates for 24 months following his termination date. Change in Control Termination. If Mr. Hourican’s termination occurs as a result of, or within two years following, a Change in Control, Mr. Hourican will be entitled to the following benefits: •An amount equal to three times the sum of his annual base salary and his target AIP opportunity; •A pro-rata award under the AIP for the performance period in which the termination is effective, calculated based on the actual attainment of Sysco's performance goals for such performance period. This award will be payable at the time such incentives are paid to other Sysco executives; and •Continuation of health, dental, and vision coverage continuation at active employee rates for 36 months following his termination date. Messrs. Bertrand, Cheung, Peck, and Phillips The CLD Committee adopted, effective July 2020, forms of severance agreements for executive vice presidents (the “Severance Agreements”) to specify the benefits to which executive vice presidents will be entitled to receive. Non-Change in Control Termination. If an NEO’s employment is terminated without “Cause” or such NEO resigns for “Good Reason” (as such terms are defined in the Severance Agreements), and the termination does not constitute a “Change in Control” (as defined in the 2018 Omnibus Incentive Plan), the NEOs will be entitled to receive: •An amount equal to two times annual base salary; •A pro-rata award under the AIP for the performance period in which the termination is effective, calculated based on the actual attainment of Sysco's performance goals for such performance period. This award will be payable at the time such incentives are paid to other Sysco executives; •Reimbursement for the amounts of any premiums paid by the NEO under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) in excess of the applicable active employee rates to maintain their health benefits for a period of 18 months following their termination date; and •Outplacement services for a period of up to 12 months.
AND OTHER INFORMATION
COMPENSATION DISCUSSION AND ANALYSIS Executive Compensation Governance and Other Information Change in Control Termination. If the termination of employment occurs upon, or within two years following, the effectiveness of a Change in Control, the NEO will receive: •An amount equal to two times the sum of annual base salary and their target AIP opportunity; •A pro-rata award under the AIP for the performance period in which the termination is effective, calculated based on the NEO’s target incentive opportunity. This award will be payable at the time such incentives are paid to other Sysco executives; •Reimbursement for the amounts of any premiums paid by the NEO under COBRA in excess of the applicable active employee rates to maintain their health benefits for a period of 18 months following the termination date; and •Outplacement services for a period of up to 12 months. Change in Control Provisions Sysco’s change in control provisions are structured to incorporate a “double trigger” accelerated vesting mechanism before benefits become payable. Specifically, the vesting of equity-based awards will only occur upon a change in control if, within the specified timeframe of 12 months prior to the change in control and extending 24 months post such change in control, the employment of the NEO is terminated without “cause” or if the NEO voluntary terminates their employment for “good reason.” The CLD Committee has carefully considered the implications of accelerated provisions and has placed corresponding provisions in the MSP, the SERP, and the EDCP. These provisions stipulate a reduction in benefits if they exceed the deductible limits set forth by Section 280G of the Internal Revenue Code (the "Code"), thereby balancing the interests of the NEOs with the tax implications for Sysco. Relocation Expenses In alignment with best practices in corporate governance and compensation, the CLD Committee has instituted a policy regarding executive relocation expense reimbursements that applies uniformly to all NEOs. This policy explicitly prohibits the reimbursement of any losses incurred from the sale of a residence linked to the relocation process. Furthermore, it mandates that any NEO who receives reimbursement for relocation expenses must pay back all or a portion of those expenses should their employment be terminated for reasons other than death, disability, a change in control, or termination without cause or for good reason, within a designated timeframe following the receipt of reimbursement. Employee Benefits We provide a comprehensive suite of employee benefits to eligible employees, including our NEOs. This benefits package encompasses access to a 401(k) retirement savings plan, an employee stock purchase plan, group life insurance, and other group health and welfare benefit plans. Although NEOs have access to the same health and welfare benefits as other employees, their contributions towards the monthly premiums for medical coverage are adjusted based on salary levels resulting in NEOs paying higher contributions than other employees. For the 401(k) retirement savings plan, Sysco contributes 3% of an employees’ eligible earnings, regardless of whether the employee makes their own contributions, and matches $0.50 for every dollar contributed by the employee on the first 6% of eligible earnings. Additionally, Sysco maintains a pension plan, which was closed to non-union participants as of December 31, 2012. Currently, Mr. Bertrand is the only NEO who is a participant in the pension plan.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth information with respect to compensation for each NEO for the three prior fiscal years.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | Kevin P. Hourican Chair of the Board and Chief Executive Officer | 2024 | 1,341,760 | — | 9,430,664 | 2,399,982 | 2,221,000 | — | 204,844 | 15,598,250 | | | 2023 | 1,296,438 | — | 7,775,318 | 3,299,985 | 1,762,976 | — | 206,303 | 14,341,020 | | | 2022 | 1,296,438 | — | 6,990,845 | 3,146,812 | 2,070,900 | — | 151,511 | 13,656,506 | | Kenny K. Cheung(7) Executive Vice President and Chief Financial Officer | 2024 | 784,139 | — | 2,012,590 | 512,194 | 742,000 | — | 254,080 | 4,305,003 | | | 2023 | 159,288 | 600,000 | 1,686,062 | 745,859 | 144,406 | — | 33,760 | 3,369,375 | | Greg D. Bertrand Executive Vice President and Global Chief Operating Officer | 2024 | 824,924 | — | 2,311,492 | 586,587 | 1,141,000 | 17,650 | 103,082 | 4,984,735 | | | 2023 | 749,025 | — | 1,745,800 | 740,980 | 848,808 | 9,906 | 147,950 | 4,242,469 | | | 2022 | 696,441 | — | 3,792,142 | 717,975 | 927,297 | 12,157 | 143,689 | 6,289,701 | | Thomas R. Peck, Jr. Executive Vice President, Chief Information and Digital Officer | 2024 | 726,354 | — | 2,029,257 | 514,479 | 687,000 | — | 55,877 | 4,012,967 | | | 2023 | 678,480 | — | 1,448,101 | 614,607 | 645,847 | — | 56,899 | 3,443,934 | | | 2022 | 661,974 | — | 1,397,230 | 628,970 | 705,005 | — | 86,184 | 3,479,363 | | Ronald L. Phillips(7) Executive Vice President and Chief Human Resources Officer | 2024 | 682,363 | — | 1,635,867 | 415,180 | 646,000 | — | 80,620 | 3,460,030 |
SUMMARY COMPENSATION TABLE
(1)The salary amounts reflect the actual base salary payments earned by the NEOs in the applicable fiscal year. (2)The amounts in this column represent the sum of RSUs and PSUs awarded at a grant date fair value of $73.53 for the August 2023 awards, and $69.95 for the September 2023 awards, in all cases computed in accordance with ASC 718. Stock awards were granted on August 10, 2023 to each of our NEOs. Supplemental stock awards were granted to Mr. Bertrand, Mr. Peck, and Mr. Phillips on September 11, 2023 following Sysco's reorganization. See "Compensation Arrangements for Messrs. Bertrand, Peck and Phillips" above for further discussion on these grants. The values reflected in the table above include the grant date fair value of RSUs, and the grant date fair value of the PSUs at target performance. The grant date fair values of RSUs granted in fiscal year 2024 and of PSUs granted in fiscal year 2024 if target performance and maximum performance is achieved are as follows:
SUMMARY COMPENSATION TABLE
| | | Performance Share Units | | | | Restricted Stock Units ($) | Target ($) | Maximum ($) | | Kevin P. Hourican | 3,536,499 | 5,894,165 | 11,788,330 | | Kenny K. Cheung | 754,712 | 1,257,878 | 2,515,756 | | Greg D. Bertrand | 866,818 | 1,444,674 | 2,889,348 | | Thomas R. Peck, Jr. | 760,981 | 1,268,276 | 2,536,552 | | Ronald L. Phillips | 613,441 | 1,022,426 | 2,044,852 |
SUMMARY COMPENSATION TABLE
The fair value of these PSUs is determined based on the closing price of our Common Stock on the last business day before the grant date. Compensation expense is recognized over the period an NEO is required to provide service based on the estimated vesting of the PSUs granted. See the Grants of Plan-Based Awards table below for more information on the stock awards granted in fiscal year 2024. (3)The amounts in this column represent the aggregate grant date fair value of stock options granted during each year. We estimated the fair value of each stock option award using a Black-Scholes pricing model, modified for dividends and using the following assumptions: risk-free interest rate of 3.92%; expected dividend yield of 2.53%; expected share price volatility of 27.39%; and expected term of 6.6 years. We did not assume any option exercises or risk of forfeiture during the expected option life in determining the valuation of the option awards. Had we done so, such assumptions could have reduced the reported grant date value. The actual value, if any, an NEO may realize upon exercise of options will depend on the excess of the stock price over the exercise price on the date the option is exercised. Consequently, the value realized, if any, may not be at or near the value estimated by the Black-Scholes model.
SUMMARY COMPENSATION TABLE
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SUMMARY COMPENSATION TABLE
EXECUTIVE COMPENSATION Summary Compensation Table (4)The amounts in this column with respect to fiscal year 2024 reflect cash awards to the eligible NEOs pursuant to awards under the AIP in fiscal year 2024, which were determined by the CLD Committee at its July 31, 2024 meeting and, to the extent not deferred by the NEO, paid shortly thereafter. (5)The amounts reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflect above-market interest on amounts in the EDCP and the MSP, and the actuarial change in the present value of the NEOs’ benefits under all pension plans established and maintained by Sysco, determined using interest rate and mortality rate assumptions consistent with those used in Sysco’s financial statements. The pension plan amounts, some of which may not be currently vested, include: (i) changes in pension plan value and (ii) changes in the value of benefits under the SERP. Active service-based accruals under the pension plan and the SERP ceased when each of those programs was frozen. Therefore, any subsequent changes in the actuarial present value of an NEO’s accumulated benefit under the pension plan and/or the SERP would likely be attributable, primarily, to variations in the discount rate or modifications to the actuarial assumptions. To the extent that any such aggregate change in the actuarial present value of an NEO’s accumulated benefit under the pension plan and/or the SERP was a decrease, this decrease is not reflected in the amounts shown in the “All Other Compensation” column above or the “Total” column in the table below. The following table shows for Mr. Bertrand, our only NEO participant, the change in the actuarial present value for the pension plan and for the SERP, as well as the above-market interest on amounts in the EDCP and MSP for fiscal year 2024:
SUMMARY COMPENSATION TABLE
| Name | Change in Pension Plan Value ($) | Change in SERP Value ($) | Above-Market Interest on Deferred Compensation ($) | Total ($) | | Greg D. Bertrand | 9,465 | (102,297) | 8,185 | 17,650 |
SUMMARY COMPENSATION TABLE
(6)Fiscal year 2024 amounts reported in the “All Other Compensation” column include the following:
SUMMARY COMPENSATION TABLE
| Name | Perquisites, Other Personal Benefits and Tax Reimbursement ($)(a) | 401(k) Plan Employer Contribution ($)(b) | MSP Employer Contribution ($)(c) | | Kevin P. Hourican | 19,692 | 20,250 | 164,902 | | Kenny K. Cheung | 200,788 | 25,200 | 28,092 | | Greg D. Bertrand | — | 20,250 | 78,118 | | Thomas R. Peck, Jr. | — | 20,694 | 30,432 | | Ronald L. Phillips | — | 21,338 | 52,595 |
SUMMARY COMPENSATION TABLE
(a)The amount shown in this column consists of perquisite amounts over $10,000, which includes a financial advisor reimbursement for Mr. Hourican in the amount of $15,000, relocation related expenses for Mr. Cheung in the amount of $145,174, and relocation related tax gross ups for Mr. Cheung in the amount of $51,980. (b)The amount shown for each NEO reflects amounts contributed by us to the Sysco 401(k) plan during fiscal year 2024. (c)The amount shown for each NEO reflects amounts contributed by us to the Sysco MSP during fiscal year 2024. (7)Mr. Cheung became an NEO in fiscal year 2023; consequently, the Summary Compensation Table includes only two years of compensation data. Mr. Phillips became a NEO in fiscal year 2024; consequently, the Summary Compensation Table includes only one year of compensation data.
SUMMARY COMPENSATION TABLE
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SUMMARY COMPENSATION TABLE
EXECUTIVE COMPENSATION Grants of Plan-Based Awards
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table provides information on annual incentive award opportunities, PSUs, RSUs, and stock options under our 2018 Omnibus Incentive Plan granted to the NEOs during the prior fiscal year.
GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($)(5) | Grant Date Fair Value of Stock and Option Awards ($)(6) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | | | | | | Kevin P. Hourican | 8/10/2023 | — | — | — | 40,080 | 80,160 | 160,320 | — | — | — | 5,894,165 | | | 8/10/2023 | — | — | — | — | — | — | 48,096 | — | — | 3,536,499 | | | 8/10/2023 | — | — | — | — | — | — | — | 124,869 | 73.53 | 2,399,982 | | | | 1,174,519 | 2,349,038 | 4,698,077 | — | — | — | — | — | — | — | | Kenny K. Cheung | 8/10/2023 | — | — | — | 8,553 | 17,107 | 34,214 | — | — | — | 1,257,878 | | | 8/10/2023 | — | — | — | — | — | — | 10,264 | — | — | 754,712 | | | 8/10/2023 | — | — | — | — | — | — | — | 26,649 | 73.53 | 512,194 | | | | 392,231 | 784,462 | 1,568,923 | — | — | — | — | — | — | — | | Greg D. Bertrand | 8/10/2023 | — | — | — | 8,499 | 16,998 | 33,996 | — | — | — | 1,249,863 | | | 8/10/2023 | — | — | — | — | — | — | 10,199 | — | — | 749,932 | | | 8/10/2023 | — | — | — | — | — | — | — | 26,480 | 73.53 | 508,946 | | | 9/11/2023 | — | — | — | 1,392 | 2,785 | 5,570 | — | — | — | 194,811 | | | 9/11/2023 | — | — | — | — | — | — | 1,671 | — | — | 116,886 | | | 9/11/2023 | — | — | — | — | — | — | — | 4,245 | 69.95 | 77,641 | | | | 602,974 | 1,205,947 | 2,411,894 | — | — | — | — | — | — | — | | Thomas R. Peck, Jr. | 8/10/2023 | — | — | — | 7,114 | 14,228 | 28,456 | — | — | — | 1,046,185 | | | 8/10/2023 | — | — | — | — | — | — | 8,537 | — | — | 627,726 | | | 8/10/2023 | — | — | — | — | — | — | — | 22,164 | 73.53 | 425,992 | | | 9/11/2023 | — | — | — | 1,587 | 3,175 | 6,350 | — | — | — | 222,091 | | | 9/11/2023 | — | — | — | — | — | — | 1,905 | — | — | 133,255 | | | 9/11/2023 | — | — | — | — | — | — | — | 4,838 | 69.95 | 88,487 | | | | 363,321 | 726,642 | 1,453,284 | — | — | — | — | — | — | — | | Ronald L. Phillips | 8/10/2023 | — | — | — | 6,052 | 12,105 | 24,210 | — | — | — | 890,081 | | | 8/10/2023 | — | — | — | — | — | — | 7,263 | — | — | 534,048 | | | 8/10/2023 | — | — | — | — | — | — | — | 18,857 | 73.53 | 362,432 | | | 9/11/2023 | — | — | — | 946 | 1,892 | 3,784 | — | — | — | 132,345 | | | 9/11/2023 | — | — | — | — | — | — | 1,135 | — | — | 79,393 | | | 9/11/2023 | — | — | — | — | — | — | — | 2,884 | 69.95 | 52,748 | | | | 341,315 | 682,631 | 1,365,262 | — | — | — | — | — | — | — |
GRANTS OF PLAN-BASED AWARDS
(1)Amounts represent the threshold, target, and maximum payout opportunities under the AIP for fiscal year 2024. These amounts are based on the individual’s base salary in effect at the end of each performance period, and pro-rated as applicable. (2)Amounts represent the threshold, target, and maximum payout opportunities pursuant to the fiscal year 2024-2026 PSUs. Amounts do not include accrued dividend equivalents. (3)Amounts represent time-based RSU awards. (4)Amounts represent stock options awards. (5)Reflects the exercise price for the stock options granted, equal to the closing price of our Common Stock on the preceding trading day. (6)We determined the following estimated grant date fair values for the options reported in the table above using a Black-Scholes pricing model: (i) options issued on August 10, 2023 of $19.22 per option, and (ii) options issued on September 11, 2023 of $18.29 per option. The assumptions underlying these option valuations are listed below:
GRANTS OF PLAN-BASED AWARDS
| | Volatility | Risk-Free Rate of Return | Dividend Yield at the Date of Grant | Expected Option Life | | Fiscal year 2024 | 27.39% | 3.92% | 2.53% | 6.6 years |
GRANTS OF PLAN-BASED AWARDS
We did not assume any option exercises or risk of forfeiture during the expected option life in determining the valuation of the option awards. Had we done so, such assumptions could have reduced the reported grant date value. The actual value, if any, an executive may realize upon exercise of options will depend on the excess of the stock price over the exercise price on the date the option is exercised. Consequently, the value realized, if any, may not be at or near the value estimated by the Black-Scholes model.
GRANTS OF PLAN-BASED AWARDS
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GRANTS OF PLAN-BASED AWARDS
EXECUTIVE COMPENSATION Outstanding Equity Awards at Year-End We determined the estimated grant date fair value of the PSUs granted on (i) August 10, 2023 to be $73.53 and (ii) September 11, 2023, to be $69.95, per PSU, each being the closing price of our Common Stock on the last business day before the grant date, and assuming the target number of shares would be earned at the end of the three-year performance period. Grants of PSUs are reflected at target since actual shares to be received, if any, will be determined after the three-year performance period ending on June 27, 2026. The estimated grant date fair value of each of the RSUs reported in the table above is equal to the grant date fair value of the corresponding PSUs awarded on the same date and indicated in this footnote (6) above, in each case being the closing price of our Common Stock on the last business day before the grant date
OUTSTANDING EQUITY AWARDS AT YEAR-END
OUTSTANDING EQUITY AWARDS AT YEAR-END The following table provides information on the stock option, RSU, and PSU grants held by each NEO as of June 29, 2024.
OUTSTANDING EQUITY AWARDS AT YEAR-END
| | Option Awards | | | | | Stock Awards | | | Name | Date Granted | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Kevin P. Hourican | August 2023 | — | — | — | — | 81,861(2) | 5,844,057 | | | August 2023 | — | — | — | — | 48,096(3) | 3,433,573 | | | August 2023 | — | 124,869(4) | 73.53 | 8/9/2033 | — | — | | | August 2022 | — | — | — | — | 68,027(5) | 4,856,448 | | | August 2022 | — | — | — | — | 17,307(6) | 1,235,547 | | | August 2022 | 45,454 | 90,909(7) | 85.57 | 8/17/2032 | — | — | | | August 2021 | — | — | — | — | 8,653(8) | 617,738 | | | August 2021 | 120,845 | 60,423(9) | 76.94 | 8/18/2031 | — | — | | | August 2020 | 75,019 | — | 58.08 | 8/19/2030 | — | — | | | February 2020 | 303,030 | — | 76.27 | 2/11/2030 | — | — | | | February 2020 | 380,273 | — | 76.27 | 2/11/2030 | — | — | | Kenny K. Cheung | August 2023 | — | — | — | — | 17,470(2) | 1,247,183 | | | August 2023 | — | — | — | — | 10,264(3) | 732,747 | | | August 2023 | — | 26,649(4) | 73.53 | 8/9/2033 | — | — | | | May 2023 | — | — | — | — | 16,871(10) | 1,204,421 | | | May 2023 | — | — | — | — | 4,376(11) | 312,403 | | | May 2023 | 11,981 | 23,964(12) | 73.39 | 5/10/2033 | — | — | | Greg D. Bertrand | September 2023 | — | — | — | — | 2,844(13) | 203,033 | | | September 2023 | — | — | — | — | 1,671(14) | 119,293 | | | September 2023 | — | 4,245(15) | 69.95 | 9/10/2033 | — | — | | | August 2023 | — | — | — | — | 17,359(2) | 1,239,259 | | | August 2023 | — | — | — | — | 10,199(3) | 728,107 | | | August 2023 | — | 26,480(4) | 73.53 | 8/9/2033 | — | — | | | August 2022 | — | — | — | — | 15,274(5) | 1,090,411 | | | August 2022 | — | — | — | — | 3,886(6) | 277,422 | | | August 2022 | 10,206 | 20,413(7) | 85.57 | 8/17/2032 | — | — | | | August 2021 | — | — | — | — | 1,974(8) | 140,924 | | | August 2021 | 27,572 | 13,786(9) | 76.94 | 8/18/2031 | — | — | | | August 2020 | 49,613 | — | 58.08 | 8/19/2030 | — | — | | | August 2019 | 75,929 | — | 72.80 | 8/20/2029 | — | — | | | August 2018 | 74,649 | — | 75.08 | 8/22/2028 | — | — | | | August 2017 | 79,918 | — | 51.22 | 8/24/2027 | — | — | | | August 2016 | 43,750 | — | 52.42 | 8/24/2026 | — | — |
OUTSTANDING EQUITY AWARDS AT YEAR-END
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OUTSTANDING EQUITY AWARDS AT YEAR-END
EXECUTIVE COMPENSATION Outstanding Equity Awards at Year-End
OUTSTANDING EQUITY AWARDS AT YEAR-END
| | Option Awards | | | | | Stock Awards | | | Name | Date Granted | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Thomas R. Peck, Jr. | September 2023 | — | — | — | — | 3,242(13) | 231,446 | | | September 2023 | — | — | — | — | 1,905(14) | 135,998 | | | September 2023 | — | 4,838(15) | 69.95 | 9/10/2033 | — | — | | | August 2023 | — | — | — | — | 14,530(2) | 1,037,297 | | | August 2023 | — | — | — | — | 8,537(3) | 609,456 | | | August 2023 | — | 22,164(4) | 73.53 | 8/9/2033 | — | — | | | August 2022 | — | — | — | — | 12,670(5) | 904,511 | | | August 2022 | — | — | — | — | 3,223(6) | 230,090 | | | August 2022 | 8,465 | 16,932(7) | 85.57 | 8/17/2032 | — | — | | | August 2021 | — | — | — | — | 1,729(8) | 123,433 | | | August 2021 | 24,154 | 12,077(9) | 76.94 | 8/18/2031 | — | — | | | February 2021 | 30,532 | — | 76.14 | 2/10/2031 | — | — | | Ronald L. Phillips | September 2023 | — | — | — | — | 1,932(13) | 137,925 | | | September 2023 | — | — | — | — | 1,135(14) | 81,028 | | | September 2023 | — | 2,884(15) | 69.95 | 9/10/2033 | — | — | | | August 2023 | — | — | — | — | 12,362(2) | 882,523 | | | August 2023 | — | — | — | — | 7,263(3) | 518,506 | | | August 2023 | — | 18,857(4) | 73.53 | 8/9/2033 | — | — | | | August 2022 | — | — | — | — | 10,823(5) | 772,654 | | | August 2022 | — | — | — | — | 2,753(6) | 196,537 | | | August 2022 | 7,231 | 14,464(7) | 85.57 | 8/17/2032 | — | — | | | August 2021 | — | — | — | — | 1,449(8) | 103,444 | | | August 2021 | 20,238 | 10,120(9) | 76.94 | 8/18/2031 | — | — |
OUTSTANDING EQUITY AWARDS AT YEAR-END
(1)The aggregate value, rounded to the nearest whole dollar, of each outstanding award of RSUs and PSUs is calculated using the closing price of our Common Stock on June 28, 2024, the last trading day of fiscal year 2024, of $71.39. (2)Represents the target number of shares of our Common Stock, rounded down to the nearest whole share, underlying the PSUs awarded to the NEOs in August 2023 in connection with their annual LTIP award, as well as dividend equivalents that are expected to be paid in shares of Common Stock upon vesting of these PSUs. Each PSU represents the right to receive one share of Common Stock, at target levels, but the ultimate number of shares of Common Stock to be earned with respect to a participant’s PSUs will be determined at the end of the three-year performance period ending on June 27, 2026 and could range from 0% to 200% of the target number of PSUs granted to the participant, based on the Company’s performance relative to the pre-established targets. See “Compensation Discussion and Analysis— What We Paid—Long Term Incentive Plan” above for further discussion of these PSUs. (3)These RSUs were awarded to the NEOs in August 2023 in connection with their annual LTIP award. One-third of these RSUs vested on August 10, 2024, with the remainder vesting in equal installments on August 10, 2025 and 2026. See “Compensation Discussion and Analysis—What We Paid—Long Term Incentive Plan” above for further discussion of these RSUs. (4)These options were awarded to the NEOs in August 2023 in connection with their annual LTIP award. One-third of these options vested on August 10, 2024, with the remainder vesting in equal installments on August 10, 2025 and 2026. See “Compensation Discussion and Analysis—What We Paid—Long Term Incentive Plan” above for further discussion of these options. (5)These PSUs, displayed at target, were awarded to the NEOs in August 2022 in connection with their annual LTIP award, as well as dividend equivalents that are expected to be paid upon vesting of these PSUs. PSUs will be determined at the end of the three-year performance period ending on June 28, 2025 and could range from 0% to 200% of the target number of PSUs granted to the participant, based on the Company’s performance relative to the pre-established targets. (6)These RSUs were awarded to the NEOs in August 2022 in connection with their annual LTIP award. One-third of these RSUs vested on each of September 1, 2023 and 2024, with the remainder vesting on September 1, 2025. (7)These options were awarded to the NEOs in August 2022 in connection with their annual LTIP award. One-third of these options vested on each of August 18, 2023 and 2024, with the remainder vesting on August 18, 2025. (8)These RSUs were awarded to the NEOs in August 2021 in connection with their annual LTIP award. One-third of these RSUs vested on each of September 1, 2022 and 2023, and 2024. (9)These options were awarded to the NEOs in August 2021 in connection with their annual LTIP award. One-third of these options vested on each of August 19, 2022 and 2023, and 2024.
OUTSTANDING EQUITY AWARDS AT YEAR-END
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OUTSTANDING EQUITY AWARDS AT YEAR-END
EXECUTIVE COMPENSATION Option Exercises and Stock Vested (10)These PSUs, displayed at target, were awarded to Mr. Cheung in May 2023 in connection with his appointment as Chief Financial Officer, as well as dividend equivalents that are expected to be paid upon vesting of these PSUs. PSUs will be determined at the end of the three-year performance period ending on June 28, 2025 and could range from 0% to 200% of the target number of PSUs granted to the participant, based on the Company’s performance relative to the pre-established targets. (11)These RSUs were awarded to Mr. Cheung in May 2023 in connection with his appointment as Chief Financial Officer. One-third of these RSUs vested on June 1, 2024, with the remainder vesting in equal installments on June 1, 2025 and 2026. (12)These options were awarded to Mr. Cheung in May 2023 in connection with his appointment as Chief Financial Officer. One-third of these options vested on May 11, 2024, with the remainder vesting in equal installments on May 11, 2025 and 2026. (13)Represents the target number of shares of Common Stock, rounded down to the nearest whole share, underlying the PSUs awarded to the NEOs in September 2023 in connection with their expanded duties, as well as dividend equivalents that are expected to be paid in shares of Common Stock upon vesting of these PSUs. Each PSU represents the right to receive one share of Common Stock, at target levels, but the ultimate number of shares of Common Stock to be earned with respect to a participant’s PSUs will be determined at the end of the three-year performance period ending on June 27, 2026 and could range from 0% to 200% of the target number of PSUs granted to the participant, based on the Company’s performance relative to the pre-established targets. (14)These RSUs were awarded to Messrs. Bertrand, Peck, and Phillips in September 2023 in connection with their expanded duties. One-third of these RSUs vested on September 11, 2024, with the remainder vesting in equal installments on September 11, 2025 and 2026. (15)These options were awarded to Messrs. Bertrand, Peck, and Phillips in September 2023 in connection with their expanded duties. One-third of these options vested on September 11, 2024, with the remainder vesting in equal installments on September 11, 2025 and 2026.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED The following table provides information with respect to aggregate option exercises and the vesting of stock awards during the prior fiscal year for each of the NEOs.
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Kevin P. Hourican | — | — | 82,024 | 6,075,768 | | Kenny Cheung | — | — | 2,188 | 159,330 | | Greg D. Bertrand | — | — | 42,103 | 3,174,872 | | Thomas R. Peck Jr. | — | — | 15,754 | 1,189,370 | | Ronald L. Phillips | — | — | 11,773 | 880,766 |
OPTION EXERCISES AND STOCK VESTED
(1)We computed the value realized upon vesting of RSUs by multiplying the number of shares of Common Stock underlying RSUs that vested by the closing price of Common Stock on the last trading day prior to the vesting date. Dividend equivalents with regard to the RSUs that vested during fiscal year 2024 were paid in cash at the time of such vesting and are not reflected in this column. We computed the value realized upon the distribution of the shares of Common Stock underlying the PSUs that vested during fiscal year 2024 by multiplying that number of shares by the NYSE closing price of Common Stock on the last trading day prior to the payable date. Dividend equivalents with regard to the PSUs that vested during fiscal year 2024 were paid in shares and credited at each dividend payment date.
OPTION EXERCISES AND STOCK VESTED
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OPTION EXERCISES AND STOCK VESTED
EXECUTIVE COMPENSATION Nonqualified Deferred Compensation
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION The following table provides information regarding executive contributions and related company matches, earnings, and account balances under the EDCP and the MSP for each of the NEOs during fiscal year 2024. None of the NEOs made any withdrawals or received any distributions under these plans with respect to fiscal year 2024. During fiscal year 2024, all NEOs were participants in the MSP and only Mr. Bertrand was a participant in the EDCP.
NONQUALIFIED DEFERRED COMPENSATION
| Name | Applicable Plan | Executive Contributions for Fiscal year 2024 ($)(1) | Registrant Contributions for Fiscal year 2024 ($)(2) | Aggregate Earnings in Fiscal Year 2024 ($)(3) | Aggregate Balance on June 29, 2024 ($) | | Kevin P. Hourican | MSP | 179,548 | 164,902 | 38,185 | 896,171 | | | EDCP | — | — | — | — | | Kenny K. Cheung | MSP | — | 28,092 | 3,322 | 31,413 | | | EDCP | — | — | — | — | | Greg D. Bertrand | MSP | 169,762 | 78,118 | 469,708 | 3,948,693 | | | EDCP | — | — | 36,740 | 621,523 | | Thomas R. Peck, Jr. | MSP | — | 30,432 | 2,750 | 115,109 | | | EDCP | — | — | — | — | | Ronald L. Phillips | MSP | 49,109 | 52,595 | 30,950 | 230,999 | | | EDCP | — | — | — | — |
NONQUALIFIED DEFERRED COMPENSATION
(1)For the MSP, the amount shown for each NEO includes the deferral of a portion of the salary paid to the NEO for fiscal year 2024. The amount of such deferred salary is included in the Summary Compensation Table above under the “Salary” column for fiscal year 2024. (2)As discussed below, the MSP allows participants to defer a portion of their salary and annual incentive award and provides for Company contributions to participants’ accounts, including matching, non-elective and SERP transitional contributions. The amount shown consists of the following Company contributions for each NEO:
NONQUALIFIED DEFERRED COMPENSATION
| | Match ($) | Non-elective ($) | SERP Transition ($) | | Kevin P. Hourican | 82,451 | 82,451 | — | | Kenny K. Cheung | — | 28,092 | — | | Greg D. Bertrand | 39,059 | 39,059 | — | | Thomas R. Peck, Jr. | — | 30,432 | — | | Ronald L. Phillips | 25,766 | 26,829 | — |
NONQUALIFIED DEFERRED COMPENSATION
(3)The above-market interest portion of these amounts is included in the fiscal year 2024 disclosure under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column and footnote (5) of the Summary Compensation Table above, in the following amounts: $8,185 for the EDCP and $0 for the MSP for Mr. Bertrand. The Management Savings Plan Sysco offers the MSP to certain highly compensated employees with the continued opportunity to build retirement savings on a tax-deferred basis through deferrals and Company contributions. The MSP is a competitive plan for nonqualified executive retirement benefits and is designed to supplement the Sysco 401(k) plan. The MSP allows participants, including the NEOs, to defer up to 50% of their base salary compensation and up to 90% of their annual incentive award. However, the MSP is not applicable to LTIP awards. We make contributions to participants’ accounts, including non-elective and matching contributions. The MSP allows for deferrals and contributions that would not be permitted under the 401(k) plan due to IRS limits. The Executive Deferred Compensation Plan Prior to December 31, 2012, Sysco offered the EDCP to provide eligible participants the opportunity to save for retirement and accumulate wealth in a tax-efficient manner beyond savings opportunities under Sysco’s 401(k) retirement savings plan. Participants were able to defer up to 100% of their base salary and up to 40% of their MIP bonus, or any bonus paid in lieu of or as a replacement for the MIP bonus, to the EDCP. Sysco did not match any base salary deferrals into the EDCP in fiscal year 2024, as deferrals are no longer permitted. Participants who have deferred compensation under the EDCP may choose from a variety of investment options. An executive is always 100% vested in his or her past deferrals and Sysco matches, but any portion of an executive’s account attributable to Sysco matches, including associated
NONQUALIFIED DEFERRED COMPENSATION
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NONQUALIFIED DEFERRED COMPENSATION
EXECUTIVE COMPENSATION Pension Benefits deemed investment return, and the net investment gain, if any, credited on his or her deferrals, is subject to forfeiture in certain instances (generally, cause and competing against Sysco). Federal income taxes on all amounts credited under the EDCP will be deferred until payout under current tax law. The EDCP is administered by the CLD Committee. To mitigate the loss in projected non-qualified retirement benefits, affected individuals were eligible for transitional compensation opportunities, including supplemental contributions to the MSP, for a period of up to ten plan years commencing January 1, 2013, or until the employee ceased employment with Sysco, whichever is earlier.
PENSION BENEFITS
PENSION BENEFITS Sysco maintains two defined benefit pension plans. The Sysco Corporation Retirement Plan (“pension plan”) is intended to be a tax-qualified plan under the Code. The SERP is not a tax- qualified plan. The pension plan ceased all non-union participant accruals effective December 31, 2012, and the SERP was amended to freeze benefits and stop future accruals effective June 29, 2013. Participants covered by the SERP as of June 29, 2013, were granted accelerated vesting. Those who retire and are not eligible for immediate commencement of their SERP benefit will be deemed 100% vested, with benefits payable upon reaching age 65. For those who are eligible for a SERP benefit at the time of retirement, an early retirement reduction factor will be used to determine the amount available. As of January 1, 2013, the broad-based, tax-qualified 401(k) plan was enhanced to provide a larger benefit going forward. The following table shows the years of credited service for eligibility purposes (e.g., early retirement rights) and the present value of the accrued benefits for each of the NEOs under each of the pension plan and SERP as of June 29, 2024. Mr. Bertrand is the only NEO who is a participant in either of the Sysco- maintained defined benefit plans.
PENSION BENEFITS
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Greg D. Bertrand | Pension Plan | 33.0 | 450,919 | — | | | SERP | 33.0 | 2,458,786 | — |
PENSION BENEFITS
As required by SEC rules, we calculated Mr. Bertrand’s accrued benefits under the pension plan by assuming he will remain in service with the Company until age 65, which is the earliest age at which the NEOs can retire without any reduction in benefits. Amounts shown below assume the pension plan benefit will be paid in the form of a life-only annuity with a 5- year guarantee. Amounts for present value purposes assume that 50% will elect the 100% joint-life annuity and 50% will elect a single life-only annuity. Other optional forms of payment are available from the pension plan. For the SERP, we calculated Mr. Bertrand’s accrued benefits by assuming he will remain in service with Sysco until the earliest age they could retire without any reduction in SERP benefits, which is age 60. Our SERP plan defines the earliest unreduced retirement age as when the individual’s full years of age plus full years of service equals or exceeds 80. The amounts shown below and for present value purposes assume the SERP will be paid as a joint-life annuity, reducing to two-thirds upon the death of either the executive or his spouse, with the unreduced payment guaranteed for 10 years. Members also have the option to elect a life-only annuity with a 10-year guarantee. We calculated the present value of the accumulated pension plan and SERP benefits based on a 5.86% discount rate for the pension plan and a 5.89% discount rate for the SERP, with a post-retirement mortality assumption based on the Society of Actuaries’ Pri-2012 Private Retirement Plans Mortality Table for healthy retirees without collars and the MP-2021 projection scale. Following are the estimated accrued benefits earned through the fiscal year ended June 29, 2024, for the pension plan or SERP, as noted. These annual amounts would be payable at the earliest unreduced retirement age, as described above, if the NEO remains in the service of Sysco until such an age. Projected benefits that may be earned due to pay and service after the fiscal year ended June 29, 2024, are not included in these estimates.
PENSION BENEFITS
| Name | Plan Name | Earliest Unreduced Retirement Age | Expected Years of Payments | Estimated Annual Benefit ($) | | Greg D. Bertrand | Pension Plan | 65 | 21.1 | 50,829 | | | SERP | 60 | 29.3 | 176,058 |
PENSION BENEFITS
In addition to the above, we provide a temporary Social Security bridge benefit to an executive commencing SERP benefits before age 62, payable until the earlier of age 62 or death. The amount of this monthly benefit for Mr. Bertrand based on the SERP early retirement assumptions above, is $1,638.
PENSION BENEFITS
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PENSION BENEFITS
EXECUTIVE COMPENSATION Pension Benefits Pension Plan The pension plan, which is intended to be tax-qualified, is funded through an irrevocable tax-exempt trust. As noted above, as of January 1, 2013, non-union employees no longer earn additional retirement benefits under the pension plan, so earnings and service after December 31, 2012, were not taken into account for determining non-union participants’ accrued benefits under the pension plan. In general, a participant’s accrued benefit is equal to 1.5% times the participant’s average monthly eligible earnings for each year or partial year of service with Sysco or a subsidiary. The accrued benefit under the pension plan is expressed in the form of a monthly annuity for the participant’s life, beginning at age 65, the plan’s normal retirement age, and with payments guaranteed for five years. A participant who remains with Sysco until at least age 55 with 10 years of service is entitled to early retirement payments. In such case, we reduce the benefit by 6.67% per year for the first five years prior to normal retirement age and an additional 3.33% per year for years prior to age 60. Employees vest in the pension plan after five years of service; the amendment to freeze benefit accruals under the pension plan after December 31, 2012, did not impact the service determination for vesting purposes. Benefits provided under the pension plan are based on compensation up to a limit, which is $345,000 for calendar year 2024, under the Code. In addition, annual benefits provided under the pension plan may not exceed a limit, which is $275,000 for calendar year 2024, under the Code. Supplemental Executive Retirement Plan We maintain a SERP to provide for retirement benefits beyond the amounts available under Sysco’s various broad-based U.S. and Canadian pension plans. Mr. Bertrand is the only NEO who participates in the SERP. We intend for the SERP to comply with Section 409A of the Code in both form and operation. The SERP is an unsecured obligation of Sysco and is not qualified for tax purposes. The SERP was amended to freeze benefits and stop future accruals effective June 29, 2013. Participants covered by the SERP as of that date were granted accelerated vesting. Those who retire and are not eligible for immediate commencement of their SERP benefit will be deemed 100% vested, with benefits payable upon reaching age 65. For those who are eligible for a SERP benefit at the time of retirement, an early retirement reduction factor will be used to determine the amount available. The SERP was designed to provide, in combination with other retirement benefits, 50% of an executive’s final average compensation, provided an executive had at least 20 years of Sysco service, including service with an acquired company. “Other retirement benefits” include Social Security, benefits from the pension plan, and employer contributions under Sysco’s 401(k) plan and similar qualified plans of acquired companies. We reduce the gross accrued benefit of 50% of final average compensation by 5% per year for each year of Sysco service, including service with an acquired company, of less than 20 years. For purposes of this service calculation, Sysco service was frozen effective June 29, 2013. Additionally, final average compensation is determined using the monthly average of a participant’s eligible earnings for the last 10 fiscal years prior to June 29, 2013, or the date the participant ceases to be covered under the SERP, if earlier. With respect to the determination of a participant’s accrued benefit as of June 28, 2008, as discussed below, final average compensation is determined using the monthly average of a participant’s eligible earnings for the highest five of the 10 fiscal years prior to, and including, the fiscal year ended June 28, 2008. The term “eligible earnings” refers to compensation taken into account for SERP purposes. As discussed below, beginning with fiscal year 2009, the portion of a participant’s MIP bonus counted as eligible earnings is capped at 150% of the participant’s rate of base salary as of the last day of the applicable fiscal year. Eligible earnings for fiscal years prior to fiscal year 2009, including eligible earnings for purposes of determining a participant’s accrued benefit as of June 28, 2008, as discussed below, are not affected by this plan change. The definition of eligible earnings that places a cap on the MIP bonus for fiscal years after fiscal year 2008 will be used in all benefit calculations except for certain death benefit calculations and a participant’s accrued benefit as of June 28, 2008.
PENSION BENEFITS
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PENSION BENEFITS
EXECUTIVE COMPENSATION Pay Versus Performance
CEO PAY RATIO
CEO PAY RATIO As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and related SEC rules, we are providing the following information about the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (the “Annual Total Compensation”), of our CEO, Kevin P. Hourican, and the Annual Total Compensation of our median employee. For fiscal year 2024:
CEO PAY RATIO
| The Annual Total Compensation of our CEO | $15,598,250 | | The Annual Total Compensation of our Median Employee | $71,868 | | The Ratio of the CEO’s to the Median Employee’s Annual Total Compensation | 217:1 |
CEO PAY RATIO
We identified our median employee from among our enterprise population as of April 1, 2024, which is within three months of our fiscal year end. We included all full-time, part-time, and seasonal or temporary workers employed by the Company or its consolidated subsidiaries, excluding our CEO. Under the “De Minimis Exemption” we excluded approximately 2,500 non- U.S. employees, representing less than 5% of our total workforce. Employees from the following countries were excluded: Bahamas, China, Dubai, Hong Kong, Mexico, Panama, Singapore, Sri Lanka, and Thailand. Additionally, we excluded approximately 1,300 employees who became Sysco employees in fiscal year 2024 as a result of the Edward Don & Company business acquisition. To identify our median employee, we utilized total taxable earnings in the most recently completed taxable year as our consistently applied compensation measure, as permitted by SEC rules. This included base salary, overtime pay, incentive awards, and any region specific taxable incentives or cash bonuses. For full-and part-time employees who were hired by the Company and its consolidated subsidiaries after the beginning of the most recently completed taxable year, we annualized their compensation. For international employees who receive payment in local currency, we converted the value into U.S. dollars using the March month end exchange rate. We then identified and calculated the elements of the median employee’s total compensation for fiscal year 2024 in accordance with the requirements of Item 402(c) (2)(x) of Regulation S-K, resulting in Annual Total Compensation of $71,868. With respect to the Annual Total Compensation of our CEO, we used the amount reported in the “Total” column of our 2024 Summary Compensation Table. Because the SEC rules for identifying the median employee and calculating the CEO pay ratio allow companies to use different methodologies, exemptions, estimates, and assumptions, our disclosure may not be comparable to the CEO pay ratios reported by other companies. However, we believe our CEO pay ratio is a reasonable estimate calculated in a manner consistent with the applicable SEC rules.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three completed fiscal years. In determining the “Compensation Actually Paid” (“CAP”) to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table (“SCT”) in previous years, as the SEC’s valuation methods for this section differ from those required in the SCT. Due to the valuation component of CAP, the dollar amounts do not reflect the actual amounts of compensation earned or paid during the year. The Pay Versus Performance (“PVP”) table below summarizes compensation values both previously reported in our SCT, as well as the adjusted values required in this section for the fiscal years ending 2021, 2022, 2023, and 2024. Note that for our NEOs other than our CEO, compensation is reported as an average.
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | SCT Total for Mr. Hourican ($)(1) | Compensation Actually Paid to Mr. Hourican ($)(2) | Average SCT Total for Non-CEO NEOs ($)(3) | Average Compensation Actually Paid to Non-CEO NEOs ($)(4) | Total Shareholder Return ($)(5) | Peer Group Total Shareholder Return ($)(5) | Net Earnings MM ($)(6) | Operating Income MM ($)(7) | | 2024 | 15,598,250 | 14,158,576 | 4,190,684 | 3,953,550 | 153 | 190 | 1,955 | 3,481 | | 2023 | 14,341,020 | 8,556,035 | 3,333,442 | 1,497,738 | 154 | 147 | 1,770 | 3,210 | | 2022 | 13,656,506 | 24,735,090 | 4,768,765 | 5,276,821 | 175 | 136 | 1,359 | 2,638 | | 2021 | 23,168,494 | 41,044,027 | 4,072,368 | 5,628,058 | 153 | 130 | 524 | 1,417 |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
EXECUTIVE COMPENSATION Pay Versus Performance (1)Values shown are as calculated in the SCT for each given year. Kevin P. Hourican served as CEO in 2021, 2022, 2023 and 2024. (2)Values shown represent Mr. Hourican’s CAP calculated in accordance with SEC rules. This value is derived in part from outstanding equity compensation that may be realizable in the future, and as such, the values shown do not fully represent the actual final amount of compensation earned or paid to Mr. Hourican during the applicable years. See “Mr. Hourican (CEO) Compensation” below for additional information on the adjustments made to Mr. Hourican’s total compensation to determine CAP for each year. (3)Values shown reflect the average total compensation of our non-CEO NEOs, as calculated in the SCT for each given year. Non-CEO NEOs were as follows: •2024: Greg D. Bertrand, Kenny K. Cheung, Thomas R. Peck, Jr., and Ronald L. Phillips; •2023: Aaron E. Alt, Greg D. Bertrand, Kenny K. Cheung, Thomas R. Peck, Jr., Neil A. Russell, II, and Judith S. Sansone; •2022: Aaron E. Alt, Greg D. Bertrand, Tim Ørting Jørgensen, Thomas R. Peck, Jr., and Judith S. Sansone; and •2021: Aaron E. Alt, Greg D. Bertrand, Joel T. Grade, Tim Ørting Jørgensen, and Thomas R. Peck, Jr. (4)Values shown represent the average non-CEO NEOs CAP calculated in accordance with SEC rules. This value is derived in part from outstanding equity compensation that may be realizable in the future, and as such, the values shown do not fully represent the actual final amount of compensation earned or paid to the NEOs during the applicable years. See “Average Non-CEO NEOs Compensation” below for additional information on the adjustments made to the Non-CEO NEOs total compensation to determine CAP for each year. (5)TSR assumes $100 is invested as of June 27, 2020. TSR represents cumulative return over the applicable period. The Peer Group used for this calculation was the S&P 500 Food/Staple Retail Index which is also reported on Form 10-K in the Performance Graph. (6)Net Earnings reflected represents GAAP Net Earnings as reported on Form 10-K within the Key Operating Metrics. (7)Operating Income is the Company-selected performance measure, per the requirements of item 402(v) of Regulation S-K. See reconciliation in Annex I – Non-GAAP Reconciliations. Mr. Hourican (CEO) Compensation To determine the value of CAP for Mr. Hourican in the PVP table above, the following amounts were deducted from and added to, as applicable, Mr. Hourican’s total compensation as reported in the SCT, in accordance with Item 402(v) of Regulation S-K.
PAY VERSUS PERFORMANCE
| Year | SCT Total for Mr. Hourican ($) | SCT Reported Equity Award Value for Mr. Hourican ($) | Equity Award Adjustments for Mr. Hourican ($)(1) | Change in the Actuarial Present Value of Pension Benefits for Mr. Hourican ($) | Pension Benefit Adjustments for Mr. Hourican ($) | Compensation Actually Paid to Mr. Hourican ($) | | 2024 | 15,598,250 | (11,830,646) | 10,390,972 | — | — | 14,158,576 | | 2023 | 14,341,020 | (11,075,303) | 5,290,318 | — | — | 8,556,035 | | 2022 | 13,656,506 | (10,137,657) | 21,216,241 | — | — | 24,735,090 | | 2021 | 23,168,494 | (19,155,231) | 37,030,764 | — | — | 41,044,027 |
PAY VERSUS PERFORMANCE
(1)Represents the year-over-year change in the fair value of equity awards to Mr. Hourican as summarized below:
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Unvested Equity Awards Granted in the Year ($) | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 11,177,089 | (810,354) | — | (493,976) | — | 518,213 | 10,390,972 | | 2023 | 8,298,461 | (1,803,464) | — | (1,508,143) | — | 303,464 | 5,290,318 | | 2022 | 13,067,265 | 4,093,998 | — | 3,450,805 | — | 604,173 | 21,216,241 | | 2021 | 28,685,543 | 6,990,463 | — | 983,825 | — | 370,933 | 37,030,764 |
PAY VERSUS PERFORMANCE
In the table above, the equity values are computed in accordance with the methodologies used for financial reporting purposes, reflecting updated economic assumptions as of the valuation dates.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
EXECUTIVE COMPENSATION Pay Versus Performance Average Non-CEO NEO Compensation To determine the value of CAP for the non-CEO NEOs in the PVP table above, the following amounts were deducted from and added to, as applicable, the average total compensation as reported in the SCT, in accordance with Item 402(v) of Regulation S-K.
PAY VERSUS PERFORMANCE
| Year | Average SCT Total for Non-CEO NEOs ($) | Average SCT Reported Equity Award Value for Non-CEO NEOs ($) | Average Equity Award Adjustments for Non-CEO NEOs ($)(1) | Change in the Actuarial Present Value of Pension Benefits for Non- CEO NEOs ($) | Pension Benefit Adjustments for Non-CEO NEOs ($) | Average Compensation Actually Paid to Non-CEO NEOs ($) | | 2024 | 4,190,684 | (2,504,411) | 2,267,277 | — | — | 3,953,550 | | 2023 | 3,333,442 | (2,145,906) | 310,202 | — | — | 1,497,738 | | 2022 | 4,768,765 | (2,635,513) | 3,143,569 | — | — | 5,276,821 | | 2021 | 4,072,368 | (2,275,596) | 3,831,286 | — | — | 5,628,058 |
PAY VERSUS PERFORMANCE
(1)Represents the year-over-year change in the fair value of equity awards to our Non-CEO NEO’s as summarized below:
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Unvested Equity Awards Granted in the Year ($) | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 2,382,551 | (133,187) | — | (96,373) | — | 114,286 | 2,267,277 | | 2023 | 1,385,454 | (191,650) | — | (318,402) | (609,532) | 44,332 | 310,202 | | 2022 | 2,808,683 | 286,402 | — | 253,935 | (287,778) | 82,327 | 3,143,569 | | 2021 | 3,015,663 | 474,690 | — | 275,233 | — | 65,700 | 3,831,286 |
PAY VERSUS PERFORMANCE
In the table above, the equity values are computed in accordance with the methodologies used for financial reporting purposes, reflecting updated economic assumptions as of the valuation dates. Company-Selected Measure and Other Financial Performance Measures The following financial performance measures, listed alphabetically, were used to link NEO Compensation Actually Paid to company performance during the most recently completed fiscal year.
PAY VERSUS PERFORMANCE
| Performance Measures | | Cost Per Piece | | EPS Growth | | Local Case Growth | | Market Share Growth | | Return on Invested Capital (ROIC) | | Sales Growth |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
EXECUTIVE COMPENSATION Pay Versus Performance Relationship of Compensation Actually Paid and Performance Measures The following charts describe the relationship of CAP to the performance measures listed in the PVP Table above. Generally, CAP has a low correlation with the financial measures for the years shown in the charts below. Sysco places significant emphasis on equity compensation, which is sensitive to stock price changes. Due to the sensitivity of CAP to stock price changes, the timing of the grants and the changes in stock price thereafter significantly influence the CAP each year, as determined under Item 402(v) of Regulation S-K. Compensation Actually Paid vs. Sysco 4-year Cumulative TSR vs. Peer 4-year Cumulative TSR Compensation Actually Paid (in Millions) Total Shareholder Returns
PAY VERSUS PERFORMANCE
| n | CEO - Hourican | n | Avg. NEOs | | TSR | | Peer TSR |
PAY VERSUS PERFORMANCE
Compensation Actually Paid vs. Net Earnings Compensation Actually Paid (in Millions) Net Earnings (in Millions)
PAY VERSUS PERFORMANCE
| n | CEO - Hourican | n | Avg. NEOs | | Net Earnings |
PAY VERSUS PERFORMANCE
Compensation Actually Paid vs. Operating Income(1) Compensation Actually Paid (in Millions) Operating Income: CSM (in Millions)
PAY VERSUS PERFORMANCE
| n | CEO - Hourican | n | Avg. NEOs | | Operating Income |
PAY VERSUS PERFORMANCE
(1)Operating Income includes non-GAAP adjustments. See reconciliation in Annex I – Non-GAAP Reconciliations.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
EXECUTIVE COMPENSATION Quantification of Termination/Change in Control Payments
DIRECTOR AND PAY VERSUS PERFORMANCE)
DIRECTOR AND PAY VERSUS PERFORMANCE)
DIRECTOR AND PAY VERSUS PERFORMANCE)
| (In Millions) | 2024 ($) | 2023 ($) | 2022 ($) | 2021 ($) | | Sales (GAAP) | 78,844 | 76,325 | 68,636 | 51,298 | | Less 1 week fourth quarter sales | — | — | — | (1,153) | | Sales using a 52 week basis (Non-GAAP) | 78,844 | 76,325 | 68,636 | 50,145 | | Cost of sales (GAAP) | 64,236 | 62,370 | 56,316 | 41,941 | | Impact of inventory valuation adjustment(3) | — | 3 | (73) | — | | Cost of sales adjusted for Certain Items (Non-GAAP) | 64,236 | 62,373 | 56,243 | 41,941 | | Less 1 week fourth quarter cost of sales | — | — | — | (944) | | Cost of sales adjusted for Certain Items using a 52 week basis (Non-GAAP) | 64,236 | 62,373 | 56,243 | 40,997 | | Gross profit (GAAP) | 14,608 | 13,955 | 12,320 | 9,357 | | Impact of inventory valuation adjustment(3) | — | (3) | 73 | — | | Gross profit adjusted for Certain Items (Non-GAAP) | 14,608 | 13,952 | 12,393 | 9,357 | | Less 1 week fourth quarter gross profit | — | — | — | (209) | | Gross profit adjusted for Certain Items using a 52 week basis (Non-GAAP) | 14,608 | 13,952 | 12,393 | 9,148 | | Operating expenses (GAAP) | 11,406 | 10,916 | 9,974 | 7,910 | | Impact of restructuring and transformational project costs(1) | (120) | (63) | (108) | (119) | | Impact of acquisition-related costs(2) | (159) | (116) | (139) | (80) | | Impact of bad debt reserve adjustments(4) | — | 5 | 28 | 185 | | Operating expenses adjusted for Certain Items (Non-GAAP) | 11,127 | 10,742 | 9,755 | 7,896 | | Less 1 week fourth quarter operating expense | — | — | — | (165) | | Operating expenses adjusted for Certain Items using a 52 week basis (Non-GAAP) | 11,127 | 10,742 | 9,755 | 7,731 | | Operating income (GAAP) | 3,202 | 3,039 | 2,346 | 1,447 | | Impact of inventory valuation adjustment(3) | — | (3) | 73 | — | | Impact of restructuring and transformational project costs(1) | 120 | 63 | 108 | 119 | | Impact of acquisition-related costs(2) | 159 | 116 | 139 | 80 | | Impact of bad debt reserve adjustments(4) | — | (5) | (28) | (185) | | Operating income adjusted for Certain Items (Non-GAAP) | 3,481 | 3,210 | 2,638 | 1,461 | | Less 1 week fourth quarter operating income | — | — | — | (44) | | Operating income adjusted for Certain Items using a 52 week basis (Non-GAAP) | 3,481 | 3,210 | 2,638 | 1,417 |
DIRECTOR AND PAY VERSUS PERFORMANCE)
(1)Restructuring and severance charges were $56 million for fiscal year 2024, $20 million for fiscal year 2023, $59 million for fiscal year 2022 and $72 million for fiscal year 2021. Transformation initiative costs, primarily consisting of changes to our business technology strategy were $64 million for fiscal year 2024, $43 million for fiscal year 2023, $49 million for fiscal year 2022 and $56 million for fiscal year 2021. (2)Fiscal year 2024 includes $128 million of intangible amortization expense and $31 million in acquisition and due diligence costs. Fiscal year 2023 includes $105 million of intangible amortization expense and $10 million in acquisition and due diligence costs. Fiscal year 2022 includes $106 million of intangible amortization expense and $33 million in acquisition and due diligence costs. Fiscal year 2021 represents $74 million of intangible amortization expense and $6 million of due diligence costs. (3)Fiscal year 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory. Fiscal year 2022 represents a write-down of COVID-related personal protection equipment inventory due to the reduction in the net realizable value of inventory. (4)Fiscal year 2023, 2022, and 2021 represent the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal year 2020.
DIRECTOR AND PAY VERSUS PERFORMANCE)
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DIRECTOR AND PAY VERSUS PERFORMANCE)
ANNEX I - NON-GAAP RECONCILIATIONS EBITDA and Adjusted EBITDA Non-GAAP Reconciliation (Business Highlights and Compensation Discussion and Analysis)