DEF 14A of Phibro Animal Health Corp
Filed Sep 20, 2024 · FY20240001558370-24-012924
PROPOSAL ONE — ELECTION OF CLASS II DIRECTORS
PROPOSAL ONE — ELECTION OF CLASS II DIRECTORS
General
General Our Board of Directors may establish the authorized number of directors from time to time by resolution. Our Board of Directors is currently comprised of eight members who are divided into three classes with staggered three-year terms. A director serves in office until his or her respective successor is duly elected and qualified or until his or her earlier death or resignation. Our amended and restated certificate of incorporation authorizes our Board of Directors to fill vacancies on our Board of Directors until the next annual meeting of stockholders at which the directors of the class in which such vacancy occurred will be elected. Any additional directorships resulting from an increase in the authorized number of directors would be distributed among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized number of directors. Your proxy cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Nominees
Nominees Two Class II Directors have been nominated for election for a three-year term expiring at our 2027 annual meeting. Our Board of Directors has approved and nominated Mary Lou Malanoski and Carol A. Wrenn for election as the two Class II Directors. The term of office of each person elected as a Class II Director will continue until such director’s term expires in 2027, or until such director’s successor has been duly elected and qualified.
Information Regarding the Nominees and other Directors
Information Regarding the Nominees and other Directors
Nominees for Class II Directors for a Term Expiring in 2027
Nominees for Class II Directors for a Term Expiring in 2027
Nominees for Class II Directors for a Term Expiring in 2027
| Name | Age | Principal Occupation and Business Experience | | Mary Lou Malanoski | 67 | Ms. Malanoski has been a director since May 2004. Ms. Malanoski is the Chief Financial Officer of S2K Partners Co. LLC and was the Chief Financial Officer of its predecessor entities, S2K Financial Holdings LLC and S2K Partners Holdings LLC, beginning in April 2016. | | | | Ms. Malanoski serves on the board of directors, is a member of the audit committee and is the Chairperson of the nominating and corporate governance committee of Getty Realty Corp., a real estate investment trust specializing in convenience stores, gasoline stations and related properties. In addition to her understanding of our business from her service on our Board of Directors, Ms. Malanoski brings to our Board substantial management, finance and investment banking experience. | | | | Previously, Ms. Malanoski was an independent financial consultant from April 2015 until March 2016 and served as the acting Chief Financial Officer of Nina McLemore, LLC from June 2015 until December 2015. Ms. Malanoski served as Vice Chair and Chief Operating Officer at Morgan Joseph TriArtisan Group, Inc., an investment bank focused on mid-market companies, from March 2012 to March 2015. She joined Morgan Joseph TriArtisan Group, Inc. in July 2001 as a Managing Director and Chief Financial Officer, became Co-Head of Investment Banking in 2008, and served as Head of Investment Banking from March 2009 through March 2012. Ms. Malanoski also served on the board of directors of Morgan Joseph TriArtisan Group, Inc. from 2008 to 2021. From 1994 until 2001, Ms. Malanoski served as Managing Director and Chief Financial Officer of New Street Advisors LP, a private equity firm that she co-founded. Prior to 1994, Ms. Malanoski was a Managing Director at New Street Capital, the successor to the reorganized Drexel Burnham Lambert, where she began her career in the Corporate Finance Department. |
Nominees for Class II Directors for a Term Expiring in 2027
| Carol A. Wrenn | 63 | Ms. Wrenn has been a director since July 2010. Ms. Wrenn also serves as a member of the Audit Committee and the Compensation Committee. She is currently the sole owner of Aurora Borealis LLC, which operates online retail businesses. She was the founder and owner of Whitewater Advisors LLC, which provided consulting services to small businesses from 2017 through 2020. She was also the founder and owner of Sky River Helicopters, LLC, a company that provided helicopter charters, tours, commercial services, and lessons, from January 2010 until September 2015. She previously served as an Executive Vice President and the President of the Animal Health Division at Alpharma Inc., a human and animal pharmaceutical company, from November 2001 to June 2009. From April 2007 to April 2009, Ms. Wrenn also held the position of Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. | | | | From January 2002 to June 2009, she was an active member of the board of directors of the International Federation of Animal Health. Prior to joining Alpharma, Ms. Wrenn held various executive positions at Honeywell International Inc. (formerly AlliedSignal Inc.) from 1984 to 2001. She served as Business Director of Honeywell’s Refrigerants, Fluorine Products Division from 2000 to 2001 and was the Commercial Director and Managing Director of Honeywell’s European Fluorochemical operations based in Haasrode, Belgium from 1997 to 2000. Ms. Wrenn also held a number of positions in sales, marketing, business development and finance during her tenure with AlliedSignal. Ms. Wrenn served as a director of Heska Corporation from January 2013 until May 2019. She holds a Bachelor’s Degree from Union College, an MBA from Lehigh University, and a DBA from California Southern University. Ms. Wrenn is qualified to serve on our Board of Directors due to her relevant industry and business experience. |
Incumbent Class III Directors, Whose Terms Expire in 2025
Incumbent Class III Directors, Whose Terms Expire in 2025
Incumbent Class III Directors, Whose Terms Expire in 2025
| Name | Age | Principal Occupation and Business Experience | | Jack C. Bendheim | 77 | Mr. Bendheim is Chairman of our Board of Directors and serves as our President and Chief Executive Officer. Mr. Bendheim has served as our President since 1988 and he was also appointed Chief Executive Officer in March 2014. He has been a director since 1984. Mr. Bendheim joined us in 1969 and served as Chief Executive Officer from 1998 to 2002, as Chief Operating Officer from 1988 to 1998, as Executive Vice President and Treasurer from 1983 to 1988 and as Vice President and Treasurer from 1975 to 1983. Until 2017, Mr. Bendheim served on the Board of Directors of Empire Resources, Inc. Mr. Bendheim is also a past Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. Mr. Bendheim, together with certain other family members, is a manager of BFI Co., LLC (“BFI”), an investment vehicle of the Bendheim family, with respect to the economic rights pertaining to shares of our stock owned by BFI. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI. Mr. Bendheim is the father of Daniel M. Bendheim and Jonathan Bendheim. Mr. Bendheim is qualified to serve on our Board of Directors due to his many years of experience in the animal health industry and with our Company and his control over a majority of the voting rights in our common stock. | | Alejandro Bernal | 51 | Mr. Bernal has been a director since February 2023. Mr. Bernal also serves as a member of the Compensation Committee. Since July 2024, Mr. Bernal has also served as the Chief Executive Officer of Wedgewood Pharmacy, the largest US veterinary compounding pharmacy and provider of online pharmacy services based in Swedesboro, NJ. From January 2023 to April 2024, Mr. Bernal was the Chief Executive Officer of PetDx® – The Liquid Biopsy Company for Pets™, a company based in San Diego, CA, that focused on early detection of cancer using Next Generation Sequencing (NGS) technology. Prior to joining PetDx, Mr. Bernal was the President for Mars Veterinary Health International and Global Diagnostics, a global leader in pet food and veterinary health services, from March 2018 to December 2022. While at Mars, he was responsible for establishing and operating a network of over 600 veterinary hospitals outside North America and for Antech, a veterinary diagnostics company with over 70 reference labs in the U.S. Prior to Mars, Mr. Bernal worked 17 years for Zoetis Inc. (formerly Pfizer Animal Health, “Zoetis”). He was a member of the Executive Team for 10 years as Area President for Latin America, and then for Europe, Africa and Middle East, and Corporate Development. Mr. Bernal holds a Doctorate in veterinary medicine from Universidad de Caldas (Colombia), a Master’s Degree in Physiology from Texas A&M University (USA), and an MBA from Universidad de los Andes (Colombia) and Manchester Business School (UK). Mr. Bernal is qualified to serve on our Board of Directors due to his extensive management and leadership experience in all facets of the animal health industry, including in corporate strategy and business development. |
Incumbent Class III Directors, Whose Terms Expire in 2025
| E. Thomas Corcoran | 77 | Mr. Corcoran has been a director since May 2008. Mr. Corcoran also serves as Chair of the Audit Committee. Mr. Corcoran joined Fort Dodge Animal Health, a division of Wyeth, Inc., as its President in 1985. Wyeth was a research-based corporation with businesses focused on human health and animal health. Mr. Corcoran served on the Management, the Operations, the Legal, and the Human Resources and Benefits committees of Wyeth until his retirement in March 2008. From 2008 until 2010, Mr. Corcoran was a member of the Board of Directors of AHI, Inc., a veterinary distribution company. From 2010 until 2016, Mr. Corcoran was a director of Putney, Inc., a pet pharmaceutical company. Mr. Corcoran also served as the Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. Since 2009, Mr. Corcoran has served on the Board of Trustees of the University of South Alabama, where he is Chairman of the Finance and Budget committee. | | | | Mr. Corcoran is a recipient of the Animal Pharm Lifetime Achievement Award, the Banfield Industry Leadership Award, the Lifetime Achievement Award from the American Veterinary Distributors Association and the Industry Leadership Award from the Kansas City Animal Health Corridor. Mr. Corcoran is a recipient of the Distinguished Alumni Award from the University of South Alabama. Mr. Corcoran is qualified to serve on our Board of Directors due to his extensive experience and executive leadership in the animal health industry. |
Incumbent Class I Directors, Whose Terms Expire in 2026
Incumbent Class I Directors, Whose Terms Expire in 2026
Incumbent Class I Directors, Whose Terms Expire in 2026
| Name | Age | Principal Occupation and Business Experience | | Daniel M. Bendheim | 52 | Mr. Bendheim serves as a member of our Board of Directors and is our Executive Vice President, Corporate Strategy. Mr. Bendheim joined us in 1997. He was appointed Vice President of Business Development in 2001 and was later appointed President, Performance Products in 2004, and then Executive Vice President, Corporate Strategy in March 2014. He was elected as a director of Phibro in November 2013. Prior to joining us, Mr. Bendheim worked as an analyst at South Coast Capital, a boutique investment bank. Mr. Bendheim obtained a B.A. degree in political science with honors from Yeshiva University in 1993 and a J.D. degree with honors from Harvard Law School in 1996. Mr. Bendheim is a son of Jack C. Bendheim and, together with certain other family members, is a manager of BFI with respect to certain economic rights pertaining to shares of our stock owned by BFI. Mr. Bendheim is qualified to serve on our Board of Directors due to his extensive management experience in all facets of the animal health, mineral nutrition and performance products businesses during his tenure with the Company and his management role within BFI. | | Jonathan Bendheim | 48 | Mr. Bendheim serves as a member of our Board of Directors and was recently appointed to the role of Senior Vice President, Global Technology and Talent in September 2024. Previously, Mr. Bendheim served as President of our MACIE Region (which consists of the Middle East, Africa, the Commonwealth of Independent States, India and Europe), and was the general manager of our operating plants in Israel and Ireland. Mr. Bendheim will continue to oversee his commercial responsibilities as head of the MACIE region until a successor is appointed. Mr. Bendheim will retain operational responsibility for MACIE manufacturing and R&D operations, and Phibro’s global aquaculture and pHi-Tech businesses. |
Incumbent Class I Directors, Whose Terms Expire in 2026
| | | Mr. Bendheim joined Phibro in 2001 as a Manager for logistics and supply chain. In 2005, Mr. Bendheim was appointed Vice President of Sales and Business Development for our Israel operations. In 2008, he led the acquisition of Abic Biological Laboratories from Teva, and in 2009, he was appointed the Managing Director of our operations in Israel. In 2011, his responsibilities were expanded to include oversight of all sales activities in the MACIE Region. Mr. Bendheim led the establishment of Phibro’s global aquaculture business in 2014 and founded Phibro’s pHi-Tech business unit in 2018. | | | | Mr. Bendheim holds a B.A. degree in political science from Yeshiva University and an MBA from Columbia Business School. Mr. Bendheim is a son of Jack C. Bendheim. Mr. Bendheim is qualified to serve on our Board of Directors due to his extensive management experience in all facets of Phibro’s animal health and nutrition businesses during his tenure with the Company. | | Sam Gejdenson | 76 | Mr. Gejdenson has been a director of Phibro since January 2004 and is a member of our Audit Committee and our Compensation Committee. Mr. Gejdenson is the Chair of our Compensation Committee. Since 2001, Mr. Gejdenson has been involved in international trade through his own company, Sam Gejdenson International, where he has worked with various multi-national clients on projects in Europe, Asia and Africa. Mr. Gejdenson presently serves on the board of the National Democratic Institute and was formerly a Commissioner on the U.S. Commission for International Religious Freedom. From 1981 to 2001, Mr. Gejdenson served eastern Connecticut as a Congressman in the U.S. House of Representatives where he was the senior Democrat on the House International Relations Committee. In 1974, he was elected to the Connecticut House of Representatives, serving two terms. He received an A.S. degree from Mitchell College in New London, Connecticut in 1968 and a B.A. from the University of Connecticut in Storrs, Connecticut in 1970. Mr. Gejdenson is qualified to serve on our Board of Directors due to his understanding of our business from his service on our Board and his extensive knowledge of global business and governments around the world. |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees All members of our Board of Directors are responsible for screening and recommending nominees for election as directors, including nominees recommended by stockholders of Phibro. When making recommendations regarding nominees to the Board, the Board of Directors will consider advice and recommendations from stockholders, management and others as they deem appropriate, and will also take into account the performance of incumbent directors in determining whether to recommend them to stand for re-election at the annual meeting of stockholders. Phibro seeks Board members who have skills, experience and backgrounds that are relevant to the key strategic and operational issues that they will oversee and approve. Director candidates are typically selected based on their integrity and character, sound, independent judgment, track record of accomplishment in leadership roles, as well as their professional and corporate expertise, skills and experience. Some of the factors that the Board of Directors will take into consideration when evaluating director candidates include: (i) the independence, judgment, strength of character, reputation in the business community, ethics and integrity of the individual; (ii) the business or other relevant experience, skills and knowledge that the individual may have that will enable him or her to provide effective oversight of Phibro’s business; (iii) the fit of the individual’s skill set and personality with those of the other Board members so as to build a Board that works together effectively and constructively; and (iv) the individual’s ability to devote sufficient time to carry out his or her responsibilities as a director in light of his or her occupation and the number of boards of directors of other public companies on which he or she serves. While the Board of Directors does not have a formal diversity policy related to the evaluation of nominees to the Board, diversity is a factor considered when identifying prospective nominees.
2024 Director Compensation
2024 Director Compensation The following table sets forth information regarding the amounts earned by or paid to our non-employee directors for their service as a director for the fiscal year ended June 30, 2024:
2024 Director Compensation
| | Fees earned | | | | or paid | | | Name | in cash ($) | Total ($) | | Alejandro Bernal | 50,000 | 50,000 | | E. Thomas Corcoran | 50,000 | 50,000 | | Sam Gejdenson | 60,000 | 60,000 | | Mary Lou Malanoski | 40,000 | 40,000 | | Carol A. Wrenn | 60,000 | 60,000 |
2024 Director Compensation
For the year ended June 30, 2024, Alejandro Bernal, E. Thomas Corcoran, Sam Gejdenson, Mary Lou Malanoski and Carol A. Wrenn received compensation for their services on our Board of Directors. The non-employee members of the Board of Directors receive $40,000 annual cash compensation for their service as a director. The non-employee members of the Audit and Compensation Committees receive supplemental annual cash compensation of $10,000 for each committee on which they serve. We pay our directors on a quarterly basis. Directors have been and will continue to be reimbursed for travel, food, lodging and other expenses directly related to their activities as directors. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as the protection provided by director and officer liability insurance provided by us. Other than as set forth above, no other compensation was paid to our non-employee directors for the year ended June 30, 2024. Messrs. Jack C. Bendheim, Daniel M. Bendheim and Jonathan Bendheim serve on our Board of Directors and as President and Chief Executive Officer, Executive Vice President, Corporate Strategy, and Senior Vice President, Global Technology and Talent, respectively. Mr. Jonathan Bendheim served as President, MACIE Region & General Manager, Israel Operations until September 2024. None of Jack C. Bendheim, Daniel M. Bendheim or Jonathan Bendheim received any additional compensation for their service on our Board of Directors. As named executive officers, both Jack C. Bendheim’s and Daniel M. Bendheim’s compensation is fully reflected in the 2024 Summary Compensation Table below.
Key Fiscal Year 2024 Compensation Actions
| | Link to Business and | Fiscal year ended June 30, 2024 | | Compensation Component | Talent Strategies | Compensation Actions | | Base Salary (Page 24) | ● Competitive base salaries help attract and retain executive talent. | ● Messrs. Jack C. Bendheim, Miller, Aukerman and Daniel Bendheim each received a merit-based salary increase of approximately 4.0% during our fiscal year ended June 30, 2024. Mr. David joined us in February 2024 and thus, did not receive a base salary increase. Given the interim nature of Mr. Johnson’s position, he did not receive any increase in base salary during his tenure serving as Interim Chief Financial Officer. | | Management Incentive Plan (Page 24) | ● Variable incentive compensation opportunities focuses executives on achieving financial results that are key indicators of ongoing operational performance that are expected to drive stockholder value creation. | ● An annual cash incentive award based on pre-determined financial performance criteria was earned by each of the NEOs (other than Mr. David and Mr. Finio) for the fiscal year ended June 30, 2024, in amounts ranging from 83.0% to 83.5% of targets (and Mr. Johnson’s was pro-rated for his period of service as Interim Chief Financial Officer). Each NEO (except Mr. David and Mr. Finio) also received a discretionary incentive award for the fiscal year ended June 30, 2024. | | Equity Incentive Plan (Page 27) | ● Equity incentive awards are used in a limited but strategic manner to help attract and retain executive talent. | ● In the fiscal year ended June 30, 2024, each of Messrs. David and Miller received a grant of 300,000 RSUs pursuant to the Company’s Equity Incentive Plan (as defined below) and their respective RSU award agreements. |
Oversight Responsibilities for Executive Compensation
| Compensation Committee | ● Establishes executive compensation philosophy ● Approves incentive compensation programs and performance goals for the annual management incentive plan (“MIP”) ● Approves all compensation actions for the NEOs, including any equity and non-equity incentive awards ● Committee members approve all compensation actions for the CEO outside of the CEO’s presence | | CEO and Management | ● The CEO, in consultation with certain members of management, develops preliminary recommendations regarding compensation matters, other than for the CEO, and provides these recommendations to the Compensation Committee, which makes the final decisions ● Administers compensation programs once Compensation Committee decisions are finalized ● CEO is not involved in any decision as to his own compensation |
Use of Market Data
Use of Market Data To obtain a broad view of competitive practices among industry peers and competitors for executive talent, management presents to the Compensation Committee data derived from the following national compensation surveys: Willis Towers Watson Compensation Survey, Mercer Life Sciences Survey and Mercer Executive Compensation Survey. The Compensation Committee does not review the specific companies included in these surveys and the data presented to the Compensation Committee is general and not specific to any particular subset of companies. The survey data is used as a reference point to assess the competitiveness of base salary, incentive targets, and total direct compensation awarded to the NEOs and as information on overall market practices. The Company’s philosophy is to provide base salary and variable cash compensation that is competitive with the median of the survey data, with appropriate adjustments above or below the median based on factors such as experience, time in role, individual contribution and accomplishments and market conditions.
Management Incentive Plan (MIP)
Management Incentive Plan (MIP) Our annual MIP is a cash-based program that rewards employees for achieving critical business and financial goals that are key indicators of ongoing operational performance that will drive stockholder value creation. Goals are established at the beginning of each fiscal year and are reviewed and approved by the Compensation Committee. Where minimum threshold performance targets are satisfied, annual incentive payments can range from 50% to 150% of the target award opportunity, based on performance relative to goals as determined by the Compensation Committee. The Compensation Committee reviews our target annual bonus opportunities each year to ensure they are competitive. The target annual incentive opportunity as a percent of annual base salary for each of our NEOs in our fiscal year ended June 30, 2024, was as follows:
Management Incentive Plan (MIP)
| | Fiscal year ended | | | | June 30, 2024 | | | | Target Annual | Fiscal year ended | | | Incentive as | June 30, 2024 | | | Percent of | Target Annual | | | Base Salary | Incentive | | | (%) | ($) | | Jack C. Bendheim | 50% | $1,180,000 | | Glenn David(1) | —% | $— | | Richard Johnson(2) | 50% | $104,167 | | Damian Finio(3) | 50% | $250,053 | | Larry L. Miller | 50% | $343,406 | | Rob Aukerman | 40% | $201,688 | | Daniel M. Bendheim | 50% | $238,939 |
Management Incentive Plan (MIP)
| (1) Pursuant to the terms of his employment agreement, Mr. David was not eligible to receive a cash incentive award under the MIP Plan for fiscal year ended June 30, 2024. |
Management Incentive Plan (MIP)
| (2) Mr. Johnson’s target annual incentive opportunity amount is pro-rated based on the time he served in the role of Interim Chief Financial Officer. |
Management Incentive Plan (MIP)
| (3) Mr. Finio resigned from the position of Chief Financial Officer, effective September 29, 2023, and did not receive any cash incentive award for fiscal year ended June 30, 2024. |
Management Incentive Plan (MIP)
In conjunction with management, the Compensation Committee undertakes a review and analysis to establish annual performance goals under the MIP. The performance levels are intended to be aggressive but realistic, such that achieving threshold levels would represent minimum acceptable performance and achieving maximum levels would represent outstanding performance. The target performance goals align with our annual Company performance goals and may be modified by Compensation Committee assessment of individual performance. For our fiscal year ended June 30, 2024, the following were the goals and payout levels under the MIP applicable to Messrs. Jack C. Bendheim, Johnson, Finio, Miller and Daniel M. Bendheim:
Management Incentive Plan (MIP)
| | | | Payout Range | | Metric | Weighting | Rationale for Metric | (% of Target) | | Sales | 15% | Sales is reflective of top line performance and is a key metric for our investors. | 50% – 150% | | Adjusted EBITDA | 75% | Earnings before Interest, Taxes, Depreciation and Amortization, adjusted for certain items including restructuring and acquisition related items, stock-based compensation costs and other unusual or non-operational items (Adjusted EBITDA) is reflective of our operating performance and is a key metric for our investors. | 50% – 150% | | Free Cash Flow(1) | 10% | Free cash flow, as used in determining payout levels under MIP, is associated with days of inventory and accounts receivable and is reflective of our ability to manage cash flow with a focus on streamlining working capital. | 50% – 150% |
Management Incentive Plan (MIP)
| (1) Free cash flow, as used above as a metric for determining goals and payout levels under the MIP is differentiated from “free cash flow” as used in our financial earnings press releases filed with the SEC. As used in our financial earnings press releases, “free cash flow” equals cash flow from operating activities less capital expenditures. |
Management Incentive Plan (MIP)
For our fiscal year ended June 30, 2024, the following were the goals and payout levels under the MIP applicable to Mr. Aukerman:
Management Incentive Plan (MIP)
| | | | Payout Range | | Metric | Weighting | Rationale for Metric | (% of Target) | | Global Index | 30% | This metric is the weighted average of certain sales and Adjusted EBITDA of our global animal health business. This figure is useful because it is reflective of the top line and operating performance of this key business which is an important contributor to our overall performance. | 50% – 150% | | North America Index | 35% | This metric is the weighted average of sales and profitability generated by the North America Animal Health business for which Mr. Aukerman has management responsibility. The sales and profitability measurements are based on regional sales, with profitability determined by deducting certain costs and operating expenses. Together, these figures are reflective of the overall financial performance of the Animal Health business under Mr. Aukerman’s area of responsibility. | 50% – 150% | | Mineral Nutrition RPC | 15% | This metric is the profitability generated by the Mineral Nutrition business for which Mr. Aukerman has management responsibility. The profitability measurement is based on regional sales and is determined by deducting certain costs and operating expenses. This figure is reflective of the overall financial performance of the Mineral Nutrition business under Mr. Aukerman’s area of responsibility. | 50% – 150% | | Personal Goals | 20% | This metric is based upon key management goals that are agreed between Mr. Aukerman and Mr. Miller, his supervisor, at the start of the fiscal year and represent accomplishment or progress toward important strategic initiatives which will help ensure the future success of the Company’s business. For our fiscal year ended June 30, 2023, Mr. Aukerman’s personal goals related to new product launches and organizational development initiatives. | 50% – 150% |
Management Incentive Plan (MIP)
The annual cash incentive awards awarded to our NEOs for the fiscal year ended June 30, 2024 were as follows.
Management Incentive Plan (MIP)
| | Target | Earned | | | | | Annual | Annual | | Discretionary | | | Incentive | Cash | | Bonus | | | Opportunity | Incentive | % of Target | Payout | | Jack C. Bendheim | $1,180,000 | $985,300 | 83.5% | $194,700 | | Glenn David(1) | $— | $— | —% | $— | | Richard Johnson(2) | $104,167 | $86,979 | 83.5% | $17,171 | | Damian Finio(3) | $250,053 | $— | —% | $— | | Larry L. Miller | $343,406 | $286,744 | 83.5% | $56,656 | | Rob Aukerman | $201,688 | $167,401 | 83.0% | $34,299 | | Daniel M. Bendheim | $238,939 | $199,514 | 83.5% | $39,436 |
Management Incentive Plan (MIP)
| (1) Pursuant to the terms of his employment agreement, Mr. David was not eligible to receive a cash incentive award under the MIP Plan for fiscal year ended June 30, 2024. |
Management Incentive Plan (MIP)
| (2) Mr. Johnson’s target annual incentive opportunity and earned annual cash incentive amounts are pro-rated based on the time he served in the role of Interim Chief Financial Officer. |
Management Incentive Plan (MIP)
| (3) Mr. Finio resigned from the position of Chief Financial Officer, effective September 29, 2023, and did not receive any cash incentive award for fiscal year ended June 30, 2024. |
Management Incentive Plan (MIP)
The annual cash incentive awards paid are based on what is earned by each individual under the MIP and adjusted for any discretionary awards. For the fiscal year ended June 30, 2024, in addition to their earned incentive awards, Messrs. Jack C. Bendheim, Johnson, Miller, Aukerman and Daniel M. Bendheim also received a discretionary cash incentive award in recognition of their ongoing contributions to the Company with certain corporate projects and transactions, including with respect to “Phibro Forward” initiatives, focused on unlocking additional areas of revenue growth and cost-savings, and the pending acquisition of the medicated feed additive (MFA) product portfolio, certain water-soluble products and related assets from Zoetis.
Equity Incentive Plan
Equity Incentive Plan We believe that annual base salary, together with a wholly performance-based annual cash incentive opportunity, generally accomplishes our primary goal of attracting and retaining key talent. The Board is attentive to share usage and stockholder dilution and, at this time, we do not offer equity incentives as a regular component of the annual compensation program. Rather, we have used equity incentive awards in a limited but strategic manner to recruit, recognize and/or retain executives under specific circumstances (as described below). In addition, we believe our CEO’s current interest in BFI (as disclosed in the beneficial ownership table) is sufficient to support our objective of aligning executive and stockholder interests. On July 5, 2023, considering it to be in the best interests of the Company to continue to retain Mr. Miller in light of his knowledge and experience, the Compensation Committee approved the grant of 300,000 restricted stock units (“RSUs”) as a retention award to Mr. Miller pursuant to the Company’s 2008 Incentive Plan (the “Equity Incentive Plan”) and the RSU award agreement. All of the RSUs granted to Mr. Miller are subject to share price performance-based vesting over a four-year period, subject to Mr. Miller’s continued employment on such date. As a condition of the grant of RSUs, Mr. Miller will not receive additional equity awards from the Company prior to December 31, 2025. Mr. Miller’s award agreement is further detailed in the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2023. On February 9, 2024, in connection with the Company’s search to fill the role of Chief Financial Officer of the Company, and pursuant to the approval of the Compensation Committee and the terms of his employment agreement, Mr. David received, in connection with his appointment to such role, a grant of 300,000 RSUs pursuant to the Company’s Equity Incentive Plan and his award agreement. Mr. David’s RSUs vest as follows: (i) 150,000 RSUs are subject to time-vesting and will vest in equal installments on each of the first five anniversaries of the grant date, subject to continued service through each such vesting date, and (ii) 150,000 RSUs are subject to share price performance-based vesting over a five-year period, subject to Mr. David’s continued employment on such date, in each case, as further detailed in the Company’s Current Report on Form 8-K filed with the SEC on February 6, 2024.
Employment Agreements
Employment Agreements We have entered into employment agreements with Messrs. Jack C. Bendheim, David, Finio, Miller and Aukerman that provide that employment is at-will and describe the terms of their employment, including base salary and performance bonus opportunity and equity grants, if any, as well as limited severance benefits. We did not enter into any formal agreement with Mr. Johnson in connection with him assuming the role of Interim Chief Financial Officer and do not maintain any formal agreement with Mr. Daniel M. Bendheim related to his role as Executive Vice President, Corporate Strategy. However, all of the NEOs are bound by customary intellectual property provisions, noncompete and nonsolicitation provisions, all of which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter). For a description of the employment agreements and the arrangements with Messrs. Johnson and Daniel M. Bendheim, see “Executive Compensation — Individual Arrangements — Employment Agreements.”
2024 Summary Compensation Table
2024 Summary Compensation Table The following table sets forth the total compensation that was paid to or accrued for the NEOs for the fiscal years ended June 30, 2024, 2023 and 2022. The NEOs for the fiscal year ended June 30, 2024 are (i) our Chairman of the Board, President and Chief Executive Officer, (ii) our Chief Financial Officers (consisting of Mr. David (current CFO), Mr. Johnson (Former Interim CFO) and Mr. Finio (Former CFO)), (iii) our Chief Operating Officer, (iv) our President, North America Region and (v) our Executive Vice President, Corporate Strategy.
2024 Summary Compensation Table
| | | | | | | Change in | | | | | | | | | | Pension | | | | | | | | | | Value and | | | | | | | | | | Nonqualified | | | | | | | | | Non-Equity | Deferred | | | | | | | | | Incentive Plan | Compensation | All Other | | | | Fiscal | Salary | Bonus | Stock Awards | Compensation | Earnings | Compensation | Total | | Name and Principal Position | Year | ($) | ($)(2) | ($)(3) | ($)(4)(9) | ($)(5) | ($)(6) | ($) | | Jack C. Bendheim, Chairman of the Board, President, and Chief Executive Officer(1) | 2024 | $2,360,000 | $194,700 | $— | $985,300 | $790,988 | $422,890 | $4,753,878 | | | 2023 | $2,270,000 | $— | $— | $221,325 | $43,711 | $403,863 | $2,938,899 | | | 2022 | $2,185,000 | $— | $— | $1,055,000 | $44,670 | $324,829 | $3,609,499 | | Glenn David, Chief Financial Officer(7) | 2024 | $263,757 | $135,000 | $1,979,000 | $— | $— | $18,039 | $2,395,796 | | Richard Johnson, Former Interim Chief Financial Officer(7) | 2024 | $208,333 | $17,171 | $— | $86,979 | $— | $103,690 | $416,173 | | Damian Finio, Former Chief Financial Officer(7) | 2024 | $161,892 | $— | $— | $— | $— | $6,358 | $168,250 | | | 2023 | $480,870 | $— | $— | $46,885 | $— | $39,706 | $567,461 | | | 2022 | $462,375 | $— | $— | $227,000 | $— | $30,006 | $719,381 | | Larry L. Miller, Chief Operating Officer | 2024 | $686,811 | $1,119,156 | $1,284,000 | $286,744 | $322 | $41,523 | $3,418,556 | | | 2023 | $660,395 | $— | $— | $64,389 | $3,889 | $50,130 | $778,803 | | | 2022 | $634,995 | $— | $— | $320,000 | $— | $43,826 | $998,821 | | Rob Aukerman, President, North America Region | 2024 | $504,221 | $34,299 | $— | $167,401 | $— | $46,781 | $752,702 | | | 2023 | $484,828 | $38,780 | $— | $50,150 | $— | $45,514 | $619,272 | | | 2022 | $463,950 | $105,000 | $— | $194,950 | $— | $43,540 | $807,440 | | Daniel M. Bendheim, Director and Executive Vice President, Corporate Strategy(8) | 2024 | $477,878 | $39,436 | $— | $199,514 | $— | $46,415 | $763,243 | | | 2023 | $459,498 | $— | $— | $44,801 | $6,514 | $43,877 | $554,690 | | | 2022 | $441,825 | $— | $— | $217,000 | $— | $30,916 | $689,741 |
2024 Summary Compensation Table
| (1) Mr. Jack C. Bendheim also serves on the Board of Directors. He received no additional compensation for such service during the fiscal years ended June 30, 2024, 2023, and 2022. |
2024 Summary Compensation Table
| (2) Amounts in this column reflect discretionary bonuses paid to or earned by each of the NEOs noted to recognize their individual contributions to the Company in the applicable fiscal year, including with respect to “Phibro Forward” initiatives and the pending acquisition of the MFA product portfolio, certain water-soluble products and related assets from Zoetis in fiscal year 2024. Pursuant to the terms of his employment agreement, Mr. David was awarded a signing bonus in the amount of $135,000, which was paid on September 11, 2024. The amount set forth for Mr. |
2024 Summary Compensation Table
| Miller also includes payment under his LTIP Award in the amount of $1,062,500, the first of four installments in connection with the total $4.25 million award, which was paid on September 16, 2024. |
2024 Summary Compensation Table
| (3) Represents the aggregate grant date fair market value of the RSUs awarded to Messrs. David and Miller in the fiscal year ended June 30, 2024, computed in accordance with FASB ASC Topic 718. The amounts reported in this column in respect of the performance-based RSU awards granted to Messrs. David and Miller reflect the Company’s determination of the probable outcome of the performance-vesting conditions. Assuming maximum performance for the performance-based RSU awards granted to Messrs. David and Miller in fiscal year 2024, the grant date fair value included in this column would increase for Mr. David by $1,091,000 and for Mr. Miller by $2,499,795. See “Grants of Plan-Based Awards in Fiscal Year 2024” and “Outstanding Equity Awards at 2024 Fiscal Year End” tables below for further details on these grants. |
2024 Summary Compensation Table
| (4) The amounts set forth in the Non-Equity Incentive Plan Compensation column for the fiscal years ended June 30, 2024, 2023 and 2022 represent cash incentives paid to or earned by each NEO in the respective fiscal year under the MIP. See “Fiscal Year 2024 Named Executive Officer Compensation—Management Incentive Plan (MIP)” for additional information. Mr. Johnson received a pro-rated cash bonus for the time served as Interim Chief Financial Officer. |
2024 Summary Compensation Table
| (5) In the case of Jack C. Bendheim, Change in Pension Value and Nonqualified Deferred Compensation Earnings for the fiscal year ended June 30, 2024, includes the aggregate change in (i) the actuarial present value of accrued pension benefits of $700,206 primarily due to a true-up to reflect actuarial increases applicable to participants who previously deferred benefit commencement, (ii) the actuarial present value of benefits under the Retirement Income Plan of $90,782, and (iii) the actuarial present value of benefits under the Executive Income Program of $0 since the change in present value was $(4,404). The only other NEOs that participate in the Pension Plan are Messrs. Miller and Daniel M. Bendheim. For Mr. Miller, the Change in Pension Value and Nonqualified Deferred Compensation Earnings for the fiscal year ended June 30, 2024, includes only the aggregate change in the actuarial present value of accrued pension benefits, which was $322. For Mr. Daniel M. Bendheim, the Change in Pension Value and Nonqualified Deferred Compensation Earnings for the fiscal year ended June 30, 2024, includes only the aggregate change in the actuarial present value of accrued pension benefits, which was $0 since the change in present value was $(14,917). See “— Pension and Other Retirement Plans.” |
2024 Summary Compensation Table
| (6) All Other Compensation for fiscal year 2024 includes the value of the Company’s contributions to the 401(k) Plan (discussed below), automobile allowance and group term life insurance for our NEOs, as well as the payment of premiums under the Split Dollar Agreement, and financial, tax planning and legal services provided to Jack C. Bendheim and certain members of his family. Pursuant to the terms of Jack C. Bendheim’s employment agreement, for fiscal year 2022, the Company was required to make payments up to an aggregate maximum cost of $450,000 per annum for legal, audit and tax services for Jack C. Bendheim and his family and payments for members of his family for non-full-time employment and consulting arrangements and medical and other insurance coverage. Following the fiscal year ended June 30, 2022, on September 15, 2022, the Company increased the permitted aggregate maximum cost to $550,000 per annum. |
Grants of Plan-Based Awards in Fiscal Year 2024
Grants of Plan-Based Awards in Fiscal Year 2024 The following table provides information concerning each award made in fiscal year 2024 to the NEOs under any plan. Other than to Messrs. David and Miller, we did not grant any plan-based equity or stock awards to our other NEOs during our fiscal year ended June 30, 2024.
Grants of Plan-Based Awards in Fiscal Year 2024
| | | | | | | | | | All Other | | | | | | | | | | | | Stock Awards: | Grant Date | | | | | Estimated Future Payouts Under | | | Estimated Future Payouts Under | | | Number of | Fair Value | | | | | Non-Equity Incentive Plan Awards(1) | | | Equity Incentive Plan Awards(2) | | | Shares of Stock | of Stock and Option | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Awards | | Name | Award | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#)(3) | ($)(4) | | Jack C. Bendheim | MIP | — | $590,000 | $1,180,000 | $1,770,000 | — | — | — | — | $— | | Glenn David | MIP | — | $162,500 | $325,000 | $487,500 | — | — | — | — | $— | | | RSU | 2/9/2024 | — | — | — | — | — | — | 150,000 | $1,535,000 | | | PRSU | 2/9/2024 | — | — | — | 30,000 | 150,000 | 150,000 | — | $444,000 | | Richard Johnson | MIP | — | $52,083 | $104,167 | $156,250 | — | — | — | — | $— | | Damian Finio | N/A | — | $— | $— | $— | — | — | — | — | $— | | Larry L. Miller | MIP | — | $171,703 | $343,406 | $515,109 | — | — | — | — | $— | | | PRSU | 7/5/2023 | — | — | — | 60,000 | 300,000 | 300,000 | — | $1,284,000 | | | LTIP | 7/5/2023 | $4,250,000 | $4,250,000 | $4,250,000 | — | — | — | — | $— | | Rob Aukerman | MIP | — | $100,844 | $201,688 | $302,532 | — | — | — | — | $— | | Daniel M. Bendheim | MIP | — | $119,470 | $238,939 | $358,409 | — | — | — | — | $— |
Grants of Plan-Based Awards in Fiscal Year 2024
| (1) These amounts represent threshold, target and maximum annual cash award opportunities for our 2024 fiscal year under the Management Incentive Plan (MIP). The amount actually paid to or earned by each NEO under the MIP is |
Grants of Plan-Based Awards in Fiscal Year 2024
| included as Non-Equity Incentive Plan Compensation in the 2024 Summary Compensation Table. For further discussion of these awards, see “Fiscal Year 2024 Named Executive Officer Compensation — Management Incentive Plan (MIP).” |
Grants of Plan-Based Awards in Fiscal Year 2024
| (2) Amounts in this column represent the performance-based RSU awards granted to our NEOs in fiscal year 2024 under the Equity Incentive Plan. None of the performance-based RSUs will vest if the 90-day average prior to the vesting date is below $20, 20% of the RSUs will vest if the 90-day average prior to the vesting date reaches $20, and the maximum vesting percentage is 100% if the 90-day average prior to the vesting date reaches $60 or above. |
Grants of Plan-Based Awards in Fiscal Year 2024
| (3) Amounts in this column represent the time-based RSU awards granted to Mr. David in fiscal year in fiscal year 2024 under the Equity Incentive Plan. |
Grants of Plan-Based Awards in Fiscal Year 2024
| (4) Amounts in this column represent the grant date fair value of the RSU awards granted to Mr. David and Mr. Miller in fiscal year 2024, as computed in accordance with FASB ASC Topic 718. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal Year 2024
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal Year 2024
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table sets forth certain information with respect to outstanding equity awards held by our NEOs as of the fiscal year ended June 30, 2024.
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Stock Awards(1) | | | | | | | | Number of | Market Value of | Equity Incentive Plan Awards: | Equity Incentive Plan Awards: | | | | Shares or | Shares or | Number of Unearned | Market or Payout Value | | | | Units of | Units of | Shares, Units or | of Unearned Shares, Units or | | | | Stock That | Stock that | Other Rights That | Other Rights That | | | | Have not Vested | Have Not Vested | Have not Vested | Have Not Vested | | Name | Grant Date | (#) | ($)(2) | (#) | ($)(2) | | Jack C. Bendheim | — | — | — | — | — | | Glenn David | 02/09/2024(3) | — | — | 150,000 | 2,515,500 | | | 02/09/2024(3) | 150,000 | 2,515,500 | — | — | | Richard Johnson | — | — | — | — | — | | Damian Finio | — | — | — | — | — | | Larry L. Miller | 07/05/2023(4) | — | — | 300,000 | 5,031,000 | | Rob Aukerman | — | — | — | — | — | | Daniel M. Bendheim | — | — | — | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (1) The treatment of these awards upon certain employment termination and change in control events is described in the section below titled “—Potential Payments Upon Termination or a Change in Control.” |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (2) The values in these columns were calculated based on the closing price of the Company’s common stock on June 28, 2024 (i.e., $16.77), the last trading day of fiscal year 2024. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (3) The RSUs granted to Mr. David vest as follows: (i) 150,000 RSUs are subject to time-vesting and will vest in equal installments on each of the first five anniversaries of the grant date, subject to his continued service through each such vesting date, and (ii) 150,000 RSUs are subject to share price performance-based vesting over a five-year period, subject to Mr. David’s continued employment on such date. |
Outstanding Equity Awards at 2024 Fiscal Year-End
| (4) All 300,000 RSUs granted to Mr. Miller are subject to share price performance-based vesting over a four-year period, subject to Mr. Miller’s continued employment on such date. |
2024 Option Exercises and Stock Vested
2024 Option Exercises and Stock Vested During the 2024 fiscal year, there were no option exercises or shares of stock vested by our NEOs.
2024 Pension Benefits
2024 Pension Benefits
2024 Pension Benefits
| | | | Present Value of | Payments | | | | Number of Years | Accumulated | During Last | | | | Credited Service | Benefit | Fiscal Year | | Name | Plan Name | (#)(1) | ($)(2) | ($) | | Jack C. Bendheim | Pension Plan | 25.1 | $2,061,142 | $— | | | Retirement Income Plan | 30.3 | $2,003,665 | $— | | | Executive Income Program | 34.4 | $231,626 | $— | | Glenn David | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Richard Johnson | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Damian Finio | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Larry L. Miller | Pension Plan | 8.3 | $280,498 | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Rob Aukerman | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Daniel M. Bendheim | Pension Plan | 19.0 | $409,985 | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— |
2024 Pension Benefits
| (1) With respect to the Pension Plan, Years of Service ceased to be recognized for purposes of determining benefit accrual amounts when the Pension Plan was frozen on September 30, 2016. |
2024 Pension Benefits
| (2) The valuation method and all relevant material assumptions used in calculating the present value of accumulated benefits are set forth in the Notes to the Consolidated Financial Statements for our fiscal year ended June 30, 2024 which are filed with our Annual Report on Form 10-K filed on August 28, 2024. See Note 11 — Employee Benefits — Domestic Pension Plan. |
2024 Pension Benefits
Pension Plan We maintain for the benefit of our United States employees employed on or prior to December 31, 2013, a defined benefit pension plan qualified under Section 401(a) of the Code (the “Pension Plan”). In July 2016, we amended the Pension Plan to eliminate credit for future service and compensation increases, effective as of September 30, 2016. The Pension Plan provides benefits equal to the sum of (a) 1.0% of an employee’s “average salary” plus 0.5% of the employee’s “average salary” in excess of the average of the employee’s social security taxable wage base, times years of service after July 1, 1989 until September 30, 2016, plus (b) the employee’s frozen accrued benefit, if any, as of June 30, 1989 calculated under the Pension Plan formula in effect at that time. For purposes of calculating the portion of the benefit based on “average salary” in excess of the average wage base, years of service shall not exceed 35. “Average salary” for these purposes means the employee’s salary over the consecutive five-year period in the ten years preceding September 30, 2016 that produces the highest average. An employee becomes vested in his or her plan benefit once the employee completes five years of service with us. In general, benefits are payable after retirement or disability in the form of a 50%, 75% or 100% joint and survivor annuity, life annuity or life annuity with a five- or ten-year term certain. Benefits are also payable in the case of a qualifying early retirement (i.e., 55 years old and 10 years of service), with such benefits reduced based on the employee’s distance from normal retirement age (i.e., 65 years old). In some cases, benefits may also be payable under the Pension Plan in the event of an employee’s death. Messrs. Jack C. Bendheim, Miller and Daniel M. Bendheim participate in the Pension Plan. Messrs. Jack C. Bendheim and Miller are currently retirement eligible. Mr. Daniel M. Bendheim does not currently qualify for early retirement or retirement. Retirement Income Plan In 1994, we adopted a non-qualified supplemental executive retirement plan as an incentive for certain executives (the “Retirement Income Plan”). The plan provides for (i) a Retirement Income Benefit, (ii) a Survivor’s Income Benefit, and (iii) a Deferred Compensation Benefit (each, as defined therein and described below). A grantor trust has been established to provide the benefits under such plan. Mr. Jack C. Bendheim is the only NEO that participates in the Retirement Income Plan. The Retirement Income Benefit is determined based upon the participant’s salary, years of service and age at retirement. At present, it is contemplated that a benefit of 1% of Mr. Jack C. Bendheim’s eligible compensation will be accrued each year. The benefit is payable upon Mr. Jack C. Bendheim’s retirement (after age 65 with at least 10 years of service) in monthly installments over a 15-year period to Mr. Jack C. Bendheim or, in the event of his death, to his named beneficiary. The Survivor’s Income Benefit is payable to the beneficiary of a participant who dies before having retired from the Company. For the Retirement Income Plan’s current participants, including Mr. Jack C. Bendheim, such benefit is equal to each participant’s annualized compensation at the time of death, capped at $1,500,000. At Mr. Jack C. Bendheim’s election, such benefit will be payable in 12 equal monthly installments. Pursuant to the Deferred Compensation Benefit, a participant may elect each year to defer at least $3,000 but not more than $20,000 of his or her base salary in excess of $150,000. The deferred amount will earn interest at a rate that increases after five and ten years of participation in the Retirement Income Plan. Under certain circumstances, the Company matches the first $3,000 of the deferred amount. Participants may elect whether to have their deferred compensation account balances payable in a lump-sum or in monthly installments for any period between two to 15 years upon a termination of service, with the timing of such elections designed to comply with Section 409A of the Code. Such account balances become immediately payable upon a participant’s death. As of June 30, 2024, Mr. Jack C. Bendheim has (i) an annual Retirement Income Benefit of $207,136 payable over a 15-year period, (ii) a Survivor’s Income Benefit of $1,500,000 payable in 12 equal monthly installments and (iii) a Deferred Compensation Benefit of $1,423,568. Executive Income Program In 1990, we entered into an Executive Income Program to provide a pre-retirement death benefit and a retirement benefit to certain executives. Mr. Jack C. Bendheim is the only NEO who participates in the Executive Income Program, which provides that, upon the executive’s retirement, at or after attaining age 65, we will make retirement payments to the executive during the executive’s life for 10 years or until the executive or the executive’s beneficiaries have received a total of 120 monthly payments. Participants have no claim against us other than as unsecured creditors. We intend to fund the payments using the cash value or the death benefit from the life insurance policies insuring the executive’s life. Mr. Jack C. Bendheim currently participates in this plan and his annual retirement benefit is $30,000. Each policy also contains additional paid-up insurance and extended term insurance. On the death of the executive prior to the executive’s actual retirement date: (i) the first $1,000,000 of the death benefit is payable to the executive’s spouse or issue; (ii) the excess is payable to us up to the aggregate amount of premiums paid by us; and (iii) any balance is payable to the executive’s spouse or issue.
2024 Nonqualified Deferred Compensation
2024 Nonqualified Deferred Compensation The following table shows the executive contributions, company contributions, earnings, withdrawals and distributions and account balances for the Company’s unfunded, unsecured deferred compensation plan, which is a component of the Retirement Income Plan. Mr. Jack C. Bendheim is the only NEO who participates in the deferred compensation plan.
2024 Nonqualified Deferred Compensation
| | Executive | Registrant | Aggregate | Aggregate | Aggregate | | | Contributions | Contributions | Earnings | Withdrawals/ | Balance | | | in Last FY | in Last FY | in Last FY | Distributions | at Last FYE | | Name | ($) | ($) | ($) | ($) | ($) | | Jack C. Bendheim | $— | $— | $85,018(1) | $— | $1,423,568(2) | | Glenn David | $— | $— | $— | $— | $— | | Richard Johnson | $— | $— | $— | $— | $— | | Damian Finio | $— | $— | $— | $— | $— | | Larry L. Miller | $— | $— | $— | $— | $— | | Rob Aukerman | $— | $— | $— | $— | $— | | Daniel M. Bendheim | $— | $— | $— | $— | $— |
2024 Nonqualified Deferred Compensation
| (1) Represents the value of aggregate interest accrued on Mr. Jack C. Bendheim’s deferred compensation account for the fiscal year ended June 30, 2024. |
2024 Nonqualified Deferred Compensation
| (2) Represents the total value of Mr. Jack C. Bendheim’s deferred compensation account balance as of the end of the Company’s fiscal year ended June 30, 2024. |
2024 Nonqualified Deferred Compensation
Mr. Jack C. Bendheim did not make any contributions to his deferred compensation account during the Company’s fiscal year ended June 30, 2024, and the Company does not provide for above-market or preferential earnings on deferred compensation under the Retirement Income Plan. Mr. Jack C. Bendheim made his last contribution to his deferred compensation account prior to the date that the Company became subject to the reporting requirements set forth under Item 402 of SEC Regulation S-K.
Potential Payments upon Termination or a Change in Control
Potential Payments upon Termination or a Change in Control The following table estimates the dollar value of the additional payments and benefits the NEOs would have been entitled to receive under the applicable plans and/or arrangements, assuming the triggering event occurred on June 30, 2024. Messrs. Johnson, Finio, and Aukerman would not receive any such additional payments and benefits. Additionally, neither Mr. Johnson nor Mr. Finio received any additional payments or benefits upon their resignation from the position of Interim Chief Financial Officer and Chief Financial Officer, respectively.
Potential Payments upon Termination or a Change in Control
| | | Termination for | | | | Termination in | Change in | | | | Good Reason / | | | | Connection with | Control (absent | | | | Without Cause | Death | Disability | Retirement | a Change in | a Qualifying | | Name | Type of Payment | ($)(1) | ($) | ($) | ($) | Control ($)(2) | Termination) ($)(3) | | Jack C. Bendheim | Cash Severance(4) | $— | $1,180,000 | $1,180,000 | $— | $— | $— | | | Healthcare Coverage(5) | $28,769 | $— | $19,179 | $— | $28,769 | $— | | | Pension/Benefits(6) | $— | $— | $— | $4,296,433 | $— | $— | | | Total | $28,769 | $1,180,000 | $1,199,179 | $4,296,433 | $28,769 | $— | | Glenn David | Cash Severance(7) | $650,000 | $— | $— | $— | $650,000 | $— | | | Healthcare Coverage(8) | $16,588 | $— | $— | $— | $16,588 | $— | | | Equity Incentives(9) | $2,515,500 | $— | $— | $— | $5,031,000 | $5,031,000 | | | Signing Bonus(10) | $135,000 | $— | $— | $— | $135,000 | $— | | | Total | $3,317,088 | $— | $— | $— | $5,832,588 | $5,031,000 | | Larry L. Miller | Cash Severance(11) | $973,555 | $— | $— | $— | $973,555 | $— | | | Pension/Benefits(12) | $— | $— | $— | $280,498 | $— | $— | | | Equity Incentives(13) | $— | $— | $— | $— | $5,031,000 | $5,031,000 | | | Long-Term Cash(14) | $4,250,000 | $— | $— | $— | $4,250,000 | $— | | | Total | $5,223,555 | $— | $— | $280,498 | $10,254,555 | $5,031,000 | | Daniel M. Bendheim | Pension/Benefits(15) | $— | $— | $— | $409,985 | $— | $— | | | Total | $— | $— | $— | $409,985 | $— | $— |
Potential Payments upon Termination or a Change in Control
| (1) Amounts reported in this column for Mr. Jack C. Bendheim reflect his voluntary resignation. |
Potential Payments upon Termination or a Change in Control
| (2) Amounts reported in this column are paid upon (i) a change in control (excluding a Take-Private Transaction (as defined below)) or (ii) where a termination for Good Reason or without cause has occurred in the 12-month period following such change in control. |
Potential Payments upon Termination or a Change in Control
| (3) Amounts reported in this column reflect payments made upon a change in control where in connection with the change in control 100% of the Company’s shares of stock cease to be traded on a nationally recognized stock exchange and the Company is no longer listed on any such exchange (a “Take-Private Transaction”). |
Potential Payments upon Termination or a Change in Control
| (4) Upon termination due to death or disability, Mr. Jack C. Bendheim is entitled to receive six months continued base salary. |
Potential Payments upon Termination or a Change in Control
| (5) Upon voluntary resignation or termination without cause, Mr. Jack C. Bendheim is entitled to receive COBRA continuation coverage for a period of 18 months. Upon termination due to disability, Mr. Jack C. Bendheim is entitled to continue to receive his health and life insurance benefits then in effect under the Company’s plans for a period of one year. |
Potential Payments upon Termination or a Change in Control
| (6) Upon a termination due to retirement, Mr. Jack C. Bendheim would receive the “Present Value of Accumulated Benefit” as set forth in the 2024 Pension Benefits Table. |
Potential Payments upon Termination or a Change in Control
| (7) Upon a termination for good reason or without cause, Mr. David is entitled to receive one year of base salary and a pro-rated portion of his annual bonus for the year of termination subject to year-to-date results through the most recently completed calendar month. As he was not eligible to receive an annual bonus in respect of fiscal year 2024, the amount reported in respect of the “Cash Severance” row does not include any amount attributable to an annual bonus. |
Potential Payments upon Termination or a Change in Control
| (8) Upon a termination for good reason or without cause, and the Company wishes to hold Mr. David to some or all of the one year non-compete restrictions set forth in his noncompetition and nonsolicitation agreement, then the Company will continue to pay the costs of Mr. David’s medical benefits under COBRA up to a maximum of one (1) year. |
Potential Payments upon Termination or a Change in Control
| (9) Upon Mr. David’s termination for Good Reason or without cause, and subject to the execution and non-revocation of a general release, all 150,000 of his time-vesting RSUs shall become fully vested as of the effective date of |
Potential Payments upon Termination or a Change in Control
| termination, and all 150,000 of his performance-vesting RSUs will vest based on the 90-Day Average of the Company’s stock price ending on a date selected by Mr. David during the period beginning on the date of the qualifying termination and ending on the first to occur of (x) five years from the grant date, (y) the first anniversary of the qualifying termination and (z) March 15 of the year following the date of the qualifying termination. None of the performance-vesting RSUs will vest if the 90-Day Average is below $20, and the maximum vesting percentage for the performance-vesting RSUs is 100% for achievement of a 90-Day Average of $60 or above. The amount reported in the “Equity Incentives” row upon termination for Good Reason or without cause includes the value of only Mr. David’s time-vesting RSUs, as his performance-vesting RSUs would have vested as to 0% assuming that June 30, 2024 had been selected as the end of the 90-day period following Mr. David’s qualifying termination for the purposes of the calculations. In the event of a change in control, (i) which is a Take-Private Transaction or (ii) which is not a Take-Private Transaction following which a termination for Good Reason or without cause occurs in the 12-month period following such change in control, all of Mr. David’s unvested RSUs will immediately vest in full. |
Potential Payments upon Termination or a Change in Control
| (10) Mr. David was also awarded a $135,000 signing bonus that was paid on September 11, 2024. |
Potential Payments upon Termination or a Change in Control
| (11) Upon a termination for Good Reason or without cause, Mr. Miller is entitled to receive one year of base salary and a pro-rated portion of his annual bonus for the year of termination subject to year-to-date results through the most recently completed calendar month. The amount reported in the “Cash Severance” row includes the annual bonus earned by Mr. Miller in respect of fiscal year 2024, as reported in the “Non-Equity Incentive Plan Compensation” column of the 2024 Summary Compensation Table. |
Potential Payments upon Termination or a Change in Control
| (12) Upon a termination due to retirement, Mr. Miller would receive the “Present Value of Accumulated Benefit” as set forth in the 2024 Pension Benefits Table. |
Potential Payments upon Termination or a Change in Control
| (13) Upon Mr. Miller’s termination for Good Reason or without cause, and subject to the execution and non-revocation of a general release, all 300,000 of his time performance-vesting RSUs will vest based on the 90-Day Average of the Company’s stock price ending on a date selected by Mr. David during the period beginning on the date of the qualifying termination and ending on the first to occur of (x) June 30, 2027, (y) the first anniversary of the qualifying termination and (z) March 15 of the year following the date of the qualifying termination. None of the performance-vesting RSUs will vest if the 90-Day Average is below $20, and the maximum vesting percentage for the performance-vesting RSUs is 100% for achievement of a 90-Day Average of $60 or above. The amount reported in the ‘Equity Incentives’ row upon termination for Good Reason or without cause shows that Mr. Miller’s performance-vesting RSUs would have vested as to 0% assuming that June 30, 2024 had been selected as the end of the 90-day period following Mr. Miller’s qualifying termination for the purposes of the calculations. In the event of a change in control, (i) which is a Take-Private Transaction or (ii) which is not a Take-Private Transaction following which a termination for Good Reason or without cause occurs in the 12-month period following such change in control, all of Mr. Miller’s unvested RSUs will immediately vest in full. |
Potential Payments upon Termination or a Change in Control
| (14) Under the terms of his LTIP Award, Mr. Miller is eligible to receive a retention cash award equal to $4.25 million, to be paid in four substantially equal installments, subject to Mr. Miller’s continued employment on each of the first four anniversaries of June 30, 2024. Upon a termination for Good Reason or without cause, any portion of such LTIP Award not yet paid prior to such qualifying termination will be paid on the first payroll date that is 30 days following such termination, subject to Mr. Miller’s execution and non-revocation of a general release of claims. The first installment of the award in the amount of $1,062,500 was paid to Mr. Miller on September 16, 2024. |
Potential Payments upon Termination or a Change in Control
| (15) Upon a termination due to retirement, Mr. Daniel M. Bendheim would receive the “Present Value of Accumulated Benefit” as set forth in the 2024 Pension Benefits Table. |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, the Company is providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Jack C. Bendheim, our Chairman, President and Chief Executive Officer during our fiscal year ended June 30, 2024. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. We identified the median employee as of June 30, 2024. For purposes of identifying the median employee, we determined that, as of the fiscal year ended June 30, 2024, our employee population consisted of approximately 1,940 employees. We considered annualized base salary for all full and part-time employees employed as of June 30, 2024. We selected base pay as it represents the principal form of compensation delivered to all of our employees. For our fiscal year ended June 30, 2024,
CEO PAY RATIO
| ● | We identified the median of all employees (other than our Chief Executive Officer); |
CEO PAY RATIO
| ● | The annual total compensation of the median employee was $68,322. |
CEO PAY RATIO
| ● | The annual total compensation of our Chief Executive Officer was $4,753,878; and |
CEO PAY RATIO
| ● | The estimated ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of the median employee was 70 to 1. |
CEO PAY RATIO
We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Pay Versus Performance
Pay Versus Performance The following tables and related information provide additional compensation information regarding our NEOs for the fiscal years presented.
Pay Versus Performance
| | | | | | Value of initial | | | | | | | | | | $100 Investment | | | | | | | | Average | | Based on: | | | | | | | | Summary | Average | | | | Company - | | | Summary | | Compensation | Compensation | | Peer Group | | Selected | | | Compensation | Compensation | Table Total | Actually Paid | Total | Total | Net | Measure: | | | Table Total | Actually Paid | for Non-PEO | to Non-PEO | Shareholder | Shareholder | Income | Adjusted EBITDA | | Fiscal Year | for PEO(1) | to PEO(1)(2)(6)(7) | NEOs(1) | NEOs(1)(2)(6) | Return(3) | Return(3) | (in thousands)(4) | (in thousands)(5) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | $4,753,878 | $3,962,890 | $1,319,120 | $1,444,508 | $72 | $97 | $2,416 | $111,237 | | 2023 | $2,938,899 | $2,895,188 | $630,057 | $627,456 | $56 | $98 | $32,606 | $112,753 | | 2022 | $3,609,499 | $3,564,829 | $803,846 | $803,846 | $76 | $100 | $49,175 | $111,083 | | 2021 | $4,001,319 | $3,688,472 | $943,330 | $895,453 | $112 | $121 | $54,385 | $107,882 |
Pay Versus Performance
| (1) In all years shown, Mr. Jack C. Bendheim was our Principal Executive Officer (“PEO”). The names of the non-Principal Executive Officer NEOs of the Company (each, a “Non-PEO NEO”) reflected in these columns for each applicable fiscal year are as follows: for fiscal year 2024, Messrs. Glenn David (assumed the position of Chief Financial Officer in February 2024), Richard Johnson (served as our Interim Chief Financial Officer from September 2023 until Mr. David’s appointment), Damian Finio (served as our Chief Financial Officer from November 2020 until September 2023), Larry Miller, Rob Aukerman and Daniel M. Bendheim; for fiscal years 2023 and 2022, Messrs. Finio, Miller, Aukerman and Daniel M. Bendheim; for fiscal year 2021, Messrs. Johnson (retired from his position as Chief Financial Officer in November 2020), Finio, (assumed the role of Chief Financial Officer in November 2020), Miller, Thomas Dagger (retired from his position as Senior Vice President, General Counsel and Corporate Secretary in June 2023) and Daniel M. Bendheim. |
Pay Versus Performance
| (2) In calculating the ‘compensation actually paid’ amounts reflected in these columns, the adjustments made to the pension benefit values were computed in accordance with U.S. GAAP. |
Pay Versus Performance
| (3) Total Shareholder Return (“TSR”) is cumulative for the measurement periods beginning on June 30, 2020 and ended on June 30, 2024, 2023, 2022 and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K. Peer Group represents the S&P 500 Pharmaceuticals Index, which is used by the Company for purposes of compliance with Item 201(e) of Regulation S-K, and assumes dividends, if any, were reinvested from the market close on June 30, 2020 through and including the end of the fiscal year for each year reported in the table. |
Pay Versus Performance
| (4) Represents the amount of the net income reflected in the Company’s audited GAAP financial statements for each applicable fiscal year. |
Pay Versus Performance
| (5) We have selected Adjusted EBITDA, a non-GAAP measure, as our most important financial measure (that is not otherwise required to be disclosed in the table) used to link ‘compensation actually paid’ to our NEOs to company performance for fiscal year 2024. For a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, please see our earnings release for the fourth quarter and full year ended June 30, 2024 furnished as Exhibit 99.1 to the Company’s Current Report on Form 8 K filed with the SEC on August 28, 2024 |
Pay Versus Performance
| (6) The values in this column reflect each of the following adjustments made to the total compensation amounts reported in the 2024 Summary Compensation Table for the applicable fiscal year, computed in accordance with Item 402(v) of Regulation S-K: |
Pay Versus Performance
| i. | The tables below reflects certain adjustments to the ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the Non-PEO NEOs for each of the fiscal years |
Pay Versus Performance
| presented. There were no actuarily determined service costs for services rendered by the PEO or Non-PEO NEOs during the covered fiscal year. No adjustments were required for the following categories: (i) the cost of benefits granted in an amendment or initiation during the covered fiscal year attributed to services rendered prior to the amendment or initiation, (ii) the change in fair value of awards granted in prior years that are outstanding and unvested (from prior year-end to year-end); (iii) the vesting date fair value of awards granted in the covered fiscal year that vested in that year; (iv) the change in the fair value of awards granted in prior years that vested in the covered fiscal year (from prior year-end to vesting date); (v) the prior year-end fair value of awards granted in prior years that failed to vest in the covered fiscal year; and (vi) the dollar value of dividends, dividend equivalents or other earnings paid on stock & option awards in the covered fiscal year prior to vesting (not reflected in the fair value of such award or included in total compensation for that year). |
Pay Versus Performance
| | Fiscal | Fiscal | Fiscal | Fiscal | | | Year | Year | Year | Year | | PEO | 2024 | 2023 | 2022 | 2021 | | Total Compensation Reported in the 2024 Summary Compensation Table | $4,753,878 | $2,938,899 | $3,609,499 | $4,001,319 | | Less: the Change in Actuarial Present Value of Benefit Reported in the 2024 Summary Compensation Table | $(790,988) | $(43,711) | $(44,670) | $(312,847) | | Total Adjustments | $(790,988) | $(43,711) | $(44,670) | $(312,847) | | Compensation Actually Paid for the Covered Fiscal Year | $3,962,890 | $2,895,188 | $3,564,829 | $3,688,472 | | | Fiscal | Fiscal | Fiscal | Fiscal | | | Year | Year | Year | Year | | Non-PEO NEOs | 2024 | 2023 | 2022 | 2021 | | Total Compensation Reported in the 2024 Summary Compensation Table | $1,319,120 | $630,057 | $803,846 | $943,330 | | Less: the Change in Actuarial Present Value of Benefit Reported in the 2024 Summary Compensation Table | $(54) | $(2,601) | $— | $(47,877) | | Less: Grant Date Fair Value of Stock Awards Reported in the 2024 Summary Compensation Table | $(543,833) | $— | $— | $— | | Plus, Year-End Fair Value of Awards Granted in the Covered Fiscal Year that are Outstanding and Unvested | $669,275 | $— | $— | $— | | Total Adjustments | $125,388 | $(2,601) | $— | $(47,877) | | Compensation Actually Paid for the Covered Fiscal Year | $1,444,508 | $627,456 | $803,846 | $895,453 |
Pay Versus Performance
| (7) Mr. Jack C. Bendheim elected to forgo his earned incentive award of $221,325 for the fiscal year ended June 30, 2023. |
Pay versus Performance Comparative Disclosure
Pay versus Performance Comparative Disclosure In accordance with Item 402(v)(5) of Regulation S-K, the Company is providing the following descriptions of the relationships between the information presented in the table above. The graphs below show (1) the relationship of ‘compensation actually paid’ to our PEO and the average amount of ‘compensation actually paid’ to the non-PEO NEOs versus our (i) cumulative TSR, (ii) our net income, and (iii) our Adjusted EBITDA, and (2) and the relationship between our TSR and our Peer Group TSR, in each case, for the fiscal years presented. Compensation Actually Paid and Company TSR As demonstrated by the following graph, the amount of ‘compensation actually paid’ to our PEO, and the average amount of ‘compensation actually paid’ to the Non-PEO NEOs are generally aligned with the Company’s TSR over the four years presented in the table. While equity awards do not comprise a portion of ‘compensation actually paid’ to the PEO and are seldom awarded to the Non-PEO NEOs, non-equity incentive plan awards are awarded and paid in large part based on the financial performance of the Company. Compensation Actually Paid and Net Income As demonstrated by the following graph, the amount of ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the Non-PEO NEOs are generally aligned with the Company’s net income over the fiscal years 2021, 2022 and 2023 presented in the table. While the Company does not use net income as a performance measure in its overall executive compensation program, the measure of net income is correlated with Net Sales, which the Company does use when setting goals for the Company’s short-term incentive compensation program. As described in more detail in the sections titled “Fiscal Year 2024 Named Executive Officer Compensation—Management Incentive Plan (MIP)” and “2024 Summary Compensation Table,” a substantial portion of the value of total compensation awarded to the NEOs is comprised of amounts determined under the Company’s non-equity incentive program. The decrease in net income for fiscal year 2024 was driven, in part, by increased acquisition-related costs and higher incentive-related employee costs, which we believe will be non-recurring. The amount of ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the Non-PEO NEOs have been generally consistent over the periods presented historically. In addition, the Company has also established various other financial objectives and targets, including with respect to Net Sales, when setting goals for the Company’s short-term incentive compensation program that have affected the ‘compensation actually paid.’ Compensation Actually Paid and Adjusted EBITDA As demonstrated by the following graph, the amount of ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the Non-PEO NEOs are generally not aligned with the Company’s Adjusted EBITDA over the four years presented in the table. While Adjusted EBITDA has generally been inconsistent over the periods presented, as noted above, the Company has also established various other financial objectives and targets, including with respect to Adjusted EBITDA targets, when setting goals for the Company’s short-term incentive compensation program that have affected the ‘compensation actually paid.’ As described above, Adjusted EBITDA is defined as Earnings before Interest, Taxes, Depreciation and Amortization, adjusted for certain items including restructuring and acquisition related items, stock-based compensation costs and other unusual or non-operational items and is reflective of our operating performance. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Adjusted EBITDA is the Company’s most important financial performance measure (that is not otherwise required to be disclosed in the table) used to link ‘compensation actually paid’ to the NEOs to Company performance for fiscal year 2024. Company TSR and Peer Group TSR The graph below assumes an initial investment of $100 on June 30, 2020, in our common stock and the S&P 500 Pharmaceuticals Index, and assumes dividends, if any, were reinvested. As the graph shows, Phibro’s TSR is lower in all years reflected when compared to the TSR of the S&P 500 Pharmaceuticals Index. The companies in the S&P 500 Pharmaceuticals Index are not the same as those used for our compensation benchmarking. As demonstrated by the following graph, the Company’s TSR over the four years presented in the table declined approximately 28%, while the Company’s peer group TSR declined approximately 3% over the four years presented in the table. Pay versus Performance Tabular List The following table lists our most important performance measures used by us to link ‘compensation actually paid’ to our NEOs to Company performance for fiscal year 2024. The performance measures included in this table are not ranked by relative importance.
Pay versus Performance Comparative Disclosure
| Net Sales | | Most Important Performance Measures | | Adjusted EBITDA | | Free Cash Flow | | Net Sales |