DEF 14A of Cal-Maine Foods Inc
Filed Aug 17, 2021 · FY20210001193125-21-248349
PROPOSAL NO. 1: ELECTION OF DIRECTORS
PROPOSAL NO. 1: ELECTION OF DIRECTORS Our bylaws provide that the number of directors shall be fixed by resolution of the Board of Directors and that the number may not be less than three nor more than 12. The Board of Directors has fixed the number of directors at seven as of the date of the Annual Meeting. Unless otherwise specified, proxies will be voted FOR the election of the seven nominees named below to serve until the next annual meeting of stockholders and until their successors are elected and qualified. If, at the time of the Annual Meeting, any of the nominees named below is unable to serve or for good cause will not serve, the proxies will be voted for the election of such other person or persons as the Board of Directors may designate in their discretion, unless otherwise directed. The Board of Directors has designated Adolphus B. Baker, Max P. Bowman, Letitia C. Hughes, Sherman L. Miller, James E. Poole, Steve W. Sanders and Camille S. Young as nominees for election as directors of the Company at the Annual Meeting (each a “Nominee”). Each Nominee is currently a director of the Company and all Nominees have consented to being named as a nominee in this proxy statement and to serve as a director if elected. If elected, each Nominee will serve until the expiration of his/her term at the next annual meeting of stockholders and until his/her successor is elected and qualified or until his/her earlier death, resignation or removal from office. Under our bylaws, our directors are elected by a plurality of votes cast. For more information on the voting requirements, see “Voting Shares—Election of Directors” above. The Board unanimously recommends a vote “FOR” the seven Nominees.
DIRECTOR NOMINEES
DIRECTOR NOMINEES The table below sets forth certain information regarding the business experience and qualifications, attributes and skills of the Nominees for election to the Board of Directors:
DIRECTOR NOMINEES
| Name and Tenure | Age | Business Experience, Qualifications, Attributes and Skills | | Adolphus B. Baker Director since 1991 | 64 | Mr. Baker serves as Chairman of the Board and Chief Executive Officer of the Company. He served as President until April 7, 2018. He was elected Chairman of the Board in 2012 and President and Chief Operating Officer in 1997. Mr. Baker served as Chief Operating Officer until he was elected Chief Executive Officer in 2010. He was serving as Vice President and Director of Marketing of the Company when elected President. Previously, Mr. Baker had served as Assistant to the President since 1987 and has been employed by the Company since 1986. He is past chairman of the American Egg Board, United Egg Producers, Egg Clearinghouse, Inc. and Mississippi Poultry Association and a past director of United Egg Producers. He is a director of Eggland’s Best, Inc., Trustmark Corporation and Trustmark National Bank. He is also a member of the board of managers of Eggland’s Best, LLC. Mr. Baker is the son-in-law of Fred R. Adams, Jr., our late founder. Mr. Baker brings a highly informed view of Company operations to the Board’s activities. He is active in the industry and has the depth of knowledge and experience necessary to guide the Company through a continuously changing spectrum of challenges and opportunities in the egg industry. | | Max P. Bowman Director since 2018 | 61 | Mr. Bowman has served as Vice President – Chief Financial Officer, Treasurer and Secretary since October 5, 2018. He joined the Company as the Vice President – Finance in June 2018. Mr. Bowman was Chief Financial Officer, Vice President and Secretary of Southern States Utility Trailer Sales, Inc. and H & P Leasing, Inc. from October 2014 until June 2018. From 2003 to 2014, Mr. Bowman was co-founder of Tenax LLC and Tenax Aerospace, LLC, a special mission aircraft leasing company. Mr. Bowman served in numerous leadership capacities at Tenax Aerospace including, Chief Executive Officer, Chief Financial Officer and President and served on the Board of Directors. Mr. Bowman also served as a Board member and executive officer or WGS Systems, LLC. From 1997 until 2003 Mr. Bowman served as the Chief Financial Officer for ChemFirst, Inc. (CEM), a NYSE company that was sold to DuPont, DD-B (NYSE) in December 2002. With more than 35 years of relevant business experience in finance and executive management in private and public companies, Mr. Bowman brings proven and strong leadership to the Company particularly in the areas of Accounting, Finance, Communications and Risk Management. | | Letitia C. Hughes Director since 2001 | 69 | Ms. Hughes was associated with Trustmark National Bank, Jackson, Mississippi, in managerial positions from 1974 until her retirement in 2014. At her retirement she served as Senior Vice-President, Manager, Private Banking. She is an independent director. Ms. Hughes’ experience in leadership positions at Trustmark National Bank, a large regional bank operating in the southeastern portion of the United States, gives her broad knowledge of the general business climate and has given the Board invaluable insights into the Company’s relationships with its banks and lenders. |
DIRECTOR NOMINEES
| Sherman L. Miller Director since 2012 | 46 | Mr. Miller serves as President and Chief Operating Officer of the Company. He joined the Company in 1996 and has served in various positions in operations. Mr. Miller was elected President in 2018 and Chief Operating Officer in 2011, and Vice President of Operations in 2007. He is a director of the U.S. Poultry and Egg Association, United Egg Producers and the American Feed Industry Association. Mr. Miller’s more than 20 years of experience with the Company provides him with a deep knowledge and experience base regarding the Company’s operations, customers and industry. | | James E. Poole Director since 2004 | 72 | Mr. Poole is a Certified Public Accountant and was a principal with the accounting firm of Grantham, Poole, Randall, Reitano, Arrington & Cunningham, PLLC of Ridgeland, Mississippi for more than five years until his retirement in 2013. Mr. Poole is an independent director. Until his retirement in 2013, Mr. Poole served a broad scope of clients as a principal in one of the larger public accounting firms in the State of Mississippi. He brings not only accounting expertise to the Board but also a broad knowledge of the general business climate within which the Company operates. | | Steve W. Sanders Director since 2009 | 75 | Mr. Sanders is a Certified Public Accountant. He retired in 2002 as the managing partner of the Jackson, Mississippi office of Ernst & Young LLP, certified public accountants, after over 30 years with that firm. He served as a director of Valley Services, Inc., a privately-held food services company from 2003 until its sale in 2012. He also served as a Lecturer at the Adkerson School of Accountancy, Mississippi State University, where he has taught accounting and auditing courses from 2003 until his retirement on June 30, 2017. Mr. Sanders is an independent director. Mr. Sanders headed the Jackson, Mississippi office of Ernst & Young, where he was presented with a multitude of accounting issues raised by a client base consisting of a wide array of businesses until his retirement in 2002. Mr. Sanders brings to the board extensive accounting knowledge and leadership from his experience consulting and guiding companies through a multitude of complex issues and continual changes in various industries. | | Camille S. Young Director since 2021 | 48 | Ms. Young serves as Principal and Director of Cornerstone Government Affairs, a full-service, bipartisan consulting firm specializing in federal and state government relations, public affairs and strategic communications, and advisory services. She also serves as the co-chair of the firm’s diversity and inclusion working group. She joined the firm in 2011. Ms. Young is an independent director. Prior to joining Cornerstone, Ms. Young was a government affairs representative with one of Mississippi’s leading law firms, Watkins Ludlam Winter & Stennis, P.A. Ms. Young previously worked for the Mississippi Farm Bureau Federation in several capacities, including communications specialist, director of media relations and government relations specialist, and she also held a position with the United States Department of Agriculture as an outreach and public affairs specialist. |
Consideration of Director Nominees; Diversity
Consideration of Director Nominees; Diversity In recommending nominees for the Board, the Nominating Committee considers any specific criteria the Board may request from time to time and such other factors as it deems appropriate. These factors may include any special training or skill, experience with businesses and other organizations of comparable size and type, experience or knowledge with businesses that are particularly relevant to the Company’s current or future business plans, financial expertise, the interplay of the candidate’s experience with the experience of the other directors, sufficient time to devote to the responsibilities of a director, freedom from conflicts of interest or legal issues and the extent to which, in the Nominating Committee’s opinion, the candidate would be a desirable addition to the Board. Diversity is taken into account when determining how the candidates’ qualities and attributes would complement the other directors’ backgrounds. Type of advanced studies and certification, type of industry experience, area of corporate experience and gender, among other factors, are taken into consideration. The Nominating Committee believes that the different business and educational backgrounds of the directors of the Board contribute to the overall insight necessary to evaluate matters coming before the Board. Each candidate brought to the attention of the Nominating Committee, regardless of who recommended such candidate, will be considered on the basis of the criteria set forth above.
Base Salary
Base Salary We believe that base salaries, which provide fixed compensation, should meet the objective of attracting and retaining the executive officers needed to manage our business successfully. Base salary adjustments, if any, are approved in December of each year and become effective January 1st of the following calendar year. After consideration of the review of peer company compensation prepared in 2019 by Mercer (US) Inc. (“Mercer”), a compensation consulting firm engaged by our Compensation Committee, which review indicated that the base salaries of our executive officers lagged behind the peer group, the Compensation Committee approved base salary increases effective January 1, 2021 for the members of the Executive Committee as follows: Mr. Baker – 3%, Mr. Bowman – 5.5% and Mr. Miller – 7.15%, and Mr. Holladay, our General Counsel, 6.5%. Based on the same analysis, the Executive Committee approved base salary increases for our other named executive officer, Mr. Hardin – 3%, also effective January 1, 2021. We believe following these increases and those made in 2020, the base salaries of our named executive officers remain in the 25th percentile of our peer group based on the 2019 Mercer report. See “Benchmarking of Compensation” below for information regarding the Mercer report.
Annual Cash Bonus
Annual Cash Bonus Executive Committee Members and General Counsel Bonus Programs For members of our Executive Committee and Mr. Holladay, the bonus program is essentially subjective, rather than utilizing objective criteria. The Executive Committee recommends bonuses for its members and Mr. Holladay, and the Compensation Committee reviews these recommendations and makes the final determination as to bonus awards. Although these bonus awards are not based on objective goals, our Company’s profitability has historically been the most significant item in determining bonus amounts for the Executive Committee members and Mr. Holladay. Mr. Hardin has historically participated in the general bonus program applicable to our other officers and employees. The Committee considered the Company’s lower profitability compared to 2020 and each individual’s workload and job performance in determining bonuses for the Executive Committee and Mr. Holladay for 2021, which were lower than the 2020 bonus awards, except for Mr. Bowman, as a result of the Company’s lower profitability. General Bonus Program During fiscal year 2021, Mr. Hardin was covered by our general bonus program. Officers in this program are eligible to earn a bonus equal to 50% of the sum of the officer’s base salary plus such officer’s prior year’s bonus. This program is designed to reward both Company and individual performance during the year. Of the potential bonus that could be earned by Mr. Hardin under this program, approximately 50% is based on our profitability. If we earn a minimum profit, on a pre-tax basis, of five cents per dozen eggs produced, Mr. Hardin could earn the full portion of his bonus attributable to our profitability, subject to adjustment at the discretion of the Chief Executive Officer. If our profit is less than five cents per dozen eggs produced, Mr. Hardin’s bonus would be reduced by a corresponding percentage, again subject to adjustment at the discretion of our Chief Executive Officer. The remaining approximate 50% is based on his individual performance as evaluated by our Chief Executive Officer in his discretion. Mr. Baker’s evaluation includes his personal assessment of the overall efficiency, effectiveness, cooperativeness, enthusiasm, judgment and attitude that Mr. Hardin brings to the performance of his duties. Our Chief Executive Officer has the authority to adjust general bonuses under this program for our officers as deemed appropriate for competitive reasons or extraordinary circumstances or conditions.
Equity Compensation
Equity Compensation The Company believes it is essential to provide our named executive officers with a long-term equity component of compensation in order to better align their interests with those of the Company’s stockholders. Our named executive officers participate in our Amended and Restated 2012 Omnibus Long-Term Incentive Plan (“Plan”). The Plan is administered by the LTIP Committee. On December 11, 2020, the LTIP Committee authorized grants of RSAs to a broad base of employees of the Company, including the named executive officers, which grants were effective January 12, 2021. The RSAs vest fully on the third anniversary of the date of grant, January 12, 2024. The LTIP Committee’s use of RSAs, the level of RSAs awarded to each named executive officer, and the vesting structure of such RSAs were based in large part on the recommendations of Mercer’s 2019 report, and comparisons to the Company’s peer group, and were consistent with the grant levels during the past three years. See the “Benchmarking of Compensation” and “Compensation Consultants” sections below. While the LTIP Committee has not developed formal policies concerning the timing of grants and other matters, its practice has been to authorize grants of restricted shares annually in mid-December, with the grants to be made effective the following January.
Employment Agreements and Severance and Change in Control Arrangements
Employment Agreements and Severance and Change in Control Arrangements None of our named executive officers has an employment agreement with the Company. In addition, no named executive officer is entitled to receive any severance or change in control payment; however, existing grants of RSAs do vest on death, disability or change in control, and the LTIP Committee in its sole discretion may determine that such grants will vest partially or in full as of retirement. See the “Potential Payments Upon Termination or Change in Control” section below.
Benchmarking of Compensation
Benchmarking of Compensation Since fiscal year 2013 the Compensation Committee has engaged the consulting firm of Mercer, a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), to periodically provide compensation analysis and consulting services regarding executive and director compensation. Part of this engagement involves benchmarking the Company’s executive pay against a peer group and published compensation surveys. Mercer last provided the Compensation Committee with an executive compensation analysis in 2019, which include a benchmarking analysis. The 2019 peer group consisted of 15 companies, all of which were publicly traded at the time of the report. The peer group was selected based on research by Mercer and input from management and consisted of the following companies based on size as measured by revenues (with the Company falling in the 60th percentile), industry focus and market capitalization (with the Company falling in the 63th percentile):
Benchmarking of Compensation
| B&G Foods, Inc. | National Beverage Corp. | | Calavo Growers, Inc. | Pyxus International, Inc. | | Flowers Foods, Inc. | Sanderson Farms, Inc. | | Farmer Brothers Co. | Seneca Foods Corporation | | The Hain Celestial Group, Inc. | Sunopta, Inc. | | J & J Snack Foods Corp. | The Boston Beer Company, Inc. | | John B. Sanfilipo & Son, Inc. | Universal Corporation | | Lancaster Colony Corporation | |
Compensation Consultants
Compensation Consultants In addition to the services described above, the Chairman of the Compensation Committee periodically engages Mercer to review annual and long-term incentive plan designs for competitiveness and alignment with peer companies, and to update management and the Board on executive compensation trends, including director compensation. This review was last completed in fiscal 2020. Mercer reported to Mr. Poole, who is an independent director and Chairman of the Compensation Committee, and consulted with Mr. Baker, Chairman of the Board and Chief Executive Officer and Mr. Bowman, a Vice President and Chief Financial Officer of the Company, in connection with the Executive Committee’s determinations and recommendations regarding other officers’ compensation. During fiscal year 2021, the LTIP Committee based its grants of RSAs to officers and directors in large part on Mercer’s 2019 recommendations. At the time of Mercer’s most recent engagement in fiscal 2020, the Compensation Committee assessed the independence of Mercer pursuant to applicable SEC and NASDAQ rules and concluded that the engagement did not raise any conflicts of interest. Mercer did not provide any compensation consulting services during fiscal 2021.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(3) | Total ($) | | Adolphus B. Baker, | 2021 | 454,518 | 285,671 | 296,134 | -0- | 138,078 | 1,174,401 | | Chairman/CEO | 2020 | 440,815 | 300,300 | 296,055 | 89,035 | 134,555 | 1,260,760 | | | 2019 | 426,485 | 410,000 | 293,724 | 22,343 | 137,532 | 1,290,084 | | Max P. Bowman, | 2021 | 276,296 | 168,563 | 98,774 | -0- | 82,862 | 626,495 | | VP/ CFO/ Treasurer/ Secretary | 2020 | 254,136 | 164,500 | 98,685 | 4,535 | 84,687 | 606,543 | | | 2019 | 239,808 | 200,000 | 97,823 | 3,978 | 72,169 | 613,778 | | Sherman L. Miller, | 2021 | 288,522 | 181,406 | 98,774 | -0- | 22,652 | 591,354 | | President/Chief Operating Officer | 2020 | 261,444 | 183,750 | 98,685 | -0- | 24,073 | 567,952 | | | 2019 | 260,231 | 245,500 | 97,823 | -0- | 29,909 | 633,463 | | Charles J. Hardin, | 2021 | 238,043 | 146,952 | 59,189 | -0- | 57,517 | 501,701 | | VP/ Sales | 2020 | 220,994 | 149,822 | 59,096 | 74,156 | 60,114 | 564,182 | | | 2019 | 222,091 | 193,062 | 58,728 | 17,491 | 60,523 | 551,895 | | Robert L. Holladay, | 2021 | 236,406 | 148,181 | 98,774 | -0- | 22,618 | 505,979 | | Jr., VP/General Counsel | 2020 | 211,683 | 150,150 | 98,685 | -0- | 26,959 | 487,477 | | | 2019 | 209,502 | 200,000 | 97,823 | -0- | 33,608 | 540,933 |
SUMMARY COMPENSATION TABLE
| (1) Salary for fiscal years 2019, 2020 and 2021 include 26 pay periods. We have adjusted Mr. Baker’s salary for 2020 by approximately $17,000 to better reflect the timing of the payroll periods. |
SUMMARY COMPENSATION TABLE
| (2) The amount listed represents the aggregate grant date fair value of time-vested restricted share awards (“RSAs”) computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 – Compensation – Stock Compensation (“FASB ASC Topic 718”). |
SUMMARY COMPENSATION TABLE
| (3) The detail on amounts in this column is set forth in the “2021 All Other Compensation” table below. |
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date | Approval Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock and Option Awards ($)(2) | | Adolphus B. Baker | 01/12/21 | 12/11/20 | 7,855 | 296,134 | | Max P. Bowman | 01/12/21 | 12/11/20 | 2,620 | 98,774 | | Sherman L. Miller | 01/12/21 | 12/11/20 | 2,620 | 98,774 | | Charles J. Hardin | 01/12/21 | 12/11/20 | 1,570 | 59,189 | | Robert L. Holladay, Jr. | 01/12/21 | 12/11/20 | 2,620 | 98,774 |
GRANTS OF PLAN-BASED AWARDS
| (1) Amounts shown in this column represent grants of RSAs made in fiscal year 2021, which vest fully on the third anniversary of the date of grant, generally conditioned upon the grantee remaining employed by the Company. Vesting of such RSAs is accelerated upon a change in control of the Company or upon the death or disability of the grantee. If the grantee’s employment is terminated due to retirement, the LTIP Committee may provide for full or partial vesting of such shares in its sole discretion. |
GRANTS OF PLAN-BASED AWARDS
| (2) The grant date fair value of the RSAs set forth in this column is based on the closing price of Company common stock on the grant date, which was $37.70. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Stock Awards | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Adolphus B. Baker | 1/15/2019 | 6,882 | 240,251 | | | 1/14/2020 | 7,740 | 270,203 | | | 1/12/2021 | 7,855 | 274,218 | | Max P. Bowman | 1/15/2019 | 2,292 | 80,014 | | | 1/14/2020 | 2,580 | 90,068 | | | 1/12/2021 | 2,620 | 91,464 | | Sherman L. Miller | 1/15/2019 | 2,292 | 80,014 | | | 1/14/2020 | 2,580 | 90,068 | | | 1/12/2021 | 2,620 | 91,464 | | Charles J. Hardin | 1/15/2019 | 1,376 | 48,036 | | | 1/14/2020 | 1,545 | 53,936 | | | 1/12/2021 | 1,570 | 54,809 | | Robert L. Holladay, Jr. | 1/15/2019 | 2,292 | 80,014 | | | 1/14/2020 | 2,580 | 90,068 | | | 1/12/2021 | 2,620 | 91,464 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) All of these RSA grants were made under the Plan and will vest fully on the third anniversary of the date of grant, conditioned upon the grantee remaining employed by the Company. Vesting of such RSAs is accelerated upon a change in control of the Company (as defined in the Plan) or upon the death or disability of the grantee. If the grantee’s employment is terminated due to retirement, the LTIP Committee may provide for full or partial vesting of such shares in its sole discretion. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) Market value is based on the closing price of Company common stock as of May 28, 2021, the last business day of the Company’s fiscal year 2021, which was $34.91. |
STOCK VESTED
STOCK VESTED
STOCK VESTED
| | Restricted Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized On Vesting ($)(2) | | Adolphus B. Baker | 6,500 | 237,055 | | Max P. Bowman | -0- | -0- | | Sherman L. Miller | 2,165 | 78,958 | | Charles J. Hardin | 1,300 | 47,411 | | Robert L. Holladay, Jr. | 2,165 | 78,958 |
STOCK VESTED
| (1) The number of shares acquired is reported on a gross basis. The Company withheld the necessary number of shares of common stock in order to satisfy withholding taxes due upon vesting of the RSAs, thus the named executive officers actually received a lower number of shares of the Company’s common stock than the numbers reported in this table. |
STOCK VESTED
| (2) The value realized on vesting of RSAs is based on the closing sale price on the date of vesting of the RSAs or, if there were no reported sales on such date, on the last preceding date on which any reported sale occurred. |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Adolphus B. Baker | -0- | 70,240 | 361,834 | -0- | 1,304,087 | | Max P. Bowman | -0- | 48,600 | 47,663 | -0- | 196,576 | | Sherman L. Miller | N/A | N/A | N/A | N/A | N/A | | Charles J. Hardin | -0- | 42,300 | 290,236 | -0- | 1,037,189 | | Robert L. Holladay, Jr. | N/A | N/A | N/A | N/A | N/A |
NONQUALIFIED DEFERRED COMPENSATION
| (1) The entire amount reported in this column for each named executive officer is included within the amount reported as 2021 all other compensation in the Summary Compensation Table. |
NONQUALIFIED DEFERRED COMPENSATION
| (2) This amount reflects aggregate earnings on nonqualified deferred compensation based on the increase in value of the Vanguard 500 Index Fund Admiral Shares, the index fund selected by the Board to determine investment credits under the nonqualified Deferred Compensation Plan. This fund is also an investment options for participants in our KSOP. |
NONQUALIFIED DEFERRED COMPENSATION
| (3) Amounts reported in this column for each named executive officer include amounts previously reported in the Company’s Summary Compensation Table in previous years when earned if that officer’s compensation was required to be disclosed in a previous year. Amounts previously reported in such years include previously earned, but deferred, contributions. This total reflects the cumulative value of each named executive officer’s contributions and investment experience. |
NONQUALIFIED DEFERRED COMPENSATION
For additional detail regarding these arrangements, see “Compensation Discussion and Analysis – Elements of Compensation – Deferred Compensation Arrangements.”
Pension Benefits
Pension Benefits No named executive officer participates in any pension plan.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL As described in the Compensation Discussion and Analysis, the Company has not entered into agreements with our named executive offices that provide for severance or change in control payments. Accordingly, the RSAs, which will vest upon certain terminations of employment and a change in control (as defined in the Plan), as described in the footnotes to the table below, are the only form of compensation reflected in the table below. In addition, the following table does not quantify payments under plans that are generally available to all salaried employees, similarly situated to the named executive officers in age, years of service, date of hire, etc., and that do not discriminate in scope, terms or operation in favor of executive officers. For the named executive officers, the value of the RSAs that would vest upon termination of employment due to death or disability, or a change in control of the Company as of the end of the Company’s fiscal year ended May 29, 2021, are outlined below, based on the Company’s closing stock price of $34.91 on May 28, 2021, the last business day of such fiscal year.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| Name | Form of Compensation | Involuntary Termination By Company or Voluntary Termination by Employee(1) ($) | Retirement(2) ($) | Death or Disability(3) | Change in Control(4) | | Adolphus B. Baker | RSAs | -0- | 784,672 | 784,672 | 784,672 | | Max P. Bowman | RSAs | -0- | 261,546 | 261,546 | 261,546 | | Sherman L. Miller | RSAs | -0- | 261,546 | 261,546 | 261,546 | | Charles J. Hardin | RSAs | -0- | 156,781 | 156,781 | 156,781 | | Robert L. Holladay, Jr. | RSAs | -0- | 261,546 | 261,546 | 261,546 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (1) Upon termination by the Company or the employee (other than termination due to a retirement, death or disability), the named executive officers’ RSA agreements provide for forfeiture of all unvested RSAs. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (2) Upon retirement of a grantee, the LTIP Committee in its sole discretion may provide that RSAs will vest partially or in full as of the effective date of the grantee’s termination due to retirement. The amounts set forth in the column assume the LTIP Committee has exercised discretionary authority to fully vest all such RSAs. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (3) Upon death or disability of a grantee, all RSAs will vest as of the date of such death or disability and all restrictions will lapse. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| (4) Upon the completion of a change in control of the Company, all RSAs will vest and all restrictions will lapse. |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE To determine the median employee compensation, we analyzed all of Cal-Maine’s employees, excluding Cal- Maine’s Chief Executive Officer, as of May 29, 2021. We annualized wages for employees that were not employed for the full year. We used year to date gross wages as the consistently applied compensation metric to determine the median employee. After identifying the median employee, we calculated annual total compensation for the median employee according to the methodology used to report the annual compensation of our named executive officers in the Summary Compensation Table on page 19. The 2021 annual total compensation of our median employee other than Mr. Baker was $37,768. Mr. Baker’s 2021 annual total compensation was $1,174,401. Based on the foregoing, our estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees was approximately 31 to 1. Given the different methodologies that different public companies use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION For fiscal year 2021, the Company’s non-employee directors each received an annual fee of $45,000 as compensation for their services as a director. The fee is paid in quarterly installments, in advance of each quarterly board meeting. In addition to the non-employee directors’ annual fees, Ms. Hughes received $3,000 and Messrs. Poole and Sanders each received $2,500 as members of a special committee of the Board. Employee directors receive no additional compensation for their services as directors of the Company, and the compensation of Messrs. Baker, Bowman and Miller is reflected in the Summary Compensation Table above. On January 12, 2021, Ms. Hughes and Messrs. Poole and Sanders, as independent directors, each received grants of 2,620 RSAs, and upon Ms. Young becoming an independent director on March 11, 2021, she was granted 2,300 RSAs under the Plan. Such RSAs vest 100% on the third anniversary of the date of grant. Mercer also periodically reviews and benchmarks the Company’s director compensation program, and the last such review was completed in 2019. See “Compensation Discussion & Analysis – Compensation Advisors” for more information regarding Mercer.
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | | Letitia C. Hughes | 48,000 | 98,774 | 146,774 | | James E. Poole | 47,500 | 98,774 | 146,274 | | Steve W. Sanders | 47,500 | 98,774 | 146,274 | | Camille S. Young | 22,500 | 98,187 | 120,687 |
DIRECTOR COMPENSATION TABLE
| (1) Board fees are ordinarily paid in advance of each quarterly board meeting but after each quarter close. All directors were paid for four board meetings except Ms. Young, who was paid for two board meetings related to fiscal year 2021. |
DIRECTOR COMPENSATION TABLE
| (2) The aggregate grant date fair value of the RSAs set forth in this column is computed in accordance with FASB ASC Topic 718 and based on the closing price of the Company’s common stock as of the grant date, which was $37.70 for the grants to all the directors except Ms. Young and $42.69 for the grant to Ms. Young. At the end of fiscal year 2021, Ms. Young had 2,300 unvested RSAs and each other director listed in this table had 7,492 unvested RSAs. |