DEF 14A of Conagra Brands Inc.
Filed Aug 7, 2024 · FY20240001558370-24-011213
Proposal 1: Election of Directors (▶ page 19)
Proposal 1: Election of Directors (▶ page 19)
Proposal 1: Election of Directors (▶ page 19)
| | Our Board recommends that you vote FOR ALL of the nominees under this proposal 1. |
Proposal 1: Election of Directors (▶ page 19)
Our business is managed under the direction of the Board, and you are being asked to vote to elect the members of the Board to hold office until the Conagra Brands 2025 Annual Meeting of Shareholders, and until their successors have been elected and qualified. The Board has nominated the 11 current directors, all listed below, for election at the Annual Meeting. The Board believes that the combined nominee group reflects a broad range of skills, education, experiences, qualifications, age, tenure, and other characteristics that are valuable to our Company. As a result of the Board’s robust refreshment processes, our Board currently includes 5 directors with fewer than 5 years of service on our Board (who joined our Board in 2021, 2022, and 2023) and the average tenure of our directors is 7 years. The following table provides a summary of certain information about our director nominees including the year each joined our board, current age, primary occupation, independence, committee membership, and service on the boards of other publicly-traded companies.
Proposal 1: Election of Directors (▶ page 19)
| | | | | | | Standing Committee Membership | | | # of Other Public Company Boards | | Name and Primary Occupation | | | Age | Director Since | Independent | Audit / Finance | Human Resources | Nominating & Corporate Governance | | | | Anil Arora Senior Partner The TIFIN Group | | 63 | 2018 | | | | | 1 | | | Thomas “Tony” K. Brown Retired Group Vice President, Global Purchasing Ford Motor Company | | 68 | 2013 | | | | | 1 | | | Emanuel “Manny” Chirico Retired Exec. Chairman and CEO PVH Corp. | | 67 | 2021 | | | | | 1 | | | Sean M. Connolly President and CEO Conagra Brands, Inc. | | 58 | 2015 | | | | | 0 | | | George Dowdie Retired Executive Vice President of Global Supply Chain Starbucks Corporation | | 68 | 2022 | | | | | 0 | | | Francisco Fraga EVP Chief Information Officer and Chief Technology Officer McKesson Corporation | | 51 | 2023 | | | | | 0 | | | Fran Horowitz Chief Executive Officer Abercrombie & Fitch Co. | | 60 | 2021 | | | | | 1 | | | Richard H. Lenny Retired Chair, President and CEO The Hershey Company | | 72 | 2009 | | * | | | 1 | | | Melissa Lora Retired President, Taco Bell International, part of Yum! Brands, Inc. | | 62 | 2019 | | | | | 1 | | | Ruth Ann Marshall Retired President of the Americas MasterCard International, Inc. | | 70 | 2007 | | | | | 2 | | | Denise A. Paulonis President and CEO Sally Beauty Holdings, Inc. | | 52 | 2022 | | | | | 1 |
Proposal 1: Election of Directors (▶ page 19)
| | Non-Executive Chair of the Board | | Committee Chair | | Committee Member | | Audit Committee Financial Expert |
Proposal 1: Election of Directors (▶ page 19)
| * As Board Chair, Mr. Lenny is also deemed an ex-officio member of the Audit / Finance Committee. |
Director Refreshment
Director Refreshment Our Board represents an intentional mix of long-tenured directors and new perspectives, insights, expertise, and experiences. The average tenure of our director nominees is 7 years, with seven of our current directors having joined our Board since 2018. The Board uses refreshment processes to enable it to evaluate the continued alignment of the Board’s membership with the needs of Conagra Brands. The Board’s refreshment processes involve reviewing and modifying the skills matrix and experience required for membership. The Board also enables planned refreshment through its retirement policy contained in the Conagra Brands Corporate Governance Principles (Corporate Governance Principles), which provides that no director may be nominated to a new term if he or she would be over age 75 at the time of the election.
Director Nominees
Director Nominees The following biographies provide more detail regarding each nominee including their age on August 7, 2024, the date of this Proxy Statement.
Director Nominees
| ANIL ARORA | Independent | Director since July 17, 2018 | | Age 63 Board Committees • Human Resources • Nominating and Corporate Governance | Professional Experience The TIFIN Group (2020 to present) • Senior Partner Envestnet | Yodlee (2015 to 2019) • Chief Executive Officer Yodlee, Inc. (2000 to 2015) • Chief Executive Officer Gateway, Inc. The Pillsbury Company Kraft Foods Group • Various management roles | Other Public Boards ON24, Inc. (2022 to present) • Lead Independent Director (2023 to present) Past Public Boards Ping Identity Holding Corp. (2022) Envestnet, Inc. (2015 to 2021) Yodlee, Inc. (2011 to 2015) Visual Sciences, Inc. (2005 to 2008) | | | Highlighted Skills and Qualifications Mr. Arora brings significant public company experience, C-suite leadership skills and insights, M&A experience, and technology expertise to our Board. Our Board benefits from his experience leading Yodlee from a start-up through its initial public offering and subsequent acquisition by Envestnet including his service as vice chairman of Envestnet and chief executive officer of Envestnet | Yodlee (a financial technology and data intelligence company), as well as his previous leadership, strategy, and marketing experience from Gateway, Inc., The Pillsbury Company, and Kraft Foods Group. Mr. Arora also adds finance, risk management, and technology expertise to our Board from his past executive roles and his current role as a director and senior partner at The TIFIN Group, a private financial technology company. | |
Director Nominees
| THOMAS “TONY” K. BROWN | Independent | Director since October 15, 2013 | | Age 68 Board Committees • Audit / Finance • Nominating and Corporate Governance | Professional Experience Ford Motor Company (1999 to retirement in 2013) • Group Vice President, Global Purchasing (2008 to 2013) • Various leadership positions in Global Purchasing United Technologies Corporation QMS, Inc. Digital Equipment Corporation • Various management roles in supply chain and purchasing | Other Public Boards 3M Company (2013 to present) Past Public Boards Tower International, Inc. (2014 to 2019) | | | Highlighted Skills and Qualifications Mr. Brown brings valuable insights to our Board based on his global purchasing leadership experience and his service on other public company boards. His experience as a board member for 3M and Tower International, both publicly-traded, international manufacturing companies, provides him with a deep understanding of the Board’s risk oversight responsibilities. Additionally, Mr. Brown adds valuable supply chain, capital management, and financing insights and expertise to our Board from experience leading Ford Motor Company’s global purchasing team and other senior leadership roles in global purchasing management and supply chain operations. | |
Director Nominees
| EMANUEL “MANNY” CHIRICO | Independent | Director since February 1, 2021 | | Age 67 Board Committees • Audit / Finance | Professional Experience PVH Corp. (1993 to retirement in 2021) • Executive Chairman (2007 to 2021) • Chief Executive Officer (2006 to 2021) • President and Chief Operating Officer (2005 to 2006) • Executive Vice President and Chief Financial Officer (1998 to 2005) • Vice President and Controller (1993 to 1999) Ernst & Young LLP • Partner, Retail and Apparel Practice Group | Other Public Boards Dick’s Sporting Goods, Inc. (2003 to present) Past Public Boards PVH Corp. (2005 to 2021) | | | Highlighted Skills and Qualifications Mr. Chirico brings C-suite executive experience, financial expertise, and experience with boards of other publicly-traded companies to our Board. He provides valuable insights based on his substantial market facing, international business, and management experience from his service as chairman and chief executive officer of PVH Corp. (a wholesale and retail apparel company), as well as his financial background as an audit partner and chief financial officer. Mr. Chirico also brings robust expertise in M&A, finance, and risk and compliance oversight. | |
Director Nominees
| SEAN M. CONNOLLY | | Director since April 6, 2015 | | Age 58 Board Committees • Executive | Professional Experience Conagra Brands, Inc. (2015 to present) • President and Chief Executive Officer The Hillshire Brands Company (2012 to 2014) • President and Chief Executive Officer Sara Lee Corporation (2012) • Executive Vice President and Chief Executive Officer, Sara Lee North American Retail and Foodservice Campbell Soup Company The Procter & Gamble Company • Various food and beverage brand management roles | Other Public Boards None Past Public Company Boards The Hillshire Brands Company (2012 to 2014) | | | Highlighted Skills and Qualifications As our President and Chief Executive Officer, Mr. Connolly provides our Board with valuable insights on the Company, as well as significant market-facing experience from a career-long focus on building leading consumer brands in the food industry. He contributes his broad understanding of governance issues from his experience as a board member of Hillshire and from his current board service to S. C. Johnson & Son, Inc., a privately held consumer products company. Mr. Connolly also brings substantial broad-based industry expertise and significant transactional experience to our Board from his career in different management roles within the consumer packaged goods industry. | |
Director Nominees
| GEORGE DOWDIE | Independent | Director since March 1, 2022 | | Age 68 Board Committees • Audit / Finance | Professional Experience Starbucks Corporation (2013 to retirement in 2023) • Executive Vice President, Global Supply Chain (2020 to 2023) • Senior Vice President, Global Food Safety, Quality & Regulatory (2013 to 2020) Campbell Soup Company Seagram Co. Ltd. Frito-Lay • Various management roles | Other Public Boards None | | | Highlighted Skills and Qualifications Mr. Dowdie brings strong international and market-facing experience to our board from his recent executive leadership roles at Starbucks (a multinational retailer of specialty coffee). He provides our Board with valuable insights from his experience leading supply chain, product development, and food safety operations for leading consumer products in the food and beverage industries. Mr. Dowdie also brings broad industry expertise as well as market-facing commercialization, innovation management, and new business development experience to our Board based on his experience from his roles at Campbell Soup Company, Seagram Co., Ltd., and Frito-Lay. | |
Director Nominees
| FRANCISCO FRAGA | Independent | Director Since September 14, 2023 | | Age 51 Board Committees • Audit / Finance | Professional Experience McKesson Corporation (2021 to present) • EVP, Chief Information Officer and Chief Technology Officer (2023 to present) • Senior Vice President and Chief Information Officer, U.S. Pharmaceutical (2021 to 2023) Campbell Soup Company, Inc. (2017 to 2021) • Senior Vice President and Chief Information & Technology Officer Procter & Gamble Company (1996 to 2017) • Various management roles | Other Public Boards None | | | Highlighted Skills and Qualifications Mr. Fraga brings valuable technology and cybersecurity expertise to our Board. He provides insights grounded in his robust consumer products industry background and based on his experience leading information technology transformations. Mr. Fraga also adds global market-facing eCommerce experience from his current role at McKesson Corporation (a diversified healthcare services company), where he has been instrumental in introducing new digital capabilities, and his past work at Campbell Soup Company (a branded food products company) and Procter & Gamble (a branded consumer packaged goods company) where he also oversaw digital innovations. | |
Director Nominees
| FRAN HOROWITZ | Independent | Director since August 2, 2021 | | Age 60 Board Committees • Human Resources | Professional Experience Abercrombie & Fitch Co. (2014 to present) • Chief Executive Officer (2017 to present) • President and Chief Merchandising Officer (2015 to 2017) • Member of the Office of the Chairman (2014 to 2017) • Brand President of Hollister (2014 to 2015) Ann Taylor Loft, Inc. Express, Inc. Bloomingdale’s • Various management roles | Other Public Boards Abercrombie & Fitch Co. (2017 to present) | | | Highlighted Skills and Qualifications As an active CEO of a publicly-traded company, Abercrombie & Fitch Co. (a branded fashion retailer), Ms. Horowitz brings strong leadership skills and insights on human capital management to our Board. Additionally, through prior leadership positions with a variety of companies, including leading fashion retailers Ann Taylor Loft, Inc., Express, Inc., and Bloomingdale’s, she provides our Board with retail market-facing expertise and experience with international operations. | |
Director Nominees
| RICHARD H. LENNY | Independent | Director since March 17, 2009 Non-Executive Chair since May 28, 2018 | | Age 72 Board Committees • Audit / Finance (Ex-officio member) • Executive (Chair) • Human Resources • Nominating and Corporate Governance (Chair) | Professional Experience Friedman, Fleischer & Lowe, LLC (2011 to retirement in 2016) • Senior Advisor (2014 to 2016) • Operating Partner (2011 to 2014) The Hershey Company (2001 to 2007) • President and Chief Executive Officer Nabisco Biscuit Company Pillsbury Company Kraft Foods • Various management roles | Other Public Boards Illinois Tool Works Inc. (2014 to present) • Lead Independent Director (2020 to present) Past Public Boards McDonald’s Corporation (2005 to 2023) Information Resources, Inc. (2013 to 2018) Discover Financial Services (2009 to 2018) The Hershey Company (2001 to 2007) | | | Highlighted Skills and Qualifications As a former executive officer with major consumer brand companies, Mr. Lenny brings a deep knowledge of strategy, marketing, and business development of consumer products in the food industry, both domestically and abroad. He also brings extensive knowledge and understanding of corporate governance best practices from his board service to other publicly-traded companies. Mr. Lenny provides strong leadership and expertise in leadership selection and development from his executive positions and his service in leadership capacities on the boards of other public companies, including as lead independent director of Illinois Tool Works Inc. | |
Director Nominees
| MELISSA LORA | Independent | Director since January 4, 2019 | | Age 62 Board Committees • Audit / Finance (Chair) • Executive Committee • Nominating and Corporate Governance | Professional Experience Taco Bell Corp., a subsidiary of Yum! Brands, Inc. (2001 to retirement in 2018) • President, Taco Bell International (2013 to 2018) • Global Chief Financial and Development Officer (2012 to 2013) • Chief Financial and Development Officer (2006 to 2012) • Chief Financial Officer (2001 to 2006) | Other Public Boards NVIDIA Corporation (2023 to present) Past Public Boards KB Home (2004 to 2024) • Lead Independent Director (2016 to 2024) MGIC Investment Corporation (2018 to 2022) | | | Highlighted Skills and Qualifications As a former senior officer serving in various leadership roles at Taco Bell Corp., an operating division of Yum! Brands, Inc. (a multinational restaurant company), Ms. Lora brings strong leadership skills to our Board. Additionally, she provides insights from her substantial international business and market-facing experience and deep expertise in finance, risk, and compliance oversight from more than a decade of service as a Chief Financial Officer, as well as more than a decade of service as the chair of the audit committee of KB Home. Ms. Lora also provides our Board with a broad understanding of governance issues facing publicly-traded companies from her board service to other public companies, including during her time as lead independent director of KB Home. | |
Director Nominees
| RUTH ANN MARSHALL | Independent | Director since May 23, 2007 | | Age 70 Board Committees • Executive • Human Resources (Chair) • Nominating and Corporate Governance | Professional Experience MasterCard International, Inc. (1999 to retirement in 2006) • President of the Americas (2004 to 2006) • President, MasterCard North America (1999 to 2004) Concord EFS, Inc. (1995 to 1999) • Senior Executive Vice President | Other Public Boards Regions Financial Corporation (2011 to present) • Lead Independent Director (2024 to present) Global Payments, Inc. (2006 to present) | | | Highlighted Skills and Qualifications Ms. Marshall brings strong leadership and provides valuable insights in the areas of marketing, account management, and customer service from her experience as an executive officer in various roles at Mastercard International. She has a broad understanding of corporate governance issues from her board service to other publicly-traded companies. Ms. Marshall also provides our Board with her market-facing experience and technology expertise gained from her work growing the MasterCard Americas payments technology business, domestically and internationally, including through new product development. | |
Director Nominees
| DENISE A. PAULONIS | Independent | Director since August 1, 2022 | | Age 52 Board Committees • Audit / Finance | Professional Experience Sally Beauty Holdings, Inc. (2021 to present) • President and Chief Executive Officer Sprouts Farmers Market (2020 to 2021) • Chief Financial Officer The Michaels Companies, Inc. (2014 to 2020) • Executive Vice President, Chief Financial Officer (2016 to 2020) • Various leadership roles in the finance and IT functions PepsiCo McKinsey & Company • Various management roles | Other Public Boards Sally Beauty Holdings, Inc. (2018 to present) | | | Highlighted Skills and Qualifications As an active CEO of a publicly-traded company, Sally Beauty Holdings, Inc. (a multinational retailer and distributor of beauty products), Ms. Paulonis brings strong leadership capabilities and experience driving strategic and operational transformation to our Board. As a former chief financial officer, she has significant finance, risk management, and compliance oversight expertise. Ms. Paulonis also brings to our Board her international business and management experience, including expertise in technology from her leadership roles at both Sprouts Farmers Market (a supermarket chain) and The Michaels Companies (an arts and crafts specialty retail company). | |
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE AND DIRECTOR COMPENSATION The HR Committee has authority, subject only to the further involvement of the other independent directors, over the determination of executive and non-employee director compensation. The HR Committee may delegate certain of its responsibilities to subcommittees comprised of one or more HR Committee members or to selected members of management, subject to requirements of our Bylaws and applicable laws, regulations, and the terms of shareholder-approved compensation plans. Additional information about the HR Committee’s processes for determining executive compensation, as well as the role of executive officers and the HR Committee’s compensation consultant in those determinations, can be found under “Compensation Discussion and Analysis” below.
Director Compensation
Director Compensation We use a combination of cash and equity-based compensation to attract and retain qualified candidates to serve on the Board. On an annual basis, the HR Committee recommends the non-employee director compensation program to the Board for approval. In setting director compensation, the HR Committee receives input from Frederic W. Cook & Co., Inc. (FW Cook), its independent compensation consultant, on factors including the time commitment and skill level required to serve on the Board, as well as broader market practices. In addition, our Conagra Brands, Inc. 2023 Stock Plan places a limit on the equity awards that may be awarded to each non-employee director in any fiscal year. A summary of non-employee director compensation for fiscal 2024 is set forth below.
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR The following table summarizes the compensation program for our non-employee directors, other than the Board Chair, that was in effect during fiscal 2024.
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR
| | Non-Employee Director Compensation—Directors Other than the Board Chair | | Annual Cash Retainer | $105,000 per year(1) | | Annual Committee Chair Retainer Audit Committee Other Committee | $25,000 per year(1) $20,000 per year(1) | | Meeting Fees | None, unless the director’s attendance is required at more than a total of 24 Board and committee meetings during a fiscal year. A fee of $1,500 is paid for each meeting attended in excess of 24 meetings and at which a director’s attendance was required. | | Annual Equity Award | A grant of restricted stock units (RSUs), with a one-year vesting period and a value equal to $180,000, effective on the first trading day of the fiscal year(2) |
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR
| (1) Directors who join the Board or who are elected as the Chair of a committee after the start of a fiscal quarter receive a prorated retainer for that quarter based on the number of days served. |
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR
| (2) Directors who join the Board after the start of a fiscal year receive a prorated grant for that year based on the number of partial and full months served. |
NON-EMPLOYEE DIRECTOR COMPENSATION—DIRECTORS OTHER THAN THE BOARD CHAIR
All non-employee directors (other than the Board Chair) serving as of the first trading day of fiscal 2024 received 4,871 RSUs on May 30, 2023 (targeted value of $180,000). These RSUs vested on May 30, 2024. In connection with his appointment to the Board in September 2023, Mr. Fraga received 4,643 RSUs on October 2, 2023 (target value of $135,000), which RSUs are scheduled to vest on October 2, 2024. Vesting of the RSUs in the non-employee director compensation program is accelerated in the event of death or permanent disability. If a director is no longer serving on the Board one year from the date of grant, vesting is prorated 25% for each fiscal quarter during which the director served for any amount of time. Dividend equivalents accrue on the RSUs at the regular dividend rate in shares of our common stock and are paid in stock upon vesting.
NON-EMPLOYEE DIRECTOR COMPENSATION—BOARD CHAIR
NON-EMPLOYEE DIRECTOR COMPENSATION—BOARD CHAIR In lieu of the elements of compensation for board service described above, the Board Chair’s compensation for fiscal 2024 consisted of a grant of RSUs with a targeted value equal to $460,000. The number of RSUs granted, 12,449, was determined by dividing $460,000 by the average closing price of our common stock on the NYSE for the 30 trading days prior to the grant date of May 30, 2023. The material terms of the RSUs were identical to those described above for the other non-employee directors. In addition, for fiscal 2024, our Board Chair was paid an annual committee chair retainer equal to $20,000, as outlined above, for his service as Chair of our Nominating and Corporate Governance Committee.
OTHER NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAMS
OTHER NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAMS In addition to the cash payments and equity awards described above, all non-employee directors were entitled to participate in the following programs during fiscal 2024:
OTHER NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAMS
| ● | A matching gifts program was available to all non-employee directors. Conagra Brands matched up to $10,000 of a director’s eligible charitable donations made during the fiscal year; and |
OTHER NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAMS
| ● | A nonqualified deferred compensation plan was available to all non-employee directors. This plan provided non-employee directors the ability to defer receipt of their cash or stock compensation. This program did not provide above-market or preferential earnings (as defined by SEC rules). |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
| | Fees Earned or Paid in Cash | Stock Awards(1) | All Other Compensation(2) | Total | | Name | ($) | ($) | ($) | ($) | | Anil Arora | 105,000 | 167,027 | 10,000 | 282,027 | | Thomas “Tony” K. Brown | 105,000 | 167,027 | 0 | 272,027 | | Emanuel “Manny” Chirico | 105,000 | 167,027 | 10,000 | 282,027 | | George Dowdie | 105,000 | 167,027 | 1,000 | 273,027 | | Francisco Fraga (3) | 73,846 | 124,386 | 0 | 198,232 | | Fran Horowitz | 105,000 | 167,027 | 10,000 | 282,027 | | Richard H. Lenny | 20,000 | 426,876 | 5,000 | 451,876 | | Melissa Lora | 130,000 | 167,027 | 10,000 | 307,027 | | Ruth Ann Marshall | 125,000 | 167,027 | 5,000 | 297,027 | | Denise Paulonis | 105,000 | 167,027 | 10,000 | 282,027 |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (1) Reflects the grant date fair value (computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC Topic 718) of the stock awards made to non-employee directors during fiscal 2024. The number of RSUs granted to all directors was determined by dividing the intended grant value ($135,000 for Mr. Fraga and $180,000 for other non-employee directors other than Mr. Lenny who received $460,000) by the average of the closing stock price of our common stock on the NYSE for the 30 trading days prior to the grant date. Assumptions made in the valuation of these awards are discussed in Note 12 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2024. At fiscal 2024 year-end, Mr. Lenny held 12,910 RSUs, Mr. Fraga held 4,759 RSUs, and each other non-employee director held 5,051 RSUs, all of which vested on May 30, 2024 (except for Mr. Fraga’s RSUs, which will vest on October 2, 2024). |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (2) Reflects the amount paid to designated charitable organizations on the director’s behalf under the non-employee director matching gifts program. |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (3) Mr. Fraga was appointed to the Board effective September 14, 2023. |
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE—FISCAL 2024
PROPOSAL 2: APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION
Fiscal 2024 ANNUAL INCENTIVE PLAN
Fiscal 2024 ANNUAL INCENTIVE PLAN
Fiscal 2024 ANNUAL INCENTIVE PLAN
| Metric (Weight) | | Fiscal 2024 Target ($ in millions) | Fiscal 2024 AIP Results ($ in millions) | Payout Level (% of Target) | | | Adjusted Operating Profit (50%) | $2,031 | $1,923 | 93.4% | | | Adjusted Net Sales (25%) | $12,409 | $12,051 | 97.1% | | | Adjusted Free Cash Flow (25%) | $1,178 | $1,628 | 250.0% | | | | | Calculated Payout % | 133.5% | | | | | Discretionary Negative Adjustment % | (7.8)% | | | | | Approved Payout % | 125.7% |
LONG-TERM INCENTIVE PLAN—Fiscal 2022-2024 PERFORMANCE SHARES
LONG-TERM INCENTIVE PLAN—Fiscal 2022-2024 PERFORMANCE SHARES
LONG-TERM INCENTIVE PLAN—Fiscal 2022-2024 PERFORMANCE SHARES
| | Performance | Actual | Payout Level | | Performance Period | Metric | Fiscal 2022 to 2024 | (% of Target) | | Fiscal 2022 to Fiscal 2024 | Adjusted EPS | $2.67 | 113.0% |
LONG-TERM INCENTIVE PLAN—Fiscal 2022-2024 PERFORMANCE SHARES
Based on these results, the Committee approved a 125.7% payout under the fiscal 2024 AIP (which was subject to an individual performance modifier for each participant), reflecting a negative discretionary adjustment of (7.8)%. Additionally, the Committee approved a 113.0% payout under the fiscal 2022 to fiscal 2024 Performance Shares with the Committee following its practice to pay Performance Shares at a level equal to the earned amount, without applying further discretion. The Committee believes that its fiscal 2024 compensation decisions appropriately reflect its pay-for-performance philosophy. This philosophy is focused on: ● compensating executives based on actual Company performance, and ● aligning management’s interests with those of our shareholders. See “Additional Information on Compensation Practices and Policies—Use of Adjustments in Incentive Programs” for information on how these metrics are calculated.
Fiscal 2024 Compensation Program Goals and Elements
| | | Pay Element | Description | | | ◀ FIXED ▶ | Short- Term | BASE SALARY AND BENEFITS | • A fixed compensation program with salaries reviewed annually and adjusted as appropriate (as further described below). | • Benefit packages that are market competitive and generally broad-based in the Company. | | ◀ AT RISK / VARIABLE ▶ | | ANNUAL INCENTIVE PROGRAM (AIP) | • A cash-based annual incentive program based on a single year of performance results. • Fiscal 2024 awards were generally based on three weighted metrics: ◦ 25% Weighting: Net Sales, adjusted for items impacting comparability (Adjusted Net Sales) ◦ 25% Weighting: Free Cash Flow, adjusted for items impacting comparability (Adjusted Free Cash Flow) ◦ 50% Weighting: Operating Profit, adjusted for items impacting comparability (Adjusted Operating Profit) | • Financial performance measures are aligned to our annual operating plan. • Individual performance modifier is based on annual performance evaluations. • Payouts in fiscal 2024 could range from 0% to 200% of target. | | | Long- Term | LONG-TERM INCENTIVE PLAN (LTI) | • A stock-based incentive program based on multi-year results or service. • Vesting over 3 years | | | | | | Performance Shares—60% of Opportunity | | | | | | • Opportunity to earn shares of our common stock if we achieve pre-set performance goals over a 3-year period. • Performance goals were set using growth rates to determine targets for: ◦ Diluted earnings per share (EPS), adjusted for items impacting comparability (Adjusted EPS) weighted at 70% ◦ Net sales adjusted for items impacting comparability (Adjusted Net Sales), weighted at 30% | • Payouts will ultimately range from 0% to 200% of target. • Pays out after 3-year performance period. | | | | | RSUs—40% of Opportunity | | | | | | • Opportunity to earn shares of our common stock if the employee generally remains with Conagra over the 3-year ratable vesting period of the award. | • Rewards stock price appreciation and tenure. • 33% vests each year over 3 years. |
Changes to Fiscal 2024 AIP and Vesting Schedule for RSUs under Fiscal 2024 LTI Plan
Changes to Fiscal 2024 AIP and Vesting Schedule for RSUs under Fiscal 2024 LTI Plan Informed by our shareholder engagement, the Committee incorporated a third metric – free cash flow (weight 25%) – into our fiscal 2024 AIP to better align our plan with our priorities to drive improvements of our debt-to-equity ratio and our overall credit rating. In order to better align our LTI Plan with the compensation practices of our peers and other companies for which we compete for talent, the Committee approved ratable vesting for the RSUs granted in fiscal 2024, which will vest one-third each grant date anniversary.
Retention Awards Granted in Fiscal 2024
Retention Awards Granted in Fiscal 2024 The Committee also approved certain awards for our CEO and CFO to help retain them for at least the next three years while motivating them to continue building shareholder value. On July 19, 2023, the Committee approved the grant of certain performance and retention incentive awards to Mr. Connolly consisting of $8,000,000 in Performance Shares, measurable over a 3-year performance period, representing 80% of the total target value, and $2,000,000 in service-based RSUs with 3-year cliff vesting, representing 20% of the total target value, that are specifically exempt from accelerated vesting upon retirement that he otherwise would be entitled to in order to enhance their retentive effect. For Mr. Marberger, the Committee approved a grant consisting of $1,500,000 in Performance Shares, measurable over a 3-year performance period, representing 60% of the total target value, and $1,000,000 in service-based RSUs with 3-year cliff vesting, representing 40% of the total target value. Please see “Our Approach to Additional Awards” under “Our Fiscal 2024 Executive Compensation Program” below for more information on these grants.
Changes to LTI Plan for Fiscal 2025
Changes to LTI Plan for Fiscal 2025 Informed by our shareholder engagement in fiscal 2024, the Committee made changes to its approach to Performance Shares for awards it approved in fiscal 2025. These changes reflect the Committee’s understanding of our shareholders’ interest in the Company considering a total shareholder return (TSR) component to our compensation program. Additionally, the changes reflect our discussions with our shareholders regarding our metrics and goal setting approach. The Committee approved the addition of a relative TSR multiplier to all Performance Shares awarded in fiscal 2025 to further align our long-term incentives with returns to shareholders. Maximum payout of Performance Shares is limited to 200% of the target award (subject to a multiplier of up to an additional 10 percentage points based on our relative three-year TSR vs. our near-in food peers, General Mills, Inc., Kellanova Company, J.M. Smucker Company, The Kraft Heinz Company, and Campbell Soup Company), plus any dividend equivalents earned. Additionally, for all Performance Shares awarded in fiscal 2025, the Committee took a 3-year cumulative approach to goal-setting reflecting a change from the year-over-year growth rate approach taken for grants made in fiscal 2023 and 2024. The Committee continued to utilize Adjusted EPS (weighted at 70%) and Adjusted Net Sales (weighted at 30%) as the Performance Share metrics for fiscal 2025.
OUR FISCAL 2024 EXECUTIVE COMPENSATION PROGRAM
| Fixed Compensation | Variable Compensation | | • Base Salary • Health and Welfare Benefits • Retirement Benefits | • Fiscal 2024 AIP (cash settled) • Fiscal 2024-2026 LTI Plan (stock settled) |
OUR FISCAL 2024 EXECUTIVE COMPENSATION PROGRAM
| Mr. Sean Connolly | The terms and requirements of Mr. Connolly’s employment agreement His tenure and performance as our President and Chief Executive Officer and as a member of the Board since 2015 His significant business experience and in-depth knowledge of the food industry The Committee’s view that within our Company, Mr. Connolly should have the largest aggregate compensation opportunity due to his level of responsibility The Committee’s view that Mr. Connolly should have the greatest proportion of his compensation opportunity at-risk, which is supported by external market data Mr. Connolly’s accountability for the performance of the entire organization The Company’s interest in retaining Mr. Connolly’s long-term leadership | | Mr. David S. Marberger | Mr. Marberger’s tenure and performance as our Executive Vice President and Chief Financial Officer since 2016 His skills and the broad scope of his responsibilities as Chief Financial Officer, serving as our Principal Financial Officer and leading all Finance, Investor Relations, Information Technology, and M&A functions Mr. Marberger’s previous experience as a Chief Financial Officer and more than 30 years of finance and leadership experience His in-depth knowledge of the food industry An assessment of retention risk based on the competitive market for chief financial officer talent in the industry Internal pay equity considerations and external market data |
Our Approach to Additional Awards
Our Approach to Additional Awards Fiscal 2023 Additional Value Grants The performance share plan concluding in fiscal 2022 (covering the fiscal 2020 to 2022 performance period) resulted in a 0% payout as a result of significant unexpected inflationary pressures. The Committee reviewed the performance of the Company during the fiscal 2020 to 2022 performance period and determined the 0% payout largely resulted from a 90-day lag between the financial impact of input cost inflation and the Company’s ability to offset input cost increases through customer pricing. Absent this lag, the fiscal 2020 to 2022 performance shares would have been earned near the target level. The Committee determined that the 0% result was not reflective of the LTI Plan participants’ strong performance during a period of historic macro-volatility and inflationary super cycle. In lieu of adjusting the payout for the fiscal 2020 to 2022 performance shares, the Committee provided the LTI Plan participants, including the NEOs, with the ability to re-earn a portion of the value lost in the fiscal 2020 to 2022 performance share program by providing additional target value in the fiscal 2023 LTI grant. The size of the additional value was informed by both the target value forfeited in the fiscal 2020 to 2022 performance period and individual performance during fiscal 2020 to 2022. A majority of the additional awards, 60%, was provided in performance shares which strongly incents performance during the fiscal 2023 to 2025 performance period. The remaining 40% was provided in RSUs vesting over three years which provides additional retention linkages to our critical leaders during a period of heightened demand for executive talent. The Committee does not intend to repeat the additional value approach going forward, recognizing it was a unique (one-time) approach to address a set of extraordinary circumstances. Fiscal 2024 Performance and Retention Grants The Committee leads the board oversight of succession planning for senior executives which includes an assessment of retention risk. On at least an annual basis, a complete succession plan for our Senior Leadership Team, including each of our NEOs, is presented and discussed with the full Board. The Committee considers retention risks and succession planning when making compensation decisions each year. When considering fiscal 2024 compensation, the Committee recognized Mr. Connolly’s long tenure, his retirement eligibility under his employment agreement with the Company, and his proven track record in delivering strong performance, and determined that it was in the Company’s and our shareholders’ best interest to incent his continued leadership for a period of at least three years. Accordingly, the Committee approved the $10,000,000 CEO Performance and Retention Award on July 19, 2023. 80% ($8,000,000) of the CEO Performance and Retention Award target value was provided in fiscal 2024 to 2026 performance shares tied to 3-year Earnings Per Share and Net Sales goals, both of which are critical in building sustainable shareholder value. The remaining 20% ($2,000,000) of the CEO Performance and Retention Award target value was provided in RSUs that cliff vest three years from the grant date. In order to secure Mr. Connolly’s long-term leadership, the Committee designed the CEO Performance and Retention Award to require his continued employment with limited exceptions and to incentivize the achievement of 3-year performance goals for 80% of the award to vest. The Committee’s setting of the overall value of the award was guided by the value of awards provided to similar CEOs (based on information provided by our outside advisor) and approximated the $9,400,000 target award value of Mr. Connolly’s fiscal 2024 annual LTI grant. The Committee’s selection of a mix of 80% Performance Shares and 20% RSUs and 3-year RSU cliff vesting for the CEO Performance and Retention Award compared to the mix of 60% Performance Shares and 40% RSUs and the 3-year RSU ratable vesting for his fiscal 2024 annual LTI grant reflected the Committee’s intention to emphasize both performance and retention with the award. Based on a robust engagement process with our shareholders, we understand that shareholders strongly prefer providing equity through the annual LTI grants, rather than special grants. In this case, in light of the Company’s contractual obligations regarding Mr. Connolly’s LTI participation and the parameters of retirement eligibility under terms his existing employment agreement with the Company, Mr. Connolly’s annual LTI grants would not provide the desired retentive effect. Nonetheless, we are committing to not provide any additional special grants to Mr. Connolly during his CEO tenure. Also on July 19, 2023, the Committee provided Mr. Marberger with a $2,500,000 target value performance and retention grant following an assessment of retention risk based on the competitive market for chief financial officer talent in the industry, his skills, more than 30 years of finance and leadership experience, tenure with the Company, and important role in the Company’s succession planning efforts. Similar to Mr. Connolly, the Committee wished to incent Mr. Marberger’s continued leadership for a period of at least three years, which the Committee believed was in the best interests of our shareholders. 60% ($1,500,000) of the target value of his retention grant was provided in fiscal 2024 to 2026 Performance Shares tied to 3-year Earnings Per Share and Net Sales goals, both of which are critical in building sustainable shareholder value. The remaining 40% ($1,000,000) of target value of his retention grant was provided in RSUs that cliff vest three years from the grant date. The overall value of the award was guided by the value of awards provided to similar chief financial officers and aligned with the $2,500,000 target award value of Mr. Marberger’s fiscal 2024 annual LTI grant. The Committee provided for 3-year cliff vesting for Mr. Marberger’s retention RSUs, in lieu of the 3-year ratable vesting approved for the fiscal 2024 annual LTI RSUs, in order to enhance the retentive effect of the award.
INCENTIVE PROGRAMS
INCENTIVE PROGRAMS
ANNUAL INCENTIVE PLAN
ANNUAL INCENTIVE PLAN The fiscal 2024 AIP provided a broad-based, cash incentive opportunity to approximately 4,700 employees, including our named executive officers. We have regularly provided an annual incentive opportunity to a broad group of employees to reinforce a sense of ownership across our Company and drive and sustain a pay-for-performance culture. At the start of fiscal 2024, the Committee approved AIP metrics including Adjusted Operating Profit and Adjusted Net Sales at revised weightings of 50% and 25%, respectively, and added Adjusted Free Cash Flow as a third metric weighted at 25% to align focus on managing working capital and paying down debt for fiscal 2024. Results for each metric are subject to adjustment for defined comparability items to neutralize for external factors beyond management’s control. Under the fiscal 2024 AIP, the total payout opportunity for participants continued to be capped at 200% of targeted awards, although each metric had a different maximum payout opportunity as noted in the table below. An individual performance modifier is included in the Annual Incentive Plan to ensure that the final incentive payouts accurately reflect each participant’s contributions. At the beginning of each fiscal year, each named executive officer sets individual performance goals based on our corporate strategy and the annual operating plan. Goals are then cascaded throughout the Company to align our employees’ goals with our corporate goals. Performance against these goals is assessed following the end of the fiscal year to determine the individual performance modifier for each plan participant, including our named executive officers. The Committee exercises discretion to assess each NEO’s individual performance against these goals, taking into account factors such as degree of difficulty and individual accountability for achievement of strategic objectives. For the fiscal 2024 AIP, the Committee included achievement of diversity and inclusion goals as a factor to be considered in the overall assessment of the individual performance modifier for senior leaders. The individual performance modifier would not cause any participant’s total payout opportunity to exceed the maximum payout of 200% of targeted awards. The Adjusted Operating Profit, Adjusted Net Sales, and Adjusted Free Cash Flow goals for the fiscal 2024 AIP were as follows:
ANNUAL INCENTIVE PLAN
| | | | | | Goals ($ in millions) | | | | | | Metric | | | Weight | | Threshold (25% Payout) | Below Target (95% Payout) | Target (100% Payout) | Above Target (105% Payout) | Maximum (200% Payout)* | | | Adjusted Operating Profit | 50 | % | | 1,625 | 1,929 | 2,031 | 2,092 | 2,336 | | | Adjusted Net Sales | 25 | % | | 11,168 | 11,789 | 12,409 | 13,030 | 13,650 | | | Adjusted Free Cash Flow | 25 | % | | 942 | 1,119 | 1,178 | 1,236 | 1,413 |
ANNUAL INCENTIVE PLAN
*The maximum payout under the AIP was 200% with individual maximums by metric of 200% for Adjusted Operating Profit, 150% for Adjusted Net Sales and 250% for Adjusted Free Cash Flow). See “Additional Information on Compensation Practices and Policies—Use of Adjustments in Incentive Programs” for information on how these metrics are calculated.
Individual Payout Opportunities
Individual Payout Opportunities In addition to setting the financial goals for the fiscal 2024 AIP, the Committee set corresponding target AIP opportunities for each named executive officer, measured as a percentage of their base salary earned for fiscal 2024. The following table shows the ranges of authorized payments for the named executive officers based on achievement of the Adjusted Operating Profit, Adjusted Net Sales, and Adjusted Free Cash Flow goals approved for the fiscal 2024 AIP. No portion of the incentive was guaranteed.
Individual Payout Opportunities
| | Threshold AIP Award | Target AIP Award | Maximum AIP Award | | | (as % of Base Salary | (as % of Base Salary | (as % of Base Salary | | Named Executive Officer | Earnings) | Earnings) | Earnings) | | Mr. Connolly | 45% | 180% | 360% | | Mr. Marberger | 25% | 100% | 200% | | Mr. McGough | 25% | 100% | 200% | | Mr. Serrao | 23% | 90% | 180% | | Mr. Eboli | 23% | 90% | 180% |
Individual Payout Opportunities
Mr. Connolly’s AIP target, as a percentage of base salary earned, was increased to 180% from 175% to better align his total targeted compensation opportunity between the market median and the seventy-fifth percentile for his role. The targets for the other NEOs, as percentages of base salary earned, remained unchanged, except for Mr. Eboli which increased in fiscal 2024 to 90% from 80%. Please see the information above for a discussion of the factors the Committee considered when determining the individual target AIP awards of each for the named executive officers.
Fiscal 2024 Results
| Metric | | Fiscal 2024 AIP Targets ($ in millions) | Fiscal 2024 AIP Results ($ in millions) | Payout Level (% of Target) | | | Adjusted Operating Profit | $2,031 | $1,923 | 93.4% | | | Adjusted Net Sales | $12,409 | $12,051 | 97.1% | | | Adjusted Free Cash Flow | $1,178 | $1,628 | 250.0% | | | | | Calculated Payout % | 133.5% | | | | | Discretionary Negative Adjustment % | (7.8)% | | | | | Approved Payout % | 125.7% |
Determination of Individual Named Executive Officer Awards
| | Target Opportunity | Actual AIP Payout | Actual Payout as a % of | | Named Executive Officer | ($) | ($) | Target Opportunity | | Mr. Connolly | 2,459,423 | 3,246,069 | 132.0% | | Mr. Marberger | 798,077 | 1,053,342 | 132.0% | | Mr. McGough | 799,808 | 1,005,359 | 125.7% | | Mr. Serrao | 590,106 | 741,763 | 125.7% | | Mr. Eboli | 518,885 | 750,074 | 144.6% |
LONG-TERM INCENTIVE PLAN OVERVIEW
LONG-TERM INCENTIVE PLAN OVERVIEW The Committee firmly believes in aligning the interests of our senior leaders with those of our shareholders. The significant extent to which equity is included in our named executive officers’ compensation opportunity evidences this belief. For fiscal 2024, our LTI Plan was intended to:
LONG-TERM INCENTIVE PLAN OVERVIEW
| | | | | • provide variable, competitive compensation based on long-term Company performance | • incent and reward leaders who have the greatest ability to drive long-term Company success | • reward participants for desired results that align with shareholder value creation |
LONG-TERM INCENTIVE PLAN OVERVIEW
| The Committee annually establishes a target long-term incentive grant value for each named executive officer using a value-based approach. In fiscal 2024, as in recent years, 60% of this total targeted value was delivered in the form of a Performance Shares, and 40% of this total targeted value was delivered in the form of RSUs. | |
Fiscal 2024 LTI Plan Target Opportunity and Retention Awards
Fiscal 2024 LTI Plan Target Opportunity and Retention Awards After considering the factors described above, the Committee approved an increase in Mr. Connolly’s LTI Plan target opportunity for fiscal 2024 to $9,400,000 from $8,800,000 to better align Mr. Connolly’s total targeted compensation to between the market median and market seventy-fifth percentile. The targets for the other NEO’s remain unchanged from fiscal 2023, except for Mr. Eboli, whose LTI Plan target opportunity for fiscal 2024 was also increased to $1,600,000 from $1,200,000 to align more closely between the market median and market seventy-fifth percentile for his role. All fiscal 2024 LTI Plan grants were made on July 19, 2023.
Fiscal 2024 LTI Plan Target Opportunity and Retention Awards
| | Fiscal 2023 Grant Value (1) | | Fiscal 2024 Grant Value (1) | | | | Fiscal 2023 Annual | Fiscal 2023 Additional | Fiscal 2024 Annual | Fiscal 2024 Retention | | | Grant Value | Grant Value | Grant Value | Grant Value | | Named Executive Officer | ($) | ($) | ($) | ($) | | Mr. Connolly | 8,800,000 | 7,000,000 | 9,400,000 | 10,000,000 | | Mr. Marberger | 2,500,000 | 1,500,000 | 2,500,000 | 2,500,000 | | Mr. McGough | 2,500,000 | 1,500,000 | 2,500,000 | — | | Mr. Serrao | 1,600,000 | 1,500,000 | 1,600,000 | — | | Mr. Eboli | 1,200,000 | — | 1,600,000 | — |
Fiscal 2024 LTI Plan Target Opportunity and Retention Awards
| (1) Reflects the approved grant value which is used to determine the number of shares to be granted by dividing the approved value by the average of the closing price of our common stock on the NYSE for the 10 trading days prior to the grant date. |
Fiscal 2024 LTI Plan Target Opportunity and Retention Awards
Each element of the LTI Plan used in fiscal 2024 is discussed more fully below.
LONG-TERM INCENTIVE PLAN—RSUS
LONG-TERM INCENTIVE PLAN—RSUS RSUs generally represent the right to receive a defined number of shares of our common stock after completing a period of service established at the grant date. RSUs encourage long-term commitment to the Company. In general, RSUs granted under the fiscal 2024 LTI Plan vest ratably, one third on each anniversary of the date of grant for three years, subject to the executive’s continued employment. RSUs granted to Messrs. Connolly and Marberger under the fiscal 2024 Performance and Retention Grant vest in full on the third anniversary of the date of grant. Awards granted in fiscal 2024 are generally not entitled to dividend equivalents. However, Mr. Connolly’s retention grant of RSUs accrues dividend equivalents at our regular dividend rate in additional shares of common stock on shares actually earned. The number of RSUs granted to each named executive officer pursuant to the fiscal 2024 LTI Plan is set forth below with the Performance and Retention grants listed separately. Targeted values described above were converted into grant sizes by dividing the dollar value of the targeted opportunity by the average of the closing market price of our common stock on the NYSE for the 10 trading days prior to, but not including the grant date.
LONG-TERM INCENTIVE PLAN—RSUS
| | Annual Grant of RSUs for Fiscal 2024 | Retention Grant of RSUs for Fiscal 2024 | | Named Executive Officer | (#) | (#) | | Mr. Connolly | 113,988 | 60,632 | | Mr. Marberger | 30,316 | 30,316 | | Mr. McGough | 30,316 | — | | Mr. Serrao | 19,402 | — | | Mr. Eboli | 19,402 | — |
LONG-TERM INCENTIVE PLAN—PERFORMANCE SHARES
LONG-TERM INCENTIVE PLAN—PERFORMANCE SHARES Performance Shares represent an opportunity to earn a defined number of shares of our common stock if we achieve pre-set performance goals over a performance measurement period. In general, the Performance Shares vest following completion of the third fiscal year following the grant and provide the named executive officer participating in the cycle the opportunity to earn a payout, in shares of common stock, from 0% to 200% of their respective targeted award. Dividend equivalents are paid on the portion of Performance Shares actually earned at our regular dividend rate in additional shares of common stock. The three-year nature of each Performance Share grant means that in any year, a named executive officer can have Performance Shares relating to up to three performance periods outstanding at any time. In fiscal 2024, for example, each named executive officer had outstanding fiscal 2022 to 2024 Performance Shares, fiscal 2023 to 2025 Performance Shares, and fiscal 2024 to 2026 Performance Shares. The targeted number of Performance Shares granted to our named executive officers in fiscal 2024 and fiscal 2023 (with the additional grant values listed separately from the annual grant) together with the Performance Share grants made under the comparable program in fiscal 2022, are set forth below. Targeted values described above were converted into grant sizes by dividing the dollar value of the targeted opportunity by the average of the closing market price of our common stock on the NYSE for the 10 trading days prior to, but not including the grant date.
LONG-TERM INCENTIVE PLAN—PERFORMANCE SHARES
| | | Fiscal 2023 to 2025 Cycle | | Fiscal 2024 to 2026 Cycle | | | | Grant for | Grant for | Additional Grant for | Grant for | Retention Grant for | | | Fiscal 2022 to 2024 | Fiscal 2023 to 2025 | Fiscal 2023 to 2025 | Fiscal 2024 to 2026 | Fiscal 2024 to 2026 | | Named Executive Officer | Cycle (#) | Cycle (#) | Cycle (#) | Cycle (#) | Cycle (#) | | Mr. Connolly | 180,203 | 152,628 | 121,408 | 170,982 | 242,527 | | Mr. Marberger | 42,798 | 43,360 | 26,016 | 45,474 | 45,474 | | Mr. McGough | 42,798 | 43,360 | 26,016 | 45,474 | — | | Mr. Serrao | 34,239 | 27,751 | 26,016 | 29,103 | — | | Mr. Eboli | 21,399 | 20,813 | — | 29,103 | — |
Goal Setting for Performance Shares
Goal Setting for Performance Shares The Committee’s approach to selecting and setting performance goals for each cycle of Performance Shares is thorough. Prior to the start of a performance period, the Committee discusses proposed plan design, taking into consideration the Company’s strategic plan. Then, shortly after the start of each performance period, the Committee approves the actual metric or metrics for the program and the specific financial hurdles that must be met for awards to be earned. The Committee’s preferred approach is for the performance goals in each grant to cover the full three years of the performance period and remain un-revised throughout the cycle. However, the Committee retains the discretion to modify goals or use longer or shorter performance periods if doing so is appropriate considering relevant Company dynamics or macroeconomic conditions. For the fiscal 2022 to 2024 Performance Shares, the Committee established a three-year Adjusted EPS goal.
Goal Setting for Performance Shares
| For the fiscal 2023 to 2025 Performance Shares, the Committee utilized a year-over-year growth rate approach to set goals for each fiscal year in the three-year performance period adding a second metric of Adjusted Net Sales (weighted at 30%) in addition to the previously utilized Adjusted EPS metric (weighted at 70%). For the fiscal 2024 to 2026 Performance Shares, the Committee continued to utilize a year-over-year growth rate approach to set goals for Adjusted Net Sales (weighted at 30%) and Adjusted EPS (weighted at 70%) metrics. The three-year Performance Shares utilized selected annual growth rates to set goals for each metric for each of the three fiscal years based on the prior fiscal year’s performance which the Committee feels is appropriate for maintaining focus on continued growth of these key performance metrics. | |
Goal Setting for Performance Shares
The Committee feels effective goal setting is among the most important aspects of establishing the executive compensation program. As such, the Committee makes goal-setting decisions that it believes best maintains the alignment of the Company’s LTI Plan with the Company’s external financial commitments to investors. The balance of this subsection of the Compensation Discussion and Analysis describes, in more detail, each cycle of our Performance Shares outstanding during fiscal 2024. Performance shares for the fiscal 2022 to fiscal 2024 cycle of the long-term incentive plan were granted at the start of fiscal 2022. The performance was measured against adjusted EPS targets calculated based on a three-year compound annual growth rate approved by the Committee. The performance period concluded at the end of fiscal 2024 with Adjusted EPS targets as follows:
Goal Setting for Performance Shares
| | Threshold | Target | Maximum | | Performance Period | Adjusted EPS (1) | Adjusted EPS (2) | Adjusted EPS (3) | | Fiscal 2022 to Fiscal 2024 | $2.46 | $2.62 | $2.78 |
Goal Setting for Performance Shares
| (1) Results below this level result in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity. |
Goal Setting for Performance Shares
| (2) Results at this level result in a payout equal to 100% of the targeted opportunity. |
Goal Setting for Performance Shares
| (3) Results at or above this level result in a payout equal to 200% of the targeted opportunity. |
Goal Setting for Performance Shares
As set forth in the table below, our financial performance over the three-year performance period fiscal 2022 to fiscal 2024 resulted in a funding level equal to 113.0% of the targeted Performance Shares which were paid out, to the extent earned, in shares of common stock in July 2024. It is generally the Committee’s practice to pay Performance Shares at a level equal to the earned amount, without applying further discretion. The Committee followed this practice for the fiscal 2022 to fiscal 2024 Performance Shares.
Goal Setting for Performance Shares
| | Performance | | Payout | | Performance Period | Metric | Results | Level | | Fiscal 2022 to Fiscal 2024 | Adjusted EPS | $2.67 | 113.0% |
Goal Setting for Performance Shares
The noted amounts paid to each individual named executive officer include dividend equivalents accrued on earned shares, which were paid in additional shares of common stock.
Goal Setting for Performance Shares
| | Targeted Performance | Actual Performance | Actual as % of | Actual as % of | | | Shares Granted for | Shares Earned for | Target (without | Target (with | | | Fiscal 2022 to Fiscal 2024 Cycle | Fiscal 2022 to Fiscal 2024 Cycle | Dividend | Dividend | | Named Executive Officer | (#) | (#) | Equivalents) | Equivalents) | | Mr. Connolly | 180,203 | 230,347 | 113.0% | 127.8% | | Mr. Marberger | 42,798 | 54,707 | 113.0% | 127.8% | | Mr. McGough | 42,798 | 54,707 | 113.0% | 127.8% | | Mr. Serrao | 34,239 | 43,766 | 113.0% | 127.8% | | Mr. Eboli | 21,399 | 27,354 | 113.0% | 127.8% |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
Fiscal 2023 TO 2025 PERFORMANCE SHARES Performance shares for the fiscal 2023 to fiscal 2025 cycle of the LTI Plan were granted at the start of fiscal 2023. The Committee established year-over-year growth rate goals to calculate Adjusted EPS and Adjusted Net Sales targets. The performance period for this cycle will conclude at the end of fiscal 2025 and the Performance Shares will pay out, to the extent earned, in shares of common stock in summer 2025. The specific fiscal 2025 plan targets are as follows:
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| | Adjusted EPS | | | Adjusted Net Sales | | | | Performance Period | Threshold(1) | Target(2) | Max(3) | Threshold(1) | Target(2) | Max(3) | | Fiscal 2023 | $2.14 | $2.27 | $2.40 | $11,287 | $12,055 | $12,823 | | Fiscal 2024 | $2.44 | $2.59 | $2.73 | $11,667 | $12,461 | $13,255 | | Fiscal 2025 | $2.40 | $2.55 | $2.69 | $11,452 | $12,232 | $13,011 |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (1) Results below this level result in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (2) Results at this level result in a payout equal to 100% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (3) Results at or above this level result in a payout equal to 200% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
The grant date fair value of all Performance Shares granted to the named executive officers under the fiscal 2023 to fiscal 2025 cycle, based on target, the probable outcome of the performance conditions for such period, is included for fiscal 2023 in the “Stock Awards” column of the “Summary Compensation Table—Fiscal 2024.” Performance shares for the fiscal 2024 to fiscal 2026 cycle of the LTI Plan were granted at the start of fiscal 2024. The Committee established targets using a year-over-year growth rate approach. The performance period for this cycle will conclude at the end of fiscal 2026 and the Performance Shares will pay out, to the extent earned, in shares of common stock in summer 2026. The specific fiscal 2026 plan targets are as follows:
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| | Adjusted EPS | | | Adjusted Net Sales | | | | Performance Period | Threshold(1) | Target(2) | Max(3) | Threshold(1) | Target(2) | Max(3) | | Fiscal 2024 | $2.37 | $2.52 | $2.65 | $11,702 | $12,449 | $13,196 | | Fiscal 2025 | $2.42 | $2.58 | $2.71 | $11,486 | $12,220 | $12,953 | | Fiscal 2026 | Target: +7% above FY25 actual results | | | Target: +1.4% above FY25 actual results | | |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (1) Results below this level result in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (2) Results at this level result in a payout equal to 100% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
| (3) Results at or above this level result in a payout equal to 200% of the targeted opportunity. |
Fiscal 2023 TO 2025 PERFORMANCE SHARES
The grant date fair value of all Performance Shares granted to the named executive officers under the fiscal 2024 to fiscal 2026 cycle, based on target, the probable outcome of the performance conditions for such period, is included for fiscal 2024 in the “Stock Awards” column of the “Summary Compensation Table—Fiscal 2024.”
Agreement with Mr. Connolly
Agreement with Mr. Connolly We entered into a letter agreement with Mr. Connolly on August 2, 2018, which replaced Mr. Connolly’s prior employment agreement that expired on August 1, 2018. The letter agreement generally describes Mr. Connolly’s duties and responsibilities as CEO, and provides for a minimum base salary of $1.2 million subject to review and possible increase by the Committee and the Board’s independent directors, as well as a customary vacation allowance. The letter agreement also outlines Mr. Connolly’s participation in our incentive compensation programs. Regarding the annual incentive program, the agreement provides that Mr. Connolly’s target opportunity will be at least 150% of his base salary. With respect to long-term incentives, Mr. Connolly is entitled each year to receive a targeted long-term award opportunity with a value of at least $7.5 million for any routine three-year performance period approved by the Committee, subject to the terms and conditions established by the Committee. The agreement subjects Mr. Connolly to our stock ownership guidelines. Mr. Connolly also remains bound to certain provisions in his prior employment agreement that survived the expiration of such agreement, including a one-year post-employment non-competition restriction and our standard confidentiality and non-solicitation agreement. The agreement continues the application of our security policy to Mr. Connolly, as further described above and under “Executive Compensation—Summary Compensation Table—Fiscal 2024” below. In addition, we also agreed to pay Mr. Connolly for professional fees incurred in the negotiation and preparation of the new letter agreement (and related documents). The agreement also entitles Mr. Connolly to participate in benefit plans and programs that are made available to senior executives generally. For information about the terms of Mr. Connolly’s participation in our retirement plans and deferred compensation plans, see “Executive Compensation—Nonqualified Deferred Compensation—Fiscal 2024” below. The letter agreement also includes retirement benefits for Mr. Connolly. It provides that, for Mr. Connolly’s equity awards granted on or after July 17, 2018, and for any annual incentive plan in effect in the year of his retirement, (a) any definition of “early retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attains at least age 55 but has not yet attained age 57, and (b) any definition of “normal retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attain at least age 57. In addition, if any RSU or Performance Share award or agreement with Mr. Connolly under the LTI Plan for an award outstanding at the time of his termination of employment provides for immediate vesting (either pro-rata or in full, as applicable) in the event of normal retirement or early retirement (as such terms are defined in the RSU or Performance Share award or agreement), and such normal retirement or early retirement is not within 2 years of a change of control (as that term is defined in the RSU or Performance Share award or agreement), then such RSU or Performance Share award or agreement will be deemed to be amended by the letter agreement so that it provides for continued vesting after the retirement in accordance with the normal vesting schedule for such award (either pro-rata or in full, as applicable). The letter agreement also provides for severance, termination, and change of control benefits. Mr. Connolly’s severance benefits under the letter agreement are further described below under the heading “Executive Compensation—Potential Payments Upon Termination or Change of Control.”
Change of Control Benefits
Change of Control Benefits We have agreements with our named executive officers that are designed to promote stability and continuity of senior management in the event of a change of control. The Committee routinely evaluates participation in this program and its benefit levels to ensure their reasonableness. Since fiscal 2012, individuals promoted or hired into positions that, in the Committee’s view, are appropriate for change of control program participation have not been entitled to any excise tax gross-up protection. Although the Committee continues to believe in the importance of maintaining a change of control program, it believes that offering excise tax gross-ups to new participants is inappropriate relative to best executive pay practices. We provide a complete description of the amounts potentially payable to our named executive officers under these agreements under the heading “Executive Compensation—Potential Payments Upon Termination or Change of Control.”
Severance Benefits
Severance Benefits We have adopted a broad severance plan potentially applicable to all salaried employees, including the named executive officers. In some circumstances, as part of negotiations during the hiring or recruiting process, we have supplemented this plan with specific severance arrangements. No such arrangements currently exist with our named executive officers other than Mr. Connolly.
Advice from Independent Consultant and Review of Market Data
Advice from Independent Consultant and Review of Market Data As part of its process, the Committee leveraged the advice and counsel of its independent compensation consultant, FW Cook, in setting fiscal 2024 compensation. The consultant assists the Committee in monitoring:
Advice from Independent Consultant and Review of Market Data
| ● | policy positions of institutional shareholders and their advisors, |
Advice from Independent Consultant and Review of Market Data
| ● | emerging market practices in compensation design and philosophy, and |
Advice from Independent Consultant and Review of Market Data
| ● | policy developments relevant to the Committee’s work. |
Advice from Independent Consultant and Review of Market Data
The Committee’s consultant also provides internal and external pay comparison data. The Committee uses this data as a market check on its compensation decisions and does not mandate target ranges for our named executive officers’ salaries, annual incentive opportunities, long-term incentive opportunities, or total direct compensation levels as compared to the peer group. The Committee recognizes that over-reliance on external comparisons can be of concern; therefore, the Committee uses external comparisons as only one point of reference and is mindful of the value and limitations of comparative data. The Committee’s first step in using external data for fiscal 2024 was the identification of an appropriate peer group. FW Cook prepared a list of potential peer companies (with an emphasis on food and beverage companies) based on consideration of the following criteria:
Advice from Independent Consultant and Review of Market Data
| | OPERATIONS AND SCALE Companies similar in size (based on revenue, market capitalization, and enterprise value) and industry (packaged food and meats and broader brand-based consumer packaged goods companies); | | | BUSINESS CHARACTERISTICS Public companies listed on major U.S. exchanges and subject to U.S. disclosure rules, and companies with whom we compete for talent; and | | | PROXY ADVISOR PEERS Companies included in peer groups used by shareholder advisory firms (as a reference). |
Advice from Independent Consultant and Review of Market Data
Following discussion, the Committee decided to maintain fiscal 2023’s peer group for fiscal 2024 compensation decisions and reapproved the following peer group of 16 companies for purposes of assessing fiscal 2024 compensation competitiveness:
Advice from Independent Consultant and Review of Market Data
| • Campbell Soup Company | • The J. M. Smucker Company | | • Church & Dwight Co., Inc. | • Kellanova Company | | • The Clorox Company | • Keurig Dr. Pepper Inc. | | • Colgate-Palmolive Company | • Kimberly-Clark Corporation | | • The Estée Lauder Companies Inc. | • The Kraft Heinz Company | | • General Mills, Inc. | • McCormick & Company, Incorporated | | • The Hershey Company | • Mondelēz International, Inc. | | • Hormel Foods Corporation | • Newell Brands Inc. |
Input from our Chief Executive Officer
| | SELECTING PERFORMANCE METRICS AND TARGETED PERFORMANCE LEVELS An important part of designing incentive compensation programs is the selection of plan metrics and performance targets. To help ensure that the Committee’s pay-for-performance goals are achieved, selected metrics must be tied to shareholder value creation. In addition, performance targets must be set at levels that balance investor expectations against achievability, without incenting undue risk taking. The Committee sought Mr. Connolly’s input on these matters for fiscal 2024. Mr. Connolly provided the Committee his views on the appropriate Company goals for use in our AIP and LTI Plan. Mr. Connolly provided input based on his understanding of investor expectations and our operating plans and financial goals. | | | ASSESSING COMPANY PERFORMANCE Financial performance is at the core of our incentive programs. However, the Committee retains the discretion to modify payouts based on the manner in which business results are delivered. At the end of fiscal 2024, Mr. Connolly offered the Committee his views of the quality of our performance against expectations, recommending a negative adjustment to the payout under our AIP. | | | ASSESSING INDIVIDUAL PERFORMANCE With respect to individual performance, which also informed fiscal 2024 compensation decisions, the Committee relied on Mr. Connolly’s regular performance evaluations of the senior leadership team. Mr. Connolly shared information on the named executive officers’ impact on strategic initiatives and organizational goals, as well as their leadership behaviors. |
Committee’s Practices Regarding the Timing of Equity Grants
Committee’s Practices Regarding the Timing of Equity Grants We do not backdate stock options or grant equity retroactively. We do not coordinate grants of equity with disclosures of positive or negative information. Most equity is granted in the ordinary course at an annual Committee meeting each July. The Committee eliminated the granting of stock options from its executive compensation program in 2016. However, historically, stock options were granted with an exercise price equal to the closing market price of our common stock on the NYSE on the date of grant. If a stock option grant was made other than during the routine July Committee meeting, the Company would require that the grant be made on the first trading day of the month on or following the grantee’s date of hire.
Additional Information on the Committee’s Compensation Consultant
Additional Information on the Committee’s Compensation Consultant The Committee engaged FW Cook directly to assist it in obtaining and reviewing information relevant to its compensation decisions. The independence and performance of FW Cook are of the utmost importance to the Committee. As a result, Committee policy prevents management from directly engaging the consultant without the prior approval of the Committee’s Chair. For fiscal 2024, FW Cook did not provide any additional services to us or our affiliates. In addition, the Committee reviews the types of services provided by the consultant and all fees paid for those services on a regular basis and conducts a formal evaluation of the consultant on an annual basis. The Committee assessed the independence of FW Cook, as required under NYSE listing rules. The Committee has also considered and assessed all relevant factors, including those required by the SEC that could give rise to a potential conflict of interest with respect to FW Cook during fiscal 2024. Based on this review, the Committee did not identify any conflict of interest raised by the work performed by FW Cook.
Use of Adjustments in Incentive Programs
Use of Adjustments in Incentive Programs Our goal is to pay incentives based on the same underlying business trends and results that our investors are using to measure Company performance. To incent management to make decisions that have positive, long-term impacts, even at the expense of shorter-term results, and to prevent one-time gains and losses from having too great of an impact on incentive payouts, the Committee designed its programs to exclude certain items impacting comparability from results in the fiscal 2024 AIP and the fiscal 2022 to fiscal 2024 cycle of Performance Shares. The metrics for the fiscal 2024 AIP were fiscal 2024 Adjusted Operating Profit (weighted at 50%), Adjusted Net Sales (weighted at 25%), and Adjusted Free Cash Flow (weighted at 25%). The metric for the fiscal 2022 to fiscal 2024 cycle of Performance Shares was Adjusted EPS for the fiscal 2022 through fiscal 2024 period (weighted at 100%). In both the fiscal 2024 AIP and the fiscal 2022 to fiscal 2024 Performance Shares, the Committee approved adjustments to our financial metrics that are consistent with the adjustments used to calculate non-GAAP financial measures presented to investors in our discussions of comparable earnings results, except for Adjusted Net Sales. Adjusted Net Sales generally aligns with Organic Net Sales, a non-GAAP financial measure, however, Adjusted Net Sales for compensation purposes does not give effect to the $(28.6) million impact of foreign exchange. Additionally, Adjusted Free Cash Flow used for compensation purposes aligns with Free Cash Flow, a non-GAAP financial measure. See Appendix A to this Proxy Statement for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measure. Adjustments included the following types of unplanned events, which can either negatively or positively impact our performance versus incentive plan targets in a manner that is not indicative of underlying business performance:
Use of Adjustments in Incentive Programs
| ● | Restructuring charges; |
Use of Adjustments in Incentive Programs
| ● | Mergers, acquisitions, or divestitures, including supporting costs; |
Use of Adjustments in Incentive Programs
| ● | Material changes in business, operations, corporate or capital structure; |
Use of Adjustments in Incentive Programs
| ● | Impairments and other write-offs; |
Use of Adjustments in Incentive Programs
| ● | The movement of an operation into discontinued operations after the start of the performance period; |
Use of Adjustments in Incentive Programs
| ● | Foreign exchange or hedge-related gains and losses; |
Use of Adjustments in Incentive Programs
| ● | Non-operating/non-cash gains and losses; |
Use of Adjustments in Incentive Programs
| ● | Litigation or claim adjudication, judgments, or settlements—positive and negative; |
Use of Adjustments in Incentive Programs
| ● | Adjustments to prior year tax liabilities; and |
Use of Adjustments in Incentive Programs
| ● | The cumulative effects of accounting charges. |
MITIGATING RISK IN OUR COMPENSATION PROGRAM
| What We DO | What We DON’T DO | | Focus employees on both short- and long-term goals. Consider a mix of financial and non-financial goals to prevent over-emphasis on any single metric. Allow for some subjective evaluation in the determination of incentive payouts, to ensure linkage between payouts and the “quality” of performance. Employ a greater portion of variable pay (i.e., incentives) at more senior levels of the organization. Require stock ownership for approximately 100 of our most senior employees, as of fiscal year end. Generally require a “double-trigger” for accelerated vesting to occur in equity awards in connection with a change of control. Provide for the claw back of amounts paid to any of our most senior officers in certain circumstances. Use a range of strong processes and controls, including Committee oversight, in our compensation practices. Engage an independent compensation consultant for the Committee; consultant performs no other work for our Company. Pay incentive compensation only after our financial results have been finalized and certified by the Committee. | No director or executive officer may pledge or hedge their ownership of Company stock. No excessive perquisites are provided to executives. No backdating or re-pricing of options may occur without shareholder approval. Since fiscal 2012, no change in control agreements have been executed with excise tax “gross-up” protection. No additional years of credited service are provided to named executive officers in pension programs. No compensation programs that encourage unreasonable risk taking will be implemented. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
SUMMARY COMPENSATION TABLE—FISCAL 2024 The table below presents compensation information for individuals who served as our CEO and Chief Financial Officer during fiscal 2024 and for each of the other three most highly compensated individuals who were serving as executive officers at the end of fiscal 2024. Mr. Serrao’s last day of employment with Conagra was May 26, 2024, the last day of fiscal 2024. For information about payments received by him in connection with his separation from service see “Potential Payments Upon Termination or Change of Control” in this Proxy Statement.
SUMMARY COMPENSATION TABLE—FISCAL 2024
| | | | | | | Change in | | | | | | | | | | Pension Value | | | | | | | | | | and Nonqualified | | | | | | | | | Non-Equity | Plan Deferred | | | | | | | | Stock | Incentive Plan | Compensation | All Other | | | Name and | Fiscal | Salary | Bonus | Awards(1) | Compensation(2) | Earnings(3) | Compensation(4) | Total | | Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Sean Connolly | 2024 | 1,366,346 | — | 18,854,433 | 3,246,069 | — | 563,378 | 24,030,226 | | President and Chief | 2023 | 1,317,308 | — | 14,444,447 | 2,471,385 | — | 486,961 | 18,720,100 | | Executive Officer | 2022 | 1,269,000 | — | 7,976,396 | 2,198,543 | — | 503,115 | 11,947,054 | | Dave Marberger | 2024 | 798,077 | — | 4,738,087 | 1,053,342 | — | 155,174 | 6,744,680 | | Executive Vice President | 2023 | 760,646 | — | 3,656,819 | 893,113 | — | 137,866 | 5,448,444 | | and Chief Financial Officer | 2022 | 736,700 | — | 1,894,382 | 736,700 | — | 153,874 | 3,521,656 | | Thomas McGough | 2024 | 799,808 | — | 2,388,446 | 1,005,359 | 12,908 | 140,149 | 4,346,670 | | Executive Vice President and | 2023 | 771,154 | — | 3,656,819 | 787,348 | — | 135,462 | 5,350,783 | | Co-Chief Operating Officer | 2022 | 750,000 | — | 1,894,382 | 750,000 | — | 145,478 | 3,539,860 | | Darren Serrao | 2024 | 655,673 | — | 1,528,587 | 741,763 | — | 107,703 | 3,033,726 | | Executive Vice President and | 2023 | 631,154 | — | 2,834,039 | 579,967 | — | 104,385 | 4,149,545 | | Co-Chief Operating Officer | 2022 | 610,000 | — | 1,515,532 | 549,000 | — | 113,859 | 2,788,391 | | Alexandre Eboli | 2024 | 576,539 | 150,000 | 1,528,587 | 750,074 | — | 88,571 | 3,093,771 | | Executive Vice President and | 2023 | 556,923 | 250,000 | 1,097,043 | 454,895 | — | 83,194 | 2,442,055 | | Chief Supply Chain Officer | 2022 | 477,693 | 380,000 | 1,262,702 | 382,154 | — | 105,575 | 2,608,124 |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (1) Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the stock awards granted during the reported fiscal years. The amounts reported for fiscal 2022 include the Performance Shares awarded in fiscal 2022 (the fiscal 2022 to 2024 PSP cycle), the amounts reported for fiscal 2023 include the Performance Shares awarded in fiscal 2023 (the fiscal 2023 to 2025 PSP cycle), and the amounts reported for fiscal 2024 include the Performance Shares awarded in fiscal 2024 (the fiscal 2024 to 2026 PSP cycle). Assuming the highest level of performance is achieved for the fiscal 2024 to 2026 Performance Shares awarded in fiscal 2024, the grant date fair value of the fiscal 2024 to 2026 Performance Shares would have been: $26,935,976 for Mr. Connolly, $5,924,352 for Mr. Marberger, $2,962,176 for Mr. McGough, and $1,895,770 for each of Messrs. Serrao and Eboli. Assumptions made in the valuation of these awards are discussed in Note 12 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2024. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (2) For fiscal 2024, reflects awards earned under the fiscal 2024 AIP. A description of the fiscal 2024 AIP is included in the Compensation Discussion and Analysis. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (3) The measurement date for pension value for fiscal 2024 was May 26, 2024. We do not offer above-market (as defined by SEC rules) or preferential earnings rates in our deferred compensation plans. For fiscal 2024, the entire amount reflects the aggregate change in the actuarial present value of pension amounts rather than nonqualified deferred compensation earnings. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (4) The components of fiscal 2024 “All Other Compensation” include the following: |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| | Perquisites and Personal Benefits | | | | | | (1) | (2) | (3) | (4) | | | Personal Use of | Matching | Security | Company Contribution to | | | Aircraft(a) | Gifts(b) | Expenses(c) | Defined Contribution Plans(d) | | Named Executive Officer | ($) | ($) | ($) | ($) | | Mr. Connolly | 184,031 | * | 37,800 | 334,047 | | Mr. Marberger | — | * | — | 149,174 | | Mr. McGough | — | — | — | 140,149 | | Mr. Serrao | — | — | — | 107,703 | | Mr. Eboli | — | — | — | 88,571 |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (a) Column 1 reflects the Company’s incremental cost of Mr. Connolly’s personal use of the aircraft (including the incremental cost of repositioning flights associated with such use). Mr. Connolly was not obligated under his aircraft time share agreement with the Company to reimburse the Company for any of the $184,031 of incremental costs (such as fuel and incidentals, landing and parking fees, airport taxes, and catering costs) because the reimbursable portion (Mr. Connolly is not obligated to reimburse for fixed costs that would be incurred in any event to operate the company aircraft such as aircraft purchase costs, maintenance, insurance, and flight crew salaries) amounted to $132,633 (which was less than the $150,000 reimbursement threshold under his agreement). See “Security Policy” above. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (b) For Column 2, * notation in lieu of a dollar amount indicates that the named executive officer received the benefit but at an incremental cost to us of less than $25,000. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (c) Column 3 reflects the Company’s incremental cost (including related parking, automobile insurance expenses, and a portion of the compensation and benefits costs of a company employee who provided driving services) of providing Mr. Connolly with a company car and driver for his commute and other transportation to and from our corporate office under our security policy. See “Security Policy” above. |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| (d) Reflects the qualified 401(k) plan contributions and the Voluntary Deferred Comp Plan (VDCP) contributions (as detailed in the table below) by Conagra. See additional information about the VDCP under “Nonqualified Deferred Compensation—Fiscal 2024.” |
SUMMARY COMPENSATION TABLE—FISCAL 2024
| | Company Contributions | Company Contributions | | | to Qualified 401(k) Plan | to VDCP | | Named Executive Officer | ($) | ($) | | Mr. Connolly | 27,629 | 306,418 | | Mr. Marberger | 31,033 | 118,141 | | Mr. McGough | 30,779 | 109,370 | | Mr. Serrao | 29,040 | 78,663 | | Mr. Eboli | 27,669 | 60,902 |
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024 The following table presents information about grants of plan-based awards (equity and non-equity) made during fiscal 2024 to the named executive officers. All equity-based grants were made under the shareholder approved 2014 Stock Plan.
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
| | | Estimated Possible Payouts Under | | | Estimated Future Payouts | | | All Other Stock | Grant Date Fair | | | | Non-Equity Incentive Plan | | | Under Equity Incentive Plan | | | Awards: Number | Value of Stock | | | | Awards(1) | | | Awards(2) | | | of Shares of | and Option | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or Units(3) | Awards(4) | | Name | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | ($) | | Mr. Connolly | — | — | 2,459,423 | 4,918,846 | — | — | — | — | — | | | 7/19/2023 | — | — | — | — | 413,509 | 827,018 | — | 13,467,988 | | | 7/19/2023 | — | — | — | — | — | — | 174,620 | 5,386,445 | | Mr. Marberger | — | — | 798,077 | 1,596,154 | — | — | — | — | — | | | 7/19/2023 | — | — | — | — | 90,948 | 181,896 | — | 2,962,176 | | | 7/19/2023 | — | — | — | — | — | — | 60,632 | 1,775,911 | | Mr. McGough | — | — | 799,808 | 1,599,616 | — | — | — | — | — | | | 7/19/2023 | — | — | — | — | 45,474 | 90,948 | — | 1,481,088 | | | 7/19/2023 | — | — | — | — | — | — | 30,316 | 907,358 | | Mr. Serrao | — | — | 590,106 | 1,180,212 | — | — | — | — | — | | | 7/19/2023 | — | — | — | — | 29,103 | 58,206 | — | 947,885 | | | 7/19/2023 | — | — | — | — | — | — | 19,402 | 580,702 | | Mr. Eboli | — | — | 518,885 | 1,037,770 | — | — | — | — | — | | | 7/19/2023 | — | — | — | — | 29,103 | 58,206 | — | 947,885 | | | 7/19/2023 | — | — | — | — | — | — | 19,402 | 580,702 |
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
| (1) Amounts reflect payout opportunities under the fiscal 2024 AIP discussed in our Compensation Discussion and Analysis. Actual payouts earned under the program for fiscal 2024 for all named executive officers can be found in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table—Fiscal 2024.” |
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
| (2) Amounts reflect the Performance Share opportunities granted to our named executive officers in fiscal 2024 under our LTI Plan with a measurement period of fiscal 2024 to 2026 including the additional value awarded in fiscal 2024 described under “Long-Term Incentive Plan Overview—Fiscal 2024 LTI Target Opportunity and Retention Awards” under “Compensation Discussion and Analysis” above. For Mr. Connolly and Mr. Marberger, the target number of Performance Shares awarded as additional value accounted for 242,527 and 45,474 shares, respectively. The amount of Performance Shares earned, including any above-target payouts, will be determined in general based on our performance against goals set for each of the fiscal years during the performance period of fiscal 2024 to 2026. Final Performance Share payouts are subject to full negative discretion by the Committee. Further information about the Performance Shares can be found in the section headed “Compensation Discussion and Analysis—Long-Term Incentive Plan—Performance Shares.” |
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
| (3) Amounts reflect the RSUs granted to our named executive officers in fiscal 2024 under our LTI Plan that generally vest one third each year over 3 years, including the retention grants awarded in fiscal 2024 that generally vest after 3 years, described under “Long-Term Incentive Plan Overview—Fiscal 2024 LTI Target Opportunity and Retention Awards” under “Compensation Discussion and Analysis” above. For Mr. Connolly and Mr. Marberger, the number of RSUs awarded as retention grants was 60,632 and 30,316, respectively. |
GRANTS OF PLAN-BASED AWARDS—FISCAL 2024
| (4) The grant date fair value of Performance Shares granted under our LTI Plan for relevant measurement periods is based on the probable (target) outcome for the relevant performance goals (computed in accordance with FASB ASC Topic 718), and reflects all of the performance years under the awards. These amounts are included in the “Stock Awards” column of the “Summary Compensation Table—Fiscal 2024.” |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024 The following table lists all stock options, Performance Shares and RSUs outstanding as of May 26, 2024 for the named executive officers.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| | | Option Awards | | | | Stock Awards | | | | | | | | | | | Number | Market | Equity Incentive | Equity Incentive | | | | | | | | of Shares | Value of | Plan Awards: | Plan Awards: | | | | Number of | Number of | | | or Units | Shares or | Number of | Market or Payout | | | | Securities | Securities | | | of Stock | Units of | Unearned | Value of Unearned | | | | Underlying | Underlying | Option | | that Have | Stock that | Shares, Units or | Shares, Units or | | | | Unexercised | Unexercised | Exercise | Option | Not | Have Not | Other Rights that | Other Rights that | | | | Options (#) | Options (#) | Price | Expiration | Vested(2) | Vested(3) | Have Not Vested(4) | Have Not Vested(3)(4) | | Name | Grant Date | Exercisable(1) | Unexercisable | ($) | Date | (#) | ($) | (#) | ($) | | Mr. Connolly | 4/1/2015 | 806,150 | — | 27.44 | 3/31/2025 | — | — | — | — | | | 8/28/2015 | 283,111 | — | 31.06 | 8/27/2025 | — | — | — | — | | | 7/11/2016 | 273,309 | — | 35.81 | 7/10/2026 | — | — | — | — | | | 7/22/2021 | — | — | — | — | 60,068 | 1,818,859 | — | — | | | 7/20/2022 | — | — | — | — | 182,691 | 5,531,884 | — | — | | | 7/19/2023 | — | — | — | — | 113,988 | 3,451,557 | — | — | | | 7/19/2023 | — | — | — | — | 62,875(5)(6) | 1,903,861 | — | — | | | 7/20/2022 | — | — | — | — | — | — | 589,751 | 17,857,663 | | | 7/19/2023 | — | — | — | — | — | — | 354,616 | 10,737,759 | | | 7/19/2023 | — | — | — | — | — | — | 502,999 | 15,230,822 | | Mr. Marberger | 9/1/2016 | 69,248 | — | 34.26 | 8/31/2026 | — | — | — | — | | | 7/22/2021 | — | — | — | — | 14,266 | 431,974 | — | — | | | 7/20/2022 | — | — | — | — | 46,251 | 1,400,480 | — | — | | | 7/19/2023 | — | — | — | — | 30,316 | 917,969 | — | — | | | 7/19/2023 | — | — | — | — | 30,316(5) | 917,969 | — | — | | | 7/20/2022 | — | — | — | — | — | — | 149,304 | 4,520,914 | | | 7/19/2023 | — | — | — | — | — | — | 94,313 | 2,855,791 | | | 7/19/2023 | — | — | — | — | — | — | 94,313 | 2,855,791 | | Mr. McGough | 8/28/2015 | 72,480 | — | 31.06 | 8/27/2025 | — | — | — | — | | | 7/11/2016 | 69,965 | — | 35.81 | 7/10/2026 | — | — | — | — | | | 7/22/2021 | — | — | — | — | 14,266 | 431,974 | — | — | | | 7/20/2022 | — | — | — | — | 46,251 | 1,400,480 | — | — | | | 7/19/2023 | — | — | — | — | 30,316 | 917,969 | — | — | | | 7/20/2022 | — | — | — | — | — | — | 149,304 | 4,520,914 | | | 7/19/2023 | — | — | — | — | — | — | 94,313 | 2,855,791 | | Mr. Serrao | 8/28/2015 | 54,358 | — | 31.06 | 8/27/2025 | — | — | — | — | | | 7/11/2016 | 52,472 | — | 35.81 | 7/10/2026 | — | — | — | — | | | 7/22/2021 | — | — | — | — | 11,413 | 345,586 | — | — | | | 7/20/2022 | — | — | — | — | 35,844 | 1,085,356 | — | — | | | 7/19/2023 | — | — | — | — | 19,402 | 587,493 | — | — | | | 7/20/2022 | — | — | — | — | — | — | 115,712 | 3,503,748 | | | 7/19/2023 | — | — | — | — | — | — | 60,359 | 1,827,684 | | Mr. Eboli | 7/22/2021 | — | — | — | — | 7,133 | 215,987 | — | — | | | 7/20/2022 | — | — | — | — | 13,875 | 420,135 | — | — | | | 7/19/2023 | — | — | — | — | 19,402 | 587,493 | — | — | | | 7/20/2022 | — | — | — | — | — | — | 44,792 | 1,356,287 | | | 7/19/2023 | — | — | — | — | — | — | 60,359 | 1,827,684 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (1) Please note that all share amounts and (if applicable) exercise prices included in the tables in this “Executive Compensation” section for awards granted prior to November 9, 2016 reflect the equitable adjustments to the Company’s outstanding equity awards that were made in connection with the spin-off of Lamb Weston. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (2) Service-based RSUs generally vest in full on the third anniversary of the grant date for grants prior to July 19, 2023 and generally vest a third each year on the anniversary of the grant date for three years for grants made on or after July 19, 2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (3) The market value of unvested or unearned RSUs and Performance Shares is calculated using $30.28 per share, which was the closing market price of our common stock on the NYSE on the last trading day of fiscal 2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (4) Reflects, on separate lines, as of May 26, 2024, the maximum number of shares that could be earned under the fiscal 2023 to 2025 and the fiscal 2024 to 2026 Performance Shares, plus accrued dividend equivalents. Generally, the Performance Shares are only earned to the extent we achieve the performance targets with respect to such awards. Fiscal 2023 to 2025 Performance Shares, plus dividend equivalents, will be distributed, if earned, following fiscal 2025, and fiscal 2024 to 2026 Performance Shares, plus dividend equivalents, will be distributed, if earned, following fiscal 2026. The fiscal 2022 to 2024 Performance Shares are included in table entitled "Option Exercises and Stock Vested - Fiscal 2024" below. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (5) Service-based RSUs awarded for retention purposes vest in full on the third anniversary of the grant date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END—FISCAL 2024
| (6) Reflects accrued dividend equivalents. |
OPTION EXERCISES AND STOCK VESTED—FISCAL 2024
OPTION EXERCISES AND STOCK VESTED—FISCAL 2024 The following table summarizes the RSUs vested, the Performance Shares earned and the option awards exercised during fiscal 2024 for each of the named executive officers.
OPTION EXERCISES AND STOCK VESTED—FISCAL 2024
| | Option Awards | | Stock Awards | | | | Number of Shares | Value Realized on | Number of Shares | Value Realized on | | | Acquired on Exercise(1) | Exercise(1) | Acquired on Vesting(2) | Vesting | | Name | (#) | ($) | (#) | ($) | | Mr. Connolly | — | — | 283,700 | 8,654,283 | | Mr. Marberger | — | — | 65,722 | 2,000,240 | | Mr. McGough | 90,951 | 916,232 | 65,722 | 2,000,240 | | Mr. Serrao | — | — | 54,781 | 1,673,542 | | Mr. Eboli | — | — | 32,461 | 984,504 |
OPTION EXERCISES AND STOCK VESTED—FISCAL 2024
| (1) Please note that all share amounts and (if applicable) exercise prices included in the tables in this “Executive Compensation” section for awards granted prior to November 9, 2016 reflect the equitable adjustments to the Company’s outstanding equity awards that were made in connection with the spin-off of Lamb Weston. |
OPTION EXERCISES AND STOCK VESTED—FISCAL 2024
| (2) Pursuant to the terms of the Performance Shares, dividend equivalents on earned shares, paid in additional shares of common stock, were also distributed to the named executive officers, specifically: 26,717 shares for Mr. Connolly; 6,345 shares for Messrs. Marberger, McGough; 5,076 shares for Mr. Serrao; and 3,173 shares for Mr. Eboli. |
PENSION BENEFITS—FISCAL 2024
PENSION BENEFITS—FISCAL 2024 Conagra Brands previously maintained a non-contributory defined benefit pension plan for eligible employees (the Qualified Pension). The Qualified Pension was closed to new participants who joined the Company on or after August 1, 2013. As a result, Messrs. Connolly, Marberger, Serrao, and Eboli are not eligible to participate. Of the named executive officers, only Mr. McGough currently participates in this plan. In the Qualified Pension, the pension benefit formula for the named executive officer participants is determined by adding two components:
PENSION BENEFITS—FISCAL 2024
| ● | A multiple—0.9%—of Average Monthly Earnings (up to the integration level) multiplied by years of credited service. |
PENSION BENEFITS—FISCAL 2024
| ● | A multiple—1.3%—of Average Monthly Earnings (over the integration level) multiplied by years of credited service. |
PENSION BENEFITS—FISCAL 2024
“Average Monthly Earnings” is the monthly average of the executive’s annual compensation from the Company, up to the IRS limit, for the highest five consecutive years of the final ten years of his service. Only salary and annual incentive payments (reported in the “Non-Equity Incentive Plan Compensation” column of the summary compensation table year to year) are considered for the named executive officers in computing Average Monthly Earnings. The integration level is calculated by the IRS by averaging the last 35 years of Social Security taxable wages, up to and including the year in which the executive’s employment ends. Messrs. Connolly, Marberger, Serrao, and Eboli are excluded from the table below because they are not eligible to participate in the Qualified Pension. Participants become vested in the pension benefit once they have 5 years of service with the Company; Mr. McGough is vested. Pension benefits become payable at age 65. There is no difference in the benefit formula upon an early retirement, and there is no payment election option that would impact the amount of annual benefits any of the named executive officers would receive. The Qualified Pension was frozen effective December 31, 2017. Credited service and Average Monthly Earnings were frozen as of such date.
PENSION BENEFITS—FISCAL 2024
| | | Number of Years Credited | Present Value of Accumulated | | | | Service(2) | Benefit(3) | | Name | Plan Name(1) | (#) | ($) | | Mr. McGough | Qualified Pension | 10.9 | 307,332 |
PENSION BENEFITS—FISCAL 2024
| (1) Qualified Pension refers to the Conagra Brands, Inc. Pension Plan. |
PENSION BENEFITS—FISCAL 2024
| (2) The number of years of credited service set forth above is calculated as of May 26, 2024, which is the pension plan measurement date used for financial statement reporting purposes. The number of years of credited service set forth above is less than the actual years of service of Mr. McGough due to the freezing of the Qualified Pension effective December 31, 2017. Actual years of service are as follows: 17.3 years for Mr. McGough. |
PENSION BENEFITS—FISCAL 2024
| (3) The valuation methodology and all material assumptions applied in quantifying the present value of the accumulated benefit are presented in Note 17 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2024. |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024 The table below shows the nonqualified deferred compensation activity for each named executive officer for fiscal 2024 under the Conagra Brands, Inc. Voluntary Deferred Compensation Plan, as amended and restated (Voluntary Deferred Comp Plan). Our Voluntary Deferred Comp Plan allows certain employees to defer receipt of between 6% to 50% of their salary, up to 90% of their annual incentive payment, or up to 90% of their salary plus annual incentive payment in excess of the IRS limit ($345,000 for calendar year 2024, and $330,000 for calendar year 2023). The investment alternatives for deferred amounts mirror those available under our Qualified 401(k) Plan. An election to participate in the plan must be timely filed with the Company in accordance with IRS requirements. Our Voluntary Deferred Comp Plan also provides nonqualified matching contribution benefits. The plan provides for Company matching contributions and Company non-elective contributions for eligible participants associated with amounts of eligible compensation above IRS limits. Mirroring the benefits provided under our Qualified 401(k) Plan, the matching contribution under our Voluntary Deferred Comp Plan also is a dollar-for-dollar match, limited to 6% of eligible compensation earned by the participant and paid by the Company in excess of the IRS limit. The non-elective contribution is equal to 3% of an eligible participant’s eligible compensation in excess of the IRS limit. Matching contributions and non-elective contributions are credited on or about December 31st of each year. The Voluntary Deferred Comp Plan also provides that, unless the Company determines otherwise with respect to a participant, the interest of each participant in his matching contributions and non-elective contributions will be immediately 100% vested. With respect to distributions from the Voluntary Deferred Comp Plan, in general, amounts will be distributed in cash in a lump sum in January following the individual’s separation from service. Participants may also elect to receive their balances at certain other times, including in the January of the calendar year specified by the participant or 18 months following the occurrence of a change of control. Elections regarding the time and form of payment are intended to comply with Section 409A of the Code, and certain payments to executives meeting the definition of a “specified employee” under Section 409A will be delayed for six months after the date of the separation from service. Executives may make hardship withdrawals from the Voluntary Deferred Comp Plan under certain circumstances, but no hardship withdrawals were requested by executives during fiscal 2024.
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| | | Executive | Registrant | Aggregate | Aggregate | Aggregate | | | | Contributions | Contributions | Earnings in | Withdrawals/ | Balance at | | | | in Last FY(2) | in Last FY(3) | Last FY(4) | Distributions | Last FYE(5) | | Name | Plan(1) | ($) | ($) | ($) | ($) | ($) | | Mr. Connolly | Voluntary Def Comp Plan | 259,103 | 306,418 | 332,801 | — | 5,056,105 | | Mr. Marberger | Voluntary Def Comp Plan | 90,270 | 118,141 | 58,769 | — | 2,100,057 | | Mr. McGough | Voluntary Def Comp Plan | 169,103 | 109,370 | 558,703 | — | 3,855,844 | | Mr. Serrao | Voluntary Def Comp Plan | 18,906 | 78,663 | 103,501 | — | 1,241,788 | | Mr. Eboli | Voluntary Def Comp Plan | 59,289 | 60,902 | 22,476 | — | 266,875 |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| (1) Voluntary Def Comp Plan refers to the Conagra Brands, Inc. Voluntary Deferred Compensation Plan, as amended. |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| (2) The amounts reported are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the “Summary Compensation Table—Fiscal 2024.” |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| (3) The amounts reported are included in the “All Other Compensation” column of the “Summary Compensation Table—Fiscal 2024.” These amounts, together with our match on executive contributions to the Qualified CRISP, are disclosed in the column labeled “Company Contribution to Defined Contribution Plans” in the table included as footnote 4 to the “Summary Compensation Table—Fiscal 2024.” |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| (4) Our Voluntary Deferred Compensation Plan does not offer above market earnings (as defined by SEC rules). As a result, none of these earnings or losses are reflected in the “Summary Compensation Table—Fiscal 2024.” |
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 2024
| (5) The following amounts from this column were reported in Summary Compensation Tables for prior fiscal years: Mr. Connolly, $3,626,806; Mr. Marberger, $1,684,272; Mr. McGough, $2,418,101; Mr. Serrao, $787,721; and $119,813, Mr. Eboli. These amounts reflect contributions only and do not include accumulated earnings or losses. The amount in this column includes the amount reflected in the “Executive Contributions in Last FY” and “Registrant Contributions in Last FY” columns. |
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control Our named executive officers’ employment may be terminated under several possible scenarios. In some of these scenarios, our plans, agreements, and arrangements would provide severance benefits in varying amounts to the executive. Further, our plans, agreements, and arrangements would provide for certain benefits (or for the acceleration of certain benefits) upon a change of control. Severance and other benefits that are payable upon a termination of employment or upon a change of control are described below. In the event of an actual triggering event under any of the plans, agreements, and arrangements discussed in this section, all benefits would be paid to the executive in accordance with, and at times permitted by, Section 409A of the Code.
CEO Pay Ratio
CEO Pay Ratio For fiscal 2024, the ratio of the annual total compensation of our CEO, Mr. Connolly (CEO Compensation), to the median of the annual total compensation of all our consolidated subsidiary employees other than Mr. Connolly (Median Annual Compensation), was 359 to 1. For purposes of this pay ratio disclosure, CEO Compensation was determined to be $24,030,226 which represents the total compensation reported for Mr. Connolly under the “Summary Compensation Table—Fiscal 2024.” Median Annual Compensation for the identified median employee was determined to be $66,966.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive “compensation actually paid” and certain financial performance of the Company. The Committee does not utilize compensation actually paid as the basis for making compensation decisions. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, see “Compensation Discussion and Analysis.”
Pay Versus Performance
| | | | Average | Average | Value of Initial Fixed $100 | | | | | | Summary | | Summary | Compensation | Investment Based On: | | | Company | | | Compensation | Compensation | Compensation | Actually Paid | Total Shareholder | TSR (S&P 500 | Net | Selected | | | Table Total for | Actually Paid | Table Total for | to Non-PEO | Return (TSR), | Packaged | Income | Measure: | | Fiscal | PEO(1) | to PEO(2) | Non-PEO NEOs(3) | NEOs(4) | Conagra | Foods Index) | ($in | Adj. EPS(5) | | Year | ($) | ($) | ($) | ($) | ($) | ($) | millions) | ($) | | 2024 | 24,030,226 | 7,319,776 | 4,304,712 | 1,400,454 | 100.95 | 123.88 | 347.7 | 2.67 | | 2023 | 18,720,100 | 31,185,315 | 4,441,115 | 6,840,948 | 110.86 | 137.44 | 683.2 | 2.77 | | 2022 | 11,947,054 | (896,941) | 3,114,508 | 635,033 | 101.71 | 124.42 | 888.2 | 2.41 | | 2021 | 11,770,023 | 24,526,984 | 3,160,545 | 5,554,173 | 112.71 | 118.79 | 1,300.9 | 2.66 |
Pay Versus Performance
The PEO and NEOs included in the above compensation columns reflect the following:
Pay Versus Performance
| Fiscal Year | PEO | NEOs | | 2024 | Sean Connolly | Dave Marberger, Tom McGough, Darren Serrao, Alexandre Eboli | | 2023 | Sean Connolly | Dave Marberger, Tom McGough, Darren Serrao, Charisse Brock | | 2022 | Sean Connolly | Dave Marberger, Tom McGough, Darren Serrao, Alexandre Eboli | | 2021 | Sean Connolly | Dave Marberger, Tom McGough, Darren Serrao, Colleen Batcheler |
Pay Versus Performance
| (1) The amounts reported in this column reflect the total compensation reported for Conagra Brands’ principal executive officer (PEO), Mr. Connolly, for each corresponding year in the “Total” column of the Summary Compensation Table (Total compensation). Refer to the “Compensation of Executive Officers—Summary Compensation Table.” |
Pay Versus Performance
| (2) The amounts reported in this column represent the compensation actually paid (or CAP) to Mr. Connolly in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned or paid to Mr. Connolly during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments shown in the first table following footnote 4 below were made to Mr. Connolly’s Total compensation for each year to determine the CAP. |
Pay Versus Performance
| (3) The amounts reported in this column reflect the average Total compensation reported for the non-PEO NEOs for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to the “Compensation of Executive Officers—Summary Compensation Table.” |
Pay Versus Performance
| (4) The amounts reported in this column represent the average of CAP for the non-PEO NEOs in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned or paid to such non-PEO NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments shown in the second table below were made to the average Total compensation for the non-PEO NEOs for each year to determine the CAP. |
Pay Versus Performance
Adjustments for PEO:
Pay Versus Performance
| | Summary | | | | | | Compensation Table | Value of Equity | Equity Award | Compensation | | Fiscal | Total(1) | Stock Awards(a) | Adjustments(b) | Actually Paid | | Year | ($) | ($) | ($) | ($) | | 2024 | 24,030,226 | (18,854,433) | 2,143,983 | 7,319,776 | | 2023 | 18,720,100 | (14,444,447) | 26,909,662 | 31,185,315 | | 2022 | 11,947,054 | (7,976,396) | (4,867,599) | (896,941) | | 2021 | 11,770,023 | (7,722,276) | 20,479,237 | 24,526,984 |
Pay Versus Performance
Average Adjustments for Non-PEO NEOs:
Pay Versus Performance
| | Summary | | | Change in Actuarial | Aggregate Service | | | | Compensation Table | Value of Equity | Equity Award | Present Value | Cost for Pension | Compensation | | | Total(1) | Stock Awards(a) | Adjustments(b) | of Pension Benefits | Benefits | Actually Paid | | Fiscal Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 4,304,712 | (2,545,927) | (355,104) | (3,227) | 0 | 1,400,454 | | 2023 | 4,441,115 | (2,994,018) | 5,393,851 | 0 | 0 | 6,840,948 | | 2022 | 3,114,508 | (1,641,750) | (837,725) | 0 | 0 | 635,033 | | 2021 | 3,160,545 | (1,594,274) | 3,987,902 | 0 | 0 | 5,554,173 |
Pay Versus Performance
| (a) The reported value of equity awards represents the grant date fair value of equity awards as reported in the Stock Awards column in the Summary Compensation Table for the applicable year. The Company has not granted option awards since 2016. |
Pay Versus Performance
| (b) The equity award adjustments for each applicable year include the addition (or subtraction) of the amount of change in fair value as of the end of the applicable year (from the end of the prior fiscal year) of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year. For awards granted in prior years that vest in the applicable year, the amount of change in fair value as of the vesting date (from the end of the prior fiscal year) is included. The dollar value of any dividends paid on stock awards in the applicable year of the vesting date that are not otherwise reflected in the fair value or included in any other component of total compensation for the applicable year is included. The RSU fair value was estimated by discounting the fair value of the RSUs based on the dividend yield. These adjustments are listed in the tables below. |
Pay Versus Performance
Equity Award Adjustments for PEO:
Pay Versus Performance
| | | | + Fair Value as | +/- Year Over Year | - Fair Value at the | + Value of Dividends | | | | | | of Vesting | Change in Fair | End of Prior | or Other Earnings | | | | + Year End | +/- Year Over | Date of | Value of Equity | Year of Equity | Paid on Stock or | | | | Fair Value of | Year Change | Equity | Awards | Awards that | Option Awards Not | | | | Equity | in Fair Value | Awards | Granted in | Failed to Meet | Otherwise | | | | Awards | of Outstanding | Granted and | Prior Years that | Vesting | Reflected in Fair | Total Equity | | | Granted in | and Unvested | Vested in | Vested in | Conditions in | Value or Total | Award | | Fiscal | the Year | Equity Awards | the Year | the Year | the Year | Compensation | Adjustments | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 14,078,130 | (12,174,855) | 0 | (608,262) | 0 | 848,970 | 2,143,983 | | 2023 | 17,612,830 | 9,236,755 | 0 | 60,077 | 0 | 0 | 26,909,662 | | 2022 | 7,782,827 | (12,567,296) | 0 | (887,971) | 0 | 804,841 | (4,867,599) | | 2021 | 10,009,874 | 8,842,267 | 0 | 727,186 | 0 | 899,910 | 20,479,237 |
Pay Versus Performance
Average Equity Award Adjustments for Non-PEO NEOs:
Pay Versus Performance
| | | | | +/- Year Over | | | | | | | | + Fair Value as | Year Change | - Fair Value at the | + Value of Dividends | | | | | | of Vesting | in Fair | End of Prior | or Other Earnings | | | | | +/- Year Over | Date of | Value of Equity | Year of Equity | Paid on Stock or | | | | + Year End | Year Change | Equity | Awards | Awards that | Option Awards | | | | Fair Value of | in Fair Value | Awards | Granted in | Failed to Meet | Not Otherwise | | | | Equity Awards | of Outstanding | Granted and | Prior Years that | Vesting | Reflected in Fair | Total Equity | | | Granted in | and Unvested | Vested in | Vested in | Conditions in | Value or Total | Award | | Fiscal | the Year | Equity Awards | the Year | the Year | the Year | Compensation | Adjustments | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 1,972,698 | (2,378,717) | 0 | (124,344) | 0 | 175,259 | (355,104) | | 2023 | 3,650,755 | 1,731,832 | 0 | 11,264 | 0 | 0 | 5,393,851 | | 2022 | 1,607,110 | (2,428,521) | 0 | (174,172) | 0 | 157,858 | (837,725) | | 2021 | 2,066,549 | 1,556,684 | 0 | 165,328 | 0 | 199,341 | 3,987,902 |
Pay Versus Performance
| (5) Adjusted EPS, our Company-Selected Measure, is calculated as described in “Additional Information on Compensation Practices and Policies — Use of Adjustments in Incentive Programs” in the “Compensation Discussion and Analysis” above. |
ANALYSIS OF THE INFORMATION PRESENTED IN THE PAY VERSUS PERFORMANCE TABLE
ANALYSIS OF THE INFORMATION PRESENTED IN THE PAY VERSUS PERFORMANCE TABLE As described in more detail in the section “Compensation Discussion and Analysis” above, our executive compensation program reflects our pay-for-performance philosophy. While we utilize several performance measures to align executive compensation with our performance, not all performance measures are presented in the Pay Versus Performance table. Moreover, we generally seek to incentivize long-term performance, and therefore we do not specifically align our performance measures with CAP (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, we are providing the following charts to reflect the relationships between information presented in the Pay Versus Performance table. The following graph reflects the relationship between the compensation actually paid for our PEO and for the average of our other NEOs as calculated in accordance with Item 402(v) of Regulation S-K, Conagra’s total shareholder return, and the total shareholder return of the S&P 500 Packaged Foods Index over the applicable measurement period.
COMPENSATION ACTUALLY PAID VS TSR
COMPENSATION ACTUALLY PAID VS TSR The following graph reflects the relationship between the compensation actually paid for our PEO and for the average of our other NEOs as calculated in accordance with Item 402(v) of Regulation S-K and Conagra’s net income calculated in accordance with GAAP over the applicable measurement period.
COMPENSATION ACTUALLY PAID VS NET INCOME
COMPENSATION ACTUALLY PAID VS NET INCOME The following graph reflects the relationship between the compensation actually paid for our PEO and for the average of our other NEOs as calculated in accordance with Item 402(v) of Regulation S-K and Conagra’s adjusted EPS, as calculated for compensation purposes, over the applicable measurement period.
COMPENSATION ACTUALLY PAID VS ADJ. EPS(1)
COMPENSATION ACTUALLY PAID VS ADJ. EPS(1) In addition, on a voluntary basis, we are providing the following additional description of the relationship between compensation actually paid and another financial performance measure used in our executive compensation program, Adjusted Operating profit, as calculated for compensation purposes:
COMPENSATION ACTUALLY PAID VS ADJ. OPERATING PROFIT(1)
COMPENSATION ACTUALLY PAID VS ADJ. OPERATING PROFIT(1)
COMPENSATION ACTUALLY PAID VS ADJ. OPERATING PROFIT(1)
| (1) Adjusted EPS and Adjusted Operating Profit are calculated as described in “Additional Information on Compensation Practices and Policies—Use of Adjustments in Incentive Programs” in the “Compensation Discussion and Analysis” above. |