DEF 14A of Mission Produce, Inc.
Filed Feb 22, 2024 · FY20230001140361-24-009015
ITEM 1: ELECTION OF DIRECTORS
ITEM 1: ELECTION OF DIRECTORS Our Board of Directors currently consists of nine members. In accordance with our Certificate of Incorporation, our Board of Directors is divided into three classes (Class I, Class II, and Class III) with staggered three-year terms. At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election, until his or her successor is elected and qualified, or, if earlier, until his or her earlier death, resignation, disqualification, or removal. In April 2023, Shaunte Mears Watkins, one of our Class III directors, resigned due to her relocation to Australia. In August 2023, Tony Bashir Sarsam joined the Board of Directors as a Class I director. Mr. Sarsam was identified as a director candidate by an independent third-party search firm used by the Nominating and Corporate Governance Committee to assist with identifying qualified director candidates. One of our Class I directors – Stephen W. Bershad – will not stand for re-election at the 2024 Annual Meeting. The Board of Directors is actively engaged in an ongoing search process to identify a qualified candidate for appointment to the Board of Directors. The Board of Directors has reduced the size of the Board of Directors from nine to eight directors effective as of the 2024 Annual Meeting to reflect the reduction in Board size given Mr. Bershad will not be standing for re-election. Our current directors are divided among the three classes as follows:
ITEM 1: ELECTION OF DIRECTORS
| Class | Director | Term Expiration | | Class I | Stephen A. Beebe Stephen W. Bershad (not standing for re-election at the 2024 Annual Meeting) Jay A. Pack Tony Bashir Sarsam | 2024 Annual Meeting | | Class II | Luis A. Gonzalez Bruce C. Taylor | 2025 Annual Meeting | | Class III | Stephen J. Barnard Bonnie C. Lind Linda B. Segre | 2026 Annual Meeting |
ITEM 1: ELECTION OF DIRECTORS
Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated Stephen A. Beebe, Jay A. Pack, and Tony Bashir Sarsam for re-election to the Board of Directors for three-year terms expiring at the 2027 annual meeting of stockholders, until the director’s successor is elected and qualified, or, if earlier, until the director’s earlier death, resignation, disqualification, or removal.
Board of Directors Overview
Board of Directors Overview The following table provides an overview of the current composition of our Board of Directors.
Board of Directors Overview
| Director: | Stephen J. Barnard | Stephen A. Beebe | Stephen W. Bershad* | Luis A. Gonzalez | Bonnie C. Lind | Jay A. Pack | Linda B. Segre | Bruce C. Taylor | Tony Bashir Sarsam | | Age | 71 | 79 | 82 | 73 | 65 | 71 | 63 | 67 | 62 | | Director since | 1983 | 1995 | 2012 | 2011 | 2020 | 2008 | 2020 | 2001 | 2023 | | Compensation | | • | | | | • | Chair | | | | Audit | | • | | | Chair | • | | | | | Nominating and Corporate Governance | | Chair | | | • | | | • | | | Additional Appointments | CEO | Lead Independent Director | Chairman of the Board of Directors | | Financial Expert | | | | |
Board of Directors Overview
| * Mr. Bershad is not standing for re-election at the 2024 Annual Meeting. |
Continuing Directors
Continuing Directors The biographical information for our five directors whose terms will continue after the 2024 Annual Meeting and will expire at the 2025 annual meeting (Class II) or the 2026 annual meeting (Class III) is below.
Luis A. Gonzalez – Class II
Luis A. Gonzalez – Class II Luis A. Gonzalez has served on our Board of Directors since 2011. Mr. Gonzalez is a private investor in real estate and other ventures. Previously, Mr. Gonzalez founded Austral Group S.A., Peru, which was the second largest fishing and marine based food producer in Peru. Mr. Gonzalez also founded Camposol S.A., a leading agroindustrial company in Peru. Mr. Gonzalez also co-founded Grupo Arato in 2011, which the Company acquired in 2018. Previously, Mr. Gonzalez also served as a director of our wholly-owned Peruvian subsidiaries – Grupo Arato Holding S.A.C., Beggie Peru S.A., Arato Peru S.A., Inversiones Agricolas Olmos S.A.C., and Avocado Packing Company S.A.C.– until November 24, 2021. In 2007, Mr. Gonzalez was honored with the “Comendador por Servicios Distinguidos” medal by the President of Peru for his contributions to the country. Mr. Gonzalez studied mechanical engineering at Saarbrücken Fachhochschule in Germany. The Board of Directors concluded that Mr. Gonzalez should serve as a director based on his extensive business and leadership experience in the avocado and agroindustrial industries and his first-hand knowledge of avocado farming and packing operations in Peru.
Bruce C. Taylor – Class II
Bruce C. Taylor – Class II Bruce C. Taylor has served on our Board of Directors since 2001. Mr. Taylor founded Taylor Fresh Foods, a private multi-billion dollar producer of salads, fresh vegetables, and healthy fresh food, in 1995 and serves as its Chairman and Chief Executive Officer. Mr. Taylor received a Bachelor of Science degree (Business) and a Bachelor of Arts degree (Development Studies) from the University of California, Berkeley, and a Master’s in Business Administration from Harvard University. The Board of Directors concluded that Mr. Taylor should serve as a director based on his extensive business and industry knowledge and his long tenured leadership and management experience in the agriculture and farming sectors at Taylor Fresh Foods.
Stephen J. Barnard – Class III
Stephen J. Barnard – Class III Stephen J. Barnard founded the Company in 1983 and has served as the Chief Executive Officer since 1988. Mr. Barnard also served as the Company’s President from 1988 until July 2022 and from December 2023 through the present. Mr. Barnard serves as a member of the Board of Directors, a role he has held since the Company was founded. Prior to founding Mission Produce, Mr. Barnard worked in the lettuce and avocado divisions of Santa Clara Produce, Inc. Mr. Barnard previously served as Chairman of the Produce Marketing Association (PMA), Chairman of the Western Growers Association, a director of the California Avocado Commission, and a director of Sunkist Growers. He currently serves as a director for the Cal Poly Foundation. Mr. Barnard received a Bachelor of Science degree in agricultural business management from California Polytechnic State University, San Luis Obispo. The Board of Directors concluded that Mr. Barnard should serve as a director based on his deep and thorough knowledge of all aspects of our business and industry, his effective leadership and management skills, and his long-tenured service in senior roles with key industry groups.
Bonnie C. Lind – Class III
Bonnie C. Lind – Class III Bonnie C. Lind has served on our Board of Directors since September 2020. Ms. Lind is the retired Senior Vice President, CFO and Treasurer of Neenah, Inc., (NYSE: NP), a publicly traded technical specialties and fine paper company, a position she held from June 2004 to May 2020. Prior to that, Ms. Lind held a variety of increasingly senior financial and operations positions with Kimberly-Clark Corporation (NYSE: KMB), a manufacturer of personal care, consumer tissue and health care products, from 1982 until 2004. She has been a member of the Board of Directors of Hubbell Incorporated (NYSE: HUBB) since January 2019 where she is chair of the Audit Committee and a member of the Nominating and Corporate Governance Committee. Beginning in January 2022, she joined the Board of Directors of a private timberlands company, Tamarack Holdings LLC, where she is Chairman of the Audit Committee. She was previously a director at U.S. Silica Holdings, Inc. (NYSE: SLCA), a global industrial minerals and logistics leader, from 2019 to 2021 where she served on the Audit and Nominating and Corporate Governance Committees. She was also previously a director at Federal Signal Corporation (NYSE: FSS), a world leader in manufacturing lightbars, beacons, warning lights, and backup alarms/cameras, from 2014 to 2018, where she served on the Nominating and Governance Committee and the Audit Committee. She also served as a director of Empire District Electric Company (NYSE: EDE), an investor-owned utility providing electric, natural gas, and water service, from 2009 to 2017 and was a member of the Audit Committee and Chairman of its Nominating and Corporate Governance Committee. Ms. Lind holds a Bachelor of Business Administration (Finance) with honors from the University of Georgia. The Board of Directors concluded that Ms. Lind should serve as a director based on her experience as the chief financial officer of a public company, her financial acumen and financial expertise, her public and private company board experience, as well as her decades of senior financial and operations positions for public and private companies across a wide variety of industries.
Compensation Committee
| • | makes recommendations to the Board of Directors regarding director compensation; |
Director Compensation
Director Compensation Our Non-Employee Director Compensation Policy consists of the following components:
Director Compensation
| Director Compensation Program | | | Annual Cash Retainers | | | Board Cash Retainer | $60,000 | | Committee Cash Retainers: | | | Annual Committee Chair Retainer (in lieu of committee member retainers) | | | •Audit | $15,000 | | •Compensation | $10,000 | | •Nominating and Corporate Governance | $10,000 | | Annual Committee Member Retainer | | | •Audit | $7,500 | | •Compensation | $5,000 | | •Nominating and Corporate Governance | $5,000 | | Initial Equity Compensation | | | Equity Award (RSUs); pro-rated based on appointment date through next annual meeting of stockholders | $100,000 | | Annual Equity Compensation | | | Equity Award (RSUs) | $100,000 | | Additional Chairman of the Board Equity Award (RSUs) | $40,000 |
Director Compensation
Annual cash retainers are paid in quarterly installments in arrears and pro-rated for any partial calendar quarter of service. In addition, committee member or committee chair retainers are only paid if the director attends the meeting, if any, for the calendar quarter for which fees are paid. In accordance with the Non-Employee Director Compensation Policy, each non-employee director who is initially elected or appointed to serve on the Board of Directors is automatically granted RSUs with a value of approximately $100,000 on the date on which such director is appointed or elected to serve on the Board of Directors, pro-rated based on the number of days between the effective date of appointment and the Company’s next annual meeting. Additionally, each non-employee director who is serving on the Board of Directors as of the date of each annual meeting of the stockholders is automatically granted, on such annual meeting date, an RSU award with a value of approximately $100,000, and a non-employee director serving as the Chairman of the Board of Directors is automatically granted additional RSUs with a value of $40,000 on such date. All equity grants vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to the directors’ continued service through the applicable vesting date. In addition, such awards vest in full upon a change in control of the Company (as defined in the Company’s 2020 Incentive Award Plan).
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan Pursuant to the Company’s Deferred Compensation Plan applicable to non-employee directors, our non-employee directors can elect to defer up to 100% of their annual equity award grant and the annual Chairman grant, as applicable. Annual equity awards that are deferred are credited to a deferred compensation account and vested balances are distributed: (1) at the time of separation either in a lump sum or up to 10 annual installments; (2) pursuant to an in-service election on specified dates of distribution either in a lump sum or up to five annual installments; (3) upon a separation from service due to a change in control either in a lump sum or up to 10 annual installments; and (4) upon death in a lump sum to the director’s beneficiaries. The unfunded, nonqualified plan structure of the Deferred Compensation Plan is required in order to preserve the beneficial tax deferral treatment for the participants. Amounts in a participant’s deferral accounts are considered general liabilities of the Company and subject to creditor risk in the case of corporate insolvency or bankruptcy. Messrs. Beebe, Bershad, and Pack participated in the Deferred Compensation Plan during 2023.
Director Stock Ownership Guidelines
| • | Deferred equity under the Nonqualified Deferred Compensation Plan. |
2023 Director Compensation
2023 Director Compensation The following table sets forth information for the fiscal year ended October 31, 2023 regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our Board of Directors during fiscal year 2023. Mr. Barnard, our CEO, does not receive additional compensation for his service as a director. All compensation paid to Mr. Barnard is reported in the “Summary Compensation Table.”
2023 Director Compensation
| Name | Fees earned or paid in cash ($) | Stock awards ($)(1) | All Other Compensation ($) | Total ($) | | Stephen A. Beebe | 82,500 | 102,112 | 26,102(6) | 210,714 | | Stephen W. Bershad | 60,000 | 142,965(2) | 26,102(6) | 229,067 | | Luis A. Gonzalez | 60,000 | 102,112 | — | 162,112 | | Bonnie C. Lind | 80,000 | 102,112 | — | 182,112 | | Jay A. Pack | 72,500 | 102,112 | — | 174,612 | | Tony Bashir Sarsam(3) | 25,000 | 65,405(4) | — | 90,405 | | Linda B. Segre | 70,000 | 102,112 | — | 172,112 | | Bruce C. Taylor | 65,000 | 102,112 | — | 167,112 | | Shaunte Mears Watkins(5) | 30,000 | — | — | 30,000 |
2023 Director Compensation
| (1) Represents the grant date fair value of 9,158 RSUs granted to each of our non-employee directors on April 13, 2023 computed in accordance with Accounting Standards Codification Topic 718, based on a closing price of our stock on the date of grant of $11.15. Such closing stock price differs from the stock price used to calculate the number of shares awarded to each director (which is based on a trailing 30-day average stock price from the date of grant consistent with our equity grant practices). As of October 31, 2023, Messrs. Beebe, Gonzalez, Pack, and Taylor, and Mses. Lind and Segre each held 9,158 outstanding unvested RSUs, Mr. Sarsam held 5,653 outstanding unvested RSUs, and Mr. Bershad held 12,822 outstanding unvested RSUs. Messrs. Bershad, Beebe, and Pack all participated in our Non-Employee Director Deferred Compensation Plan for 2023 and therefore, the 9,158 RSUs for these directors have been deferred. In addition, outstanding vested but deferred RSUs under the Non-Employee Director Deferred Compensation Plan as of October 31, 2023 were: 8,124 for Mr. Bershad, 5,028 for Mr. Pack, 13,152 for Ms. Lind, and 8,124 for Mr. Beebe. |
2023 Director Compensation
| (2) Includes an additional 3,664 RSUs granted to Mr. Bershad on April 13, 2023 pursuant to our Director Compensation Program for serving as the Chairman of the Board of Directors and computed in accordance with Accounting Standards Codification Topic 718, based on a closing price of our stock on the date of grant of $11.15. Such closing stock price differs from the stock price used to calculate the number of shares awarded to each director (which is based on a trailing 30-day average stock price from the date of grant consistent with our equity grant practices). |
2023 Director Compensation
| (3) Mr. Sarsam was appointed to the Board of Directors effective August 14, 2023. |
2023 Director Compensation
| (4) Includes 5,653 RSUs granted to Mr. Sarsam on August 14, 2023 pursuant to our Director Compensation Program in connection with his appointment to the Board of Directors and computed in accordance with Accounting Standards Codification Topic 718, based on a closing price of our stock on the date of grant of $11.57. Such closing stock price differs from the stock price used to calculate the number of shares awarded to each director (which is based on a trailing 30-day average stock price from the date of grant consistent with our equity grant practices). |
2023 Director Compensation
| (5) Ms. Mears Watkins resigned from the Board of Directors effective April 13, 2023 due to her relocation to Australia. |
2023 Director Compensation
| (6) Messrs. Beebe and Bershad each received $26,102 to reimburse them for penalties and taxes associated with an administrative error made by the Company, and discovered in fiscal 2023, regarding equity grants that should have been deferred for the 2021 tax year, but which were not deferred, and instead, were delivered prematurely to Messrs. Beebe and Bershad on April 13, 2022. |
Overview of 2023 Compensation Program for NEOs
Overview of 2023 Compensation Program for NEOs The following pay mix charts shows fiscal 2023 compensation for our CEO and other NEOs at target performance achievement and demonstrates the Compensation Committee’s commitment to ensuring a substantial majority of NEO compensation is based on Company performance and aligned with stockholders. The 2023 compensation program pay mix design included an annual cash incentive award based primarily on the achievement of a Company financial performance metric and a performance-based long-term equity incentive as meaningful components. The Compensation Committee believes that a greater emphasis on at-risk long-term equity incentive compensation supports the Company’s long-term growth orientation and stockholder alignment and focuses on leadership development over the long- rather than short-term. The following summarizes the key elements of total direct compensation for fiscal 2023 for our NEOs: base salary, annual cash incentive, and long-term equity incentives.
Overview of 2023 Compensation Program for NEOs
| | BASE SALARY | ANNUAL CASH INCENTIVE | LONG-TERM EQUITY INCENTIVE | | COMPONENT OF PAY | Fixed cash compensation based on the market-competitive value of the skills and knowledge required for each role. Reviewed annually and adjusted when appropriate to maintain market competitiveness. Increases are not automatic nor guaranteed. | Annual cash incentives based 80% on Company performance metrics with pre-established goals that align with our budget and 20% on individual performance as assessed at year-end. | Long-term equity incentive program with forward-looking equity awards intended to motivate and reward executives for future growth and financial performance and align the interests of executives and stockholders. Performance-based PSUs that are earned based on financial performance over a three-year period and time-vested RSUs that vest ratably over a three-year period. |
Overview of 2023 Compensation Program for NEOs
| | BASE SALARY | ANNUAL CASH INCENTIVE | LONG-TERM EQUITY INCENTIVE | | 2023 SUMMARY | 2023 salary increases for our NEOs ranged from 0% to 6.7%, with no increase for our CEO, our former President and Chief Operating Officer, or our President of Central and South America. Increases to base salaries for the remaining NEOs, were based on factors such as market competitiveness and individual performance. | 2023 annual cash incentives tied to financial performance (80% of target bonus opportunity) paid out at 0% based on failure to achieve the threshold level of performance on adjusted operating income. The 20% of target bonus opportunity tied to individual performance paid out at 20% for all eligible NEOs, except Mr. Barnard, due to their valued contributions during a challenging business and operating environment. Mr. Barnard did not receive any payout under the 20% tied to individual performance. Thus, our CEO did not receive an annual cash incentive payout for fiscal 2023. Mr. Wiesner does not participate in our annual cash incentive plan. Rather, the Compensation Committee approved a bonus payout of up to 25% of Mr. Wiesner’s annual base salary, subject to our CEOs assessment of his performance at fiscal year-end. Mr. Wiesner’s actual payout was in line with the other NEOs at 20% of bonus potential. Mr. Bulow departed from the Company in September 2023 and was not eligible for an annual cash incentive payout.* | Our 2023 long-term equity incentive grants were more heavily weighted towards PSUs, with a mix of 60% RSUs and 40% PSUs (formerly a 70%/30% mix). PSUs are earned, if at all, at the end of the three-year performance period based on pre-established cumulative adjusted net income per share goals. RSUs vest 1/3 per year following grant, subject to continued service through the vesting date. The total value of 2023 long-term equity incentives awarded to each NEO was as follows: Barnard: $2,000,000 (no change from fiscal 2022) Giles: $680,000 Wiesner: $500,000 (no change from fiscal 2022) Wu: $500,000 Bulow: $500,000 (set per terms of offer letter)* |
Overview of 2023 Compensation Program for NEOs
| * In connection with Mr. Bulow’s departure from the Company, the Company entered into a Separation Agreement and General Release under which Mr. Bulow received a gross cash severance payment of $475,020 and the acceleration of the vesting of Mr. Bulow’s unvested and outstanding RSUs that would have become vested on January 6, 2024 (1/3 of Mr. Bulow’s only outstanding RSU grant) had Mr. Bulow’s employment continued through that date, pro-rated for the length of time served from the grant date through the separation date. All other RSUs held by Mr. Bulow were forfeited. In addition, pursuant to our standard PSU award agreement, Mr. Bulow will continue to participate in the 2023-2025 PSU program through the end of the performance period, with the vesting of any PSUs thereunder, if earned, pro-rated based on the length of time served during the performance period. |
Overview of 2023 Compensation Program for NEOs
Base Salary After reviewing market data and benchmarking provided by Pearl Meyer, and in consideration of the overall performance of the Company for fiscal 2022 and the standard annual merit increases provided to all employees, the Compensation Committee increased the base salary for our Chief Financial Officer by 5% and for our General Counsel and Secretary by 6.7%, with individual determinations based on factors such as market competitiveness and individual performance. Our Chief Executive Officer, our former President and Chief Operating Officer, and our President of Central and South America did not receive base salary increases for fiscal 2023. Mr. Wiesner also receives additional annual cash compensation based on a profit-sharing scheme required under Peruvian labor regulations. Such additional compensation is based on the application of a certain percentage applied to the profits of our Peruvian operations and distributed to Peruvian employees based on their respective compensation and days worked. The amount paid to Mr. Wiesner under such profit-sharing scheme for fiscal 2023 was $28,819. Annual Cash Incentive Annual cash incentive awards are designed to reward achievement of objective financial goals tied to our budget and individual contributions that support business results and execution of the Company’s strategy. For fiscal 2023, target bonus opportunity under the annual cash incentive plan ranged from 100% of base salary for our Chief Executive Officer to 75% of base salary for our other participating NEOs, other than Mr. Wiesner who does not participate in our annual cash incentive plan. Our 2023 annual incentive plan was based 80% on achievement of adjusted operating income and 20% based on individual performance, assessed at the end of the fiscal year. For the 80% based on achievement of adjusted operating income, the Compensation Committee utilized this metric as it has been used historically by the Company as a key performance indicator and is well understood by the Company’s stockholders, investment community, and employees. Operating income is also a prevalent metric in short-term incentive plans among the Company’s peers and the broader market. The threshold level of achievement for a payout under this component was set at 70% and the maximum at 130%. Potential payouts on the portion tied to adjusted operating income ranged from 50% for threshold achievement to 200% for maximum achievement, with no payout for below threshold performance. With the addition of the 20% based on individual achievement, the Compensation Committee reduced the overall maximum payouts achievable under the annual cash incentive plan from 200% to 180%.
Overview of 2023 Compensation Program for NEOs
| 80% tied to Company Performance | 20% tied to Individual Performance | | - Performance range: 70% threshold to 130% max | - Based on individual performance and contributions assessed at end of fiscal year | | - Payouts: 50% at threshold and 200% at maximum; no payouts below threshold | | | - Based on adjusted operating income performance metric | - Maximum payout capped at 20% | | Maximum payout under 2023 annual cash incentive plan reduced from 200% to 180% | |
Overview of 2023 Compensation Program for NEOs
For 2023, the Company achieved 30% of the target adjusted operating income goal, which was below threshold performance of 70% resulting in a payout percentage of 0% of target bonus opportunity for the 80% of the annual cash incentive tied to this financial measure. As such, no payouts were made to our NEOs under this portion of our annual cash incentive plan. For the 20% of the annual cash incentive based on individual performance, all eligible NEOs, except Mr. Barnard, received a payout at 20%, thereby resulting in a total payout under our annual cash incentive plan of 20% of total target opportunity for these NEOs. Mr. Barnard did not receive any payout under the 20% tied to individual performance. As such, Mr. Barnard’s payout under our 2023 annual cash incentive plan was 0%. This constitutes the second consecutive year that Mr. Barnard received a 0% annual cash incentive payout, demonstrating the Compensation Committee’s firm commitment to a pay for performance philosophy. Mr. Wiesner does not participate in our annual cash incentive plan. Rather, the Compensation Committee approved a bonus potential of up to 25% of Mr. Wiesner’s base salary, based on the CEO’s assessment of his performance at fiscal year-end. In line with the other NEOs and based on Mr. Barnard’s assessment of Mr. Wiesner’s contributions for fiscal 2023, the Compensation Committee approved a payout of 20% of bonus potential for Mr. Wiesner. Mr. Bulow departed from the Company in September 2023 and was not eligible for an annual cash incentive payout. For fiscal 2024, the Compensation Committee approved the following annual cash incentive plan design:
Overview of 2023 Compensation Program for NEOs
| ○ | Company Performance Component: For Mr. Barnard, 100% of target bonus opportunity, and for the other NEOs, 80% of target bonus opportunity, will be based on Company performance against pre-determined adjusted EBITDA metrics (instead of adjusted operating income). The Compensation Committee believes this metric more closely ties payouts to financial metrics utilized most by the CEO and stakeholders to assess Company performance. |
Overview of 2023 Compensation Program for NEOs
| ▪ | Threshold performance required for a payout was set at 50% of target and maximum level of performance achievable was set at 150% of target. |
Overview of 2023 Compensation Program for NEOs
| ▪ | Achievement at threshold performance results in a payout of 0% of target bonus opportunity; achievement at target results in a payout of 100% of target bonus opportunity; and achievement at maximum performance results in a payout of 200% of target bonus opportunity. Amounts are linearly interpolated between performance levels. |
Overview of 2023 Compensation Program for NEOs
| ○ | As a result of these changes, the maximum payout achievable under the annual cash incentive plan for Mr. Barnard will be 200% of target bonus opportunity, and for Mr. Giles and Ms. Wu, 180% of target bonus opportunity. The Compensation Committee believes that the CEO’s compensation should be fully aligned with the financial performance of the Company. |
Overview of 2023 Compensation Program for NEOs
| - | Mr. Wiesner does not participate in the annual cash incentive plan. Rather, consistent with prior years, the Compensation Committee approved a bonus potential of 25% of Mr. Wiesner’s base salary, subject to assessment by the CEO at the fiscal year end. |
Overview of 2023 Compensation Program for NEOs
Long-Term Equity Incentive Program – Improved Mix of PSUs and RSUs For fiscal 2023, the Compensation Committee continued the long-term equity incentive program that was first implemented for fiscal 2022, which included a portion of equity awards in the form of PSUs and portion in the form of RSUs. However, for fiscal 2023, the Compensation Committee assigned more of the overall equity grant value to PSUs, thereby further demonstrating a continued commitment to pay for performance. 60% of the award value for fiscal 2023 was assigned to RSUs and 40% to PSUs versus a 70/30% split, respectively, for the prior year. The percentage of PSUs comprising total annual equity long-term value will increase to 50% in fiscal 2024. The 2023-2025 PSUs are earned based on achievement of pre-established cumulative adjusted net income per share goals over the three-year performance period running from November 1, 2022 – October 31, 2025, as illustrated in the following table. The number of shares that may be earned and paid ranges from 50% of target PSUs granted for threshold performance of 70% of the target performance goal, 100% for achieving the target performance goal, and 200% for achieving the maximum performance of 130% of the target performance goal; no amounts are earned for performance below threshold level.
Overview of 2023 Compensation Program for NEOs
| | Threshold | Target | Maximum | | Performance Range (% of cumulative 3-year adjusted net income (ANI)/share) | 70% | 100% | 130% | | PSUs earned as a % of target | 50% | 100% | 200% |
Compensation Policies and Practices
| Key Compensation Philosophy Pillar | How Operationalized in Compensation Decisions | | Enable Mission to attract and retain high caliber talent | • Target total compensation levels and incentive opportunities at market competitive levels. • Provide flexibility in structuring sign-on (hire) and promotional awards. | | Link pay and performance | • Annual cash incentive plan based primarily on a prospective formulaic approach based on pre-established threshold/target/maximum adjusted operating income goals. • PSU component of long-term equity incentive plan uses cumulative adjusted net income per share metric, which is communicated in quarterly earnings to stockholders and serves as a key performance indicator and input for analyst stock price targets. • A clawback policy enabling incentive compensation to be recouped. |
Compensation Policies and Practices
| Key Compensation Philosophy Pillar | How Operationalized in Compensation Decisions | | Create alignment with stockholders | • Our compensation program utilizes a mix of multi-year PSUs and time-vested RSUs, with 60% RSUs and 40% PSUs for fiscal 2023, moving to a 50/50 split for fiscal 2024. • PSUs are earned based on our performance against pre-established cumulative adjusted net income per share goals for the three-year performance period, thereby encouraging long-term value creation in alignment with the interests of our stockholders. • Total annual equity grants as a percentage of shares outstanding (burn rate) is reasonable relative to peers. • Robust stock ownership guidelines (5x for our CEO, 3x for our CFO, and 1x for all other NEOs) ensures long-term alignment with stockholders. |
Compensation Policies and Practices
| Pay Magnitude | • Peer group data and comparisons are used with consideration given to the Company’s relative positioning on revenue, net income, market capitalization, and market capitalization divided by revenue • Size-appropriate compensation survey data is also used to fill data gaps and provide an additional layer of market data comparisons • Careful attention is paid to ensuring internal equity and retention | | Role of Market Data | • General philosophy to target market median competitive ranges depending on the circumstances • Flexibility to reflect variations as appropriate based on unique individual factors | | Mix of Pay | • Emphasis on variable at-risk compensation • Significant portion of compensation should be based on long-term equity incentives • Appropriate balance between annual and multi-year components based on performance | | Risk Orientation | • Incentive plans should have appropriately challenging targets for threshold, target, and maximum payouts • Over 100% payout upside opportunities pursuant to annual cash incentive plan and PSUs provide ample leverage while the 180% cap on our annual cash incentive and 200% cap on our PSUs mitigate against windfall payouts | | Use of Discretion | • Very limited use of discretion ensures transparency and maintains integrity of plan designs | | Stockholder Alignment | • Program design and pay outcomes should reflect a significant mix of equity, increasing alignment and balancing stockholder interests with internal motivation/retention needs |
Peer Group and Benchmarking
Peer Group and Benchmarking Market data, including information for peer group companies and from compensation surveys, is part of the diverse toolkit the Compensation Committee uses to set fair and competitive compensation levels that help drive the creation of long-term value while mitigating undue risk-taking. The Compensation Committee uses market compensation information to understand how other comparable public companies design executive compensation to assist the Company in offering competitive compensation levels to attract and retain exceptional executives. The Compensation Committee annually reviews the composition of our peer group to ensure that each company’s relevant attributes remain comparable to ours. The Compensation Committee believes it is appropriate to focus on companies with similar characteristics based on total revenues, market capitalization, and industry (by primary GICS classification). These are representative companies that face many of the same strategic and operational considerations we do and against whom we compete for executive talent. In March 2022, the Compensation Committee commenced its review of the peer group to aid in its review of compensation determinations for fiscal 2023, and in June 2022, the Compensation Committee determined to add Dole plc, Sovos Brands, Inc., and Tootsie Roll Industries, Inc. to the fiscal 2023 peer group given their business comparability and relative financial size.
Peer Group and Benchmarking
| 2023 Peer Group | | | • B&G Foods • BellRing Brands • Calavo Growers • CalMaine Foods • Dole plc • Farmer Bros • Fresh Del Monte Produce • Hostess Brands • J&J Snack Foods • John B. Sanfilippo & Son | • Lancaster Colony Corporation • Landec Corporation • Seneca Foods • Sovos Brands, Inc. • SunOpta • The Hain Celestial Group • The Simply Good Foods Company • Tootsie Roll Industries, Inc. • Utz Brands |
Peer Group and Benchmarking
The following table illustrates market capitalization and revenue statistics for the fiscal 2023 peer group and the Company’s relative position across these metrics as of June 2022.
Peer Group and Benchmarking
| Peer Group Data | Revenues (millions)(1) | Market Capitalization (millions)(2) | Market Capitalization / Revenues | | 25th Percentile | $875 | $782 | 0.6 | | 50th Percentile (median) | $1,247 | $1,430 | 0.9 | | Average | $1,676 | $1,652 | 1.4 | | 75th Percentile | $1,572 | $2,447 | 2.1 | | Mission Percentile | $979 30th | $1,015 38th | 1.0 54th |
Peer Group and Benchmarking
| (1) Trailing 12-month (4 quarter) revenues as of 6/20/2022 |
Peer Group and Benchmarking
| (2) Market capitalization as of 6/20/2022 |
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee has the sole authority to engage and terminate any compensation consultant to assist in the evaluation of director or executive compensation and has the sole authority to approve the fees and other terms of retention of such compensation consultants. The Compensation Committee has engaged Pearl Meyer since 2021 to advise on a variety of subjects, which for fiscal 2023 included peer group composition and benchmarking, executive compensation philosophy and strategy, incentive plan and equity plan design, overall compensation plan design and trends, pay-for-performance analytics, director compensation, CEO employment agreements and executive severance plans, and other compensation topics. While Pearl Meyer provided data and analyses and made recommendations for the compensation program, the Compensation Committee, or the Board of Directors, made all decisions regarding the compensation of the NEOs and our directors.
Fiscal 2023 Compensation Decisions
Annual Cash Incentive Plan In December 2022, the Compensation Committee approved the 2023 annual cash incentive plan comprising two components – (1) 80% based on achievement of adjusted operating income goals, with performance ranges and payout percentages on substantially similar terms as in fiscal 2022 and 2021; and (2) 20% based on individual performance as assessed at the end of the fiscal year. As further described below, the addition of the 20% allocated to individual performance reduced the maximum payout achievable under our annual cash incentive plan from 200% of target bonus opportunity to 180%. There were no changes to target bonus opportunities in fiscal 2023. Each NEO’s target bonus opportunity for 2023 was set as follows: Mr. Barnard – 100% of base salary, Mr. Giles – 75% of base salary, Mr. Bulow – 75% of base salary, and Ms. Wu – 75% of base salary. In each case, the percentage of base salary is based on such NEO’s base salary as of the last day of the fiscal year. Mr. Wiesner does not participate in the annual cash incentive plan. 80% Component Tied to Financial Performance Threshold performance under the portion of the annual cash incentive plan tied to our adjusted operating income performance was set at 70% of target such that any achievement on adjusted operating income goals below that amount would result in a zero payout. Conversely, maximum payouts were capped at 200% corresponding to achievement at 130% or more of the target adjusted operating income goal. The following sets forth the goals, operation of the portion of the annual cash incentive plan that was tied to company performance, and the actual performance achievement and payout percentage for fiscal 2023. Linear interpolation is utilized between the levels of achievement.
Fiscal 2023 Compensation Decisions
| | Threshold | Target | Maximum | Actual | | Performance Range (% of targeted FY 2023 Adjusted Operating Income) | 70% | 100% | 130% | 30% | | FY 2023 Operating Income Goals (000s) | $27,293 | $38,990 | $50,687 | $11,673 | | Bonus Pool Payout (% of target) | 50% | 100% | 200% | 0% |
Fiscal 2023 Compensation Decisions
For 2023, the Company achieved 30% of the target adjusted operating income goal, resulting in a payout percentage of 0%. No discretion or adjustments were made to the payouts to our NEOs under this component of the annual cash incentive plan. 20% Component Tied to Individual Performance For the component of the annual cash incentive plan tied to individual performance, the CEO recommended the Compensation Committee approve a full payout of 20% of target bonus opportunity based on his assessment of each eligible NEO’s individual contributions. For Mr. Giles, the CEO recognized the following contributions: (i) effectively overseeing the accounting, finance, procurement, and IT functions of the Company; (ii) his expanded support of cross functional teams to drive process improvements across business functions; (iii) improvements in our enterprise resource planning system and finance and accounting procedures; and (iv) support over cost reduction initiatives. For Ms. Wu, the CEO highlighted the following contributions: (i) her role in further developing and elevating the risk management and compliance functions of the Company; (ii) navigating several new SEC rules that required development of new or revised policies and disclosures; (iii) streamlining the Company’s sustainability initiatives and reporting; and (iv) leading the transition and execution of several important executive compensation and employee-related matters. The CEO also recognized both Mr. Giles and Ms. Wu for their leadership on Company-wide strategic and operational initiatives. The Compensation Committee considered the CEO’s recommendations and approved a payout of the 20% of target bonus opportunity based on individual performance for Mr. Giles and Ms. Wu. For the CEO, the Compensation Committee utilized an independent third-party firm to assist with its annual CEO performance evaluation. Based on the Company’s overall performance and the results of the CEO assessment, the Compensation Committee determined that Mr. Barnard should not receive any payout under the 20% tied to individual performance. Therefore, Mr. Barnard did not receive any payout under the 2023 annual cash incentive plan. 2023 Cash Payouts Under Annual Cash Incentive Plan The following table illustrates target and actual payouts under our 2023 annual cash incentive plan for all eligible NEOs.
Fiscal 2023 Compensation Decisions
| NEO | Target payout (100% achievement & 100% of bonus opportunity) ($) | Actual payout ($) | | Stephen J. Barnard | 775,000 | 0 | | Bryan E. Giles | 354,375 | 70,875 | | Joanne C. Wu | 312,000 | 62,400 |
Fiscal 2023 Compensation Decisions
Mr. Bulow departed from the Company in September 2023 and was not eligible for any payout under the annual cash incentive plan. Mr. Wiesner does not participate in our annual cash incentive plan. Rather, the Compensation Committee approved a bonus potential of up to 25% of Mr. Wiesner’s base salary, based on the CEO’s assessment at fiscal year-end. In line with the other NEOs, the Compensation Committee approved a payout of 20% of his bonus potential (approximately 5% of his base salary, or $21,750) based on Mr. Wiesner’s individual performance and contributions, including the development of a thorough and comprehensive plan to maximize efficiencies and reduce costs related to the Company’s Peruvian farming operations. Long-Term Equity Incentive Program The Company grants long-term incentive equity compensation to reward performance over the longer term and to align the interests of key employees with stockholders. In fiscal 2022, after extensive review and discussion, the Compensation Committee approved a long-term equity incentive program comprised of a mix of three-year performance-based PSUs and time-vesting RSUs in order to encourage long-term performance-based value creation and to facilitate retention. For fiscal 2023, the Compensation Committee assigned 60% of the award value to RSUs and 40% to PSUs. The Compensation Committee has transitioned the mix to be more heavily based on PSUs, with 70% RSUs and 30% PSUs for fiscal 2022, 60% PSUs and 40% RSUs for 2023, and moving to 50% PSUs and 50% RSUs for fiscal 2024 and beyond. The 2023 PSUs are earned based on achievement of pre-established cumulative adjusted net income per share goals at threshold, target, and maximum over the three-year performance period commencing November 1, 2022 (first day of 2023 fiscal year) through October 31, 2025. Payout levels range from 50% to 200%, with 50% of PSUs earned for performance at threshold (70% of target), 100% PSUs earned for performance at target, and 200% PSUs earned for performance at maximum (130% of target). No PSUs are earned for performance below threshold levels. RSUs under the long-term equity incentive program vest ratably over three years following the date of grant, subject to continued employment through the vesting dates. The Compensation Committee determined that cumulative adjusted net income was an appropriate metric because it incentivizes performance over a multi-year period, and adjusted net income is utilized in the Company’s financial modeling and disclosed to stockholders as part of our quarterly and year-end results. In setting the adjusted net income per share goals for fiscal 2023, the Compensation Committee considered the budget for fiscal 2023 and a number of factors, including the Company’s financial forecasts and existing market and competitive conditions. Based on these factors, the Compensation Committee determined that the targets set would be appropriately challenging for the Company to achieve and would result in delivery of meaningful stockholder value if achieved. Long-Term Equity Incentive Annual Grant Values for Fiscal 2023 In the first quarter of fiscal 2023, the Compensation Committee approved the following equity awards, with an effective grant date of January 6, 2023, the values of which were informed in part by ranges around market median values among our peer group and are designed to increase the amount of at-risk compensation tied to our stock price and financial performance as well as long-term value creation. The Compensation Committee did not increase the equity award value for Mr. Barnard or Mr. Wiesner. Mr. Bulow’s offer letter, dated April 26, 2022, provided for a guaranteed $500,000 long-term equity value for fiscal 2023.
Fiscal 2023 Compensation Decisions
| NEO | Fiscal 2022 Total Equity Award Vale | Fiscal 2023 Total Equity Award Value(1) | Fiscal 2023 RSUs Award Value (60% of total) | Fiscal 2023 PSUs Award Value (40% of total) | | Stephen J. Barnard | $2,000,000 | $2,000,000 | $1,200,000 | $800,000 | | Bryan E. Giles | $500,000 | $680,000 | $408,000 | $272,000 | | Juan A. Wiesner | $500,000 | $500,000 | $300,000 | $200,000 | | Joanne C. Wu | $350,000 | $500,000 | $300,000 | $200,000 | | Timothy A. Bulow(2) | N/A | $500,000 | $300,000 | $200,000 |
Fiscal 2023 Compensation Decisions
| (2) Mr. Bulow departed from the Company in September 2023. Per his Separation Agreement and General Release, the Company accelerated the vesting of Mr. Bulow’s unvested and outstanding RSUs that would have become vested on January 6, 2024 (1/3 of Mr. Bulow’s only outstanding RSU grant) had Mr. Bulow’s employment continued through that date, pro-rated for the length of time served from the grant date of January 6, 2023 through the separation date of September 30, 2023. All other RSUs held by Mr. Bulow were forfeited. In addition, pursuant to our standard PSU award agreement, Mr. Bulow will continue to participate in the 2023-2025 PSU program through the end of the performance period, with the vesting of any PSUs thereunder, if earned, pro-rated based on the length of time served during the performance period (i.e., November 1, 2022 through September 30, 2023). |
Fiscal 2023 Compensation Decisions
Outstanding Equity Awards at October 31, 2023 Based on cumulative adjusted net income per share at October 31, 2023, the PSUs granted pursuant to our 2022 long-term equity incentive program for the three-year performance period from November 1, 2021 through October 31, 2024, and the PSUs granted pursuant to our 2023 long-term equity incentive program for the three-year performance period from November 1, 2022 through October 31, 2025, would perform at levels below threshold and would therefore result in a zero payout. In addition, all outstanding stock options were underwater as of October 31, 2023. These values demonstrate the direct correlation between the Company’s performance, stock price, and our executive compensation program.
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement On August 7, 2023, after a careful review and consideration of market practices, and in order to continue to attract and retain qualified executives, the Compensation Committee approved an employment agreement with Mr. Barnard and adopted a Severance Plan for eligible executives, including Mr. Giles and Ms. Wu. The employment agreement with Mr. Barnard (the “Employment Agreement”) memorializes the terms of his continued employment as CEO, and has an initial five-year term, subject to automatic renewal for additional one-year periods, and subject to earlier termination in accordance with the terms of the Employment Agreement. The payments and benefits to which Mr. Barnard is entitled under the Employment Agreement include: (i) an annual base salary of at least $775,000; (ii) participation in the annual incentive plan, with a target annual bonus opportunity equal to 100% of base salary and a maximum annual bonus opportunity equal to 200% of base salary; (iii) participation in employee benefit plans that are generally available to senior executives; and (iv) eligibility to receive equity or other long-term incentive awards that may be approved by the Compensation Committee. Pursuant to the Employment Agreement, and the Severance Plan, if the Company terminates the executive’s employment without “cause” or the executive resigns for “good reason” (each, as defined), the executive will be entitled to the following severance benefits (in addition to certain accrued but unpaid amounts):
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
| • | a lump sum cash payment equal to the applicable multiple of the sum of base salary and target annual bonus for the year of termination – the applicable multiple (i) for Mr. Barnard is 2.0 times and (ii) for other eligible executives is 1.0 time for a qualifying termination that is not during a Change in Control Period (as defined) and 1.5 times for a qualifying termination that is during a Change in Control Period; |
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
| • | the payment of premiums for up to 12-months of COBRA coverage; |
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
| • | for a qualifying termination outside of the Change in Control Period, pro-rata vesting of outstanding equity awards based on days served during the vesting period, and in the case of awards subject to performance-based vesting conditions, earned based on actual performance during the applicable performance period pro-rated for actual days served during the performance period; |
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
| • | for a qualifying termination during the Change in Control Period, full vesting of outstanding equity awards, with the target vesting level for awards subject to performance-based vesting conditions; and |
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
| • | extended stock option exercise period of twelve months following termination, subject to earlier option expiration. |
Adoption of Executive Severance and Change-in-Control Plan and CEO Employment Agreement
The Severance Plan and Employment Agreement do not provide for any tax gross-up payments, and each provide that the severance benefits are subject to the executive’s execution and non-revocation of a release of claims in favor of the Company and a participation agreement that includes a non-solicitation restrictive covenant for 24-months. See – Executive Employment and Severance Arrangements; Offer Letters for definitions of applicable terms noted above.
2024 Compensation Design
| ○ | Company Performance Component: For Mr. Barnard, 100% of target bonus opportunity, and for the other NEOs, 80% of target bonus opportunity, will be based on Company performance against pre-determined adjusted EBITDA metrics (instead of adjusted operating income). The Compensation Committee believes this metric more closely ties payouts to financial metrics utilized most by the CEO and stakeholders to assess Company performance. |
2024 Compensation Design
| ▪ | Threshold performance required for a payout was set at 50% of target and maximum level of performance achievable was set at 150% of target. |
2024 Compensation Design
| ▪ | Achievement at threshold performance results in a payout of 0% of target bonus opportunity; achievement at target results in a payout of 100% of target bonus opportunity; and achievement at maximum performance results in a payout of 200% of target bonus opportunity. Amounts are linearly interpolated between performance levels. |
2024 Compensation Design
| ○ | As a result of these changes, the maximum payout achievable under the annual cash incentive plan for Mr. Barnard will be 200% of target bonus opportunity, and for Mr. Giles and Ms. Wu, 180% of target bonus opportunity. The Compensation Committee believes that the CEO’s compensation should be fully aligned with the financial performance of the Company. |
2024 Compensation Design
| - | Mr. Wiesner does not participate in the annual cash incentive plan. Rather, consistent with prior years, the Compensation Committee approved a bonus potential of 25% of Mr. Wiesner’s base salary, subject to assessment by the CEO at the fiscal year end. |
2024 Compensation Design
The design for the long-term equity incentive program for fiscal 2024 remains largely the same as prior years, except that the allocation between RSUs and PSUs for the NEOs shifted more heavily in favor of PSUs, with 50% allocated to RSUs, and 50% to PSUs. In addition, the Compensation Committee approved total equity award values that were significantly less than prior years for Mr. Barnard ($1.2 million from $2 million) and Mr. Wiesner ($200,000 from $500,000), while keeping values for Mr. Giles and Ms. Wu the same as prior year ($680,000 for Mr. Giles, and $500,000 for Ms. Wu). The essential elements of our 2024 compensation program are as follows:
Summary Compensation Table
Summary Compensation Table The following table provides information concerning the compensation of our NEOs for each of the last three completed fiscal years. Our fiscal year-end is October 31.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(2) | Stock awards ($)(3) | Non-equity incentive plan compensation ($)(4) | All other compensation ($)(5) | Total ($) | | Stephen J. Barnard, President and Chief Executive Officer | 2023 | 775,008 | — | 1,717,803 | — | 82,473 | 2,575,284 | | | 2022 | 771,164 | — | 1,821,201 | — | 77,653 | 2,670,018 | | | 2021 | 740,407 | — | — | 487,515 | 38,169 | 1,266,091 | | Bryan E. Giles, Chief Financial Officer | 2023 | 467,354 | 70,875 | 584,051 | — | 73,594 | 1,195,874 | | | 2022 | 442,338 | — | 455,296 | — | 65,955 | 963,589 | | | 2021 | 390,395 | — | — | 195,006 | 63,159 | 648,560 | | Juan A. Wiesner, President of Central and South America | 2023 | 465,910(6) | 21,750 | 429,445 | — | 16,819 | 933,924 | | | 2022 | 453,345(6) | — | 455,296 | — | 46,344 | 954,985 | | | 2021 | 443,900(6) | 35,417 | — | — | 13,171 | 492,488 | | Joanne C. Wu, General Counsel and Secretary | 2023 | 410,146 | 62,400 | 429,445 | — | 70,808 | 972,799 | | | 2022 | 383,870 | — | 318,705 | — | 67,297 | 769,872 | | | 2021 | 215,392 | — | 164,356 | 142,193 | 49,941 | 571,882 | | Timothy A. Bulow, Former President and Chief Operating Officer(1) | 2023 | 456,750 | — | 429,445(7) | — | 652,566(8) | 1,538,761 | | | 2022 | 127,890 | 404,170 | — | — | 35,374 | 567,434 |
Summary Compensation Table
| (1) Mr. Bulow became an executive officer upon his hiring on July 12, 2022 and departed the Company effective September 30, 2023. |
Summary Compensation Table
| (2) Amounts represent the 20% discretionary portion of the annual cash incentive plan determined based on a subjective performance review of the individual’s overall performance for the fiscal year. For the 20% based on individual performance, Mr. Giles and Ms. Wu achieved the 20% of target bonus opportunity allocated to this component. Mr. Barnard did not receive a payout for the portion of the annual cash incentive plan tied to individual performance. For Mr. Weisner, who does not participate in our annual cash incentive plan, amounts reflect 20% of his bonus potential which was set at a maximum of 25% of his base salary. Mr. Bulow departed the Company effective September 30, 2023 and was not eligible for a payout under the annual incentive plan. |
Summary Compensation Table
| (3) Amounts reflect the grant date fair value of equity awards computed in accordance with Accounting Standards Codification Topic 718 (“ASC 718”), based on a closing stock price of our stock on the date of grant and, for our PSUs, a percentage earnout of 100% based on the probable outcome of the financial performance measure (cumulative adjusted net income per share) over the three-year performance period as of the grant date. Our RSUs vest ratably over three years following the date of grant. For the PSUs, cumulative adjusted net income per share is a performance condition as defined under ASC 718. The grant date fair values shown in this table are based on probable outcomes of this performance condition as of the grant date. The following are the grant date fair values of PSUs granted for fiscal 2023 based on the probable outcome and if the maximum level of performance on cumulative adjusted net income per share is achieved, resulting in a payout of 200%: |
Summary Compensation Table
| NEO | Grant Date Fair Value of PSUs at Probable Outcome ($) | Grant Date Fair Value of PSUs at Maximum Outcome ($) | | Stephen J. Barnard | 687,119 | 1,374,238 | | Bryan E. Giles | 233,625 | 467,250 | | Juan A. Wiesner | 171,783 | 343,566 | | Joanne C. Wu | 171,783 | 343,566 | | Timothy A. Bulow | 171,783(7) | 343,566(7) |
Summary Compensation Table
For 2023 stock awards, as required by ASC 718, amounts reflect a closing stock price on the grant date of January 6, 2023 of $11.87 per share. Such closing stock price differs from the stock price used to calculate the number of shares awarded of $13.82 per share, which is based on a trailing 30-day average stock price from the date of grant consistent with our equity grant practices. As such, the values reported in the Summary Compensation Table are lower than the values approved by the Compensation Committee. None of our equity awards accrue or are paid dividends.
Summary Compensation Table
| (4) Amounts reflect annual cash incentive awards that were earned based on the achievement of pre-determined Company performance criteria set early in the fiscal year which comprised 80% of the annual cash incentive plan. Our performance against the Company performance criteria – adjusted net operating income – under the fiscal 2023 annual cash incentive plan was below threshold performance and thus no incentive payments were earned or paid for this component of the annual cash incentive award. |
Summary Compensation Table
| (5) All Other Compensation for fiscal 2023 includes: |
Summary Compensation Table
| • | 401K matching contributions made by the Company for each NEO participating in our 401(k) plan: (i) Mr. Barnard - $13,200; (ii) Mr. Giles - $13,200; (iii) Ms. Wu - $12,455; and (iv) Mr. Bulow - $16,123. |
Summary Compensation Table
| • | For Mr. Barnard, health insurance premiums paid by the Company on behalf of Mr. Barnard totaling: $23,235, the incremental cost to the Company for his personal use of a Company-owned car totaling $4,653 (such amounts are based on an amount allocated towards personal use and comprise vehicle cost, fuel, maintenance, insurance, and registration costs), and $33,925 of aggregate incremental cost to the Company of personal use of Company-paid chartered aircraft calculated based on charges paid to private charter companies for flights. |
Summary Compensation Table
| • | For Mr. Giles, health insurance premiums paid by the Company on behalf of Mr. Giles totaling $31,838 and a monthly car allowance. |
Summary Compensation Table
| • | For Ms. Wu, health insurance premiums paid by the Company on behalf of Ms. Wu totaling $31,838, and a monthly car allowance. |
Summary Compensation Table
| • | For Mr. Wiesner, health insurance premiums paid by the Company on behalf of Mr. Wiesner totaling $13,930 and the incremental cost to the Company for his personal use of a Company-owned car totaling $2,889. Such amounts are based on an amount allocated towards personal use and comprise vehicle cost, fuel, maintenance, insurance, and driver costs. |
Summary Compensation Table
| • | For Mr. Bulow, health insurance premiums paid by the Company on behalf of Mr. Bulow totaling $29,083 and a monthly car allowance. See also Footnote 8 to this table. |
Summary Compensation Table
| • | For all NEOs except Mr. Wiesner, premiums paid on behalf of such NEOs for supplemental disability income protection. |
Summary Compensation Table
| (6) Includes amounts paid pursuant to a profit-sharing scheme for his benefit required under Peruvian labor regulations. Such additional compensation is based on the application of a certain percentage applied to the profits of our Peruvian operations and distributed to employees based on compensation and days worked. The amount for Mr. Wiesner under such profit-sharing scheme for fiscal 2023 was $28,819. |
Summary Compensation Table
| (7) Per the terms of Mr. Bulow’s Separation Agreement and General Release, the Company accelerated the vesting of a portion of the RSUs that would have vested on January 6, 2024 (1/3 of Mr. Bulow’s only outstanding RSU grant) had Mr. Bulow’s employment continued through that date, pro-rated for the length of time served from the grant date of January 6, 2023 through the separation date of September 30, 2023. The value of such accelerated equity is reflected in All Other Compensation. All other RSUs held by Mr. Bulow were forfeited. In addition, pursuant to our standard PSU award agreement, Mr. Bulow will continue to participate in the 2023-2025 PSU program through the end of the performance period, with the vesting of any PSUs thereunder, if earned, pro-rated based on the length of time served during the performance period (i.e., November 1, 2022 through September 30, 2023). |
Summary Compensation Table
| (8) Amounts for Mr. Bulow also include the following amounts paid in connection with Mr. Bulow’s separation from the Company: (i) a gross cash severance payment of $475,020 paid to Mr. Bulow; (ii) the value of COBRA insurance premiums paid on behalf of Mr. Bulow and his family totaling $5,087, which represents the portion of the 12 months of COBRA coverage paid in fiscal 2023 that the Company agreed to provide Mr. Bulow subject to the terms of his Separation Agreement and General Release; (iii) $46,607 of paid time off accrued but unused which was paid out to Mr. Bulow at separation; and (iv) $51,501 representing the modified grant date fair value of the portion of Mr. Bulow’s RSUs that were accelerated as discussed above in footnote 7, calculated in accordance with ASC 718 using a stock price of $9.73 on September 21, 2023, the date Mr. Bulow signed his separation agreement, which amount, in accordance with SEC rules, is in addition to the grant date value included in the stock awards table for 2023 for these awards. |
Grants of Plan-Based Awards Table
Grants of Plan-Based Awards Table The following table sets forth information concerning each grant of an award made to an NEO in fiscal 2023 under any compensatory plan.
Grants of Plan-Based Awards Table
| Name | Grant Date | Estimated future payouts under non-equity incentive plan awards(1) | | | Estimated future payouts under equity incentive plan awards(2) | | | All other stock awards: Number of shares of stock or units (#)(3) | Grant date fair value of stock and option awards ($)(4) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Stephen J. Barnard | | 310,000 | 620,000 | 1,240,000 | | | | | | | | 1/6/2023 | | | | 28,944 | 57,887 | 115,774 | | 687,119 | | | 1/6/2023 | | | | | | | 86,831 | 1,030,684 | | Bryan E. Giles | | 141,750 | 283,500 | 567,000 | | | | | | | | 1/6/2023 | | | | 9,841 | 19,682 | 39,364 | | 233,625 | | | 1/6/2023 | | | | | | | 29,522 | 350,426 | | Juan A. Wiesner | | | | | | | | | | | | 1/6/2023 | | | | 7,236 | 14,472 | 28,944 | | 171,783 | | | 1/6/2023 | | | | | | | 21,707 | 257,662 | | Joanne C. Wu | | 124,800 | 249,600 | 499,200 | | | | | | | | 1/6/2023 | | | | 7,236 | 14,472 | 28,944 | | 171,783 | | | 1/6/2023 | | | | | | | 21,707 | 257,662 | | Timothy A. Bulow | | 142,500 | 285,000 | 570,000 | | | | | | | | 1/6/2023 | | | | 7,236 | 14,472 | 28,944 | | 171,783(5) | | | 1/6/2023 | | | | | | | 21,707 | 257,662(5) |
Grants of Plan-Based Awards Table
| (1) Represents estimated payouts for the 80% of our annual cash incentive plan for 2023 based on achievement of a pre-established financial performance metric (adjusted operating income). In December 2023, the Compensation Committee approved annual cash incentive payout for this component of the 2023 annual cash incentive plan at 0% of target bonus opportunity based on the Company’s achievement at below threshold level of achievement required for a payout. Values do not include the amount that may be earned under our annual cash incentive plan that is based on individual performance, representing 20% of target bonus opportunity, nor the potential bonus payment to Mr. Wiesner who does not participate in our annual incentive cash plan. Due to the subjective nature of each of these potential payments, they are considered bonuses and reflected as such in the Summary Compensation Table. Amounts shown for Mr. Bulow reflect the amounts approved by the Compensation Committee; however, Mr. Bulow departed the Company effective September 30, 2023 and was not eligible for a payout under the annual incentive plan. Actual payout amounts for 2023 are included in the Summary Compensation Table. |
Grants of Plan-Based Awards Table
| (2) Represents PSU awards under our long-term equity incentive program which are based on achievement of a pre-established financial performance metric (cumulative adjusted net income per share) over a three-year performance period (November 1, 2022 – October 31, 2025). Awards earned, if any, vest at the end of the three-year performance period. The number of PSUs granted (which equals the target number of PSUs) will be multiplied by a payout percentage, which can range from 50% at threshold performance to 200% at maximum performance, to determine the number of PSUs earned at the end of the performance period. No amounts are earned for below threshold performance. Shares of our common stock will be issued on a one-for-one basis for each PSU earned. Our PSUs were granted under our Mission Produce, Inc. 2020 Incentive Award Plan and do not earn or accrue dividends. |
Grants of Plan-Based Awards Table
| (3) Represents RSUs that vest ratably on the first, second and third anniversary of the grant date. |
Grants of Plan-Based Awards Table
| (4) Values are calculated using the closing price of our common stock of $11.87 on the grant date. Amounts reflect the grant date fair value of equity awards computed in accordance with ASC 718, which is lower than the value approved by the Compensation Committee, as more fully described in footnote 3 to the Summary Compensation Table. |
Grants of Plan-Based Awards Table
| (5) Values represent grant date values notwithstanding the modifications made in connection with Mr. Bulow’s separation. Grant date fair value of modified awards, determined in accordance with ASC 718, are reported in the Summary Compensation Table. |
Outstanding Equity Awards Table
Outstanding Equity Awards Table The following table sets forth certain information concerning outstanding equity awards held by the NEOs at October 31, 2023.
Outstanding Equity Awards Table
| | Option awards | | | | Stock awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | 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 ($)(1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(1) | | Stephen J. Barnard | | | | | | | 17,192(5) | 161,777(5) | | | 1,529,770 | 170,000(2) | 13.74 | 7/9/2029 | 140,317(4) | 1,320,383 | 28,944(6) | 272,363(6) | | Bryan E. Giles | | | | | | | 4,298(5) | 40,444(5) | | | 89,542 | 31,181(3) | 12.00 | 9/30/2030 | 42,894(4) | 403,633 | 9,841(6) | 92,604(6) | | Juan A. Wiesner | | | | | | | 4,298(5) | 40,444(5) | | | 13,858 | 6,929(3) | 12.00 | 9/30/2030 | 35,079(4) | 330,093 | 7,236(6) | 68,091(6) | | Joanne C. Wu | | | | | | | 3,009(5) | 28,315(5) | | | — | — | — | — | 34,891(4) | 328,324 | 7,236(6) | 68,091(6) | | Timothy A. Bulow | — | — | — | — | — | — | 2,211(6)(7) | 20,806(6)(7) |
Outstanding Equity Awards Table
| (1) Value calculated using the closing stock price of our common stock on October 31, 2023 of $9.41. |
Outstanding Equity Awards Table
| (2) These remaining unvested options vest on July 9, 2024, subject to Mr. Barnard’s continued employment through the vesting date. |
Outstanding Equity Awards Table
| (3) The remaining unvested options vest on September 30, 2024, subject to Mr. Giles’ and Mr. Wiesner’s continued employment through the vesting date. |
Outstanding Equity Awards Table
| (4) Amounts include the following outstanding unvested RSUs. Each vesting is subject to the individual’s continued employment through the vesting dates. |
Outstanding Equity Awards Table
| Name | Outstanding Unvested Shares | Grant Date | Future Vesting Dates | Shares Vesting on Vesting Date | | Stephen J. Barnard | 53,486 | 1/3/2022 | 1/3/2024 and 1/3/2025 | 26,743 on each vesting date | | | 86,831 | 1/6/2023 | 1/6/2024, 1/6/2025, and 1/6/2026 | 28,944 on the first and last vesting date and 28,943 on the second vesting date | | Bryan E. Giles | 13,372 | 1/3/2022 | 1/3/2024 and 1/3/2025 | 6,686 on each vesting date | | | 29,522 | 1/6/2023 | 1/6/2024, 1/6/2025, and 1/6/2026 | 9,840 on the first vesting date and 9,841 on each of the remaining vesting dates | | Juan A. Wiesner | 13,372 | 1/3/2022 | 1/3/2024 and 1/3/2025 | 6,686 on each vesting date | | | 21,707 | 1/6/2023 | 1/6/2024, 1/6/2025, and 1/6/2026 | 7,235 on the first vesting date and 7,236 on each of the remaining vesting dates | | Joanne C. Wu | 3,824 | 3/8/2021 | 3/8/24 and 3/8/25 | 1,912 on each vesting date | | | 9,630 | 1/3/2022 | 1/3/2024 and 1/3/2025 | 4,680 on each vesting date | | | 21,707 | 1/6/2023 | 1/6/2024, 1/6/2025, and 1/6/2026 | 7,235 on the first vesting date and 7,236 on each of the remaining vesting dates |
Outstanding Equity Awards Table
| (5) Represents PSUs granted pursuant to our 2022 long-term equity incentive program for the three-year performance period from November 1, 2021 through October 31, 2024, multiplied by a 50% payout percentage based on threshold performance (as required by SEC rules, the threshold payout percentage is disclosed in the table because the estimated payout percentage as of October 31, 2023 is less than the threshold level of performance). |
Outstanding Equity Awards Table
| (6) Represents PSUs granted pursuant to our 2023 long-term equity incentive program for the three-year performance period from November 1, 2022 through October 31, 2025, multiplied by a 50% payout percentage based on threshold performance (as required by SEC rules, the threshold payout percentage is disclosed in the table because the estimated payout percentage as of October 31, 2023 is less than the threshold level of performance). |
Outstanding Equity Awards Table
| (7) Following Mr. Bulow’s departure from the Company, he continued to participate in our PSU program for the 2023-2025 performance period. Amounts reflect the value of awards at threshold achievement and a 50% payout percentage, pro-rated based on the length of time served during the performance period (11 of the 36 months of the performance period). |
Option Exercises and Stock Vested Table
Option Exercises and Stock Vested Table The following table provides information about options exercised by the NEOs and stock vested for the NEOs during the fiscal year ended October 31, 2023.
Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(2) | | Stephen J. Barnard | — | — | 26,743 | 313,161 | | Bryan E. Giles | 5,000 | 45,022 | 6,685 | 78,281 | | Juan A. Wiesner | — | — | 6,685 | 78,281 | | Joanne C. Wu | — | — | 6,592 | 75,854 | | Timothy A. Bulow | — | — | 5,293(3) | 51,236(2)(3) |
Option Exercises and Stock Vested Table
| (1) Represents the aggregate of the closing market price at exercise, less the exercise price, for each share exercised. |
Option Exercises and Stock Vested Table
| (2) Calculated using the closing stock price on the date of vesting. |
Option Exercises and Stock Vested Table
| (3) In connection with his departure, the Company accelerated the vesting of Mr. Bulow’s unvested and outstanding RSUs that would have become vested on January 6, 2024 (1/3rd of Mr. Bulow’s only outstanding RSU grant) had Mr. Bulow’s employment continued through that date, pro-rated for the length of time served from the grant date through the separation date. Amounts reflect the market value of the shares on the vesting date, September 30, 2023, the date Mr. Bulow departed the Company. |
Nonqualified Deferred Compensation Plan
Nonqualified Deferred Compensation Plan We currently offer a cash deferred compensation plan for certain of our employees, including our NEOs. Our cash deferred compensation plan provides eligible employees an opportunity to save for retirement and other purposes. Employees may defer up to 90% of their pre-tax base salary and between 10% and 100% of their annual bonus under the plan, which contribution amounts may be matched by the Company at our discretion. Matching contributions, if any, are immediately vested. Employees have an opportunity to earn returns (positive or negative) based on notional investment alternatives offered under the plan but may only earn such returns with respect to any portion of the deferral account based on a single investment option at a time (i.e., no “greater of” returns apply to any amounts deferred under the Deferred Compensation Plan, and any changes to notional investments may only be made prospectively). Employees may elect that account balances be distributed upon any or all of the following payment events: a date specified by the participant with a minimum deferral period of two years, upon a separation from service, retirement or death. In fiscal 2023, Mr. Barnard, Mr. Bulow, and Mr. Giles participated in our cash deferred compensation plan. The Company did not provide any matching contributions. In connection with Mr. Bulow’s departure on September 30, 2023, all amounts were paid out to Mr. Bulow in one lump sum.
Nonqualified Deferred Compensation Plan
| Name | Executive contributions in fiscal 2023(1)($) | Registrant contributions in fiscal 2023 | Aggregate earnings in fiscal 2023(2)($) | Aggregate withdrawals/ distributions in fiscal 2023($) | Aggregate balance as of October 31, 2023(3)($) | | Stephen J. Barnard | 14,904 | — | 111,040 | — | 817,676 | | Bryan E. Giles | 135,879 | — | 11,519 | (77,785) | 310,037 | | Timothy A. Bulow | 45,675 | — | 4,404 | (86,751) | — |
Nonqualified Deferred Compensation Plan
| (1) These amounts represent compensation earned by the NEOs in fiscal 2023 and are also reported in the appropriate columns in the “Summary Compensation Table” above. |
Nonqualified Deferred Compensation Plan
| (2) Represents net amounts credited to the NEO’s accounts as a result of performance of the investment vehicle in which their accounts were deemed invested. These amounts do not represent above-market earnings, and thus are not reported in the “Summary Compensation Table.” |
Nonqualified Deferred Compensation Plan
| (3) Aggregate balance as of October 31, 2023 includes all contributions from earned compensation, plus investment income, through fiscal 2023. These balances include the following aggregate amounts that are reported as compensation in this proxy statement in the “Summary Compensation Table” for fiscal years 2023, 2022, and 2021: $349,192 for Mr. Barnard, $82,215 for Mr. Bulow, and $340,023 for Mr. Giles. |
Nonqualified Deferred Compensation Plan
Earnings on amounts contributed to our cash deferred compensation plan are based on participant selections among the investment options determined by the plan’s administrative committee. Participants do not have an ownership interest in the investment options they select. No fixed interest or “above market” interest rates are offered under the plan. The investment options under the deferred compensation plan and their annual cumulative rates of return for fiscal year 2023 are in the table below:
Nonqualified Deferred Compensation Plan
| Fund Name | Fiscal 2023 Cumulative Annual Returns (%) | Fund Name | Fiscal 2023 Cumulative Annual Returns (%) | | DWS RREEF Real Assets Fund – Class Inst | (7.05) | PGIM Total Return Bond Fund – Class R6 | (1.10) | | FID Intermediate Bond Fund | 0.50 | FID Equity Income Fund | (0.77) | | FID U.S. Bond Index Fund | (2.66) | Parnassus Core Equity Fund – Institutional Shares | 10.15 | | FID 500 Index Fund | 10.70 | MFS Mid Cap Growth Fund Class R3 | 3.51 | | FID Leveraged Company Stock Fund | 7.84 | FID Value Fund | 0.24 | | Janus Henderson Growth and Income Fund Class I | 5.00 | John Hancock Funds Disciplined Value Mid Cap Fund Class R6 | 0.33 | | FID Blue Chip Growth Fund | 31.98 | FID Stock Selector Small Cap Fund | (1.00) | | FID Contrafund | 23.85 | Hartford international Opportunities Fund Class R6 | (0.06) | | JPMorgan Large Cap Growth Fund Class R6 | 16.05 | Dodge & Cox Stock Fund Class I | 3.25 | | Parnassus Mid Cap Fund | (5.05) | Carillon Eagle Mid Cap Growth Fund Class R5 | 0.67 | | Virtus Ceredex Mid Cap Value Equity Fund Class I | (4.46) | Delaware Small Cap Core Fund Institutional Class | (6.00) | | FID Global ex US Index Fund | 1.51 | FID Select Health Care Portfolio | (8.80) | | FID Diversified International Fund | 3.24 | FID Freedom 2005 Fund Class K6 | 0.53 | | FID International Discovery Fund | (0.35) | FID Government Money Market Fund Class K6 | 4.05 | | Cohen & Steers Realty Shares Fund Class L | (6.60) | FID Freedom 2010 Fund Class K6 | 0.86 | | FID Government Money Market Fund | 3.91 | FID FREEDOM 2030 | 2.39 | | FID Real Estate Investment Portfolio | (7.62) | FID FREEDOM 2035 | 3.75 | | FID FREEDOM 2005 | 0.39 | FID FREEDOM 2040 | 5.00 | | FID FREEDOM 2010 | 0.66 | FID FREEDOM 2045 | 5.11 | | FID FREEDOM 2015 | 1.05 | FID FREEDOM 2050 | 5.17 | | FID FREEDOM 2020 | 1.33 | FID FREEDOM 2055 | 5.12 |
Nonqualified Deferred Compensation Plan
| Fund Name | Fiscal 2023 Cumulative Annual Returns (%) | Fund Name | Fiscal 2023 Cumulative Annual Returns (%) | | FID FREEDOM 2025 | 1.69 | FID FREEDOM 2060 | 5.13 | | FID Extended Market Index Fund | 2.09 | FID FREEDOM 2065 | 5.17 | | FID Freedom 2015 Fund Class K6 | 1.19 | FID Freedom 2030 Fund Class K6 | 2.64 | | FID Freedom 2020 Fund Class K6 | 1.54 | FID Freedom 2035 Fund Class K6 | 3.99 | | FID Freedom 2025 Fund Class K6 | 1.92 | FID Freedom 2040 Fund Class K6 | 5.13 | | FID Freedom 2045 Fund Class K6 | 5.44 | FID Freedom 2050 Fund Class K6 | 5.38 | | FID Freedom 2055 Fund Class K6 | 5.39 | FID Freedom 2060 Fund Class K6 | 5.42 | | FID Freedom 2065 Fund Class K6 | 5.35 | FID Freedom Income Fund | 0.15 | | Fidelity Freedom Income Fund Class K6 | 0.40 | | |
Nonqualified Deferred Compensation Plan
None of our NEOs participated in our Executive Equity Deferral Plan during fiscal 2023. This plan allowed participants to defer annual equity grants on a pre-tax basis with income tax deferrals until distribution rather than at vesting. The plan is not currently being offered on a go-forward basis.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Per the terms of the Employment Agreement and Severance Plan, Mr. Barnard, Mr. Giles, and Ms. Wu receive certain payments in the event of a qualifying termination and a qualifying termination within the change in control period (as defined) as set forth in the table set forth below– see Executive Employment and Severance Arrangements; Offer Letters. Mr. Bulow did not participate in the Severance Plan. In connection with Mr. Bulow’s termination on September 30, 2023, Mr. Bulow received (i) a gross cash severance payment of $475,020, (ii) COBRA insurance premiums paid on behalf of Mr. Bulow and his family totaling $5,087, which represents the portion of the 12 months of COBRA coverage paid in fiscal 2023 that the Company agreed to provide Mr. Bulow subject to the terms of his Separation Agreement and General Release; (iii) $46,607 of paid time-off that was accrued but unused; and (iv) accelerated vesting of certain of his outstanding and unvested RSUs, with a modified grant date fair value upon such acceleration of $51,501, all of which are reflected in “All Other Compensation” of the Summary Compensation Table above. Mr. Wiesner does not participate in our Executive Severance Plan. Equity award treatment upon termination for Mr. Wiesner is subject to our standard award agreements which provide certain limited benefits as described above. Estimated Potential Payments The table below sets forth the estimated value of compensation and benefits that would be delivered to each of our NEOs (other than Mr. Bulow, discussed above) upon (i) a termination by the Company without Cause or by the executive for Good Reason (a “Qualifying Termination”) within the Change in Control Period (“CIC Period”), (ii) a Qualifying Termination (not within the CIC Period), and (iii) death or disability, assuming such events occurred on October 31, 2023. All equity values shown in the table below are based on the closing stock price of our common stock on October 31, 2023 of $9.41. The actual value of the equity awards that would be provided can only be determined at the time of an actual triggering event.
Potential Payments Upon Termination or Change in Control
| Name and Principal Position | Triggering Event | Cash Severance ($) | Health Benefits ($)(1) | Equity Award Value ($) | Total ($) | | Stephen J. Barnard Chief Executive Officer | Qualifying Termination within CIC Period | 2,325,000(2) | 45,797 | 2,188,653(3) | 4,559,450 | | | Qualifying Termination (not within CIC Period) | 2,325,000(4) | 45,797 | 429,894(5) | 2,800,691 | | | Death or Disability | — | — | 397,274(6) | 397,274 | | Bryan E. Giles Chief Financial Officer | Qualifying Termination within CIC Period | 1,063,125(2) | 64,292 | 669,729(3) | 1,797,146 | | | Qualifying Termination (not within CIC Period) | 826,875(4) | 64,292 | 127,481(5) | 1,018,648 | | | Death or Disability | — | — | 115,662(6) | 115,662 | | Juan A. Wiesner President of Central and South America | Qualifying Termination within CIC Period | — | — | 217,070(7) | 217,070 | | | Qualifying Termination (not within CIC Period) | — | — | —(8) | —(8) | | | Death or Disability | — | — | 99,320(6) | 99,320 | | Joanne C. Wu General Counsel and Secretary | Qualifying Termination within CIC Period | 936,000(2) | 64,292 | 521,126(3) | 1,521,418 | | | Qualifying Termination (not within CIC Period) | 728,000(4) | 64,292 | 103,584(5) | 895,876 | | | Death or Disability | — | — | 83,141(6) | 83,141 |
Potential Payments Upon Termination or Change in Control
| (1) Represents premiums for 12-months of COBRA coverage substantially similar to that provided under the Company’s health plan. |
Potential Payments Upon Termination or Change in Control
| (2) Represents a lump sum cash payment (a) for Mr. Barnard, equal to 2.0 times the sum of his base salary plus target annual bonus for fiscal 2023, and (b) for the other NEOs, equal to 1.5 times the sum of the Covered Executive’s base salary plus target annual bonus for fiscal 2023. |
Potential Payments Upon Termination or Change in Control
| (3) Represents the value of full vesting of outstanding unvested RSUs and unvested stock options, plus the value of outstanding PSUs based on the number of PSUs earned at target level performance. All stock options were underwater at October 31, 2023 and therefore amounts reflect a value of zero for unvested stock options. In addition, the stock options would be exercisable for 12 months following termination. |
Potential Payments Upon Termination or Change in Control
| (4) Represents a lump sum cash payment (a) for Mr. Barnard, equal to 2.0 times the sum of his base salary plus target annual bonus for fiscal 2023, and (b) for the other NEOs, equal to 1.0 times the sum of the Covered Executive’s base salary plus target annual bonus for fiscal 2023. |
Potential Payments Upon Termination or Change in Control
| (5) Represents the value of pro- rata vesting of outstanding unvested RSUs and unvested stock options based on days served during the vesting period, plus the value of PSUs based on the estimated number of PSUs that would have been earned based on performance through October 31, 2023, prorated based on days served during the three-year performance period; such value was zero based on actual performance through October 31, 2023. All stock options were underwater at October 31, 2023 and therefore amounts reflect a value of zero for unvested stock options. In addition, the stock options would be exercisable for 12 months following termination. |
Potential Payments Upon Termination or Change in Control
| (6) Represents the value of outstanding PSUs based on the number of PSUs earned at target level performance, pro-rated based on the number of full months of service during the performance period. In the event of death or disability unvested RSUs are forfeited. In addition, unvested stock options are forfeited; vested stock options would be exercisable for 12 months following death or disability. |
Potential Payments Upon Termination or Change in Control
| (7) Based on the greater of the number of PSUs earned based on actual performance as of October 31, 2023 and target level of performance. Actual performance as of October 31, 2023 was below threshold and would result in a zero payout; as such, values reflect target level of performance. |
Potential Payments Upon Termination or Change in Control
| (8) Amounts reflect the value of PSUs based on the estimated number of PSUs that would have been earned based on performance through October 31, 2023, prorated based on full months served during the three-year performance period; such value was zero based on actual performance through October 31, 2023. |
CEO Pay Ratio
CEO Pay Ratio We are required by Item 402(u) of Regulation S-K, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, to disclose the ratio of our fiscal year 2023 CEO’s annual total compensation to the median of the annual total compensation of all of our employees. The SEC’s rules for calculating this ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio we disclose below. We believe our fiscal year 2023 pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules and in accordance with the methodology described below.
2023 CEO Pay Ratio
2023 CEO Pay Ratio Mr. Barnard had total annual compensation as reported in the Summary Compensation Table, of $2,575,284 in fiscal 2023. Our median employee had compensation of $6,611 in fiscal 2023. As a result, we estimate that the ratio of our CEO’s compensation to that of our median employee was approximately 390 to 1.
2023 CEO Pay Ratio
| Total Annual Compensation – Median Employee | Total Annual Compensation – CEO | 2023 CEO Pay Ratio | | $6,611 | $2,575,284 | 390:1 |
Pay for Performance
| (1) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year: |
Pay for Performance
| (3) Fair value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined by reference to (i) for RSUs, the closing price per share on the applicable year-ends ($9.41 for October 31, 2023, $16.64 for October 31, 2022 and $18.99 for October 31, 2021) or, in the case of vesting dates, the closing price per share on the applicable vesting dates; (ii) for the PSUs, the fair value was calculated by multiplying the probability of achievement of the applicable performance objective as of the applicable dates by the closing price per share for the respective dates; the probability of achievement for PSUs granted on January 3, 2022 was zero and 70% as of October 31, 2023 and 2022, respectively, and for PSUs granted on January 6, 2023, the probability of achievement was 60% as of October 31, 2023 (iii) for stock options, a Black Scholes value as of the applicable year-end or vesting dates. A summary of Black Scholes assumptions used for the applicable year-end or vesting dates as compared to those used at grant date is set forth below: |
Narrative Disclosure to Pay Versus Performance Table
Narrative Disclosure to Pay Versus Performance Table The Company’s initial public offering (“IPO”) occurred in October 2020. Prior to our IPO, the Company did not routinely grant equity awards as part of its executive compensation packages. In 2019, the Board of Directors granted 1.7 million stock options to the PEO in connection with the anticipated IPO. In 2020, following the completion of the IPO, the Board of Directors approved a one-time stock option grant to certain employees, including three of our non-PEO NEOs at that time. In 2021, no equity awards were granted as the Company had not yet implemented its long-term equity incentive compensation program for executives. In 2022, the Compensation Committee approved the inaugural long-term incentive program. Relationship Between Financial Performance Measures The graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our cumulative TSR, (ii) our Peer Group TSR, (iii) our net income (loss) and (iv) our adjusted operating income, in each case, for the fiscal years ended October 31, 2023, 2022 and 2021. TSR amounts reported in the graph assume an initial fixed investment of $100 on October 30, 2020, and that all dividends, if any, were reinvested. CAP versus TSR CAP versus Net Income (loss) CAP versus Adjusted Operating Income Pay Versus Performance Tabular List We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended October 31, 2023:
Narrative Disclosure to Pay Versus Performance Table
| • | Adjusted operating income; |
Narrative Disclosure to Pay Versus Performance Table
| • | Adjusted net income per share; and |
Narrative Disclosure to Pay Versus Performance Table
| • | Adjusted EBITDA. |
Narrative Disclosure to Pay Versus Performance Table
For additional details regarding our most important financial performance measures, see Overview of 2023 Compensation Program for NEOs, Fiscal 2023 Compensation Decisions, and 2024 Compensation Design.