DEF 14A of Seneca Foods Corp
Filed Jul 8, 2024 · FY20240001437749-24-022298
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, Paul L. Palmby, Donald J. Stuart, Bruce E. Ware and Keith A. Woodward. 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 2027 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 2024 Annual Meeting of Shareholders for a Term Expiring in 2027 Linda K. Nelson, age 60 – Ms. Nelson has been a director since February 2021. Ms. Nelson has over 30 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 68 – 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 60 – 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 St. Paul, Minneapolis. Directors whose Terms Expire in 2025 Kathryn J. Boor, age 65 – Dr. Boor has been a director of the Company since 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 63 – Mr. Gaylord has been a director of the Company since October 2009. He 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 Paul L. Palmby, age 61 – Mr. Palmby has been a director of the Company 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 served as a Director 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 from 2019 to 2023. 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. Mr. Palmby received his Bachelor of Science (B.S.) degree from Iowa State University. Directors whose Terms Expire in 2026 Peter R. Call, age 67 – Mr. Call has been a director of the Company 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 63 – Mr. 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.
Information Concerning Directors
Bruce E. Ware, age 48 – Mr. Ware has been a director of the Company since August 2023. 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 M.B.A. from Harvard Business School, an M.A. from the University of Texas at Austin and a B.B.A. from the University of Mississippi.
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 2024, 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 2024 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 4,864 shares of restricted Class A common stock awards under the Plan to key employees in fiscal year 2024. 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 $275,000. 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 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 who are not eligible to receive Company matching contributions under the 401(k) Plan. 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, 2024, 2023, and 2022, the amount of compensation earned by the named executive officers:
Summary Compensation Table
| Named Executive Officers | | | | | | | | | | | | | | (3) | | | | | | | | | Change in | | | | | | | | | the Present | | | | | | | (2) | Non-Equity | Value of | (4) | | | | | | Stock | Incentive Plan | Pension | All Other | | | Name and Principal Position | Year | Salary | Awards | Compensation | Benefit | Compensation | Total | | Paul L. Palmby | 2024 | $750,818 | $- | $375,409 | $57,119 | $11,717 | $1,195,063 | | President and | 2023 | $748,334 | $- | $374,167 | $- | $10,105 | $1,132,606 | | Chief Executive Officer | 2022 | $687,588 | $25,000 | $275,656 | ---- | $9,665 | $997,908 | | Michael S. Wolcott (1) | 2024 | $311,077 | $25,000 | $155,538 | $4,285 | $3,732 | $499,632 | | Senior Vice President, | | | | | | | | | Chief Financial Officer and Treasurer | | | | | | | | | Timothy R. Nelson | 2024 | $326,477 | $25,000 | $163,238 | $83,051 | $545 | $598,311 | | Senior Vice President of | 2023 | $325,397 | $25,000 | $162,699 | $- | $566 | $513,662 | | Operations | 2022 | $299,956 | $25,000 | $118,985 | ---- | $647 | $444,588 | | Dean E. Erstad (1) | 2024 | $322,085 | $25,000 | $161,043 | $73,050 | $5,326 | $586,504 | | Senior Vice President of | 2023 | $321,019 | $25,000 | $160,510 | $- | $4,662 | $511,191 | | Sales and Marketing | | | | | | | |
Summary Compensation Table
| (1) Mr. Wolcott was promoted to the position of Senior Vice President, Chief Financial Officer and Treasurer effective as of April 1, 2023. He was not a named executive officer for either fiscal year 2023 or 2022. Mr. Erstad was not a named executive officer for fiscal year 2022. |
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) 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 17 for additional information, including the present value assumptions used in this calculation. For fiscal year 2022, the Company was a smaller reporting company and not required to report this information. |
Summary Compensation Table
| (4) 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. |
Grants of Plan-Based Awards in Fiscal Year 2024
Grants of Plan-Based Awards in Fiscal Year 2024 The following table sets forth information about non-equity and equity awards granted to the named executive officers in fiscal year 2024.
Grants of Plan-Based Awards in Fiscal Year 2024
| | | | | | All Other | | | | | | | | Stock Awards: | Grant Date | | | | Estimated Possible Payouts Under Non- | | | Number of | Fair Value | | | Grant | Equity Incentive Plan Awards (1) | | | Shares of | of Stock | | Name | Date | Threshold | Target | Maximum | Stock | Awards | | Paul L. Palmby | | | | | | | | 2024 Executive Profit Sharing Bonus Plan | N/A | $75,082 | ---- | $375,409 | | | | Michael S. Wolcott | | | | | | | | 2024 Executive Profit Sharing Bonus Plan | N/A | $31,108 | ---- | $155,538 | | | | Restricted Stock | 8/9/2023 | | | | 608 | $25,000 | | Timothy R. Nelson | | | | | | | | 2024 Executive Profit Sharing Bonus Plan | N/A | $32,648 | ---- | $163,238 | | | | Restricted Stock | 8/9/2023 | | | | 608 | $25,000 | | Dean E. Erstad | | | | | | | | 2024 Executive Profit Sharing Bonus Plan | N/A | $32,209 | ---- | $161,043 | | | | Restricted Stock | 8/9/2023 | | | | 608 | $25,000 |
Grants of Plan-Based Awards in Fiscal Year 2024
| (1) Shows the potential value of the payout for the named executive officer for fiscal year 2024 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 2024, 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 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table provides information on the outstanding equity awards held by the named executive officers as of March 31, 2024.
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Number of | Market Value of | | | Shares of Restricted | Shares of Restricted | | | Stock That Have | Stock That Have | | Name | Not Vested | Not Vested (1) | | Paul L. Palmby | 524(2) | $29,816 | | Michael S. Wolcott | 608(3) | $34,595 | | Timothy R. Nelson | 1,175(4) | $66,858 | | Dean E. Erstad | 1,175(5) | $66,858 |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (1) Determined based on the closing price of the Company’s Class A Common Stock ($56.90) on March 28, 2024. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (2) Mr. Palmby’s restricted stock holdings as of March 31, 2024 vest as follows, provided that he remains employed by the Company on such dates: 407 shares in August 2024 and 117 shares in August 2025. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (3) Mr. Wolcott’s restricted stock holdings as of March 31, 2024 vest as follows, provided that he remains employed by the Company on such dates: 152 shares in August 2024, 152 shares in August 2025, 152 shares in August 2026 and 152 shares in August 2027. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (4) Mr. Nelson's restricted stock holdings as of March 31, 2024 vest as follows, provided that he remains employed by the Company on such dates: 381 shares in August 2024, 379 shares in August 2025, 263 shares in August 2026 and 152 shares in August 2027. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (5) Mr. Erstad's restricted stock holdings as of March 31, 2024 vest as follows, provided that he remains employed by the Company on such dates: 381 shares in August 2024, 379 shares in August 2025, 263 shares in August 2026 and 152 shares in August 2027. |
Option Exercises and Stock Vested in Fiscal Year 2024
Option Exercises and Stock Vested in Fiscal Year 2024 The following table provides information on the value of stock awards that vested during fiscal year 2024 for each of our named executive officers.
Option Exercises and Stock Vested in Fiscal Year 2024
| | Number of Shares | Value | | | Acquired on | Realized | | Name | Vesting | on Vesting (1) | | Paul L. Palmby | 914 | $42,565 | | Michael S. Wolcott | - | $- | | Timothy R. Nelson | 229 | $10,209 | | Dean E. Erstad | 229 | $10,209 |
Option Exercises and Stock Vested in Fiscal Year 2024
| (1) Determined based on the closing price of the Company’s Class A Common Stock on August 10, 2023 ($44.58) and August 14, 2023 ($48.16). |
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 2024, the annual limitation is $345,000. 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 $275,000. 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 | $995,442 | $- | | Michael S. Wolcott | 6 | $11,361 | $- | | Timothy R. Nelson | 29 | $580,359 | $- | | Dean E. Erstad | 28 | $765,405 | $- |
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, 2024, 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, 2024, which is the pension plan measurement date that we use for financial statement reporting purposes. |
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 2024 was $1,195,063. Our median employee’s annual total compensation was $81,938, resulting in a CEO pay ratio of 15:1. As permitted under SEC rules, we may identify our median employee for purposes of providing pay ratio disclosure once every three years, provided that there has been no change in the employee population or employee compensation arrangements that we reasonably believe would result in a significant change to the 2024 pay ratio disclosure. Accordingly, we have calculated our disclosure based on the median employee identified as of February 28, 2023. For details on our process for identifying the median employee refer to the “Pay Ratio Disclosure” section in our 2023 proxy statement filed with the SEC on July 7, 2023. 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, 2024, 2023, 2022 and 2021 in satisfaction of Item 402(v) of Regulation S-K. Please see the “Compensation Discussion and 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) | | 2024 | $1,195,063 | N/A | $1,135,160 | N/A | $561,482 | $534,022 | $143.04 | $139.86 | $63,318 | $106,117 | | 2023 | $1,132,606 | N/A | $1,171,347 | N/A | $539,468 | $555,777 | $131.40 | $150.26 | $9,231 | $147,292 | | 2022 | $997,908 | N/A | $1,016,603 | N/A | $458,274 | $460,107 | $129.56 | $136.74 | $46,200 | $111,071 | | 2021 | $787,541 | $949,409 | $817,913 | $949,409 | $588,183 | $591,968 | $118.38 | $124.03 | $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 Officer (PEO) | Non-PEO Named Executive Officers | | 2024 | Paul L. Palmby | Michael S. Wolcott, Timothy R. Nelson, Dean E. Erstad | | 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) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and applicable SEC guidance, and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. For fiscal year 2024, Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below (please note that, while similar adjustment information was provided in our 2023 proxy statement for fiscal years 2023, 2022 and 2021, under applicable SEC guidance, repeating such adjustment information is not required in this proxy statement because it is not material to our stockholders' understanding of the information reported in the Pay Versus Performance table for fiscal year 2024 or the relationship disclosures provided below): |
Pay Versus Performance Disclosure
| | 2024 | | | Adjustments | PEO | Other NEOs | | Summary Compensation Table (SCT) Total | $1,195,063 | $561,482 | | (Deduct): Change in actuarial present value of pension benefits | (57,119) | (53,462) | | Add: Service cost of pension benefits (6) | - | 16,855 | | (Deduct): SCT "Stock Awards" column value | - | (25,000) | | Add: Covered Year-end fair value of outstanding equity awards granted in Covered Year | - | 34,595 | | 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 | 2,426 | 1,313 | | 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 | (5,210) | (1,761) | | Compensation Actually Paid Total | $1,135,160 | $534,022 |
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 2024 Annual Report to Shareholders. |
Pay Versus Performance Disclosure
| (4) Net income as reported in our consolidated statements of net earnings in our 2024 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 2024 and therefore was selected as the 2024 “company selected measure” as defined in Item 402(v). Refer to the subsection “Executive Profit Sharing Bonus Plan” within the “Compensation Discussion and Analysis” section of this proxy statement for a full definition of Adjusted Annual Earnings. |
Pay Versus Performance Disclosure
| (6) For fiscal year 2024, the PEO does not have a service cost of pension benefits because he has reached his maximum years of credited service under the Pension Plan. |
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 2024 to the company’s performance. Annual Adjusted Earnings is the performance measure used to determine 2024 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 2024, 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, 2024:
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 (1) | $40,000 | | Donald J. Stuart | $80,000 | | Bruce E. Ware (1) | $53,334 | | Keith A. Woodward | $80,000 |
Compensation of Directors
| (1) Mr. Nozzolio served on the Board until the expiration of his term on August 9, 2023. Mr. Ware was elected to the Board effective as of August 9, 2023. |