DEF 14A of Hain Celestial Group Inc
Filed Sep 15, 2023 · FY20230001193125-23-236160
Corporate Governance Strengths
| • | Director Compensation |
Director Nominee Snapshot
Director Nominee Snapshot The following shows information relating to the diversity, independence and tenure of our eight director nominees.
Director Nominee Snapshot
| Diversity | Independence | Tenure | | | | |
Election of Directors
Election of Directors
General
General Our Board of Directors, upon the recommendation of the Corporate Governance and Nominating Committee, has nominated the eight nominees identified below for election at the 2023 Annual Meeting. All nominees currently serve as directors on our Board. Each director elected at the 2023 Annual Meeting will hold office until the next annual meeting of shareholders and until a successor is elected and qualified. Each director nominee has consented to being named in this proxy statement and to serving as a director if elected. Dean Hollis and Mark L. Schiller are not standing for reelection to the Board, and their service will cease as of the 2023 Annual Meeting. The Company thanks Messrs. Hollis and Schiller for their leadership and many contributions to the Company during their respective tenure. As of the 2023 Annual Meeting, the size of the Board will be reduced from ten to eight members.
General
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The Director Nominees for Election at the 2023 Annual Meeting
The Director Nominees for Election at the 2023 Annual Meeting
The Director Nominees for Election at the 2023 Annual Meeting
| Richard A. Beck Director | Richard A. Beck has been a director since October 2019. Mr. Beck served as Senior Vice President, Global Operations of PepsiCo, Inc., one of the world’s leading food and beverage companies, from February 2011 to April 2016. In this role, Mr. Beck established the company’s global operations function and led various successful initiatives that improved productivity, drove automation, technology and global systems and improved environmental, health and safety metrics. Prior to this, Mr. Beck served in other roles of increasing responsibility for PepsiCo from 1993 to 2011, including President/SVP of Gatorade, SVP, PepsiCo Chicago and SVP, Operations for Frito-Lay. In these roles, Mr. Beck oversaw the manufacturing and distribution of some of PepsiCo’s key brands and led various productivity, environmental and sustainability initiatives. Prior to joining PepsiCo, Mr. Beck served in positions of increasing responsibility at General Electric from 1981 to 1993. Since 2019, Mr. Beck has served on the board of directors of FleetPride, Inc., a privately held company and leading supplier of parts and maintenance to the commercial trucking industry. Since 2017, he has served on the Executive Council for American Securities LLC, a leading U.S. private equity firm. Key Attributes, Experience and Skills: Mr. Beck brings extensive experience in the food and beverage industry. Through his various roles throughout his career, Mr. Beck has developed significant expertise in management, logistics and supply chain optimization, which make him a valuable contributor to the Board. Mr. Beck’s background is also critical as he helps oversee and support the Company’s global sustainability and corporate citizenship initiatives as part of his chairing the Corporate Governance and Nominating Committee. | | Age: 65 Director Since: 2019 Hain Board Committees: • Audit • Corporate Governance and Nominating (Chair) | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Neil Campbell Director | Neil Campbell has been a director since September 2023. Mr. Campbell served as the Managing Director of Warburtons Limited, the largest bakery business and one of the largest individual food or drink brands in the United Kingdom, from 2013 to August 2022. As Managing Director, Mr. Campbell oversaw all operations at Warburtons. Mr. Campbell led Warburtons’ transformation from a bread-centric business to a broader portfolio of bakery products. Prior to joining Warburtons, from 1993 to 2013, Mr. Campbell served in roles of increasing responsibility at PepsiCo, Inc. in North America, the United Kingdom and Benelux, including as President of Tropicana North America from 2008 to 2013 and as General Manager of Walkers Snacks in the United Kingdom from 2005 to 2008. Mr. Campbell began his career at Cadbury Schweppes in the United Kingdom and the United States. Key Attributes, Experience and Skills: Mr. Campbell brings to the Board deep branded food industry executive leadership experience at some of the largest food and beverage companies in the world and in important international markets for the Company, including the United Kingdom where Mr. Campbell was born, resides and has spent most of his career. Mr. Campbell served on the Executive Committee at PepsiCo and has overseen all aspects of operations at multiple large, successful food and beverage businesses. He also brings a strong background in marketing, having risen through the marketing ranks at PepsiCo earlier in his career and having created award-winning and long-running advertising campaigns at Warburtons and PepsiCo. Mr. Campbell has spearheaded significant sustainability initiatives at multiple companies, including a pioneering initiative over 15 years ago to display carbon footprint information on the front of product packaging. | | Age: 58 Director Since: 2023 Hain Board Committees: • Strategy | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Celeste A. Clark, Ph.D. Director | Celeste A. Clark, Ph.D. has been a director since September 2017. Dr. Clark has been the principal of Abraham Clark Consulting, LLC, a consulting firm, since November 2011 and consults on nutrition and health policy, regulatory affairs and leadership development. Dr. Clark is also an adjunct professor in the Department of Food Science and Human Nutrition at Michigan State University, where she has served in such position since January 2012. She previously served as Senior Vice President, Global Policy and External Affairs of Kellogg Company, a food manufacturing company, and was the Chief Sustainability Officer until she retired in 2011. She was a member of the Global Executive Management Team and had an accomplished career spanning nearly 35 years in the food industry. At Kellogg Company, she was responsible for the development and implementation of health, nutrition and regulatory science initiatives globally to ensure consistency in approach and implementation. In addition, she also led global corporate communications, government relations, philanthropy and several administrative functions. Dr. Clark also serves as a trustee of the W.K. Kellogg Foundation. Key Attributes, Experience and Skills: Dr. Clark brings significant industry experience in various nutrition, consumer products, public policy, risk management and governance matters to our Board. She also brings extensive experience on ESG and sustainability matters to the Board and serves as a key resource for our ESG team. Dr. Clark has served on a number of public company boards, which have provided her with a broad understanding of the governance, operational, financial and strategic issues facing public companies. | | Age: 70 Director Since: 2017 Hain Board Committees: • Compensation (Chair) • Corporate Governance and Nominating Current Public Company Boards: • Darling Ingredients Inc. (since October 2021) • Prestige Consumer Healthcare Inc. (since February 2021) • Wells Fargo & Company (since January 2018) | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Wendy P. Davidson President and Chief Executive Officer and Director | Wendy P. Davidson has been our President and Chief Executive Officer and a director since January 2023. Prior to joining the Company, she served as President-Americas for the Performance Nutrition segment of Glanbia plc, an Ireland-based global nutrition company, from November 2020 to November 2022. Prior to joining Glanbia, Ms. Davidson served as President, Away From Home (formerly U.S. Specialty Channels), of Kellogg Company, a global manufacturer and marketer of snacks and convenience foods, from 2013 to October 2020. From 2010 to 2013, she served in various senior roles at McCormick & Company, Inc., including as Vice President, Custom Flavor Solutions, U.S. & Latin America, and from 1993 to 2009 she held a variety of executive positions at Tyson Foods, Inc., including Senior Vice President and General Manager – Global McDonald’s Business Unit and Group Vice President – Foodservice Group, culminating in her service as Senior Vice President and General Manager – Prepared Foods. Ms. Davidson serves on the boards of several industry associations and non-profit organizations, including the Consumer Brands Association and NextUp. Key Attributes, Experience and Skills: Ms. Davidson brings to the Board extensive general management experience and senior-level policy-making experience at a public company. Her experience includes marketing, sales, operations, supply chain, strategic planning, new market development, disruptive business model innovation, crisis management, digital commerce, brand building and commercial execution. She also has experience in human capital management, finance and accounting, mergers and acquisitions, government relations, enterprise risk management, and similar matters associated with running a large division of a public company. | | Age: 53 Director Since: 2023 Current Public Company Boards: • First Horizon Corporation (since January 2019) | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Shervin J. Korangy Director | Shervin J. Korangy has been a director since September 2017. Since May 2019, he has served as the President and Chief Executive Officer and a member of the board of directors of BVI Medical, Inc., a TPG Capital portfolio company that is a global developer, manufacturer and marketer of specialty products for ophthalmic surgery. Prior to being named President and Chief Executive Officer of BVI Medical, Mr. Korangy served as its Chief Financial Officer and Head of Strategy from April 2017 to May 2019. Prior to joining BVI Medical, Mr. Korangy served as a senior executive of Novartis Group AG, a diversified healthcare products company, from 2010 until March 2017. During his almost seven years at Novartis, he served in various international capacities spanning strategy, M&A, integrations, sales & marketing and general management including serving as the Global Head of Corporate Finance based in Switzerland. In 2011, Mr. Korangy co-founded Sight Sciences, Inc., a medical device company. Previously, he was a Managing Director at The Blackstone Group, an investment firm, which he joined in 1996. During his more than 14 years at Blackstone, he served both as an advisor in the Restructuring & Reorganization business and as an investor in the Private Equity business. Mr. Korangy has served on the Wharton Leadership Advisory Board, established by the Center for Leadership and Change Management at The Wharton School of the University of Pennsylvania, since January 2019. Key Attributes, Experience and Skills: Mr. Korangy’s position as the President and Chief Executive Officer at a global company, together with his significant financial and consumer packaged goods business experience, makes him a valuable addition to our Board of Directors. In addition to his strong financial expertise, the Company values his competencies in strategy, mergers and acquisitions, integration and general management. | | Age: 48 Director Since: 2017 Hain Board Committees: • Compensation • Strategy (Chair) Current Public Company Boards: • Fresenius Medical Care AG & Co. KGaA (since July 2023) Public Company Boards in Past Five Years: • Motus GI Holdings, Inc. (April 2017 to July 2023) | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Michael B. Sims Director | Michael B. Sims has been a director since October 2019. Mr. Sims served as Executive Vice President and Chief Financial Officer of Trugreen, a residential and commercial lawn care company, from February 2019 until his retirement in February 2023. In this role, Mr. Sims was responsible for driving sustainable revenue and EBITDA growth through leadership of finance and supply chain management. He has served as a Senior Advisor to Trugreen since his retirement. Prior to joining Trugreen, Mr. Sims served as Senior Vice President, Chief Financial Officer and Treasurer of AdvancePierre Foods Holdings, Inc., a producer and distributor of proteins and ready-to-eat sandwiches, from 2012 until its acquisition by Tyson Foods, Inc., in 2017. In this role, Mr. Sims was responsible for the company’s growth-driven, margin-expansion strategy. Prior to joining AdvancePierre Foods, Mr. Sims served in roles of increasing responsibility at Chiquita Brands International Inc., a leading international marketer and distributor of bananas, pineapples and packaged salads, from 1988 to 2012, most recently serving as the company’s Senior Vice President and Chief Financial Officer from 2009 to 2012, and developed expertise in global financial operations, planning and analysis, investor relations and capital markets. Prior to that, Mr. Sims held various positions with Arthur Young & Company (n/k/a Ernst & Young LLP). Key Attributes, Experience and Skills: Mr. Sims brings a broad understanding of the food industry and significant financial expertise to the Board, including through his experience as CFO of multiple consumer-facing businesses. The Board also values Mr. Sims’ significant transactional experience, including with respect to acquisitions and divestitures. | | Age: 64 Director Since: 2019 Hain Board Committees: • Audit (Chair) • Compensation | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Carlyn R. Taylor Director | Carlyn R. Taylor has been a director since June 2022. Ms. Taylor has been the Global Co-Leader of Corporate Finance at FTI Consulting, Inc. (“FTI”), a global business advisory firm, since 2016, and has served on FTI’s Executive Committee since 2011. Within Corporate Finance, Ms. Taylor leads the global Business Transformation and Transactions practices and has led hundreds of engagements helping companies improve their strategy, enhance their financial performance and execute on M&A transactions. Ms. Taylor is also responsible for the firm’s Industry specializations, of which Food & Beverage and Consumer Products are two of the dozen industry groups reporting to her. Since 2017, Ms. Taylor has also served as a Chairperson of FTI Capital Advisors, an investment banking subsidiary of FTI Consulting. From 2002 to 2016, she held various leadership roles at FTI Consulting and its affiliates. Prior to joining FTI Consulting, Ms. Taylor spent 12 years at PricewaterhouseCoopers, first as a consultant in Price Waterhouse from 1990 to 1998 and then as a partner from 1998 to 2002, where she founded and led the Telecommunication industry practice within the Financial Advisory Services group. Ms. Taylor holds licenses from FINRA as an investment banker and is a licensed CPA and an ABV (valuation credential). Key Attributes, Experience and Skills: Ms. Taylor brings to the Board her extensive background in corporate strategy, business transformation, M&A, finance and accounting, including capital allocation strategies. She also serves on another public company board and has experience serving on the boards of various privately-owned companies. | | Age: 55 Director Since: 2022 Hain Board Committees: • Audit • Strategy Current Public Company Boards: • Flowserve Corporation (since August 2020) | |
The Director Nominees for Election at the 2023 Annual Meeting
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The Director Nominees for Election at the 2023 Annual Meeting
| Dawn M. Zier Chair of the Board, Director | Dawn M. Zier has been a director since September 2017 and has been Chair of the Board since November 2022. Since February 2020, Ms. Zier has been the principal of Aurora Business Consulting, LLC, and advises public and private companies and executives on business transformation, digital/marketing acceleration, leadership and high-performance teams. Ms. Zier was formerly the President and CEO and a member of the board of directors of Nutrisystem, Inc., a leading provider of weight loss solutions and services, from November 2012 until its March 2019 acquisition by Tivity Health, Inc. Ms. Zier then continued with Tivity Health, a leading provider of fitness and social engagement solutions, serving as President/COO and a member of its board of directors, to help with the integration efforts through December 2019. Prior to November 2012, she served in a variety of executive positions at Reader’s Digest Association, a global media and data marketing company, including President of International from 2011 to 2012, President of Europe from 2009 to 2011 and President of Global Consumer Marketing from 2008 to 2009. Ms. Zier received her Corporate Director Certification from Harvard Business School in 2020 and was recognized as a Directorship 100 honoree by the National Association of Corporate Directors in 2022. Key Attributes, Experience and Skills: Ms. Zier is qualified to serve on our Board and as our Chair based on her extensive management leadership experience both domestic and international, her significant consumer product and marketing expertise, including e-commerce, her financial acumen, her M&A experience and her food industry expertise. She also has significant knowledge of sound corporate governance practices. These qualifications and experiences make her a valuable contributor to the Board. | | Age: 58 Director Since: 2017 Hain Board Committees: • Corporate Governance and Nominating • Strategy Current Public Company Boards: • Prestige Consumer Healthcare Inc. (since May 2020) • Spirit Airlines, Inc. (since June 2015) Public Company Boards in Past Five Years: • Nutrisystem, Inc. (November 2012 to March 2019) • Purple Innovation, Inc. (November 2020 to June 2023) • Tivity Health, Inc. (March 2019 to December 2019) | |
The Director Nominees for Election at the 2023 Annual Meeting
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Compensation of Directors
Compensation of Directors Our compensation program for non-employee directors is designed to:
Compensation of Directors
| • | Attract and retain highly qualified non-employee directors; |
Compensation of Directors
| • | Fairly compensate non-employee directors for work required in a company of our size and scope; and |
Compensation of Directors
| • | Align the interests of non-employee directors with those of our shareholders by paying a significant portion of non-employee director compensation in the form of equity awards. |
Compensation of Directors
Each year, the Compensation Committee and our Board review and determine compensation for our non-employee directors with the assistance of ClearBridge, the Compensation Committee’s independent compensation consultant. On a periodic basis, ClearBridge provides the Compensation Committee with an assessment of trends and developments in director compensation practices and benchmarks our director compensation program against our compensation peer group. Annual non-employee director compensation covers the period of service between annual meetings of shareholders. With respect to the period from our 2022 annual meeting of shareholders (the “2022 Annual Meeting”) to the 2023 Annual Meeting, the Compensation Committee recommended, and the Board approved, maintaining the prior year’s compensation levels. Accordingly, the compensation program for the period from the 2022 Annual Meeting to the 2023 Annual Meeting remained unchanged and is set forth below.
Compensation of Directors
| Compensation Component* | Amount ($) | | Annual base retainer for all non-employee directors | 53,000 | | Additional annual fee for Chair of the Board | 100,000 | | Additional annual fee for Chairs of Audit Committee and Strategy Committee | 20,000 | | Additional annual fee for Chairs of Compensation Committee and Corporate Governance and Nominating Committee | 15,000 | | Additional annual fee for non-Chair committee members | 5,000 | | Annual base restricted share unit award for all non-employee directors | 170,000 |
Compensation of Directors
| * Non-employee directors can elect to forgo cash components of their compensation and receive 100% of their compensation in Company restricted share units. |
Fiscal Year 2023 Director Compensation
Fiscal Year 2023 Director Compensation The following table sets forth the compensation paid by us to our non-employee directors during the fiscal year ended June 30, 2023. In accordance with SEC rules, cash fees forgone at the election of a director are included in the Fees Earned or Paid in Cash column.
Fiscal Year 2023 Director Compensation
| Name(1) | Fees Earned or Paid in Cash(2) ($) | Stock Awards3,(4) ($) | Total ($) | | Richard A. Beck | 68,000 | 170,000 | 238,000 | | Celeste A. Clark | 68,000 | 170,000 | 238,000 | | Dean Hollis(5) | 113,000 | 170,000 | 283,000 | | Shervin J. Korangy | 78,000 | 170,000 | 248,000 | | Michael B. Sims | 78,000 | 170,000 | 248,000 | | Carlyn R. Taylor | 50,833 | 170,000 | 220,833 | | Glenn W. Welling(6) | 36,500 | — | 36,500 | | Dawn M. Zier | 118,000 | 170,000 | 288,000 |
Fiscal Year 2023 Director Compensation
| 1 | Directors who are also employees of the Company receive no additional compensation for their service on our Board. Accordingly, Wendy P. Davidson, our current President and CEO, did not receive any compensation under the Company’s compensation program for non-employee directors. |
Fiscal Year 2023 Director Compensation
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Fiscal Year 2023 Director Compensation
| Mark L. Schiller remained a non-employee director following his departure as President and CEO. In furtherance of the mutual desire of the Company and Mr. Schiller to ensure a smooth transition of his responsibilities to Ms. Davidson, to be accomplished in part through Mr. Schiller’s continued service on the Board following his departure as President and CEO, and in lieu of participating in the Company’s compensation program for non-employee directors, a prorated portion (50%) of the performance share units granted to Mr. Schiller under the Company’s 2023-2025 Long Term Incentive Program remain outstanding (based on the period of Mr. Schiller’s service as President and Chief Executive Officer in fiscal year 2023) and are eligible to vest based on actual achievement of the relative and absolute total shareholder return goals through the full performance period, subject to Mr. Schiller’s continued service on the Board through the earlier of the 2023 Annual Meeting or any earlier date mutually agreed between Mr. Schiller and the Board for Mr. Schiller’s departure from the Board. For additional details regarding such equity awards, see “Potential Payments upon Termination or Change in Control,” which begins on page 49. Mr. Schiller is not standing for reelection to the Board at the 2023 Annual Meeting. Compensation paid to Ms. Davidson and Mr. Schiller in connection with their employment is set forth in the Summary Compensation Table on page 44. Neil Campbell is not reflected in this table as he joined the Board in fiscal 2024. |
Fiscal Year 2023 Director Compensation
| 2 | Cash fees are paid quarterly in February, May, August and November. Under SEC rules, cash fees forgone at the election of a director are required to be included in the Fees Earned or Paid in Cash column. The entire amounts reported in this column for Richard A. Beck, Celeste A. Clark, Dean Hollis, Shervin J. Korangy, Michael B. Sims, Carlyn R. Taylor and Glenn W. Welling were paid in the form of Company restricted share units at their election. The amounts shown in the Fees Earned or Paid in Cash column may not precisely match a director’s annual cash fee rate that was in effect for the fiscal year due to the timing of the payment cycle for director compensation. |
Fiscal Year 2023 Director Compensation
| 3 | The amounts shown in the Stock Awards column represent the grant date fair value of stock awards granted during the fiscal year, calculated in accordance with FASB ASC Topic 718. The assumptions used by the Company in calculating these amounts are included in Note 2 (under the heading “Stock-Based Compensation”) and Note 13 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. The amounts shown in the Stock Awards column omit cash fees elected to be received in the form of Company equity awards, which are reported in the Fees Earned or Paid in Cash column under SEC rules. See footnote 2 above. Accordingly, the amounts shown in the Stock Awards column represent the grant date fair value of the annual base restricted share unit award for non-employee directors. |
Fiscal Year 2023 Director Compensation
| 4 | The total number of shares underlying outstanding stock awards for each non-employee director as of June 30, 2023 was as follows: Richard A. Beck (11,930 shares), Celeste A. Clark (11,930 shares), Dean Hollis (11,439 shares), Shervin J. Korangy (12,175 shares), Michael B. Sims (12,175 shares), Carlyn R. Taylor (11,439 shares), Glenn W. Welling (0 shares) and Dawn M. Zier (8,346 shares). All such awards are restricted share units that are scheduled to vest on October 26, 2023, the date of the 2023 Annual Meeting. |
Fiscal Year 2023 Director Compensation
| 5 | Mr. Hollis is not standing for reelection to the Board at the 2023 Annual Meeting. |
Fiscal Year 2023 Director Compensation
| 6 | Mr. Welling’s service as a director ended on November 17, 2022. |
Overview
Overview Despite making significant progress during the year, we did not meet all of the financial objectives we set out to achieve during fiscal year 2023. For our total Company goals applicable to most NEOs under our Annual Incentive Plan, our Adjusted EBITDA performance did not meet the threshold goal, while Net Sales performance met the threshold goal but not the target goal. Considering that financial performance together with performance against strategic measures that met expectations, the total Company payout percentage under our Annual Incentive Plan, prior to the application of individual modifiers, was 43.4% in fiscal year 2023. Because a substantial percentage of the compensation for our NEOs is based on the success of our Company, the compensation realized by our NEOs as a whole during fiscal year 2023 was commensurate with our Company performance. The Compensation Committee believes that this demonstrates our commitment to link pay and performance and align the interests of our NEOs with the long-term interests of our shareholders. As discussed below under the heading “CEO Transition,” the Compensation Committee provided a competitive compensation package to attract Ms. Davidson to the Company. As with the other current NEOs, the majority of Ms. Davidson’s ongoing target annual compensation will be strongly tied to Company performance.
Shareholder Feedback on Compensation
Shareholder Feedback on Compensation Our Board, the Compensation Committee and our management team value shareholder perspectives on our executive compensation program and consider the outcome of the annual shareholder advisory vote on executive compensation — the “Say on Pay” vote. At our 2022 Annual Meeting in November 2022, the compensation of our named executive officers was approved by 81% of votes cast. We strive for higher levels of approval of our compensation program. Based on discussions with shareholders, we believe a significant reason we failed to gain higher approval last year was concern by some shareholders regarding the special recognition restricted share units (“RSUs”) granted to certain officers and employees in November 2021 with 100% cliff vesting
Shareholder Feedback on Compensation
on December 31, 2023. While the Compensation Committee believes that those special recognition grants played an important role in the retention of critical executives and employees at that time, the Compensation Committee values the feedback received from our shareholders and closely evaluated the compensation program for fiscal year 2023. The Compensation Committee did not make any retention equity awards during fiscal year 2023 to executive officers. As discussed below under “CEO Transition,” the Compensation Committee did grant the New CEO Make-Whole RSUs (as defined below) to Ms. Davidson in order to make whole compensation she would forfeit by leaving her then-employer, which the Compensation Committee determined was a customary and necessary component in attracting a qualified new CEO and distinguishable from grants made to existing employees. Overall, the Compensation Committee determined that the Company’s executive compensation philosophy, compensation objectives and compensation elements continued to be appropriate for fiscal year 2023.
Target Annual Compensation
| • | Target annual performance-based bonus of 125% of base salary, or $1,156,250, and |
Target Annual Compensation
| • | Target annual long-term incentive value, all of which is at-risk and a majority of which is performance based, of $3,000,000. |
Make-Whole Awards
Make-Whole Awards To attract a candidate of Ms. Davidson’s caliber, the Compensation Committee also determined that it was necessary and appropriate to remove compensation considerations at her then-current employer. Accordingly, to make Ms. Davidson whole for compensation she would forfeit by leaving her then-current employer, the Compensation Committee awarded Ms. Davidson (1) a one-time make-whole RSU award valued at $1,600,000 (which resulted in 95,321 RSUs), vesting in one-third (1/3) installments on each of the first, second and third anniversaries of January 1, 2023, the start of Ms. Davidson’s employment (the “New CEO Make-Whole RSUs”), subject to her continued employment and certain accelerated vesting terms upon specified terminations, and (2) a one-time make-whole cash signing bonus of $960,000 (the “New CEO Make-Whole Bonus”), subject to prorated recoupment if Ms. Davidson is terminated by the Company for Cause (as defined in her employment agreement) or voluntarily terminates her employment other than for Good Reason (as defined in her employment agreement) within the first 24 months following the start of her employment. The New CEO Make-Whole RSUs and New CEO Make-Whole Bonus were intended to be economically equivalent to the compensation forfeited by Ms. Davidson as a result of her leaving her then-current employer and joining the Company as CEO.
Executive Compensation Practices at a Glance
| What We Do ✓ | | What We Do NOT Do ✖ | | | ✓ | DO align annual incentive pay and performance by linking annual incentive compensation to the achievement of performance goals tied to Company strategic objectives | ✖ | NO guaranteed cash incentives, equity compensation or salary increases for NEOs except in limited scenarios in connection with their hiring | | ✓ | DO have a majority of executive compensation at risk based on corporate performance | ✖ | NO single trigger acceleration upon a change in control for equity awards granted to NEOs | | ✓ | DO align long-term incentive pay and performance by linking a portion of long-term compensation to the achievement of relative and absolute TSR goals | ✖ | NO acceleration of performance-based equity awards without regard to performance goals, with any acceleration upon a qualifying termination of employment subject to the attainment of performance goals measured through the date of the acceleration event | | ✓ | DO cap payouts for annual incentive and LTIP awards | ✖ | NO executive pension or executive retirement plans for any of our U.S.-based NEOs | | ✓ | DO maintain rigorous stock ownership guidelines (6x base salary for the CEO, 3x base salary for executive officers and other Executive Vice Presidents and 5x annual cash retainer for non-employee directors) | ✖ | NO compensation or incentives that encourage unnecessary or excessive risk taking | | ✓ | DO maintain clawback policies with respect to cash and equity incentive compensation, including mandatory clawback of incentive compensation in the event of an accounting restatement | ✖ | NO tax gross ups | | ✓ | DO conduct annual compensation review and approval of our compensation philosophy and strategy | ✖ | NO pledging of any of our securities by directors, executive officers or other employees | | ✓ | DO appoint a Compensation Committee comprised solely of independent directors | ✖ | NO hedging or derivative transactions by directors, executive officers or other employees involving our securities | | ✓ | DO use an independent compensation consultant engaged by our Compensation Committee | ✖ | NO material perquisites; limited one-time and temporary benefits for new CEO in connection with her hiring; customary home country benefits for one NEO based in Europe |
Executive Compensation Program Objectives
Executive Compensation Program Objectives We provide a competitive total compensation package to our executive management team through a combination of base salary, annual incentives, long-term incentives and other compensation, as well as severance and change-in-control arrangements. The primary objectives of our executive compensation program are to:
Executive Compensation Program Objectives
| • | Promote the creation of long-term shareholder value; and |
Executive Compensation Program Objectives
| • | Annual performance-based awards are designed to focus our executives on objectives each year that are generally operational and drive specific performance needed to achieve short-term targets that are part of our long-term growth and profitability goals; |
Executive Compensation Program Objectives
| • | Long-term incentives are designed to align our executives’ interests with those of our shareholders and to motivate executives to generate value for our shareholders over the long term; and |
Executive Compensation Program Objectives
| • | Severance and change-in-control arrangements are designed to mitigate the distraction of our key executives when faced with a potential change in control or other possible termination situations and to facilitate our ability to attract and retain executives as we compete for talented individuals in a marketplace where such protections are commonly offered. |
Benchmarking / Peer Group
Benchmarking / Peer Group A key objective of our executive compensation program is to ensure that total direct compensation is competitive with the companies against which we compete for talent. The Compensation Committee uses compensation data from a peer group as general guidance and as one of many factors that inform its judgment of appropriate compensation parameters for target compensation levels. When using peer group data, the Compensation Committee references the 50th percentile, recognizing that the specific positioning for each NEO is determined on a case-by-case basis considering multiple factors.
Benchmarking / Peer Group
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Benchmarking / Peer Group
Each year, the Compensation Committee evaluates its previously-selected peer group and determines which companies best reflect the Company’s competitors for talent. In advance of fiscal year 2023, the Compensation Committee, with the assistance of ClearBridge, conducted its annual evaluation of the Company’s peer group to be used in connection with fiscal year 2023 compensation determinations. The Compensation Committee and ClearBridge evaluated existing peer group companies and potential new peer group companies with respect to enterprise value, revenue and industry. Specifically, they considered a revenue range of approximately 1/2x to 2x the Company’s revenue and an enterprise value range of approximately 1/5x to 5x the Company’s enterprise value, with flexibility applied on the end points to accommodate peers that are a good match from a business perspective. Based on this review, the Compensation Committee determined to retain the same peer group that was in effect for fiscal year 2022 without making any changes. Accordingly, our peer group for fiscal year 2023 was established as follows:
Benchmarking / Peer Group
| Fiscal Year 2023 Peer Group | | | • B&G Foods, Inc. | • Lancaster Colony Corporation | | • BellRing Brands, Inc. | • Post Holdings, Inc. | | • Edgewell Personal Care Company | • Revlon, Inc.* | | • Flowers Foods, Inc. | • The Simply Good Foods Company | | • Hostess Brands, Inc. | • TreeHouse Foods, Inc. | | • J&J Snack Foods Corp. | • Utz Brands, Inc. |
Benchmarking / Peer Group
| * Although initially included in the peer group at the beginning of fiscal year 2023, Revlon, Inc. was removed from the peer group during the fiscal year when it ceased being listed on the New York Stock Exchange. |
Annual Incentive Plan
Annual Incentive Plan A key executive compensation objective is to have a majority of each NEO’s compensation be tied to the Company’s performance. To this end, the Company’s Annual Incentive Plan (“AIP”) is based on performance against key financial and strategic objectives designed to drive the specific performance needed to foster the Company’s growth and profitability. The Compensation Committee established the AIP for fiscal year 2023 (the “2023 AIP”) to provide the NEOs and other executives with the opportunity to earn a cash bonus based on the following calculation:
Annual Incentive Plan
| Target AIP Opportunity 125% of annual base salary for CEO 85% of annual base salary for other NEOs | × | Company Payout Percentage 0% to 200% Based on Company performance against financial and strategic objectives in specified performance measures | × | Individual Modifier (for NEOs other than CEO) 0% to 150% Based on Compensation Committee review of individual performance Cannot increase payout above 200% of target |
2023 AIP Award Opportunities
2023 AIP Award Opportunities Based on their target annual bonus percentages and the terms of the 2023 AIP, the NEOs had the opportunity to receive the cash awards shown below for fiscal year 2023 under the 2023 AIP.
2023 AIP Award Opportunities
| | 2023 AIP Target Award | | | 2023 AIP Maximum Award | | | | | % of Base Salary | ($ or €) | | % of Base Salary | ($ or €) | | | Wendy P. Davidson(1) | 125% | | 578,125 | 250% | | 1,156,250 | | Wolfgang Goldenitsch | 85% | € | 366,104 | 170% | € | 732,207 | | Kristy M. Meringolo | 85% | | 405,452 | 170% | | 810,903 | | Mark L. Schiller(2) | 125% | | 1,312,500 | 250% | | 2,625,000 | | Christopher J. Bellairs | 85% | | 474,513 | 170% | | 949,025 | | David J. Karch | 85% | | 455,175 | 170% | | 910,350 |
2023 AIP Award Opportunities
| 1 | Ms. Davidson joined the Company on January 1, 2023. Her 2023 AIP opportunity was prorated at a rate of 50% based on her commencement date, and dollar amounts in the table show the prorated opportunity. |
2023 AIP Award Opportunities
| 2 | Mr. Schiller served as President and Chief Executive Officer until December 31, 2022. Under his separation agreement with the Company, he was eligible to receive a bonus for fiscal year 2023 under the 2023 AIP, prorated at 50% of the opportunity shown in this table and paid out based on actual achievement of the applicable Company goals for fiscal year 2023. See “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
Performance Measures
Performance Measures The Compensation Committee established three Company performance measures for the 2023 AIP:
Performance Measures
| Performance Measure | Weighting | | Financial Measure — Adjusted EBITDA | 40% | | Financial Measure — Net Sales | 40% | | Strategic Measure — Objectives, Goals, Strategies and Measures (“OGSMs”) | 20% |
Performance Measures
For purposes of the 2023 AIP, both Adjusted EBITDA and Net Sales are at constant currency. Both measures are non-GAAP financial measures. See Appendix A to this proxy statement for additional information on such measures.
Performance Measures
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Performance Measures
Financial Measures Based on the Company’s budget for fiscal year 2023, the Compensation Committee established a range of goals for total Company Adjusted EBITDA and total Company Net Sales and the associated payout percentages with respect to the 2023 AIP. For each financial measure, threshold goals were established at 90% of target and maximum goals were established at 110% of target, provided that for Adjusted EBITDA, the threshold level was established at fiscal year 2022 actual performance, which was greater than 90% of target. For each financial measure, potential payouts range from 0% for performance below the threshold goal, to 50% of target for achievement of the threshold goal, to 200% of target for achievement of the maximum goal. For Company performance between specifically enumerated goals, the payout percentage is interpolated on a straight-line basis. For each financial measure, the total Company goals and associated payout percentages for our U.S.-based NEOs are set forth below, along with the baseline fiscal year 2022 performance.
Performance Measures
| Total Company Adjusted EBITDA (40% Weight) | | | | Total Company Net Sales (40% Weight) | | | | | Baseline Fiscal Year 2022 Performance ($) | Fiscal Year 2023 Goals | | | Baseline Fiscal Year 2022 Performance ($) | Fiscal Year 2023 Goals | | | | | Threshold Goal (50% Payout) ($) | Target Goal (100% Payout) ($) | Maximum Goal (200% Payout) ($) | | Threshold Goal (50% Payout) ($) | Target Goal (100% Payout) ($) | Maximum Goal (200% Payout) ($) | | 200.6 million | 200.6 million | 212.8 million | 234.0 million | 1,891.8 million | 1,833.0 million | 2,036.7 million | 2,240.4 million |
Performance Measures
If the threshold goal for Adjusted EBITDA is not attained, then the Company payout percentage, before application of the individual modifiers, is capped at 100%. Wolfgang Goldenitsch serves as the Company’s President, International. Based on his responsibility for overseeing most of the Company’s International business, the Compensation Committee determined that Mr. Goldenitsch’s goals would be for the International business overseen by Mr. Goldenitsch, using the same overall design as for the other NEOs with respect to threshold, target and maximum goals, associated payout percentages and weighting among measures. Based on the Company’s budget for fiscal year 2023, the Compensation Committee established for Mr. Goldenitsch a target goal for Adjusted EBITDA of $85.3 million (with no threshold goal below target), and threshold and target goals for Net Sales of $582.3 million and $647.0 million, respectively, in each case for the portion of the International business overseen by Mr. Goldenitsch. Strategic Measure OGSMs are objectives, goals, strategies and measures that drive priorities within the Company. As part of the Company’s fiscal year 2023 strategic planning and performance management process, the Company established fiscal year 2023 OGSMs within the following five categories:
Performance Measures
| • | Drive distribution |
Performance Measures
| • | Increase brand strength |
Performance Measures
| • | Improve margins and cash flow |
Performance Measures
| • | Ensure reliable supply at lowest cost |
Performance Measures
| • | Make Hain an employer of choice |
Performance Measures
Upon management’s recommendation, the Compensation Committee incorporated into the 2023 AIP the overarching OGSMs for our North America and International businesses. For all NEOs other than Mr. Goldenitsch, both North America and International OGSMs form part of their 2023 AIP opportunity. Mr. Goldenitsch’s 2023 AIP opportunity incorporates only OGSMs for the International business. Under the OGSM portion of the 2023 AIP (i.e., 20% of the total 2023 AIP opportunity), target-level performance against the OGSMs reflects performance that meets expectations. The Company payout percentage can range from 0% for unsatisfactory performance against the goals to 200% of target for achievement that significantly exceeds expectations. There is no threshold-level of performance. Each specific OGSM is scored on a scale of 1 to 5, and the average score is utilized to determine the payout percentage.
Performance Measures
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Fiscal Year 2023 AIP Payout Determinations
Fiscal Year 2023 AIP Payout Determinations The following table shows Company results under the 2023 AIP and the weighted formulaic payout, prior to the application of individual modifiers.
Fiscal Year 2023 AIP Payout Determinations
| | Fiscal Year 2023 Adjusted EBITDA Results for Purposes of 2023 AIP | Fiscal Year 2023 Net Sales Results for Purposes of 2023 AIP | Fiscal Year 2023 OGSM Results | Weighted Formulaic Payout as % of Target (Prior to Application of Individual Modifiers) | | Total Company | $174.2 million | $1,867.3 million | Meets Expectations | 43.4% | | International Business Overseen by Mr. Goldenitsch | $66.5 million | $606.1 million | Meets Expectations | 47.4% |
Fiscal Year 2023 AIP Payout Determinations
For the OGSM portion of the 2023 AIP, the Compensation Committee, in consultation with management, assessed performance against each specific OGSM and the average performance across all OGSMs for both the North America and International businesses. The Compensation Committee determined that the Company attained certain OGSMs, exceeded other OGSMs and fell short of attaining some OGSMs, resulting in average scores for both the North America and International businesses that fell within the “Attained / Met Expectations” scoring range. As such, the Compensation Committee awarded a Company payout percentage of 100% of target on the OGSMs measure (which is weighted at 20% of the 2023 AIP) for both the North America and International businesses. The Compensation Committee determined that, as was the case for Mr. Schiller in fiscal years 2019-2022, Ms. Davidson’s 2023 AIP payout would not be subject to an individual modifier. Ms. Davidson’s 2023 AIP payout was therefore earned at 43.4% of her target bonus amount based on Company performance. The Compensation Committee, in consultation with Ms. Davidson, reviewed the fiscal year 2023 performance of the other NEOs currently employed with the Company and applied individual modifiers. Based on the foregoing, the Compensation Committee approved the below cash payouts to the NEOs under the 2023 AIP.
Fiscal Year 2023 AIP Payout Determinations
| Name* | 2023 AIP Payout ($) | | Wendy P. Davidson | 250,906 | | Wolfgang Goldenitsch | 189,151 | | Kristy M. Meringolo | 202,361 | | Christopher J. Bellairs | 164,751 |
Fiscal Year 2023 AIP Payout Determinations
| * Mr. Schiller’s 2023 AIP payout is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. Mr. Goldenitsch’s payout was determined in U.S. dollars and will be converted to and paid in euros. Mr. Karch was not eligible to receive a 2023 AIP payout following his departure from the Company. |
Long-Term Incentive Program
Long-Term Incentive Program We believe that equity grants serve our compensation objectives by linking the compensation of our key employees to our long-term strategic plan and further align such employees with our shareholders since the value of equity awards will increase or decrease with the changes in the value of our common stock. Grants are generally made under a performance-based long-term incentive program (“LTIP”). Participants in the LTIP include our executive officers, including the NEOs, and other key employees.
Long-Term Incentive Program
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Long-Term Incentive Program
Beginning with fiscal year 2022, our LTIP generally consists of annual grants of one year’s worth of long-term incentive value, which aligns with typical market practices and provides an ongoing incentive and retention focus for our management team. The Compensation Committee seeks to use a mix of equity award types under the LTIP that provides an appropriate balance among the Company’s objectives of shareholder alignment, pay-for-performance and retention of executives. Prior to fiscal year 2019, LTIP awards were generally made annually with a three-year performance period. For fiscal years 2019-2021, instead of receiving an annual grant, NEOs and other employees generally received front-loaded LTIP awards in fiscal year 2019 under the 2019-2021 LTIP meant to represent three years’ worth of long-term incentive value through the end of fiscal year 2021. Beginning with fiscal year 2022, the Compensation Committee elected to resume the practice of granting LTIP awards annually with a three-year performance period. As such, no LTIP performance periods ended in fiscal year 2023.
2023-2025 LTIP
2023-2025 LTIP Overview As with our 2022-2024 LTIP awards granted in fiscal year 2022, the Compensation Committee determined to again use a mix of time-vested RSUs and PSUs for the 2023-2025 LTIP. The use of RSUs ensures that the 2023-2025 LTIP provides some retention value to the NEOs and other key employees, as well as support the Company’s shareholder alignment objectives. To ensure appropriate performance incentives, the Compensation Committee again decided to grant two types of PSUs with a three-year performance period, using both relative total shareholder return and absolute total shareholder return as metrics. The performance period for the 2023-2025 LTIP is from September 7, 2022 through September 6, 2025 (the “2023-2025 PSU Performance Period”). As with the 2022-2024 LTIP, it was determined that the then-current President and Chief Executive Officer, Mr. Schiller, would receive 40% of his 2023-2025 LTIP value in RSUs and 60% of the value in PSUs, and that same allocation was applied for Ms. Davidson upon her joining the Company in January 2023. The other NEOs would receive 50% of their 2023-2025 LTIP value in RSUs and 50% of the value in PSUs. Of the value received by each NEO in PSUs, two-thirds (2/3) would be in PSUs based on relative total shareholder return and one-third (1/3) would be in PSUs based on absolute total shareholder return. All NEOs other than Ms. Davidson received awards under the 2023-2025 LTIP in September 2022. Ms. Davidson joined the Company in January 2023 and received prorated awards under the 2023-2025 LTIP at that time. Accordingly, the three types of awards granted under the 2023-2025 LTIP were the same as those granted under the 2022-2024 LTIP, consisting of:
2023-2025 LTIP
| 1) | Time-vested RSUs (the “2023 LTIP RSUs”); |
2023-2025 LTIP
| 2) | PSUs based on the Company’s relative total shareholder return versus the S&P Food & Beverage Select Industry Index over the 2023-2025 PSU Performance Period (the “2023 Relative TSR PSUs”); and |
2023-2025 LTIP
| 3) | PSUs based on the Company’s absolute compound total shareholder return over the 2023-2025 PSU Performance Period (the “2023 Absolute TSR PSUs”). |
2023-2025 LTIP
Terms of 2023-2025 LTIP Awards The terms of the awards under the 2023-2025 LTIP are substantially similar to the terms of the awards under the 2022-2024 LTIP. The 2023 LTIP RSUs vest one-third (1/3) per year over three years, with vesting dates of September 6, 2023, 2024 and 2025. The 2023 LTIP RSUs provide for accelerated vesting upon death, disability or a termination without cause that occurs within 12 months following a change in control. Payouts under the 2023 Relative TSR PSUs and the 2023 Absolute TSR PSUs can range from 0% to 200% of the target number of PSUs based on Company performance over the 2023-2025 PSU Performance Period, with attainment of the threshold goal resulting in a payout of 50% of the target number of PSUs. In establishing the performance goals, the Compensation Committee analyzed and considered historical market return levels in order to support pay-for-performance objectives.
2023-2025 LTIP
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2023-2025 LTIP
The performance goals and potential payouts for the 2023 Relative TSR PSUs and the 2023 Absolute TSR PSUs are shown in the following table. Straight-line interpolation applies between performance levels and payouts.
2023-2025 LTIP
| Performance Level | 2023 Relative TSR PSUs: Percentile Rank of the Company’s Total Shareholder Return Versus the S&P Food & Beverage Select Industry Index Over the 2023-2025 PSU Performance Period | 2023 Absolute TSR PSUs: Compound Annual Total Shareholder Return Over the 2023-2025 PSU Performance Period | PSUs Earned Based on Company Performance (% of Target Number of PSUs) | | Below Threshold | Below 30th Percentile | Below 7.00% | 0% of Target | | Threshold | 30th Percentile | 7.00% | 50% of Target | | Target | 51st Percentile | 11.00% | 100% of Target | | Maximum | 75th Percentile or Greater | 15.00% or Greater | 200% of Target |
2023-2025 LTIP
For the 2023 Relative TSR PSUs, Total Shareholder Return means a company’s total shareholder return during the 2023-2025 PSU Performance Period, which is calculated as (i) the company’s average closing share price over the final 20 trading days of the 2023-2025 PSU Performance Period minus the company’s closing share price on the day prior to the start of the 2023-2025 PSU Performance Period, plus reinvested dividends, divided by (ii) the company’s closing share price on the day prior to the start of the 2023-2025 PSU Performance Period. For the 2023 Absolute TSR PSUs, Compound Annual Total Shareholder Return means the compound annual growth rate over the 2023-2025 PSU Performance Period, expressed as a percentage, from the closing price of the Company’s common stock on the day prior to the start of the 2023-2025 PSU Performance Period ($18.71) to the average closing share price per share of the Company’s common stock over the final 20 trading days of the 2023-2025 PSU Performance Period, plus reinvested dividends over the 2023-2025 PSU Performance Period. Vesting of the 2023 Relative TSR PSUs and the 2023 Absolute TSR PSUs may be accelerated upon certain qualifying terminations of employment, including certain terminations following a change in control, subject to the attainment of the performance goals measured through the date of the applicable acceleration event or earlier change in control. See “Potential Payments upon Termination or Change in Control,” which begins on page 49. As discussed under the heading “CEO Transition” beginning on page 31 above, Ms. Davidson joined the Company in January 2023, almost four months into the 2023-2025 PSU Performance Period, and received prorated awards under the 2023-2025 LTIP. The closing stock price on December 30, 2022, the trading day prior to the January 1, 2023 grant date of Ms. Davidson’s 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs, was $16.18, compared to the $18.71 starting Company stock price for purposes of calculating TSR for the 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs. Accordingly, the Company’s TSR from the beginning of the 2023 PSU Performance Period through the time of Ms. Davidson’s PSU grants was negative 13.5% and was therefore tracking considerably behind threshold level performance. As such, the Compensation Committee determined that it would be appropriate for Ms. Davidson’s 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs to have the same terms as the awards granted to the other NEOs in September 2022, such that Ms. Davidson’s PSU awards require greater TSR performance during the period from her start date through the end of the 2023 PSU Performance Period to attain the same payout levels as the awards granted in September 2022 at the beginning of the 2023 PSU Performance Period.
2023-2025 LTIP
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2023-2025 LTIP
Award Amounts The following table shows the details of the number of 2023 LTIP RSUs, 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs received by the NEOs during fiscal year 2023 as part of the 2023-2025 LTIP, as well as the annual long-term incentive value and allocation among award types used to determine the number of awards received by each NEO.
2023-2025 LTIP
| Name | Annual Long-Term Incentive Value ($) | % Breakdown RSUs / PSUs (%) | 2023 LTIP RSUs (#) | 2023 Relative TSR PSUs at Target Payout (#) | 2023 Absolute TSR PSUs at Target Payout (#) | | Wendy P. Davidson(1) | 1,500,000 | 40 / 60 | 35,746 | 35,746 | 17,873 | | Wolfgang Goldenitsch | 600,000 | 50 / 50 | 16,035 | 10,743 | 5,292 | | Kristy M. Meringolo | 600,000 | 50 / 50 | 16,035 | 10,743 | 5,292 | | Mark L. Schiller(2) | 3,750,000 | 40 / 60 | 80,172 | 80,572 | 39,685 | | Christopher J. Bellairs(3) | 1,000,000 | 50 / 50 | 26,724 | 17,905 | 8,819 | | David J. Karch(4) | 900,000 | 50 / 50 | 24,052 | 16,115 | 7,937 |
2023-2025 LTIP
| 1 | Ms. Davidson joined the Company in January 2023, and her annual long-term incentive value of $3,000,000 under the 2023-2025 LTIP was prorated to $1,500,000. |
2023-2025 LTIP
| 2 | Mr. Schiller served as President and Chief Executive Officer until December 31, 2022, at which time his 2023 LTIP RSUs were forfeited. The treatment of Mr. Schiller’s 2023 Relative TSR PSUs and Absolute TSR PSUs upon his departure as President and Chief Executive Officer is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
2023-2025 LTIP
| 3 | Mr. Bellairs served as Executive Vice President and Chief Financial Officer until September 5, 2023 and will remain as an employee at the Company through November 20, 2023 to assist with the transition of his responsibilities. As such, the first tranche of his 2023 LTIP RSUs vested on September 6, 2023 and his remaining awards under the 2023-2025 LTIP will be forfeited upon his departure from the Company. |
2023-2025 LTIP
| 4 | Mr. Karch left the Company in May 2023. As such, his awards under the 2023-2025 LTIP were forfeited in connection with his departure from the Company. |
Severance and Change-in-Control Arrangements
Severance and Change-in-Control Arrangements The Compensation Committee believes that severance and change-in-control benefits are important for attracting and retaining executive talent, helping to ensure that NEOs can remain focused during periods of uncertainty and neutralizing the potential conflict of our key executives when faced with a potential change in control. Our form of change-in-control agreement for all
Severance and Change-in-Control Arrangements
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Severance and Change-in-Control Arrangements
NEOs includes market-typical provisions. For a complete description of the severance and change-in-control benefits we have agreed to provide to the NEOs, see “Potential Payments upon Termination or Change in Control,” which begins on page 49.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation paid by us to our NEOs for services rendered during the last three fiscal years.
Summary Compensation Table
| Name and Principal Position | Fiscal Year(1) | Salary(2) ($) | Bonus ($) | Stock Awards(3)(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | All Other Compensation(6) ($) | Total ($) | | Wendy P. Davidson* President and Chief Executive Officer | 2023 | 462,500 | 960,000(7) | 3,066,503 | 250,906 | 25,547 | 4,765,456 | | Wolfgang Goldenitsch† President, International | 2023 | 451,233 | — | 709,133 | 189,151 | 59,672 | 1,409,189 | | | 2022 | 479,545 | — | 1,734,831 | — | 64,216 | 2,278,592 | | Kristy M. Meringolo Executive Vice President, Chief Legal and Corporate Affairs Officer, Corporate Secretary | 2023 | 490,156 | — | 709,133 | 202,361 | 9,269 | 1,410,919 | | | 2022 | 445,000 | — | 1,617,289 | 87,210 | 8,358 | 2,157,857 | | | 2021 | 420,829 | — | — | 549,888 | 8,459 | 979,176 | | Mark L. Schiller‡ Former President and Chief Executive Officer | 2023 | 563,718 | — | 5,612,067(8) | 284,813 | 1,281,310 | 7,741,908 | | | 2022 | 1,041,667 | — | 6,024,187 | 249,375 | 10,992 | 7,326,221 | | | 2021 | 1,000,000 | — | — | 1,875,000 | 11,066 | 2,886,066 | | Christopher J. Bellairs‡ Former Executive Vice President and Chief Financial Officer | 2023 | 578,500 | — | 1,181,850 | 164,751 | 11,889 | 1,936,990 | | | 2022 | 230,577 | 208,775(9) | 616,073 | — | 393 | 1,055,818 | | David J. Karch‡ Former Executive Vice President and Chief Commercial Officer | 2023 | 339,877 | — | 1,063,684 | — | 425,184 | 1,828,745 | | | 2022 | 525,000 | — | 3,245,579 | 67,830 | 10,980 | 3,849,389 |
Summary Compensation Table
| * Ms. Davidson joined the Company on January 1, 2023. |
Summary Compensation Table
| † Mr. Goldenitsch is employed by an Austrian subsidiary of the Company. The amounts shown in the Salary and All Other Compensation columns for Mr. Goldenitsch have been converted from euros to U.S. dollars using the average daily closing euro to U.S. dollar exchange rate during the applicable fiscal year, as reported by The Wall Street Journal. The average daily closing rate during fiscal year 2023 was 1 euro equals 1.0476 U.S. dollars, and the average daily closing rate during fiscal year 2022 was 1 euro equals 1.1274 U.S. dollars. The amount shown in the Non-Equity Incentive Plan Compensation column for Mr. Goldenitsch was determined in U.S. dollars using a U.S. dollar exchange rate of 1 euro equals 1.09 U.S. dollars. |
Summary Compensation Table
| ‡ Messrs. Schiller and Karch left their offices with the Company in December 2022 and February 2023, respectively. Mr. Bellairs left the office of Chief Financial Officer in September 2023, after having served in that role for the entirety of fiscal year 2023. |
Summary Compensation Table
| 1 | The Company’s fiscal year is July 1 to June 30, and we refer to fiscal years by the year in which they end. Fiscal year 2023 began July 1, 2022 and ended June 30, 2023. |
Summary Compensation Table
| 2 | The amounts shown in the Salary column may not precisely match an NEO’s base salary rate that was in effect for a fiscal year due to payroll timing. For U.S.-based employees who served during all of fiscal year 2023, there was one extra biweekly pay date during fiscal year 2023 due to payroll timing. |
Summary Compensation Table
| 3 | The amounts shown in the Stock Awards column represent the aggregate grant date fair value of the stock awards granted during the applicable fiscal year, calculated in accordance with FASB ASC Topic 718. The assumptions used by the Company in calculating these amounts are included in Note 2 (under the heading “Stock-Based Compensation”) and Note 13 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. |
Summary Compensation Table
| 4 | Assuming the highest level of performance will be achieved under the performance-based PSUs granted in fiscal year 2023 (i.e., the 2023 Relative TSR PSUs and the 2023 Absolute TSR PSUs), the aggregate value of such PSUs would be as follows, based on PSUs paying out at maximum (200% of target) and using the closing market price of the Company’s common stock on the date of grant: Wendy P. Davidson ($1,735,111), Wolfgang Goldenitsch ($614,461), Kristy M. Meringolo ($614,461), Mark L. Schiller ($6,984,546), Christopher J. Bellairs ($1,024,064) and David J. Karch ($921,673). Under SEC rules, the amount reported in this footnote for Mr. Schiller includes both (a) Mr. Schiller’s 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs at the time of their original grant in September 2022, and (b) those same PSU awards upon their modification in November 2022 — see footnote 8 below. |
Summary Compensation Table
| 5 | The amounts shown in the Non-Equity Incentive Plan Compensation column for fiscal year 2023 represent payouts under the 2023 AIP. These awards are discussed in the CD&A and are shown in the Fiscal Year 2023 Grants of Plan-Based Awards table below. |
Summary Compensation Table
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Summary Compensation Table
| 6 | The amounts shown in the All Other Compensation column for fiscal year 2023 consist of the following items for each NEO: |
Summary Compensation Table
| Name | 401(k) Plan Match(a) ($) | Travel and Housing Allowance(b) ($) | Legal Fees(c) ($) | Life and Other Insurance Premiums(d) ($) | Pension and Accident Insurance ($) | Company- Provided Car(e) ($) | Other(f) ($) | Separation- Related Payments and Benefits ($) | | Wendy P. Davidson | — | 15,000 | 10,000 | 522 | — | — | 25 | — | | Wolfgang Goldenitsch(g) | — | — | — | — | 48,729 | 10,560 | 383 | — | | Kristy M. Meringolo | 8,200 | — | — | 1,044 | — | — | 25 | — | | Mark L. Schiller | 10,800 | — | — | 532 | — | — | — | 1,269,978(h) | | Christopher J. Bellairs | 10,800 | — | — | 1,064 | — | — | 25 | — | | David J. Karch | 10,800 | — | — | 710 | — | — | — | 413,674(i) |
Summary Compensation Table
| a | The Company’s 401(k) match is calculated based upon a calendar year, and the amounts provided for each of the NEOs for fiscal year 2023 represent a matching contribution by the Company for calendar year 2022. |
Summary Compensation Table
| b | Represents an allowance of $5,000 per month for three months to cover costs incurred by Ms. Davidson to travel between her principal residence and the Company’s former headquarters and for temporary housing near the Company’s former headquarters. The allowance was suspended after the Company vacated its former headquarters in March 2023. |
Summary Compensation Table
| c | Represents reimbursement for legal fees incurred in connection with the negotiation of Ms. Davidson’s employment agreement and related documents. |
Summary Compensation Table
| d | Represents amounts paid by the Company on behalf of the NEOs for life, accidental death and dismemberment and long-term disability insurance. |
Summary Compensation Table
| e | We calculated the cost to us for the Company-provided car based on the depreciation expense and the operating costs, such as fuel and maintenance. |
Summary Compensation Table
| f | For Ms. Davidson, Mr. Bellairs and Ms. Meringolo, represents receipt of a gift card as part of a broad-based employee appreciation initiative. For Mr. Goldenitsch, represents Company-paid home internet service. |
Summary Compensation Table
| g | Mr. Goldenitsch is employed by an Austrian subsidiary of the Company and receives benefits that are customary for an executive in Austria. The amounts shown in this table for Mr. Goldenitsch have been converted from euros to U.S. dollars using the average daily closing euro to U.S. dollar exchange rate during our fiscal year 2023, as reported by The Wall Street Journal. The average daily closing rate during fiscal year 2023 was 1 euro equals 1.0476 U.S. dollars. |
Summary Compensation Table
| h | Mr. Schiller received the following payments and benefits during fiscal year 2023 in connection with his departure from the Company: (a) cash severance payments of $1,181,250, (b) a payment of $80,769 for unused vacation in accordance with Company policy upon an employee’s departure from the Company and (c) payment of COBRA premiums at a cost to the Company for fiscal year 2023 of $7,959. See “Potential Payments upon Termination or Change in Control,” which begins on page 49 for a description of all payments to be made and benefits to be provided to Mr. Schiller in connection with his departure from the Company. |
Summary Compensation Table
| i | Mr. Karch received the following payments and benefits during fiscal year 2023 in connection with his departure from the Company: (a) cash severance payments of $381,029, (b) a payment of $22,656 for unused vacation in accordance with Company policy upon an employee’s departure from the Company and (c) payment of COBRA premiums at a cost to the Company for fiscal year 2023 of $9,989. See “Potential Payments upon Termination or Change in Control,” which begins on page 49 for a description of all payments to be made and benefits to be provided to Mr. Karch in connection with his departure from the Company. |
Summary Compensation Table
| 7 | The amount reported in the Bonus column for Ms. Davidson for fiscal year 2023 represents a one-time make-whole cash signing bonus which is subject to prorated recoupment if Ms. Davidson is terminated by the Company for Cause (as defined in her employment agreement) or voluntarily terminates her employment other than for Good Reason (as defined in her employment agreement) within the first 24 months following January 1, 2023, her start date with the Company. |
Summary Compensation Table
| 8 | Under SEC rules, the amount reported in the Stock Awards column for Mr. Schiller for fiscal year 2023 includes both (a) the original grant date fair value of Mr. Schiller’s 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs awarded in September 2022 of $3,014,156, the expensing of which was subsequently reversed upon the modification of such awards in November 2022, and (b) the new fair value of $1,061,815 for those same PSU awards upon their modification in November 2022. The treatment of Mr. Schiller’s 2023 Relative TSR PSUs and Absolute TSR PSUs upon his departure as President and Chief Executive Officer is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. The amount reported in the Stock Awards column for Mr. Schiller for fiscal year 2023 also includes the grant date fair value of $1,536,096 for 2023 LTIP RSUs granted to Mr. Schiller in September 2022, which were forfeited in their entirety in December 2022. |
Summary Compensation Table
| 9 | The amount reported in the Bonus column for Mr. Bellairs for fiscal year 2022 represents a contractually agreed minimum payout received under the 2022 AIP, representing Mr. Bellairs’ target bonus opportunity under the 2022 AIP, prorated based on his start date with the Company. This amount is reported in the Bonus column under SEC rules due to the contractually agreed nature of the payout, which was agreed in connection with Mr. Bellairs’ hiring in January 2022. The reported $208,775 figure differs from the $203,363 figure in last year’s proxy statement due to an administrative error in the original calculation of Mr. Bellairs’ bonus which was detected and corrected following the date of last year’s proxy statement. |
Summary Compensation Table
| HAIN CELESTIAL 2023 Proxy Statement | 45 |
Fiscal Year 2023 Grants of Plan-Based Awards
Fiscal Year 2023 Grants of Plan-Based Awards The following table provides information about the following awards granted in fiscal year 2023: (1) cash bonus opportunities granted under the 2023 AIP, (2) equity awards granted under the 2023-2025 LTIP and (3) the New CEO Make-Whole RSUs. These awards are also discussed in the CD&A.
Fiscal Year 2023 Grants of Plan-Based Awards
| Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards(1) ($) | | | | | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Wendy P. Davidson* | AIP(2) | — | 578,125 | 1,156,250 | | | | | | | | RSU(3) | 1/1/2023 | | | | | | 35,746 | 578,370 | | | PSU(4) | 1/1/2023 | | | 17,873 | 35,746 | 71,492 | | 698,477 | | | PSU(5) | 1/1/2023 | | | 8,937 | 17,873 | 35,746 | | 247,362 | | | Make-Whole RSU(6) | 1/1/2023 | | | | | | 95,321 | 1,542,294 | | Wolfgang Goldenitsch | AIP(2) | — | 399,053 | 798,106 | | | | | | | | RSU(3) | 9/8/2022 | | | | | | 16,035 | 307,231 | | | PSU(4) | 9/8/2022 | | | 5,372 | 10,743 | 21,486 | | 295,110 | | | PSU(5) | 9/8/2022 | | | 2,646 | 5,292 | 10,584 | | 106,793 | | Kristy M. Meringolo | AIP(2) | — | 405,452 | 810,903 | | | | | | | | RSU(3) | 9/8/2022 | | | | | | 16,035 | 307,231 | | | PSU(4) | 9/8/2022 | | | 5,372 | 10,743 | 21,486 | | 295,110 | | | PSU(5) | 9/8/2022 | | | 2,646 | 5,292 | 10,584 | | 106,793 | | Mark L. Schiller** | AIP(2) | — | 1,312,500 | 2,265,000 | | | | | | | | RSU(3) | 9/8/2022 | | | | | | 80,172 | 1,536,096 | | | PSU(4) | 9/8/2022 | | | 40,286 | 80,572 | 161,144 | | 2,213,313 | | | PSU(5) | 9/8/2022 | | | 19,843 | 39,685 | 79,370 | | 800,843 | | | Modified PSU(7) | 11/22/2022 | | | 20,143 | 40,286 | 80,572 | | 787,188 | | | Modified PSU(7) | 11/22/2022 | | | 9,922 | 19,843 | 39,686 | | 274,627 | | Christopher J. Bellairs† | AIP(2) | — | 474,513 | 949,025 | | | | | | | | RSU(3) | 9/8/2022 | | | | | | 26,724 | 512,032 | | | PSU(4) | 9/8/2022 | | | 8,953 | 17,905 | 35,810 | | 491,850 | | | PSU(5) | 9/8/2022 | | | 4,410 | 8,819 | 17,638 | | 177,967 | | David J. Karch‡ | AIP(2) | — | 455,175 | 910,350 | | | | | | | | RSU(3) | 9/8/2022 | | | | | | 24,052 | 460,836 | | | PSU(4) | 9/8/2022 | | | 8,058 | 16,115 | 32,230 | | 442,679 | | | PSU(5) | 9/8/2022 | | | 3,969 | 7,937 | 15,874 | | 160,169 |
Fiscal Year 2023 Grants of Plan-Based Awards
| * Ms. Davidson joined the Company on January 1, 2023. Her 2023 AIP opportunity and 2023-2025 LTIP awards were prorated based on her commencement date. |
Fiscal Year 2023 Grants of Plan-Based Awards
| ** Mr. Schiller served as President and Chief Executive Officer until December 31, 2022. The treatment of Mr. Schiller’s awards listed in this table upon his departure as President and Chief Executive Officer is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
Fiscal Year 2023 Grants of Plan-Based Awards
| † Mr. Bellairs served as Executive Vice President and Chief Financial Officer until September 5, 2023 and will remain as an employee at the Company through November 20, 2023 to assist with the transition of his responsibilities. As such, Mr. Bellairs was eligible for and received a payout under the 2023 AIP as described in the CD&A. The first tranche of his 2023 LTIP RSUs vested on September 6, 2023 and his remaining awards under the 2023-2025 LTIP will be forfeited upon his departure from the Company. |
Fiscal Year 2023 Grants of Plan-Based Awards
| ‡ Mr. Karch served as Executive Vice President and Chief Operating Officer until February 6, 2023 and did not receive any payouts under the awards listed in this table, which were forfeited in connection with his departure from the Company. Mr. Karch’s severance arrangements are described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 46 | HAIN CELESTIAL 2023 Proxy Statement |
Fiscal Year 2023 Grants of Plan-Based Awards
| 1 | The grant date fair value of stock awards was calculated in accordance with FASB ASC Topic 718. The assumptions used by the Company in calculating these amounts are included in Note 2 (under the heading “Stock-Based Compensation”) and Note 13 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 2 | The amounts shown for AIP awards reflect the target and maximum cash bonuses that could be earned by each individual under the 2023 AIP. While certain measures within the 2023 AIP had threshold goals, there was no overall threshold-level potential payout for the 2023 AIP. The actual amounts paid out under these awards are shown in the Summary Compensation Table for fiscal year 2023 and are also discussed in the CD&A. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 3 | 2023 LITP RSUs awarded as part of the 2023-2025 LTIP, which are scheduled to vest in three (3) equal annual installments on September 6, 2023, 2024 and 2025. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 4 | 2023 Relative TSR PSUs awarded as part of the 2023-2025 LTIP, the terms of which are described in the CD&A. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 5 | 2023 Absolute TSR PSUs awarded as part of the 2023-2025 LTIP, the terms of which are described in the CD&A. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 6 | New CEO Make-Whole RSUs that are scheduled to vest in three (3) equal annual installments on January 1, 2024, 2025 and 2026. |
Fiscal Year 2023 Grants of Plan-Based Awards
| 7 | Represents modifications of the Relative TSR PSUs and Absolute TSR PSUs initially awarded to Mr. Schiller on September 8, 2022 as modified on November 22, 2022 in connection with his departure as President and Chief Executive Officer. The modified awards are required to be listed separately again under SEC rules. The treatment of Mr. Schiller’s 2023 Relative TSR PSUs and Absolute TSR PSUs upon his departure as President and Chief Executive Officer is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
Fiscal Year 2023 Grants of Plan-Based Awards
| HAIN CELESTIAL 2023 Proxy Statement | 47 |
Outstanding Equity Awards at Fiscal Year 2023 Year End
Outstanding Equity Awards at Fiscal Year 2023 Year End The following table lists all outstanding equity awards held by the NEOs at June 30, 2023.
Outstanding Equity Awards at Fiscal Year 2023 Year End
| | Stock Awards | | | | | | | Name | Grant 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) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | Wendy P. Davidson | 1/1/2023 | 35,74 | 6(2) | 447,182 | | | | | 1/1/2023 | | | | 17,873(3) | 223,591 | | | 1/1/2023 | | | | 8,937(4) | 111,802 | | | 1/1/2023 | 95,32 | 1(5) | 1,192,466 | | | | Wolfgang Goldenitsch | 8/12/2020 | 38 | 3(6) | 4,791 | | | | | 11/18/2021 | 4,90 | 4(7) | 61,349 | | | | | 11/18/2021 | | | | 2,465(8) | 30,837 | | | 11/18/2021 | | | | 1,214(9) | 15,187 | | | 11/18/2021 | 24,52 | 2(10) | 306,770 | | | | | 9/8/2022 | 16,03 | 5(2) | 200,598 | | | | | 9/8/2022 | | | | 5,372(3) | 67,204 | | | 9/8/2022 | | | | 2,646(4) | 33,101 | | Kristy M. Meringolo | 11/18/2021 | 4,08 | 7(7) | 51,128 | | | | | 11/18/2021 | | | | 2,054(8) | 25,696 | | | 11/18/2021 | | | | 1,012(9) | 12,660 | | | 11/18/2021 | 24,52 | 2(10) | 306,770 | | | | | 9/8/2022 | 16,03 | 5(2) | 200,598 | | | | | 9/8/2022 | | | | 5,372(3) | 67,204 | | | 9/8/2022 | | | | 2,646(4) | 33,101 | | Mark L. Schiller* | 9/8/2022 | | | | 20,143(3) | 251,989 | | | 9/8/2022 | | | | 9,922(4) | 124,124 | | Christopher J. Bellairs | 1/18/2022 | 4,53 | 4(7) | 56,720 | | | | | 1/18/2022 | | | | 2,267(8) | 28,360 | | | 1/18/2022 | | | | 1,134(9) | 14,186 | | | 9/8/2022 | 26,72 | 4(2) | 334,317 | | | | | 9/8/2022 | | | | 8,953(3) | 112,002 | | | 9/8/2022 | | | | 4,410(4) | 55,169 | | David J. Karch | — | | | | | |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| * Mr. Schiller served as President and Chief Executive Officer until December 31, 2022. The treatment of Mr. Schiller’s outstanding equity awards upon his departure as President and Chief Executive Officer is described in “Potential Payments upon Termination or Change in Control,” which begins on page 49. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 1 | The market value is based on the closing market price of the Company’s common stock on June 30, 2023, which was $12.51 per share. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 2 | RSUs awarded as part of the 2023-2025 LTIP that vest in three (3) equal annual installments, with the first installment having vested on September 6, 2023 and the remaining two installments scheduled to vest on September 6, 2024 and 2025. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 3 | 2023 Relative TSR PSUs awarded as part of the 2023-2025 LTIP, the terms of which, including vesting conditions, are described in the CD&A. In accordance with SEC rules, the amount listed represents the threshold number of shares that may be earned under the award, which is 50% of the target number of shares. Total shares earned under the PSUs will range from 0% to 200% of the target number of shares. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 4 | 2023 Absolute TSR PSUs awarded as part of the 2023-2025 LTIP, the terms of which, including vesting conditions, are described in the CD&A. In accordance with SEC rules, the amount listed represents the threshold number of shares that may be earned under the award, which is 50% of the target number of shares. Total shares earned under the PSUs will range from 0% to 200% of the target number of shares. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 5 | New CEO Make-Whole RSUs that are scheduled to vest in three (3) equal annual installments on January 1, 2024, 2025 and 2026. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 48 | HAIN CELESTIAL 2023 Proxy Statement |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 6 | RSUs that vested on August 12, 2023. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 7 | RSUs awarded as part of the 2022-2024 LTIP that vest in three (3) equal annual installments, with the first installment having vested on November 18, 2022 and the remaining two installments scheduled to vest on November 18, 2023 and 2024. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 8 | PSUs awarded as part of the 2022-2024 LTIP based on relative total shareholder return. In accordance with SEC rules, the amount listed represents the threshold number of shares that may be earned under the award, which is 50% of the target number of shares. Total shares earned under the PSUs will range from 0% to 200% of the target number of shares. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 9 | PSUs awarded as part of the 2022-2024 LTIP based on absolute total shareholder return. In accordance with SEC rules, the amount listed represents the threshold number of shares that may be earned under the award, which is 50% of the target number of shares. Total shares earned under the PSUs will range from 0% to 200% of the target number of shares. |
Outstanding Equity Awards at Fiscal Year 2023 Year End
| 10 | RSUs that are scheduled to vest on December 31, 2023. |
Fiscal Year 2023 Option Exercises and Stock Vested
Fiscal Year 2023 Option Exercises and Stock Vested The following table shows the number of shares acquired by the NEOs upon the vesting of stock awards during fiscal year 2023, and the value realized. None of the NEOs hold stock options or exercised stock options during fiscal year 2023.
Fiscal Year 2023 Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting* ($) | | Wendy P. Davidson | — | — | | Wolfgang Goldenitsch | 3,352 | 70,270 | | Kristy M. Meringolo | 2,044 | 41,595 | | Mark L. Schiller | 16,348 | 332,682 | | Christopher J. Bellairs | 2,266 | 46,113 | | David J. Karch | 33,706 | 709,638 |
Fiscal Year 2023 Option Exercises and Stock Vested
| * Represents the aggregate value realized with respect to all stock awards that vested during the fiscal year ended June 30, 2023. The value realized is based on the closing price of the Company’s common stock on the vesting date and reflects the gross value realized prior to taxes and withholding. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control We believe that severance and change-in-control benefits are important for attracting and retaining executive talent, helping to ensure that NEOs can remain focused during periods of uncertainty and neutralizing the potential conflict of our key executives when faced with a potential change in control. In this section, we describe (1) our severance and change-in-control arrangements with the NEOs who remain currently employed with the Company as executive officers and (2) the severance payments and benefits received or to be received by the NEOs who departed the Company in fiscal year 2022 or will be departing the Company in fiscal year 2023. For the NEOs who remain currently employed with the Company as executive officers, the table below contains estimates of potential payments to the NEOs upon a hypothetical termination of employment or a change in control under current employment arrangements and equity award agreements, assuming the termination or change-in-control event occurred on June 30, 2023. Values of equity awards are included at $12.51 per share, the closing price of our common stock on June 30, 2023, and the consideration paid or exchanged in a change-in-control transaction is assumed to be $12.51 per share. We have provided a brief description of the applicable employment arrangements and equity award provisions following the table, including in the footnotes. Definitions for the terms “Disability,” “Cause,” “Good Reason” and “Change in Control” are also summarized below under “Definitions of Applicable Termination Events and Change in Control.”
Potential Payments upon Termination or Change in Control
| HAIN CELESTIAL 2023 Proxy Statement | 49 |
Potential Payments upon Termination or Change in Control
The Company does not have any agreements or arrangements that provide the NEOs with payments or benefits upon a voluntary separation (including retirement) or a termination by the Company for Cause, except for payments and benefits that have accrued through the date of separation or termination.
Potential Payments upon Termination or Change in Control
| Name | Benefit Type | Death or Disability ($) | Termination Without Cause ($) | Termination for Good Reason ($) | Change in Control Without Termination ($) | Change in Control and Termination Without Cause ($) | Change in Control and Termination for Good Reason ($) | | Wendy P. Davidson | Cash Severance(1) | — | 4,162,500 | 4,162,500 | — | 6,243,750 | 6,243,750 | | | PSU Vesting(2) | — | — | — | — | — | — | | | RSU Vesting | 1,639,648 | 1,192,466 | 1,192,466 | — | 1,639,648 | 1,192,466 | | | Total | 1,639,648 | 5,354,966 | 5,354,966 | — | 7,883,398 | 7,436,216 | | Wolfgang Goldenitsch | Cash Severance(1) | — | 869,642 | — | — | 1,739,285 | 1,739,285 | | | PSU Vesting(2) | — | — | — | — | — | — | | | RSU Vesting | 573,508 | 233,748 | — | — | 573,508 | — | | | Total | 573,508 | 1,103,390 | — | — | 2,312,793 | 1,739,285 | | Kristy M. Meringolo | Cash Severance(1) | — | 882,454 | — | — | 1,764,907 | 1,764,907 | | | PSU Vesting(2) | — | — | — | — | — | — | | | RSU Vesting | 558,496 | 233,748 | — | — | 558,496 | — | | | Total | 558,496 | 1,116,202 | — | — | 2,323,403 | 1,764,907 |
Potential Payments upon Termination or Change in Control
| 1 | Cash severance is paid out over a period of time that depends on the amount of the severance obligation in relation to the individual’s annual compensation. Severance of one times the sum of annual base salary and an annual bonus amount is payable over one year; severance of two times the sum of annual base salary and an annual bonus amount is payable over two years; and severance of three times the sum of annual base salary and an annual bonus amount is payable over three years. The cash severance amounts for Mr. Goldenitsch have been converted from euros to U.S. dollars using the closing euro to U.S. dollar exchange rate on June 30, 2023, as reported by The Wall Street Journal, which was 1 euro equals 1.0914 U.S. dollars. |
Potential Payments upon Termination or Change in Control
| 2 | No PSUs held by the NEOs would have vested upon any termination or change-in-control event that occurred on June 30, 2023. To the extent the applicable event could have triggered acceleration of vesting, the threshold goals had not been attained as of that date. |
CEO Pay Ratio
CEO Pay Ratio As required by SEC rules, we are providing the following information about the relationship between the annual total compensation of our CEO and the annual total compensation of our median employee (our “CEO pay ratio”). Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with SEC rules.
Fiscal Year 2023 CEO Pay Ratio Determination
Fiscal Year 2023 CEO Pay Ratio Determination Using this methodology, we determined that the median employee as of June 30, 2023 was a full-time employee located in Europe with annual total compensation of $36,515 for fiscal year 2023, using an exchange rate of 1 euro equals 1.09 U.S. dollars. For purposes of calculating our CEO pay ratio, our CEO’s annual total compensation for fiscal year 2023 was $7,003,593, which represents an annualized amount in light of the CEO transition in fiscal year 2023. As permitted by SEC rules, we elected to annualize the compensation of Ms. Davidson, who was serving as CEO on June 30, 2023, the date we selected to determine to identity the median employee. To annualize Ms. Davidson’s compensation:
Fiscal Year 2023 CEO Pay Ratio Determination
| • | we annualized her base salary to $925,000 (from the $462,500 reported in the Summary Compensation Table); |
Fiscal Year 2023 CEO Pay Ratio Determination
| • | we annualized the grant date fair value of her equity awards under the 2023-2025 LTIP to $3,048,418 (from the $1,524,209 reported in the Summary Compensation Table with respect to such awards); |
Fiscal Year 2023 CEO Pay Ratio Determination
| • | we annualized her non-equity incentive plan compensation to $501,812 (from the $250,906 reported in the Summary Compensation Table); and |
Fiscal Year 2023 CEO Pay Ratio Determination
| • | we annualized her employee benefit for life and other insurance premiums to $1,044 (from the $522 reported in the Summary Compensation Table). |
Fiscal Year 2023 CEO Pay Ratio Determination
We did not annualize Ms. Davidson’s New CEO Make-Whole Bonus, New CEO Make-Whole RSUs, or the benefits for travel and housing and legal expenses, as those were limited one-time and temporary benefits for Ms. Davidson in connection with her hiring with the full amount already included in Ms. Davidson’s fiscal year 2023 compensation. Based on this information, the ratio of CEO annual total compensation to the median employee compensation for fiscal year 2023 was estimated to be 192 to 1.
Fiscal Year 2023 CEO Pay Ratio Determination
| 54 | HAIN CELESTIAL 2023 Proxy Statement |
Pay Versus Performance
Pay Versus Performance As required by SEC rules, we are providing the following “pay versus performance” disclosure centered around a measure of pay referred to as “
compensation actually paid
compensation actually paid ” or “
CAP
| • | A pay versus performance table and footnoted detail that includes the “Total” compensation of our NEOs as presented in the Summary Compensation Table, CAP for our NEOs, Company total shareholder return, total shareholder return of a peer group, net income (loss) and our Company-selected financial performance measure, Adjusted EBITDA, in each case for fiscal years 2021, 2022 and 2023; |
CAP
| • | Graphs that show the relationships between certain of the information included in the pay versus performance table; and |
Pay Versus Performance Table
Pay Versus Performance Table The following table shows, for fiscal years 2021, 2022 and 2023, the “Total” compensation of our current and former CEOs and the average “Total” compensation for our other NEOs, as presented in the Summary Compensation Table, CAP for our current and former CEOs and the average CAP for other NEOs, Company total shareholder return, total shareholder return of the S&P Food & Beverage Select Industry Index, net income (loss) and our Company selected financial performance measure, Adjusted EBITDA.
Pay Versus Performance Table
| Fiscal Year | Summary Compensation Table Total for Current CEO 1 ($) | Summary Compensation Table Total for Former CEO 2 ($) | Compensation Actually Paid to Current CEO 3 ($) | Compensation Actually Paid to Former CEO 3 ($) | Average Summary Compensation Table Total for Non-CEO NEOs 4 ($) | Average Compensation Actually Paid to Non-CEO NEOs 5 ($) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) 8 (Thousands) ($) | Adjusted EBITDA 9 (Thousands) ($) | | | | | | | | | Company Total Shareholder Return 6 ($) | Peer Group Total Shareholder Return 7 ($) | | | | 2023 | 4,765,456 | 7,741,908 | 3,752,004 | 847,657 | 1,646,461 | 551,002 | 39.70 | 135.55 | (116,537) | 166,622 | | 2022 | — | 7,326,221 | — | 8,910,969 | 2,631,605 | 2,762,642 | 75.34 | 131.35 | 77,873 | 200,616 | | 2021 | — | 2,886,066 | — | 6,666,132 | 989,397 | 2,191,715 | 127.32 | 136.26 | 77,364 | 258,938 |
Pay Versus Performance Table
| 1 | The amount shown in this column reflects the amount reported in the Total column of the Summary Compensation Table for fiscal year 2023 for Wendy P. Davidson, who has served as our President and CEO since January 1, 2023. |
Pay Versus Performance Table
| 2 | The amounts shown in this column reflect the amounts reported in the Total column of the Summary Compensation Table for each applicable fiscal year for Mark L. Schiller, our former President and CEO who departed that role on December 31, 2022. |
Pay Versus Performance Table
| HAIN CELESTIAL 2023 Proxy Statement | 55 |
Pay Versus Performance Table
| 3 | The amounts shown in these columns reflect the “compensation actually paid” as calculated under SEC rules to Ms. Davidson for fiscal year 2023 and to Mr. Schiller for each applicable fiscal year. The following table shows those calculations. |
Pay Versus Performance Table
| Calculation of “Compensation Actually Paid” Under SEC Rules – Current CEO and Former CEO a | Current CEO – Wendy P. Davidson | Former CEO – Mark L. Schiller | | | | | Fiscal Year 2023 ($) | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Amount reported in Total column of Summary Compensation Table | 4,765,456 | 7,741,908 | 7,326,221 | 2,886,066 | | Deduction for amount reported in Stock Awards column of Summary Compensation Table ( i.e. , grant date fair value of stock awards) | (3,066,503) | (5,612,067) | (6,024,187) | — | | Increase for fair value at fiscal year-end of equity awards granted during the fiscal year that remain outstanding at fiscal year-end b | 2,053,051 | 464,267 | 2,079,133 | — | | Increase/deduction for change in fair value during the fiscal year of equity awards granted in a prior fiscal year that remain outstanding at fiscal year-end b | — | — | — | 3,749,953 | | Increase/deduction for change in fair value during the fiscal year, as of the vesting date, of equity awards granted in a prior fiscal year that vested in the fiscal year b | — | (55,420) | 5,529,802 | 30,113 | | Deduction for fair value at prior fiscal year-end of equity awards granted in a prior fiscal year that failed to meet vesting conditions and were forfeited during the fiscal year b | — | (1,691,031) | — | — | | “Compensation Actually Paid” under SEC rules | 3,752,004 | 847,657 | 8,910,969 | 6,666,132 |
Pay Versus Performance Table
| a | The following components of the calculation of “compensation actually paid” under SEC rules were not applicable: adjustments for defined benefit and actuarial pension plans; additions for equity awards that were both granted and vested during the same fiscal year; and additions for the value of dividends or other earnings paid on equity awards during the fiscal year and not otherwise included in the total compensation for the fiscal year. |
Pay Versus Performance Table
| b | For all equity awards, our methodology for calculating the fair value remained consistent between the grant date fair value measurement and the subsequent fair value measurements, provided that certain changes to assumptions are reflected in subsequent fair value measurements of PSU awards. Fair values for PSU awards that are based on relative total shareholder return or absolute total shareholder return are measured using a Monte Carlo simulation model in accordance with FASB ASC Topic 718, as described in Note 13 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. For both the Company and constituents of the peer group used for PSU awards based on relative total shareholder return, actual performance through the measurement date is taken into account. Additionally, the Monte Carlo simulation model requires the use of certain assumptions, which include assumptions relating to expected share price volatility, risk-free interest rate and, for relative total shareholder return PSUs, correlation coefficients, which factors inherently change over time. |
Pay Versus Performance Table
| 4 | The amounts shown in this column reflect, for each applicable fiscal year, the average of the amounts reported in the Total column of the Summary Compensation Table for the Company’s named executive officers other than the CEO. The named executive officers included for this purpose for each applicable year are as follows: (i) for fiscal year 2023, Wolfgang Goldenitsch, Kristy M. Meringolo, Christopher J. Bellairs and David J. Karch (former); (ii) for fiscal year 2022, Christopher J. Bellairs, Wolfgang Goldenitsch, Kristy M. Meringolo, David J. Karch (former), Javier H. Idrovo (former) and Christopher J. Boever (former); and (iii) for fiscal year 2021, Kristy M. Meringolo, Javier H. Idrovo (former), Christopher J. Boever (former) and Jeryl Wolfe (former). |
Pay Versus Performance Table
| 56 | HAIN CELESTIAL 2023 Proxy Statement |
Pay Versus Performance Table
| 5 | The amounts shown in this column reflect, for each applicable fiscal year, the average amount of “compensation actually paid” as calculated under SEC rules to the Company’s named executive officers other than the CEO. The following table shows those calculations. |
Pay Versus Performance Table
| Calculation of “Compensation Actually Paid” Under SEC Rules – Average for Non-CEO Named Executive Officers a | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Average amount reported in Total column of Summary Compensation Table | 1,646,461 | 2,631,605 | 989,397 | | Deduction for average amount reported in Stock Awards column of Summary Compensation Table ( i.e. , grant date fair value of stock awards) b | (915,950) | (2,108,881) | — | | Increase for average amount of fair value at fiscal year-end of equity awards granted during the fiscal year that remain outstanding at fiscal year-end b | 297,368 | 589,053 | — | | Increase/deduction for average amount of change in fair value during the fiscal year of equity awards granted in a prior fiscal year that remain outstanding at fiscal year-end b | (239,242) | (3,500) | 1,145,052 | | Increase/deduction for average amount of change in fair value during the fiscal year, as of the vesting date, of equity awards granted in a prior fiscal year that vested in the fiscal year b | (28,615) | 1,654,365 | 57,266 | | Deduction for average amount of fair value at prior fiscal year-end of equity awards granted in a prior fiscal year that failed to meet vesting conditions and were forfeited during the fiscal year b | (209,020) | — | — | | Average “Compensation Actually Paid” under SEC rules | 551,002 | 2,762,642 | 2,191,715 |
Pay Versus Performance Table
| a | The following components of the calculation of “compensation actually paid” under SEC rules were not applicable: adjustments for defined benefit and actuarial pension plans; additions for equity awards that were both granted and vested during the same fiscal year; and additions for the value of dividends or other earnings paid on equity awards during the fiscal year and not otherwise included in the total compensation for the fiscal year. |
Pay Versus Performance Table
| b | For all equity awards, our methodology for calculating the fair value remained consistent between the grant date fair value measurement and the subsequent fair value measurements, provided that certain changes to assumptions are reflected in subsequent fair value measurements of PSU awards. Fair values for PSU awards that are based on relative total shareholder return or absolute total shareholder return are measured using a Monte Carlo simulation model in accordance with FASB ASC Topic 718, as described in Note 13 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. For both the Company and constituents of the peer group used for PSU awards based on relative total shareholder return, actual performance through the measurement date is taken into account. Additionally, the Monte Carlo simulation model requires the use of certain assumptions, which include assumptions relating to expected share price volatility, risk-free interest rate and, for relative total shareholder return PSUs, correlation coefficients, which factors inherently change over time. |
Pay Versus Performance Table
| 6 | The amounts shown in the column reflect the cumulative total shareholder return on our common stock during the period from June 30, 2020 through the end of the applicable fiscal year, assuming an investment of $100 in our common stock as of the market close on June 30, 2020. |
Pay Versus Performance Table
| 7 | The amounts shown in the column reflect the cumulative total shareholder return of the S&P Food & Beverage Select Industry Index, the published industry index used in the performance graph included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, during the period from June 30, 2020 through the end of the applicable fiscal year, assuming an investment of $100 as of the market close on June 30, 2020. |
Pay Versus Performance Table
| 8 | Represents the amount of net income (loss) reflected in the Company’s audited financial statements for each applicable fiscal year. |
Pay Versus Performance Table
| 9 | Represents the amount of Adjusted EBITDA reported by the Company for each applicable fiscal year. Adjusted EBITDA is the measure selected by the Company under SEC rules as the most important performance measure used to link CAP for the NEOs to Company performance during fiscal year 2023. Adjusted EBITDA is a non-GAAP financial measure. See Appendix A to this proxy statement for additional information on Adjusted EBITDA. |
Pay Versus Performance Table
| HAIN CELESTIAL 2023 Proxy Statement | 57 |
Graphical Presentation of Pay Versus Performance Table
Graphical Presentation of Pay Versus Performance Table In accordance with SEC rules, the Company is providing the following graphical presentations of the relationships between information presented in the above Pay Versus Performance table. The following graph shows the relationship among (1) the CAP to our current CEO and our former CEO and the average of the CAP to our remaining NEOs in fiscal years 2021, 2022 and 2023, (2) the cumulative total shareholder return on our common stock and (3) the cumulative total shareholder return of the S&P Food & Beverage Select Industry Index, in the case of clauses (2) and (3) during the period from June 30, 2020 through June 30, 2023, assuming an investment of $100 as of the market close on June 30, 2020. The following graph shows the relationship between (1) the CAP to our current CEO and our former CEO and the average of the CAP to our remaining NEOs and (2) net income (loss), in each case in fiscal years 2021, 2022 and 2023.
Graphical Presentation of Pay Versus Performance Table
| 58 | HAIN CELESTIAL 2023 Proxy Statement |
Graphical Presentation of Pay Versus Performance Table
The following graph shows the relationship between (1) the CAP to our current CEO and our former CEO and the average of the CAP to our remaining NEOs and (2) Adjusted EBITDA, in each case in fiscal years 2021, 2022 and 2023.