DEF 14A of Seneca Foods Corp
Filed Jul 7, 2023 · FY20230001437749-23-019603
PROPOSAL ONE: ELECTION OF DIRECTORS
PROPOSAL ONE: ELECTION OF DIRECTORS The Board of Directors unanimously recommends a vote FOR the election of each of the nominees listed below. Our Board of Directors currently has nine members: Kathryn J. Boor, Peter R. Call, John P. Gaylord, Kraig H. Kayser, Linda K. Nelson, Michael F. Nozzolio, Paul L. Palmby, Donald J. Stuart and Keith A. Woodward. Mr. Nozzolio is not standing for re-election to the Board after his current term expires immediately prior to the Annual Meeting. Bruce E. Ware is a new director nominee nominated to fill the resulting vacancy. In accordance with our Bylaws, the Board of Directors is divided into three classes, as equal in number as possible. At this annual meeting, three directors will be elected to serve until the Annual Meeting of Shareholders in 2026 and until each of their successors is duly elected and shall qualify. Unless instructed otherwise, proxies will be voted FOR the election of the three nominees listed below. Although the directors do not contemplate that any of the nominees will be unable to serve prior to the Meeting, if such a situation arises, the enclosed proxy will be voted in accordance with the best judgment of the person or persons voting the proxy.
Information Concerning Directors
Information Concerning Directors The following biographies of each of the director nominees, as well as the directors whose terms continue beyond the Annual Meeting, contains information regarding that person’s principal occupation, tenure with the Company, business experience, other director positions currently held or held at any time during the past five years, and the specific experience, qualifications, attributes or skills that led to the conclusion by the Board of Directors that such person should serve as a director of the Company. Nominee Standing for Election at the 2023 Annual Meeting of Shareholders for a Term Expiring in 2026 Peter R. Call, age 66 – Mr. Call has been a director since 2011. Mr. Call is the President of My-T Acres, Inc., a vegetable and grain farm. He was President of Pro-Fac Cooperative, Inc. from 2003-2013 and a member of its Board of Directors from 2000-2013. Mr. Call currently serves on the Board of Trustees of Cornell University (since 2020). He also serves on the Board of Directors of Farm Fresh First, LLC, and has done so since 2007. Mr. Call also served as a director of Farm Credit East from 2015 to 2023, on the Board of Trustees of Genesee Community College from 2012 to 2019, and on the Board of Directors of Birds Eye Foods from 2002-2009. Mr. Call received his Bachelor of Science (B.S.) degree from Cornell University. Kraig H. Kayser, age 62 − Kraig H. Kayser previously served as a director from 1985 until his retirement from the Board in 2020. Mr. Kayser was re-appointed to the Board in November 2021, serving as Chairman since this date. Mr. Kayser is the former President and Chief Executive Officer of the Company, serving in this role from 1993 to his retirement from the position in 2020. From 1991 to 1993, he was the Company’s Chief Financial Officer. Mr. Kayser currently serves as the Chair of the Board of Trustees of Cornell University. In addition, Mr. Kayser is also a director of Moog Inc. where he serves as Chair of the Audit Committee and a member of the Nominating and Governance Committee. He received a B.A. from Hamilton College and an M.B.A. from Cornell University. Bruce E. Ware, age 47 – Mr. Ware is a new director nominee standing for election for the first time. He is a Corporate Vice President at DaVita Inc., a NYSE listed Fortune 500 Company. DaVita is a leading provider of kidney care services in the U.S. At DaVita, he leads the continental U.S. joint venture partnership capital raising activities. Mr. Ware started his career on Wall Street as an investment banker at Donaldson, Lufkin and Jenrette focused on corporate finance advisory and mergers and acquisitions activities. He is a member of the Board of Directors of AAON, Inc. a manufacturer of heating and air conditioning equipment in Tulsa, Oklahoma, where he serves as a member of the audit and compensation committees. Mr. Ware is also an independent director of Blackhawk Bank of Beloit, Wisconsin. He is a board member of the University of Mississippi Foundation, which oversees his undergraduate alma mater’s endowment. He holds an MBA from Harvard Business School, an MA from the University of Texas at Austin and a BBA from the University of Mississippi. Directors whose Terms Expire in 2024 Linda K. Nelson, age 58 – Ms. Nelson has been a director since February 2021. Ms. Nelson has over 27 years of experience in financial and operational management. Ms. Nelson currently serves as the Chief Financial Officer for IDI Billing Solutions, Inc. IDI Billing Solutions is an independent software vendor that designs and hosts operations, billing, and point of sale solutions for communications service providers. Prior to that, Ms. Nelson was a financial executive consultant, holding a senior leadership position for select organizations and on various acquisition and merger due diligence teams evaluating opportunities for both large-scale private equity firms and local entrepreneurs. From 2011 to 2013, Ms. Nelson held the role of Chief Financial Officer for First American Equipment Finance. Prior to that, Ms. Nelson was with Birds Eye Foods, Inc. for 15 years in increasingly responsible financial roles, reaching the position of Executive Vice President, Chief Financial Officer and Secretary in 2008. Donald J. Stuart, age 67 – Mr. Stuart has been a director since November 2020. Mr. Stuart is a Managing Partner / Founder at Cadent Consulting Group. Prior to Cadent, he served as Chief Operating Officer of Kantar Retail. Mr. Stuart was a founding partner of Cannondale Associates in 1992, as well as Managing Director and CEO / President. Before Cannondale, he had a strong finance and marketing background from his management positions at Glendinning Associates and Pillsbury / Green Giant. He has extensive experience in sales and marketing consulting for consumer manufacturers across multiple retail channels. Mr. Stuart received his B.A. in Economics from St. Lawrence University and his M.B.A. from the Tuck School of Business at Dartmouth. Keith A. Woodward, age 59 – Mr. Woodward has been a director since July 2018. Mr. Woodward is the former Chief Financial Officer of Tennant Corporation. He is also a former Senior Vice President, Finance for General Mills, Inc. where he worked for 26 years from 1991-2017. From 2006-2009, he was the representative of General Mills appointed to serve as a board advisor to the Company’s Board of Directors pursuant to the Green Giant Alliance Agreement. Mr. Woodward has his M.B.A. in Finance and Marketing, and a B.S. in Accounting both from Indiana University. Mr. Woodward is currently a board member of Phillips Distilling Company in Minneapolis. Directors whose Terms Expire in 2025 Kathryn J. Boor, age 64 – Dr. Boor was appointed as a director of the Company in January 2019. She is the Dean of the Graduate School and Vice Provost for Graduate Education at Cornell University. Dr. Boor serves on various boards including the US-Israel Binational Agricultural Research and Development Fund (BARD; 2019) and the US Food and Drug Administration Science Board (2019). She chairs the Innovation Committee and serves on the Nomination and Governance Committee for International Flavors and Fragrance (since January 2021) and serves on the Compensation and Nomination and Governance Committees for Sarepta Therapeutics (since June 2022). She chairs the Food Safety Innovation Lab Advisory Committee for USAID Feed the Future (2020). Dr. Boor earned a B.S. in Food Science from Cornell University, an M.S. in Food Science from the University of Wisconsin and a Ph.D. in Microbiology from the University of California, Davis. John P. Gaylord, age 62 –Mr. Gaylord has operating and management experience in manufacturing and distribution businesses, including experience as President of FishHawk LP. He currently serves as a director and member of the conflicts committee, audit committee, nominating committee and compensation committee, along with being on the audit committee of Comet Signs LLC. Mr. Gaylord holds a B.A. from Texas Christian University and an M.B.A. from Southern Methodist University. He has served as a director of the Company since October 2009.
Information Concerning Directors
Paul L. Palmby, age 60 – Mr. Palmby has been a director since June 2021. Mr. Palmby is the President and Chief Executive Officer of the Company and has served in that capacity since October of 2020. From 2006-2020 Mr. Palmby served as Executive Vice President and Chief Operating Officer of the Company. Prior to that, he served as President of the Vegetable Division of the Company from 2005 to 2006 and Vice President of Operations of the Company from 1999-2004. Mr. Palmby joined the Company in February 1987. He has been twice appointed by the Governor of Wisconsin and has served since 2015 on the Board of the Department of Agriculture, Trade and Consumer Protection for the state. He has been a Director since 2018 of Blackhawk Bancorp, Inc., the parent company of Blackhawk Bank, a Beloit, Wisconsin publicly traded community bank with nine full service banking centers in Wisconsin and Illinois. He is also a Director of the Farming For The Future Foundation which is a Foundation dedicated to educating the public about where their food comes from.
Compensation Discussion and Analysis
| ● | align our executives’ interests with the long-term interests of our shareholders. |
Compensation Discussion and Analysis
| Annual Adjusted Earnings | Award Percentage | | Less than 100% of Bonus Base | 0% | | 100% or more but less than 125% of Bonus Base | 10% | | 125% or more but less than 150% of Bonus Base | 20% | | 150% or more but less than 175% of Bonus Base | 30% | | 175% or more but less than 200% of Bonus Base | 40% | | 200% or more of Bonus Base | 50% |
Compensation Discussion and Analysis
For fiscal year 2023, the Company’s Annual Adjusted Earnings exceeded the 200% or more bonus target for a 50% bonus payment. The actual amount earned by each named executive officer in fiscal year 2023 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. Equity Based Incentive Awards - On August 10, 2007, the shareholders approved the 2007 Equity Incentive Plan to align the interests of management and shareholders through the use of stock-based incentives that result in increased stock ownership by management. Executive management’s view of the Plan is that it is important to allow us to continue to attract and retain key talent and to motivate executive and other key employees to achieve the Company’s goals. On July 28, 2017, the shareholders approved the amendment and extension of the 2007 Equity Incentive Plan for an additional ten-year term. The Company granted 3,528 shares of restricted Class A common stock awards under the Plan to key employees in fiscal year 2023. Provided that the participant remains employed by the Company, these shares of restricted stock will vest equally over a four-year period. Retirement Programs - Our executive officers are entitled to participate in the Company’s Pension Plan, which is for the benefit of all employees meeting certain eligibility requirements. Effective August 1, 1989, the Company amended the Pension Plan to provide improved pension benefits under an excess formula. The excess formula for the calculation of the annual retirement benefit is: total years of credited service (not to exceed 35) multiplied by the sum of (i) 0.6% of the participant’s average salary (five highest consecutive years, excluding bonus), and (ii) 0.6% of the participant’s average salary in excess of his or her compensation covered by Social Security. Participants who were employed by the Company prior to August 1, 1988, are eligible to receive the greater of their benefit determined under the excess formula or their benefit determined under the offset formula as of July 31, 1989. The offset formula is: (i) total years of credited service multiplied by $120, plus (ii) average salary multiplied by 25%, less 74% of the primary Social Security benefit. The maximum permitted annual retirement income that can be paid to a participant under either formula is $265,000. See “Pension Benefits” below for further information regarding the number of years of service credited to each of the named executive officers and the actuarial present value of his accumulated benefit under the Pension Plan. We also have a 401(k) Plan pursuant to which the Company makes matching and discretionary contributions, however, the named executive officers are not eligible to participate in the Company’s 401(k) match. The Company sponsors an unfunded nonqualified deferred compensation plan to permit certain eligible employees, including the named executive officers, to defer receipt of a portion of their compensation to a future date. This plan was designed to compensate the 401(k) Plan participants for any loss of Company contributions under the 401(k) Plan. None of the named executive officers received a Company match under the deferred compensation plan in excess of $10,000. Other Compensation - The Company also provides health insurance, term life insurance, and short-term disability benefits that do not discriminate in scope, terms or operation in favor of our executive officers. These benefits are included in the Summary Compensation Table for the named executive officers under “All Other Compensation” as applicable under SEC rules. Other Compensation Policies Internal Pay Equity - The Committee believes that internal pay equity is an important factor to be considered in establishing compensation for our officers. The Committee has not established a policy regarding the ratio of total compensation of our CEO to that of the other officers, but it does review compensation levels to ensure that appropriate equity exists. The Committee intends to continue to review internal pay equity and may adopt a formal policy in the future if it deems such a policy to be appropriate. Compensation Deductibility Policy - Section 162(m) of the Internal Revenue Code limits the federal tax deductions that may be claimed by a public company for compensation paid to certain individuals to $1 million, except that, in 2017 and prior years, compensation exceeding such threshold could be deducted if it met the requirements to be considered “performance-based” compensation within the meaning of Section 162(m) of the Internal Revenue Code. The Tax Cuts and Jobs Act, passed by Congress in December 2017, eliminated the “performance-based” compensation exemption under Section 162(m). Therefore, for 2018 and subsequent years, compensation paid to our chief executive officer, our chief financial officer and to each of our other named executive officers generally will not be deductible for federal income tax purposes to the extent such compensation exceeds $1 million, regardless of whether such compensation would have been considered “performance-based” under prior law. This limitation on deductibility applies to each individual who is a “covered employee” (as defined in Section 162(m)) or who becomes a covered employee, and continues to apply to each such individual for all future years, regardless of whether such individual remains a named executive officer. The compensation committee believes that our stockholders’ interests are best served by not restricting the compensation committee’s discretion in structuring compensation programs, and thus the compensation committee intends to maintain flexibility to pay compensation that is not deductible when the best interests of our company make that advisable. In approving the amount and form of compensation for our named executive officers, the compensation committee will continue to consider all elements of cost to our company of providing such compensation, including the potential impact of Section 162(m). No Stock Options - The Company has never awarded stock options to any officer or employee, and it does not presently contemplate initiating any plan or practice to award stock options. Timing of Grants - The Committee anticipates that stock awards to the Company’s officers under the 2007 Equity Incentive Plan will typically be granted annually in conjunction with the review of the individual performance of each officer. This review will take place at a regularly scheduled meeting of the Compensation Committee.
Summary Compensation Table
Summary Compensation Table The following table summarizes, for the fiscal years ended March 31, 2023, 2022, and 2021, the amount of compensation earned by the named executive officers:
Summary Compensation Table
| | | | | | | (4) | | | | | | | | | Change in | | | | | | | | | the Present | | | | | | Non-Equity | (2) | (3) | Value of | | | | | | Incentive Plan | Stock | All Other | Pension | | | Name and Principal Position | Year | Salary | Compensation | Awards | Compensation | Benefit | Total | | Paul L. Palmby | 2023 | $748,334 | $374,167 | $- | $10,105 | $- | $1,132,606 | | President and | 2022 | $687,588 | $275,656 | $25,000 | $9,665 | ---- | $997,908 | | Chief Executive Officer | 2021 | $512,328 | $214,315 | $50,000 | $10,898 | ---- | $787,541 | | Timothy J. Benjamin (1) | 2023 | $356,729 | $178,365 | $25,000 | $4,547 | $28,909 | $593,550 | | Senior Vice President and | 2022 | $327,778 | $114,722 | $25,000 | $4,460 | ---- | $471,961 | | Chief Financial Officer | 2021 | $307,371 | $107,943 | $12,500 | $4,679 | ---- | $432,493 | | Timothy R. Nelson | 2023 | $325,397 | $162,699 | $25,000 | $566 | $- | $513,662 | | Senior Vice President of | 2022 | $299,956 | $118,985 | $25,000 | $647 | ---- | $444,588 | | Operations | | | | | | | | | Dean E. Erstad | 2023 | $321,019 | $160,510 | $25,000 | $4,662 | $- | $511,191 | | Senior Vice President of Sales and Marketing | | | | | | | |
Summary Compensation Table
| 1) | Mr. Benjamin retired from the position of Senior Vice President, Chief Financial Officer and Treasurer as of April 1, 2023. He held this position for the entirety of the fiscal years ended March 31, 2023, 2022, and 2021 and is therefore included herein as a named executive officer for the Company. Mr. Nelson was not a named executive officer for fiscal year 2021. Mr. Erstad was not a named executive officer for either fiscal year 2022 or 2021. |
Summary Compensation Table
| 2) | Represents the total grant date fair value of stock awards on the date of the award. The fair values of these awards were based on the closing price of the Company’s Class A common stock as reported on the NASDAQ Global Select Market on the date of grant. |
Summary Compensation Table
| 3) | This includes the Company’s matching contribution to its deferred compensation plan for each named executive officer, if any, and the amount of premium paid by the Company for group term life insurance on the named executive officer’s life. The value of perquisites and other personal benefits are not shown in the table individually because the aggregate amount of such compensation, if any, is less than $10,000 for each named executive officer. |
Summary Compensation Table
| 4) | Represents the aggregate change in pension value of the named executive officer’s accumulated benefit under our defined benefit pension plan. In accordance with SEC rules, negative amounts have been reported as zero in this table. During fiscal year 2023, negative amounts for Mr. Palmby, Mr. Nelson, and Mr. Erstad were $64,803, $4,304, and $24,126, respectively. See the pension benefits table on page 16 for additional information, including the present value assumptions used in this calculation. For fiscal years 2022 and 2021, the Company was a smaller reporting company and not required to report this information. |
Grants of Plan-Based Awards in Fiscal Year 2023
Grants of Plan-Based Awards in Fiscal Year 2023 The following table sets forth information about non-equity and equity awards granted to the named executive officers in fiscal 2023.
Grants of Plan-Based Awards in Fiscal Year 2023
| | | | | | All Other | | | | | | | | Stock Awards: | Grant Date | | | | Estimated Possible Payouts Under Non- | | | Number of | Fair Value | | | | Equity Incentive Plan Awards (1) | | | Shares of | of Stock | | Name | Grant Date | Threshold | Target | Maximum | Stock | Awards | | Paul L. Palmby | | | | | | | | 2023 Executive Profit Sharing Bonus Plan | N/A | $74,833 | ---- | $374,167 | | | | Timothy J. Benjamin | | | | | | | | 2023 Executive Profit Sharing Bonus Plan | N/A | $35,673 | ---- | $178,365 | | | | Restricted Stock | 8/12/2022 | | | | 441 | $25,000 | | Timothy R. Nelson | | | | | | | | 2023 Executive Profit Sharing Bonus Plan | N/A | $32,540 | ---- | $162,699 | | | | Restricted Stock | 8/12/2022 | | | | 441 | $25,000 | | Dean E. Erstad | | | | | | | | 2023 Executive Profit Sharing Bonus Plan | N/A | $32,102 | ---- | $160,510 | | | | Restricted Stock | 8/12/2022 | | | | 441 | $25,000 |
Grants of Plan-Based Awards in Fiscal Year 2023
| (1) Shows the potential value of the payout for the named executive officer for fiscal year 2023 under our Executive Profit Sharing Bonus Plan if the threshold or maximum Annual Adjusted Earnings objective were satisfied. The potential payouts were performance-driven and therefore completely at risk. During fiscal year 2023, the Company exceeded the maximum bonus target and the bonus amounts paid out are set forth in the summary compensation table. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table provides information on the outstanding equity awards held by the named executive officers as of March 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Number of Shares | Market Value of | | | of Restricted Stock | Shares of Restricted | | | That Have Not | Stock That Have | | Name | Vested | Not Vested (1) | | Paul L. Palmby | 1,438(2) | $75,164 | | Timothy J. Benjamin | 1,066(3) | $55,720 | | Timothy R. Nelson | 796(4) | $41,607 | | Dean E. Erstad | 796(5) | $41,607 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) Determined based on the closing price of the Company’s Class A Common Stock ($52.27) on March 31, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) Mr. Palmby’s restricted stock holdings as of March 31, 2023 vest as follows, provided that he remains employed by the Company on such dates: 914 shares on August 10, 2023, 407 shares on August 10, 2024 and 117 shares on August 10, 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) Mr. Benjamin's restricted stock holdings of 1,066 shares as of March 31, 2023 became 100% vested on June 30, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (4) Mr. Nelson's restricted stock holdings as of March 31, 2023 vest as follows, provided that he remains employed by the Company on such dates: 229 shares on August 10, 2023, 229 shares on August 10, 2024 and 227 shares on August 10, 2025 and 111 shares on August 10, 2026. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (5) Mr. Erstad's restricted stock holdings as of March 31, 2023 vest as follows, provided that he remains employed by the Company on such dates: 229 shares on August 10, 2023, 229 shares on August 10, 2024 and 227 shares on August 10, 2025 and 111 shares on August 10, 2026. |
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023 The following table provides information on the value of stock awards that vested during fiscal year 2023 for each of our named executive officers.
Option Exercises and Stock Vested in Fiscal 2023
| | Number of Shares | | | | Acquired on | Value As of | | Name | Vesting | Prior Year-end | | Paul L. Palmby | 1,304 | $67,208 | | Timothy J. Benjamin | 415 | $21,389 | | Timothy R. Nelson | 119 | $6,133 | | Dean E. Erstad | 119 | $6,133 |
Option Exercises and Stock Vested in Fiscal 2023
| (1) Determined based on the closing price of the Company’s Class A Common Stock ($62.23) on August 10, 2023. |
Pension Benefits
Pension Benefits The Company’s Pension Plan is a funded, tax-qualified, noncontributory defined-benefit pension plan that covers certain employees, including the named executive officers. Effective August 1, 1989, the Company amended the Pension Plan to provide improved pension benefits under an excess formula. The excess formula for the calculation of the annual retirement benefit is: total years of credited service (not to exceed 35) multiplied by the sum of (i) 0.6% of the participant’s average salary (five highest consecutive years, excluding bonus), and (ii) 0.6% of the participant’s average salary in excess of his compensation covered by Social Security. The amount of annual earnings that may be considered in calculating benefits under the Pension Plan is limited by law. For 2023, the annual limitation is $330,000. Participants who were employed by the Company prior to August 1, 1988, are eligible to receive the greater of their benefit determined under the excess formula or their benefit determined under the offset formula as of July 31, 1989. The offset formula is: (i) total years of credited service multiplied by $120, plus (ii) average salary multiplied by 25%, less 74% of the primary Social Security benefit. The maximum permitted annual retirement income that can be paid to a participant under either formula is $265,000. The following table shows the present value of accumulated benefits payable to each of our named executive officers under our Pension Plan.
Pension Benefits
| | | Present Value of | | | | Number of Years | Accumulated | Payments During | | Name | Credited Service | Benefit (1) | Last Fiscal Year | | Paul L. Palmby | 35 | $938,323 | $- | | Timothy J. Benjamin (2) | 10 | $318,632 | $- | | Timothy R. Nelson | 28 | $497,308 | $- | | Dean E. Erstad | 27 | $692,355 | $- |
Pension Benefits
| (1) Please see Note 10, "Retirement Plans," in the Notes to Consolidated Financial Statements included in our Annual Report to Shareholders for the year ended March 31, 2023, for the assumptions used in calculating the present value of the accumulated benefit. Pension Plan service credit and actuarial values are calculated as of March 31, 2023, which is the pension plan measurement date that we use for financial statement reporting purposes. |
Pension Benefits
| (2) Mr. Benjamin retired from our Company on June 30, 2023, and will begin receiving pension payments in August 2023 upon reaching age 65. Additionally, Mr. Benjamin will begin receiving monthly supplemental retirement benefit payments beginning in January 2024 through June 2025 under a Supplemental Retirement Agreement with the Company that was executed on June 11, 2021 and approved by the Compensation Committee of the Board of Directors. |
Pay Ratio Disclosure
Pay Ratio Disclosure In accordance with SEC rules, we are reporting our CEO pay ratio. As set forth in the Summary Compensation Table, our CEO’s annual total compensation for fiscal 2023 was $1,132,606. Our median employee’s annual total compensation was $69,904, resulting in a CEO pay ratio of 16:1. We identified the median employee using our entire employee population, excluding our Chief Executive Officer, consisting of 3,110 employees on February 28, 2023, whether full-time, part-time, temporary, or seasonal. We identified the median employee by examining the annual cash compensation for each of our employees in the 12-month period ended December 31, 2022, gathered from payroll data. We selected annual cash compensation as our compensation measure as it is readily available in our existing payroll systems, consistently calculated for each employee, and a reasonable proxy for total compensation purposes when determining the median employee. We did not make any annualizing, assumptions, adjustments or estimates with respect to gross wages paid in the period. As required by SEC rules, after identifying our median employee, we calculated annual total compensation for both our median employee and our CEO using the same methodology that we used to determine our Named Executive Officers’ total annual compensation for the Summary Compensation Table. This information is being provided for compliance purposes. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions. Given the different methodologies that companies use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure The following table and supporting graphics present information relating to executive compensation and financial performance measures for the fiscal years ended March 31, 2023, 2022, and 2021 in satisfaction of Item 402(v) of Regulation S-K. Please see the Compensation Discussion & Analysis section for an overview of the Company’s compensation programs.
Pay Versus Performance Disclosure
| | | | | | | (2) | | | | | | | | | | | Average | Average | | | | | | | | | | | Summary | Summary | | | | | | | Summary | Summary | (2) | (2) | Compen- | Compen- | Value of Initial Fixed | | | | | | Compen- | Compen- | Compen- | Compen- | sation | sation | $100 Investment based on: | | | | | | sation | sation | sation | sation | Table | Actually | | Peer | | | | | Table | Table | Actually | Actually | Total for | Paid to | Company | Group | | (5) | | | Total for | Total for | Paid to | Paid to | Non-PEO | Non-PEO | Total | Total | (4) | Annual | | (1) | First | Second | First | Second | Named | Named | Share- | Share- | Net | Adjusted | | Fiscal | PEO | PEO | PEO | PEO | Executive | Executive | holder | holder | Income | Earnings | | Year | (Palmby) | (Kayser) | (Palmby) | (Kayser) | Officers | Officers | Return | Return (3) | ($ in 000s) | ($ in 000s) | | 2023 | $1,132,606 | N/A | $1,171,347 | N/A | $539,468 | $555,777 | $188.70 | $154.10 | $33,138 | $147,292 | | 2022 | $997,908 | N/A | $1,016,603 | N/A | $458,274 | $460,107 | $135.71 | $140.23 | $51,007 | $111,071 | | 2021 | $787,541 | $949,409 | $817,913 | $949,409 | $588,183 | $591,968 | $154.10 | $127.19 | $126,100 | $127,042 |
Pay Versus Performance Disclosure
| (1) The named executive officers included in the pay versus performance disclosure were: |
Pay Versus Performance Disclosure
| Year | Principal Executive Officers (PEO) | Non-PEO Named Executive Officers | | 2023 | Paul L. Palmby | Timothy J. Benjamin, Timothy R. Nelson, Dean E. Erstad | | 2022 | Paul L. Palmby | Timothy J. Benjamin, Timothy R. Nelson | | 2021 | Paul L. Palmby, Kraig H. Kayser | Arthur S. Wolcott, Timothy J. Benjamin |
Pay Versus Performance Disclosure
| (2) For each of fiscal years 2023, 2022 and 2021 (each, a “Covered Year”), in determining both the compensation “actually paid” to our PEO(s) and the average compensation “actually paid” to our non-PEO named executive officers for purposes of this pay versus performance disclosure, we deducted from or added back to the total amounts of compensation reported in the Summary Compensation Table, as applicable, for such fiscal year the following amounts: |
Pay Versus Performance Disclosure
| | 2023 | | 2022 | | 2021 | | | | Adjustments | PEO | Other NEOs | PEO | Other NEOs | First PEO | Second PEO | Other NEOs | | Summary Compensation Table (SCT) Total | $1,132,606 | $539,468 | $997,908 | $458,274 | $787,541 | $949,409 | $588,183 | | (Deduct): Change in actuarial present value of pension benefits (6) | - | (9,636) | N/A | N/A | N/A | N/A | N/A | | Add: Service cost of pension benefits | 23,751 | 25,210 | N/A | N/A | N/A | N/A | N/A | | (Deduct): SCT "Stock Awards" column value | - | (25,000) | (25,000) | (25,000) | (50,000) | - | (6,250) | | Add: Covered Year-end fair value of outstanding equity awards granted in Covered Year | - | 23,051 | 24,430 | 24,430 | 54,106 | - | 6,757 | | Add/(deduct): Change in fair value (from prior year-end to Covered Year-end) of equity awards outstanding at Covered Year-end that were granted in prior years | 1,050 | 358 | 10,093 | 1,259 | 19,964 | - | 2,489 | | Add/(deduct): Change in fair value (from prior year-end to vest date in Covered Year) of prior year equity awards vested in Covered Year. | 13,940 | 2,327 | 9,172 | 1,144 | 6,302 | - | 789 | | Compensation Actually Paid Total | $1,171,347 | $555,777 | $1,016,603 | $460,107 | $817,913 | $949,409 | $591,968 |
Pay Versus Performance Disclosure
| (3) The peer group used in this disclosure is the S&P Packaged Foods & Meats Index, which is the same peer group used in the stock performance graph contained within our 2023 Annual Report to Shareholders. |
Pay Versus Performance Disclosure
| (4) Net income as reported in our consolidated statements of net earnings in our 2023 Annual Report to Shareholders. |
Pay Versus Performance Disclosure
| (5) Adjusted Annual Earnings was determined to be the most important financial performance measure linking “compensation actually paid” to our company’s performance for 2023 and therefore was selected as the 2023 “company selected measure” as defined in Item 402(v). Refer to the subsection “Executive Profit Sharing Bonus Plan” within the “Compensation and Discussion” section of this Proxy Statement for a full definition of Adjusted Annual Earnings. |
Pay Versus Performance Disclosure
| (6) For fiscal years 2022 and 2021, the Company was a smaller reporting company and not required to report this information. |
Pay Versus Performance Disclosure
The following charts provide (1) a comparison between our cumulative total shareholder return and the cumulative total shareholder return of the Peer Group, and (2) illustrations of the relationships between (A) the executive compensation actually paid to the PEO and the average of the executive compensation actually paid to our non-PEO named executive officers (in each case as set forth in the pay for performance table above) and (B) each of the performance measures set forth in the pay versus performance table above (net income and annual adjusted earnings). As shown above, the Company has selected Annual Adjusted Earnings as the company-selected measure for the pay versus performance disclosure as we believe it represents the most important financial performance measure we used to link compensation actually paid to the named executive officers in 2023 to the company’s performance. Annual Adjusted Earnings is the performance measure used to determine 2023 annual cash incentive award payouts. The correlation between compensation actually paid and Annual Adjusted Earnings differs when comparing compensation actually paid to net income as reported on a GAAP basis primarily due to the large non-cash Last-In, First-Out (LIFO) charges that the Company has experienced in fiscal years 2023 and 2022 as a result of valuing inventory on a LIFO basis. The non-cash LIFO charges have been the result of significant cost inflation for various production inputs, including, but not limited to, steel, commodities, labor, ingredients, packaging, fuel, and transportation.
Compensation of Directors
Compensation of Directors Under the director compensation program, each non-employee director is paid a quarterly cash retainer of $20,000. Mr. Palmby, as a current officer of the Company, did not receive any compensation for serving the Company as a member of the Board of Directors. The Company’s non-employee directors received the following aggregate amounts of compensation for the fiscal year ended March 31, 2023:
Compensation of Directors
| Name | Fees Earned or Paid in Cash | | Kraig H. Kayser | $80,000 | | Kathryn J. Boor | $80,000 | | Peter R. Call | $80,000 | | John P. Gaylord | $80,000 | | Linda K. Nelson | $80,000 | | Michael F. Nozzolio | $80,000 | | Donald J. Stuart | $80,000 | | Keith A. Woodward | $80,000 |