SCHEDULE 14A INFORMATION
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September 25, 200921, 2012
Annual Meeting of Stockholders
 | ||||
 | ConAgra Foods, Inc. One ConAgra Drive Omaha, NE68102-5001 Phone:(402) 240-4000 |
August 12, 2009
Dear Fellow Stockholder:
It is my pleasure to invite you to join us for the ConAgra Foods Annual Meeting of Stockholders in Omaha, Nebraska on September 25, 200921, 2012 at 1:30 p.m., OmahaCentral Daylight Time, at the Joslyn Art Museum, 2200 Dodge Street, Omaha, Nebraska 68102.
The meeting will include a report on our business, discussion and voting on the matters set forthdescribed in the accompanying notice of annual meeting and proxy statement, and aquestion-and-answer session.
Whether or not you plan to seeing you in Omaha. If you cannot be withjoin us in person, please be sure to vote your shares by proxy. JustVote on the Internet or by telephone according to the instructions you find in the following pages. Or, if you received a paper copy of the materials, mark, sign and date the enclosed proxy card and return it in the postage-paid envelope. Or, use the Internet or telephonic voting methods described in the following pages. Your prompt response is appreciated.
Thank you for your continued investment in ConAgra Foods.
Sincerely,
Gary M. Rodkin
Chief Executive Officer & President
We are pleased this year to take advantage of the Securities and Exchange Commission rules that allow us to furnish proxy materials via the Internet and mail a Notice of Internet Availability of Proxy Materials. We believe this approach helps us expedite your receipt of our materials, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting.If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a paper copy of our proxy materials unless you specifically request a copy. You may request a paper copy be sent to you in the mail by following the instructions on the Notice of Internet Availability of Proxy Materials.
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Date and Time: | Friday, September 21, 2012 at 1:30 p.m. Central Daylight Time Registration will begin at 12:30 p.m. Central Daylight Time | |
Place: | The Witherspoon Concert Hall of the Joslyn Art Museum 2200 Dodge Street, Omaha, Nebraska 68102 | |
Audiocast: | If you cannot attend the meeting in person, you may join a live audiocast of the meeting on the Internet by visitinghttp://investor.conagrafoods.com at 1:30 p.m. Central Daylight Time, on September 21, 2012 | |
Items of Business: | At the meeting, stockholders will: Ÿ vote on the election of directors for the ensuing year; Ÿ vote on the ratification of the appointment of our independent auditor for fiscal 2013; Ÿ vote to approve, on a non-binding advisory basis, named executive officer compensation; and Ÿ transact any other business properly brought before the meeting. | |
Who May Vote: | Stockholders of record as of the close of business on July 27, 2012 are eligible to vote at the annual meeting and at any postponements or adjournments thereof. | |
Date of Distribution: | We mailed our Notice of Internet Availability of Proxy Materials on or about August 8, 2012. For stockholders who previously elected to receive a paper copy of the proxy materials, we mailed the Proxy Statement, our Fiscal 2012 Annual Report and the proxy card on or about August 8, 2012. | |
Electronic Availability of Materials: | The Proxy Statement and our Annual Report to stockholders for the fiscal year ended May 27, 2012 are available electronically athttp://investor.conagrafoods.com. | |
August 8, 2012 Omaha, Nebraska |
Colleen Batcheler Corporate Secretary | |
Table of ConAgra Foods, Inc. will be held on Friday, September 25, 2009, in the Witherspoon Concert Hall of the Joslyn Art Museum, 2200 Dodge Street, Omaha, Nebraska 68102. The meeting will begin promptly at 1:30 p.m. Omaha Time. Registration will begin at 12:30 p.m.
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Voting Item #3: Advisory Vote to Approve Named Executive Officer Compensation | 58 | |||
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We have included this proxy statement summary to assist as you review the proposals to be acted upon, including the election of directors and non-binding advisory vote to approve named executive officer compensation. The following information is only a summary. For more complete information on these topics, please review our Annual Report on Form 10-K and this Proxy Statement.
VOTING ITEMS AT THE ANNUAL MEETING
Recommendation | Pages | |||||
Election of 11 directors (Voting Item #1) We have included important information about the experience, qualifications and skills of each of the | FOR all nominees | 1 – 6 | ||||
Ratification of the appointment of our independent auditor for fiscal (Voting Item #2) The Audit / Finance Committee of the Board has appointed KPMG LLP as our independent auditor for fiscal 2013. As a matter of good governance, we are asking stockholders to ratify that selection. | FOR | 57 | ||||
Advisory vote to approve named executive officer compensation (Voting Item #3) Consistent with our Board’s recommendation and stockholders’ preference as indicated at our 2011 annual meeting, we currently hold a “say on pay” vote annually. This vote addresses our overall approach to the compensation of our named executive officers. We encourage you to read our Compensation Discussion and Analysis in this Proxy Statement, which explains how and why the Human Resources Committee of our Board arrived at its executive compensation actions and decisions for fiscal 2012. | ||||||
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Who may vote?FISCAL 2012 HIGHLIGHTS AND COMPENSATION
On May 27, 2012, we concluded a challenging fiscal 2012. With consumers struggling and an external environment marked by a continuation of the close of businessescalating input costs we saw in fiscal 2011, our profits were negatively impacted. However, we successfully delivered growth in diluted earnings per share, adjusted for items impacting comparability, increased net sales and placed the company on July 31, 2009 are eligible to vote atsolid ground as we entered fiscal 2013. Key accomplishments during fiscal 2012 include the annual meeting and any postponements or adjournments. You may vote by marking, signing and dating the enclosed proxy card and returning it in the postage-paid envelope. You may also vote by telephone or through the Internet. See page 1 of the accompanying proxy statement for more information on voting procedures.
| Ÿ | We successfully turned around our Lamb Weston specialty potato operations, delivering strong sales and profit growth in the business, driven by favorable volumes and product mix as well as improved operating conditions. |
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We took effective and responsible pricing actions throughout our portfolio, despite the continued weak consumer environment, to combat escalating input costs. | ||||
| Ÿ | We continued our track record of strong cost savings in our Consumer Foods business and effectively focused on total margin management. |
| Ÿ | We invested for the future through acquisitions, using approximately $694 million of cash on hand to acquire assets in large and growing categories (for example, frozen breakfast, private label pretzels and private label pita chips) and to expand in an international market where we already have a presence, Canada. We also acquired a majority ownership position in Agro Tech Foods, Ltd., an Indian food company, in which we have had an equity interest since 1997. |
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| Ÿ | We effectively leveraged our strong innovation capabilities during fiscal 2012. For example, we created platforms for growth withMarie Callender’s multi-serve meals, which use MicroRite* tray technology. We also expanded into adjacencies such as frozen mini desserts and private label health and nutrition bars. |
| Ÿ | Our Board of Directors raised the company’s annualized dividend by 4% during fiscal 2012, to its current annualized rate of $0.96 per share. |
| Ÿ | Our Board of Directors approved a $750 million increase to the company’s existing share repurchase authorization. We returned more than $352 million to stockholders through share repurchases during fiscal 2012. |
| Ÿ | Our company was listed on the Dow Jones Sustainability Index – North America, a strong indicator of our commitment to sustainable business practices. |
The fiscal 2012 pay packages for our named executive officers consisted of salary, short- and long-term incentive opportunities and other benefits discussed in the Compensation Discussion and Analysis (CD&A) section of this Proxy Statement (pages 13 to 31). You can read about our Human Resources Committee’s methodology for setting pay opportunities and approving actual payouts, and learn more about our compensation plans and programs, in that section. In summary, however, it is worth noting that in determining the amount of compensation paid to our named executive officers, the Human Resources Committee focuses intently on aligning pay and performance. As such, you will read in our CD&A that:
| Ÿ | our fiscal 2012 performance results were in line with our expectations but slightly short of our target. Payouts under our fiscal 2012 annual incentive plan reflected our performance and ranged from 70% to 100% of targeted amounts, with most awards paying out at 78% of targeted amounts; and |
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| long-term incentive plan. |
The Committee considered the positive support received from stockholders in 2011 for its compensation decisions and recognizes that our compensation programs need to continue to align with leading corporate governance practices to maintain that support. Accordingly, while the basic framework of our compensation programs for fiscal 2013 is unchanged, the Committee adopted clawback and hedging policies to enhance the program. These changes are discussed in detail in the CD&A.
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| * | MicroRite® (trademark and technology) is owned by Graphic Packaging International, Inc. (GPI) |
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One ConAgra Drive
Omaha, NebraskaNE 68102-5001
We are mailingfurnishing this proxy statement to our stockholders in connection with the solicitation by our Board of Directors of proxies to be used at the 20092012 Annual Meeting of Stockholders of ConAgra Foods, Inc. The meeting will be held in the Witherspoon Concert HallWe mailed our Notice of the Joslyn Art Museum, 2200 Dodge Street, Omaha, Nebraska 68102 on Friday, September 25, 2009, and begin promptly at 1:30 p.m., Omaha Time. DistributionInternet Availability of this proxy statement is scheduled to beginProxy Materials on or about August 12, 2009.
Stockholders of record at the close of business on July 31, 2009 will be27, 2012 are entitled to vote at the meeting and at any postponements or adjournments. On July 31, 2009,27, 2012, there were 443,134,831406,070,583 voting shares of our common stock issued and outstanding. Each share of common stock is entitled to one vote.
Your vote is very important. For this reason, the Board of Directors is requesting that you vote your shares in advance of the meeting by proxy. Internet and telephone voting is available through 11:59 p.m. Eastern Time on Tuesday, September 22, 2009 for shares held in the ConAgra Foods Retirement Income Savings Plan and through 11:59 p.m. Eastern Time on Thursday, September 24, 2009 for all other shares.
If you hold shares of ConAgra Foods stock in your own name (also known as “of record” ownership), you can come to the meeting and vote your shares in person, or you can vote your shares by proxy in one of the following manners:
By completing, signing, dating and returning (in the postage-paid envelope provided) the proxy card enclosed with paper copies of our proxy materials; |
| Ÿ | By visiting the Internet atwww.proxyvote.comand following the | ||
By calling1-800-690-6903 on a touch-tone telephone and following the recorded | |||
Internet and telephone voting is available through 11:59 p.m. Eastern Time on Tuesday, September 18, 2012 for shares held in the ConAgra Foods Retirement Income Savings Plan and through 11:59 p.m. Eastern Time on Thursday, September 20, 2012 for all other shares.
If a broker, bank or other nominee holds your stock (“street(also known as “street name” ownership), theyit will send you a voting instruction form. FollowYou may vote by completing, signing, dating and returning the instructions on the form they provide to have your shares voted by proxy.form. If you wish to attend the meeting and vote in person, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or nominee.
See pages 60 to our Corporate Secretary at or before the meeting (mail to: ConAgra Foods, Inc., Attn: Corporate Secretary, One ConAgra Drive, Omaha, Nebraska 68102), (2) submit a timely later-dated proxy (or voting instruction card if you hold shares through a broker, bank or nominee), or (3) provide timely
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| Number of Shares | Right to | Percent | ||||||||||||||
Name | Owned (3) | Acquire | of Class | Share Units | ||||||||||||
| Capital Research Global Investors(1) | 25,654,960 | — | 5.8 | % | NA | |||||||||||
| 333 South Hope Street Los Angeles, CA 90071 | ||||||||||||||||
| State Street Bank and Trust Co(2) | 23,818,601 | — | 5.4 | % | NA | |||||||||||
| State Street Financial Center One Lincoln Street Boston, MA 02111 | ||||||||||||||||
Directors and Named Executive Officers: | ||||||||||||||||
| Mogens C. Bay | 31,600 | (4) | 90,000 | (5) | * | — | ||||||||||
| Stephen G. Butler | 16,800 | (4) | 54,000 | (5) | * | 9,888 | ||||||||||
| Steven F. Goldstone | 4,600 | 309,362 | (5) | * | 3,722 | |||||||||||
| Joie A. Gregor | — | 6,000 | (5) | * | 1,211 | |||||||||||
| Rajive Johri | — | 6,750 | (5) | * | 1,378 | |||||||||||
| W.G. Jurgensen | 32,600 | 63,000 | (5) | * | 24,534 | |||||||||||
| Richard H. Lenny | 1,050 | 5,250 | (5) | * | — | |||||||||||
| Ruth Ann Marshall | 2,550 | 18,000 | (5) | * | 5,910 | |||||||||||
| Gary M. Rodkin | 489,042 | 2,530,000 | (5) | * | 169,491 | |||||||||||
| Andrew J. Schindler | 1,800 | 18,000 | (5) | * | 1,859 | |||||||||||
| Kenneth E. Stinson | 35,600 | 90,000 | (5) | * | — | |||||||||||
| John F. Gehring | 97,695 | 292,883 | (6) | * | — | |||||||||||
| Andre J. Hawaux | 108,556 | (4) | 332,700 | (6) | * | 9,494 | ||||||||||
| Scott Messel | 59,798 | 185,000 | (6) | * | 308 | |||||||||||
| Peter M. Perez | 111,741 | 402,000 | (6) | * | — | |||||||||||
| Robert F. Sharpe, Jr. | 168,038 | (4) | 818,000 | (6) | * | — | ||||||||||
| All Directors and Executive Officers as a | ||||||||||||||||
| Group (18 people) | 1,164,502 | 5,345,714 | (5)(6) | 1.45 | % | 227,795 | ||||||||||
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| Fees Earned | ||||||||||||||||||||
| or Paid | Stock | Option | All Other | |||||||||||||||||
| in Cash | Awards | Awards | Compensation | Total | ||||||||||||||||
| Name | ($) | ($)(2) | ($)(2) | ($)(3) | ($) | |||||||||||||||
| Mogens C. Bay | 92,167 | 35,370 | 34,200 | 12,901 | 174,638 | |||||||||||||||
| Stephen G. Butler | 105,000 | 35,370 | 34,200 | 2,000 | 176,570 | |||||||||||||||
| Steven F. Goldstone | — | — | 499,996 | — | 499,996 | |||||||||||||||
| Joie A. Gregor (1) | 22,667 | 20,976 | 14,938 | — | 58,581 | |||||||||||||||
| Rajive Johri (1) | 37,333 | 22,680 | 16,862 | — | 76,875 | |||||||||||||||
| W.G. Jurgensen | 83,000 | 35,370 | 34,200 | — | 152,570 | |||||||||||||||
| Richard H. Lenny (1) | 13,417 | 16,034 | 12,765 | — | 42,216 | |||||||||||||||
| Ruth Ann Marshall | 78,500 | 35,370 | 34,200 | 1,500 | 149,570 | |||||||||||||||
| Andrew J. Schindler | 87,500 | 35,370 | 34,200 | — | 157,070 | |||||||||||||||
| Kenneth E. Stinson | 102,000 | 35,370 | 34,200 | 12,901 | 184,471 | |||||||||||||||
Former Directors (1) | ||||||||||||||||||||
| John T. Chain, Jr. | 35,500 | — | — | 28,363 | 63,863 | |||||||||||||||
| Ronald W. Roskens | 35,500 | — | — | 29,581 | 65,081 | |||||||||||||||
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| Outstanding | Outstanding | |||||||||
| Stock Options Held | Stock Options Held | |||||||||
| Name | at FYE (#) | Name | at FYE (#) | |||||||
| Mogens C. Bay | 90,000 | Ruth Ann Marshall | 18,000 | |||||||
| Stephen G. Butler | 54,000 | Andrew J. Schindler | 18,000 | |||||||
| Steven F. Goldstone | 309,362 | Kenneth E. Stinson | 90,000 | |||||||
| Joie A. Gregor | 6,000 | Former Directors | ||||||||
| Rajive Johri | 6,750 | John T. Chain, Jr | 63,000 | |||||||
| W.G. Jurgensen | 63,000 | Ronald W. Roskens | 81,000 | |||||||
| Richard H. Lenny | 5,250 | |||||||||
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The Board’s Nominating, Governance and Public Affairs Committee recommended, and the Board determined, that each individual identified below be re-nominated for election. We refer to this Committee as the N/G/PA Committee throughout this Proxy Statement. A short biography, together with key experience, qualifications and skills considered by the N/G/PA Committee is noted for each nominee. The N/G/PA Committee also considered whether the slate of nominees, taken as a whole, has the skills and qualifications that the Board considers essential and desirable.
Name | Age | Director Since | Occupation | Independent | ||||
Mogens C. Bay | 63 | 1996 | Chairman & CEO, Valmont Industries, Inc. | Ö | ||||
Stephen G. Butler | 64 | 2003 | Retired Chairman & CEO, KPMG LLP | Ö | ||||
Steven F. Goldstone | 66 | 2003 | Manager, Silver Spring Group | Ö | ||||
Joie A. Gregor | 62 | 2009 | Retired Vice Chairman of Heidrick & Struggles International, Inc. | Ö | ||||
Rajive Johri | 62 | 2009 | Retired President & Director, First National Bank of Omaha | Ö | ||||
W.G. Jurgensen | 61 | 2002 | Retired CEO & Director, Nationwide Financial Insurance Services, Inc. | Ö | ||||
Richard H. Lenny | 60 | 2009 | Operating Partner, Friedman, Fleischer & Lowe | Ö | ||||
Ruth Ann Marshall | 58 | 2007 | Retired President of the Americas, MasterCard International | Ö | ||||
Gary M. Rodkin | 60 | 2005 | CEO & President, ConAgra Foods, Inc. | |||||
Andrew J. Schindler | 68 | 2007 | Retired Chairman & CEO, R.J. Reynolds Tobacco Holdings, Inc. | Ö | ||||
Kenneth E. Stinson | 69 | 1996 | Chairman of Board, Peter Kiewit Sons’, Inc. | Ö |
MOGENS C. BAY – Director since December 12, 1996
Mr. Bay (60(63 years of age) has served as Chairman of the Board and Chief Executive Officer of Valmont Industries, Inc. (products for water management and infrastructure) since January 1997. He ishas also been a director of Peter Kiewit Sons’, Inc.
Summary of experience, qualifications and skills considered in re-nominating Mr. Bay:
| Ÿ | Strong leadership capabilities and insights from service as Chief Executive Officer of Valmont for over 19 years and Chairman and Chief Executive Officer of Valmont for over 15 years |
| Ÿ | Extensive experience in U.S. and global operations and manufacturing, including agricultural based operations |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
STEPHEN G. BUTLER – Director since May 16, 2003
Mr. Butler (61(64 years of age) served as the Chairman and Chief Executive Officer of KPMG LLP (national public accounting firm) from 1996 until his retirement in June 2002 and Chairman of KPMG International from 1999 to June 2002. He ishas been a director of Cooper Industries Ltd.plc (electric lighting and wiring company) since 2002 and Ford Motor Company.
Summary of experience, qualifications and skills considered in re-nominating Mr. Butler:
| Ÿ | Strong leadership capabilities and insights from service as Chairman and Chief Executive Officer of KPMG as well as service as a managing partner of several KPMG offices |
| Ÿ | Expertise in accounting and finance and knowledge of a wide range of U.S. and international business practices based on a 34-year career with KPMG |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
STEVEN F. GOLDSTONE– Director since December 11, 2003
Mr. Goldstone (63(66 years of age) has served as non-executive Chairman of the ConAgra Foods boardBoard since October 1, 2005. He has been a manager of Silver Spring Group (private investment firm) since 2000. From 1999 to 2000, Mr. Goldstone served as Chairman of Nabisco Group Holdings (food company). He also previously served as Chairman and Chief Executive Officer of RJR Nabisco, Inc. (consumer products company). Mr. Goldstone ishas been a director of Greenhill & Co., Inc. (financial advisory services) since 2004. Mr. Goldstone also served as a director of Merck & Co., Inc. (pharmaceutical company) from 2006 until 2012 and Greenhill & Co.,Trane Inc.
Summary of experience, qualifications and skills considered in re-nominating Mr. Goldstone:
| Ÿ | Strong leadership capabilities and insights from his broad range of management experiences, including prior service as a Chief Executive Officer |
| Ÿ | Understanding of strategic and marketplace challenges for consumer products companies from his tenure with RJR Nabisco, Inc. and Nabisco Group Holdings |
| Ÿ | Broad understanding of legal and governance issues facing public companies from his board service to other public companies, including as Chairman of the Board at other companies, and earlier career in law |
JOIE A. GREGOR – Director since February 6, 2009
Ms. Gregor (59(62 years of age) served as assistant tois the President for presidential personnel under President George W. Bush. Previously, Ms. Gregor served asformer Vice Chairman of Heidrick & Struggles International, Inc. (executive search firm), a position she held from 2002 until 2007. From 1993 until 2002 she2006, Ms. Gregor served in a number of senior leadership roles with that firm, including President, North America, managing partner of the firm’s Global Board of Directors Practice and managing partner of the New York office.
Summary of experience, qualifications and skills considered in re-nominating Ms. Gregor:
| Ÿ | Strong leadership capabilities and insights, including from her service to Heidrick & Struggles |
| Ÿ | Significant experience in the assessment and recruitment of corporate executives and senior officials across a wide range of industries and government |
| Ÿ | Recognized expert in aligning leadership teams to drive operating results |
| Ÿ | Proven talent management skills |
RAJIVE JOHRI– Director since January 1, 2009
Mr. Johri (59(62 years of age) served as President and Director of First National Bank of Omaha (FNBO)(FNBO, a banking institution), from 2006 until his retirement in 2009. From September 2005 to June 2006, he served as President of First National Credit Cards Center for FNBO. Prior to that, he served as an Executive Vice President for J.P. Morgan Chase Bank (banking institution) from 1999 until 2004.
Summary of experience, qualifications and skills considered in re-nominating Mr. Johri:
| Ÿ | Strong leadership capabilities and insights, including his service to FNBO as President |
| Ÿ | Significant expertise in finance, accounting and banking, including risk assessment and risk management |
| Ÿ | Substantial international business and management experience |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
W.G. JURGENSEN – Director since August 2, 2002
Mr. Jurgensen (58(61 years of age) served as Chief Executive Officer and a director of Nationwide Financial Insurance Services, Inc. (insurance)(insurance company) from 2000 tountil his retirement in 2009. He also served as Chief Executive Officer and a director of several other companies within the Nationwide enterprise, which is comprised of Nationwide Financial, Nationwide Mutual, Nationwide Mutual Fire and all of their respective subsidiaries and affiliates. Mr. Jurgensen ishas been a director of The Scotts Miracle-Gro Company.
Summary of experience, qualifications and skills considered in re-nominating Mr. Jurgensen:
| Ÿ | Strong leadership capabilities and insights, including from his service to the Nationwide companies |
| Ÿ | Significant expertise in finance, accounting and banking, including risk assessment and risk management |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
RICHARD H. LENNY– Director since March 17, 2009
Mr. Lenny (57(60 years of age) has been an operating partner with Friedman, Fleischer & Lowe (private equity firm) since 2011. He served as Chairman, President and Chief Executive Officer of The Hershey Company (manufacturer of confectionery(confectionery and snack products),products manufacturer) from 2001 through 2007. Prior to joining
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Summary of experience, qualifications and skills considered in re-nominating Mr. Lenny:
| Ÿ | Strong leadership capabilities and insights, particularly with major consumer brands, from his role as a Chief Executive Officer for The Hershey Company and board member of consumer products companies |
| Ÿ | Knowledge of strategy and business development, finance, marketing and consumer insights, supply chain management, sustainability and other social responsibility matters pertinent to a consumer products food company |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
RUTH ANN MARSHALL– Director since May 23, 2007
Ms. Marshall (55(58 years of age) was President of the Americas, MasterCard International (payments industry) from October 1999 until her retirement in June 2006. She ishas been a director of Global Payments Inc. (currency validation systems manufacturer) since 2006 and Pella Corporation.
Summary of experience, qualifications and skills considered in re-nominating Ms. Marshall:
| Ÿ | Strong leadership capabilities and insights from her service to MasterCard International, a large consumer brand company, including marketing, account management, customer service and product development experience |
| Ÿ | Significant domestic and international experience in growing the MasterCard business |
| Ÿ | Broad understanding of governance issues facing public companies from her board service to other public companies |
GARY M. RODKIN– Director since October 1, 2005
Mr. Rodkin (57(60 years of age) has been our President and Chief Executive Officer and President since October 1, 2005. Previously, he was Chairman and Chief Executive Officer of PepsiCo Beverages and Foods North America (consumer products and manufacturing)manufacturing company) from February 2003 to June 2005. He also served as President and Chief Executive Officer of PepsiCo Beverages and Foods North America in 2002, and President and Chief Executive Officer of Pepsi-Cola North America from 1999 to 2002. Mr. Rodkin ishas been a director of Avon Products, Inc., (beauty and related products company) since 2007, and is also Chairman of the Grocery Manufacturers of America (consumer product company trade association) and Chair-elect of the Board of Boys Town.
Summary of experience, qualifications and skills considered in re-nominating Mr. Rodkin:
| Ÿ | As our Chief Executive Officer, Mr. Rodkin has a deep understanding and commitment to the success of our company, and thoroughly understands and impacts our day-to-day operations, our financial success and the development of our leaders |
| Ÿ | Career has been focused on and remains committed to building leading consumer brands in the food industry |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to another public company |
ANDREW J. SCHINDLER – Director since May 23, 2007
Mr. Schindler (65(68 years of age) served R. J. Reynolds Tobacco Holdings, Inc. (tobacco products)products company) as Chairman and Chief Executive Officer from 1999 to 2004 and Reynolds American, Inc. (tobacco products)products company) as Chairman from July 2004 until his retirement in December 2005. Mr. Schindler achieved the rank of captain in the U.S. Army, where he held command and staff positions in the United States and in Vietnam. He ishas been a director of Krispy Kreme Doughnuts Inc. (retail food establishments) since 2006 and Hanesbrands, Inc.
Summary of experience, qualifications and skills considered in re-nominating Mr. Schindler:
| Ÿ | Extensive management and leadership experience through his service to R. J. Reynolds Tobacco Holdings, Inc. and military roles, including as Captain in the U.S. Army |
| Ÿ | Strong leadership, risk-management, marketing, operations, strategic change, and personnel development experience and skills developed through his career and military service |
| Ÿ | Broad understanding of governance issues facing public companies from his Board service to other public companies |
KENNETH E. STINSON– Director since December 12, 1996
Mr. Stinson (66(69 years of age) is Chairman of the Board of Peter Kiewit Sons’, Inc. (construction and mining). He served as Chief Executive Officer of Peter Kiewit Sons’, Inc. from 1998 until 2004. Mr. Stinson ishas been a director of Valmont Industries, Inc. since 1996, and a director of McCarthy Group, L.L.C. (private equity firm) since 2008. He was a director of Kiewit Investment Fund LLLP, Valmont Industries, Inc.LLP from 2004 until 2012.
Summary of experience, qualifications and McCarthy Group, L.L.C.
| Ÿ | Extensive management and leadership experience through Chief Executive Officer service to Peter Kiewit Sons’, Inc. |
| Ÿ | Strong leadership development skills |
| Ÿ | Broad understanding of governance issues facing public companies from his board service to other public companies |
The Board of Directors recommends a vote “FOR” each of the listed nominees.
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Proposal# 2: Approval of the ConAgra Foods 2009 Stock Plan
Annual Elections for Directors
To promote greater accountability to stockholders, all of our directors stand for election annually.
Majority Voting in July 2009, subjectDirector Elections
To be elected in an uncontested election, a director nominee must receive the affirmative vote of a majority of the votes cast in the election. If an incumbent nominee is not elected, he or she is required to stockholder approval.promptly tender a resignation to the Board of Directors. The Board approvedwill act on the 2009 Stock Plantendered resignation and recommendspublicly disclose its decision within 90 days after certification of the election results.
Board Leadership Structure
Our Board of Directors believes that independent Board leadership is a votecritical component of our governance structure. Our Corporate Governance Principles require us to have either an independent Chairman of the Board or a lead independent director if the positions of Chairman and CEO are held by the same person. Since 2005, our Chairman and CEO roles have been separate. With separate Chairman and CEO roles, our CEO can focus his time and energy on setting the strategic direction for the company, overseeing daily operations, engaging with external constituents, developing our leaders and promoting employee engagement at all levels of the organization. Meanwhile, our independent Chairman leads the Board in favorthe performance of its approval becauseduties by establishing agendas and ensuring appropriate meeting content, engaging with the CEO and senior leadership team between Board meetings on business developments, and providing overall guidance to our CEO as to the Board’s views and perspectives, particularly on the strategic direction of the critical rolecompany.
Director Independence
The Board has determined that stock incentives play in aligning managerten of our 11 Board members – directors Bay, Butler, Goldstone, Gregor, Johri, Jurgensen, Lenny, Marshall, Schindler and stockholder interestsStinson – have no material relationship with ConAgra Foods and advancingare independent within the Human Resources Committee’s pay for performance agenda. As discussedmeaning of our independence standards.
In making its independence determinations, the Board applied the listing standards of the New York Stock Exchange, or NYSE, and the categorical independence standards contained in the “Compensation Discussion & Analysis,”Corporate Governance Principles. The Board considers even immaterial relationships in its decision-making process to ensure a significant portioncomplete view of each director’s independence. This year, the Board considered that Mr. Bay is the Chief Executive Officer of Valmont Industries, Inc. One of our subsidiaries was a customer for immaterial levels of environmental engineering services from an affiliate of Valmont Industries, Inc. on an arms-length basis and in the ordinary course of business during fiscal 2012. Another subsidiary purchased irrigation equipment from an affiliate of Valmont Industries, Inc. on an arms-length basis and in the ordinary course of business during fiscal 2012. The Board also reviewed our commercial relationships with companies on whose board’s our Board members served during fiscal 2012 (i.e., Ford Motor Company, McDonald’s Corporation and Valmont Industries, Inc.). The rela-
tionships with these companies involved ConAgra Foods’ purchase or sale of products and services in the ordinary course of business on arm’s-length terms in amounts and under other circumstances that did not affect the relevant directors’ independence under the Corporate Governance Principles or under applicable law and NYSE listing standards.
Applying the NYSE listing standards and the Corporate Governance Principles, the Board determined that there are no transactions, relationships or arrangements that would impair the independence or judgment of any of our non-employee directors.
In addition to satisfying our independence standards, each member of the Audit / Finance Committee must satisfy an additional SEC independence requirement that provides that the member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than his or her director’s compensation paidand may not be an “affiliated person” of ConAgra Foods. Each member of the Audit / Finance Committee satisfies this additional independence requirement.
Similarly, the SEC recently adopted rules on the independence of compensation committee members that will apply to our executive officers is in the form of stock-based awards, which ensures a pay for performance link. The Human Resources Committee, (referred to in this Proposal #2 asor HR Committee, once the Committee) has also approvedNYSE completes its rulemaking on the issuancesubject. We fully expect that the current members of stock-based awards to a broad array of managers throughout the company. Stock incentives can motivate superior performance by encouraging managers to make decisions that increase the value of the company, and thus their own wealth. Stock incentives also enable the company to attract and retain the services of a high-caliber management team.
Board’s Role in Risk Oversight
Our senior leadership is responsible for identifying, assessing and managing the 2009 Stock Plancompany’s exposure to risk. A component of this work is performed through a management Risk Oversight Committee, chaired by our Senior Vice President and Treasurer. However, our Board of Directors and its determinations will be binding on all participants.committees play an active role in overseeing management’s activities and ensuring management’s plans are balanced from a risk / reward perspective. The Committee may delegate any or all of its powers to one or more of its members. The Committee may also delegate to any individual officer of the company the authority to designate recipients of awards and the number and type of awards granted, although the officer cannot use this authority to grant awards to executive officers, directors or him or herself. This delegation authority does not permit the grant of an award to any executive officer or other employee who is reasonably expected to be covered by Section 162(m) of the Internal Revenue Code, which we refer to as the Code, except by two or more directors who each meet the criteria of “outside director” under Section 162(m) of the Code.
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| Ÿ | Board Presentations Address Risk: Each fiscal year, a full Board meeting is set aside for a discussion of our strategic plan and the longer-term risks and opportunities facing the company. At other times of the year, our Board receives reports from significant business units and functions. These presentations include a discussion of the business, regulatory, operational and other risks associated with planned strategies and tactics, as well as succession planning matters. The Board is also responsible for appointing the membership of management’s Risk Oversight Committee, based on recommendations from the Audit / Finance Committee. |
| Ÿ | Audit / Finance Committee Oversight: Our Audit / Finance Committee provides oversight for management’s handling of the company’s financial risks. During fiscal 2012, we expanded the responsibilities of the Audit / Finance Committee to include oversight of certain finance matters, and accordingly, renamed it the Audit / Finance Committee. The Committee’s Charter requires the Committee to review our processes for assessing and controlling derivative and treasury risk and oversee our risks related to capital structure, including borrowing, liquidity and allocation of capital. The Audit / Finance Committee also oversees our management of financial risk through, among other things, reviewing our significant accounting policies and the activities of management’s Risk Oversight Committee, maintaining direct oversight of our Internal Audit function, holding regular executive sessions with our independent auditors, our Chief Financial Officer and Controller, and our head of Internal Audit, and receiving regular legal and regulatory updates. Our Senior Vice President and Treasurer also provides enterprise risk management reports to the Audit / Finance Committee on a semi-annual basis. The Chair of the Audit / Finance Committee reports to the full Board on the Committee’s activities. |
| Ÿ | Human Resources Committee Oversight: The HR Committee reviews the company’s leadership development activities to ensure appropriate succession planning occurs, and also reviews the relationship between the company’s compensation programs and risk. The Chair of the Human Resources Committee reports to the full Board on the Committee’s activities. |
| Ÿ | Nominating, Governance and Public Affairs Committee Oversight: The N/G/PA Committee assists the Board in managing risks associated with Board organization, membership and structure. It also assists management in the oversight of reputational risks for the company and reviews the company’s policies and programs related to corporate citizenship, social responsibility, political giving and public policy issues. Although the Committee had been informally overseeing key public affairs matters for the Company in prior years, the Board formalized this responsibility during fiscal 2012, and renamed the Committee accordingly. The Chair of the N/G/PA Committee reports to the full Board on the Committee’s activities. |
As issues related to non-employee directors of ConAgra Foods and consultants. The number of grantees will vary from year to year. During fiscal 2009, approximately 1,200 participants were granted awards under the 2006 Plan. Based on this, we expect that approximately 1,200 participants will annually receive awards under the 2009 Stock Plan. The number of options and other awards, if any, that an individual willrisk oversight often overlap, certain issues may be entitled to receive under the 2009 Stock Plan will beaddressed at the discretion of the Committee and therefore cannot be determined in advance.
Independent Director Meetings
The maximumBoard of Directors meets on a regularly scheduled basis and holds an executive session without management present at every regularly scheduled meeting. The Chairman of the Board presides at all meetings, including executive sessions.
Attendance
During fiscal 2012, the Board met nine times (five regular meetings and four special meetings) and acted by unanimous written consent once. All members attended at least 75% of the total number of sharesBoard and meetings of ConAgra Foods’ common stock, $5.00 par value, that may be issued undercommittees on which he or she served in fiscal 2012. Our Board members are encouraged to attend the 2009 Stock Plan is 29,500,000. Any shares that have not been issued and are not subject to outstanding awards under the 2006 Plan as of the time of approval of the 2009 Stock Plan, together with any shares that are cancelled, terminated or otherwise settled without the issuance of common stock under the Predecessor Plans, are also authorized for issuance under the 2009 Stock Plan. As of July 31, 2009, 2,414,715 shares of common stock had not been issued andannual stockholders’ meeting. All nominees who were not subject to outstanding awards under the 2006 Plan. Shares used to pay the exercise price of, or withholding taxes associated with an award under the Predecessor Plans will not be made available for issuance as awards under the 2009 Stock Plan.
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Stock Ownership Guidelines for Directors and Senior Leadership
Directors and senior leaders across the company are subject to satisfy all withholding tax requirements through the deliverystock ownership guidelines. All non-employee directors are expected to ConAgra Foods of previously-acquired shares of common stock or by having shares otherwise issuable under the 2009 Stock Plan withheld by ConAgra Foods. Alternatively, participants must satisfy any tax withholding requirements by remitting cash or a check.
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| Number of Securities | ||||||||||||
| Weighted-Average | Remaining Available for | |||||||||||
| Number of Securities to | Exercise Price of | Future Issuance Under | ||||||||||
| be Issued Upon Exercise | Outstanding | Equity Compensation Plans | ||||||||||
| of Outstanding Options, | Options, Warrants, and | (Excluding Securities | ||||||||||
| Warrants, and Rights | Rights | Reflected in Column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
| Equity compensation plans approved by security holders (1)(2) | 36,715,007 | $ | 23.33 | 12,122,138 | ||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | 36,715,007 | $ | 23.33 | 12,122,138 | ||||||||
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Anti-Hedging Policy
Our directors and the next three most highly compensated executive officers, generally other than the chief financial officer. However, the limit on deductibility does not apply to compensation defined in Section 162(m) as “performance-based compensation” (which we refer to as “qualified performance-based compensation”).
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Clawback Policy
We have adopted a Clawback Policy that requires excess amounts paid to any of our senior officers under our incentive compensation programs to be recovered in the time of payment.
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No “Poison Pill” Rights Plan
We have not had a “poison pill” stockholder rights plan since 2004, when it was terminated by our Board of Directors.
Commitment to Sustainable Business Practices
We believe that ConAgra Foods has an obligation to be a good steward of the environment, nourish our employees, give back to the communities we serve and 2008. The Audit Committee has re-appointed KPMG as the independent registered public accounting firm to conduct the fiscal 2010 auditdrive economic gain for stakeholders. To these ends, we have clear corporate responsibility goals, and favor transparency with stakeholders on our corporate responsibility progress. A few examples of our financial statementsmany corporate responsibility achievements in recent years include the following:
| Ÿ | During fiscal 2012, ConAgra Foods was listed on the Dow Jones Sustainability Index for North America, one of the world’s most recognizable sustainability indices |
| Ÿ | In calendar year 2011, we received LEED® Platinum certification for our newly constructed Delhi, Louisiana, sweet potato facility |
| Ÿ | During fiscal 2012, 12 facilities, which collectively accounted for more than 70 percent of ConAgra Foods’ total solid waste generation, achieved zero-waste status |
| Ÿ | We continued to improve our people safety performance during fiscal 2012, with 35 facilities logging no recordable injuries |
| Ÿ | In April, 2011, ConAgra Foods sponsored its first-ever employee volunteerism week. After logging more than 3,000 volunteer hours during this week in 2011, we topped it with more than 3,400 volunteer hours in March 2012 |
| Ÿ | For the last two fiscal years, we have engaged our consumers in our philanthropic focus area – ending child hunger. Through our 2011 Child Hunger Ends Here campaign, we donated the monetary equivalent of 2.5 million meals to Feeding America, one of the largest charitable hunger relief organizations in the United States and a partner of our ConAgra Foods Foundation. Our fiscal 2012 campaign is on target to surpass that achievement. For more information, see www.childhungerendshere.com |
| Ÿ | As of September 2011, 1,428 employees had lost a combined total of 7,654 pounds on the “Choose to Lose with ConAgra Foods” program, an employee weight-loss program which emphasizes reduced-calorie eating and portion control, featuring products from 20 different ConAgra Foods brands |
We are proud of our focus on corporate responsibility and routinely discuss these matters with the Board’s N/G/PA Committee. We also publish an annual Corporate Responsibility Report. A copy of our 2011 Corporate Responsibility Report is available on our website athttp://investor.conagrafoods.com. Our 2012 Corporate Responsibility Report is expected to be available by September 30, 2012.
Political Contributions and Lobbying Expenditure Oversight and Disclosure
The N/G/PA Committee receives reports on political contributions and activities. Our political expenditures are limited and we focus on matters that we believe will create or preserve stockholder value. We also plan to begin publicly disclosing a summary of our political activity on our website by the end of this year.
Corporate Governance Materials Available on Our Website
To learn more about our governance practices, you can review any of the following listed documents athttp://investor.conagrafoods.com through the “Corporate Governance” link:
| Ÿ | Corporate Governance Principles |
| Ÿ | Corporate Responsibility Report |
| Ÿ | Code of Conduct, our commitment to our longstanding standards for ethical business practices |
| Ÿ | Code of Ethics for Senior Corporate Officers |
| Ÿ | Audit / Finance Committee Charter |
| Ÿ | Human Resources Committee Charter |
| Ÿ | Nominating, Governance and Public Affairs Committee Charter |
| Ÿ | Procedures for bringing concerns or complaints to the attention of the Audit / Finance Committee |
From time to time these documents are updated, and we promptly post amended documents to our website. The documents are also available in print to any stockholder who requests them from the Corporate Secretary. The information on our website is not, and will not be deemed to be, a part of this proxy statement or incorporated into any of our other filings with the SEC.
Interested parties may communicate with our Board of Directors, our non-management directors as a group or the Chairman by writing to: ConAgra Foods Board of Directors c/o Corporate Secretary, ConAgra Foods, Inc., Box 2000, One ConAgra Drive, Omaha, Nebraska 68102. Communications are compiled by the Corporate Secretary and forwarded to the addressee(s) on at least a bi-weekly basis. The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to ConAgra Foods or ConAgra Foods’ business or determined to pose a possible security risk to the addressee.
Our Board of Directors has established various committees to assist in its responsibilities. Currently, our Board of Directors has four standing committees: the Audit / Finance Committee, the Executive Committee, the Human Resources Committee and the Nominating, Governance and Public Affairs Committee. All members of the Audit / Finance Committee, Human Resources Committee and Nominating, Governance and Public Affairs Committee are independent under the rules of the NYSE and our independence standards.
| Committee | Members | Fiscal 2012 Meetings | ||
Audit / Finance Committee | Stephen G. Butler,Chair Rajive Johri Richard H. Lenny Andrew J. Schindler | 12 | ||
Human Resources Committee (the “HR Committee”) | Steven F. Goldstone Joie A. Gregor W.G. Jurgensen Ruth Ann Marshall Kenneth E. Stinson,Chair | 7 | ||
Nominating, Governance and Public Affairs Committee (the “N/G/PA Committee”) | Mogens C. Bay,Chair Joie A. Gregor Rajive Johri W.G. Jurgensen Ruth Ann Marshall Andrew Schindler | 4 |
The Executive Committee generally has the authority to act on behalf of the Board of Directors requestsbetween meetings. Its membership consists of Directors Butler, Goldstone, Rodkin and Stinson. Mr. Goldstone chairs the committee. The Executive Committee did not meet during fiscal 2012.
Audit / Finance Committee
The Audit / Finance Committee has the following responsibilities:
| Ÿ | Oversee the integrity of the company’s financial statements and review annual and quarterly SEC filings and earnings releases |
| Ÿ | Receive reports on critical accounting policies of the company, significant changes in the company’s selection or application of accounting principles and the company’s internal control processes |
| Ÿ | Retain the independent auditor and review the qualifications, independence and performance of the independent auditor and internal audit department |
| Ÿ | Pre-approve audit and non-audit services performed by the independent auditor |
| Ÿ | Review the company’s compliance with legal and regulatory requirements |
| Ÿ | Review the company’s strategies and plans related to capital structure, including borrowing, liquidity and allocation of capital |
Audit Committee Financial Expert. The Board has determined that the stockholders ratify this appointment.
| Fiscal 2009 | Fiscal 2008 | |||||||
| Audit Fees | $ | 5,842,700 | $ | 7,028,000 | ||||
| Audit-Related Fees | 7,000 | 1,221,500 | ||||||
| Tax Fees | — | 18,000 | ||||||
| All Other Fees | 5,250 | 5,250 | ||||||
| Total Fees | $ | 5,854,950 | $ | 8,272,750 | ||||
Related-Party Transactions.The Audit Feesconsist of the audits of our fiscal years 2009 and 2008 annual financial statements and/ Finance Committee has adopted a written policy regarding the review, approval and ratification of our quarterly financial statements during fiscal years 2009 and 2008.
Human Resources Committee
The HR Committee has the following responsibilities:
| Ÿ | Review, evaluate and approve compensation plans and programs for the company’s directors, executive officers and significant employees |
| Ÿ | Annually review and approve corporate goals and objectives relevant to CEO compensation and, together with the other independent directors, evaluate the CEO’s performance in light of these goals and objectives |
| Ÿ | Review directly or with the full Board, succession plans for all senior positions |
| Ÿ | Review and discuss with the full Board whether the company’s compensation programs for employees generally are designed in a manner that does not incentivize employees to take inappropriate or excessive risk and whether any compensation policies or practices are reasonably likely to have a material adverse effect on the company |
| Ÿ | Retain and terminate consultants or outside advisors for the HR Committee, and approve any such consultant’s or advisor’s fees and other terms of engagement |
The HR Committee has retained authority over the consideration and determination of executive and director compensation, subject only to the further involvement of the other independent directors with respect to the approval of the overall compensation for non-employee directors and of the compensation of the Chief Executive Officer. Additional information on the Committee’s processes for determining executive compensation and the role of the HR Committee’s compensation consultant can be found in the Compensation Discussion and Analysis section of this proxy statement.
Compensation Committee Interlocks and Insider Participation. During fiscal 2012, none of the current or former executive officers of ConAgra Foods or any of its current employees served on the compensation committee (or equivalent), or the board of directors, of another entity whose executive officer(s) served on the HR Committee or Board of ConAgra Foods.
Nominating, Governance and Public Affairs Committee
The N/G/PA Committee, has the following responsibilities:
| Ÿ | Identify qualified candidates for membership on the Board |
| Ÿ | Propose to the Board a slate of directors for election by the stockholders at each annual meeting |
| Ÿ | Propose to the Board candidates to fill vacancies on the Board |
| Ÿ | Consider and make recommendations to the Board concerning the size and functions of the Board and the various Board committees |
| Ÿ | Consider and make recommendations to the Board concerning corporate governance policies |
| Ÿ | Assess the independence of Board members |
| Ÿ | Advise management on internal and external factors and relationships affecting our image and reputation, including those related to corporate citizenship and public policy issues significant to the company |
Director Nomination Process. The N/G/PA Committee considers Board candidates suggested by KPMGBoard members, management and stockholders. The N/G/PA Committee may also retain a third-party search firm to identify candidates. A stockholder who wishes to recommend a prospective nominee for Board membership should notify our Corporate Secretary in writing at least 120 days before the annual stockholders’ meeting and include whatever supporting material the stockholder considers appropriate. The N/G/PA Committee will also consider nominations by a stockholder according to the provisions of our bylaws relating to “audit-related fees,” “tax fees”stockholder nominations as described under “Additional Information – Stockholder Proposals to be Included in our 2013 Proxy Statement” and “all“Additional Information – Other Stockholder Proposals to be Presented at our 2013 Annual Meeting” at the end of this Proxy Statement.
The N/G/PA Committee makes an initial determination as to whether to conduct a full evaluation of a candidate once he or she has come to its attention. This initial determination is based on whether additional Board members are necessary or desirable. It is also based on whether, based on the information provided or otherwise available to the N/G/PA Committee, the prospective nominee is likely to satisfy the evaluation factors described below. If the N/G/PA Committee determines that additional consideration is warranted, it may request a third-party search firm or other fees” during fiscal years 2009third party to gather additional information about the prospective nominee. The N/G/PA Committee may also elect to interview a candidate. The evaluation process for nominees recommended by stockholders does not differ.
The N/G/PA Committee evaluates each prospective nominee against the standards and 2008.
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The following Compensation Discussion &and Analysis, or CD&A, describes how, for fiscal 2012, the company’s Human Resources Committee, which we refer to in this “Executive Compensation” section as the Committee and Board of Directors designdesigned the executive compensation program and set individual pay. The focus of the Compensation Discussion & Analysis is our fiscal 2009 compensation programpay for the individuals identifiedexecutive officers named in ourthe compensation tables.tables beginning on page 32. We refer to these individualsthe Human Resources Committee as our “named executive officers.” Fiscal 2009the Committee throughout the CD&A. Our fiscal 2012 began May 26, 200830, 2011 and ended May 31, 2009.
The Executive Summary Overview. On May 27, 2012, we concluded a challenging fiscal 2012 during which we maneuvered through This executive summary reviews the conditions existing at the start of In June 2011 (the start of our fiscal 2012), we saw a challenging year ahead. We expected very high input cost inflation to continue; rapid escalation in input prices began in our fiscal 2011. We also expected a difficult consumer environment, given macroeconomic conditions. However, we were focused on, low- to mid-single digit growth in diluted EPS (adjusted for items impacting comparability), over comparable fiscal 2011 results. For purposes of our fiscal 2012 annual cash incentive program, target incentives were designed to pay out with a level of profit performance that correlated to achievement of the higher end of our EPS range; revenue growth in the mid-single-digits; and operating cash flows in the range of $1.2 billion to $1.3 billion. We also reiterated our long-term financial goals: annual EPS growth of 6% to 8% per year over the long-term; annual sales growth of approximately 3% per year over the long-term; strong operating cash flows of $1.2 billion to $1.4 billion per year over the long-term to fund investments; and return on invested capital (adjusted for items impacting comparability), which we refer to as ROIC, approaching 13% to 14% over the long-term. We expected to achieve these results in a manner consistent with our strategic plan, which we refer to as our Recipe for Growth. Our Recipe for Growth leverages the foundation established over the last six years in areas such as organizational enhancements, cost structure improvements, balance sheet strength, and Core / Adjacencies:grow our core businesses and invest in faster-growing adjacent categories; International:profitably double our annual revenues from international businesses; and Private Label: achieve strong growth in our private label business. Our Recipe for Growth also includes goals on corporate citizenship and our people. We aspire to be recognized as a great employer and responsible corporate citizen. We are promoting a culture of trust and empowerment and hope to achieve a listing on theFortune“Best Places to Work” list. We are proud to have achieved a Dow Jones Sustainability Index listing, for North America, during fiscal 2012. The Committee took our goals into account in setting fiscal 2012 incentive compensation opportunities. The Committee also considered the reasonableness of our goals, given the difficult external environment. The following performance measures were approved for our fiscal 2012 incentive programs: Fiscal 2012 Results. Fiscal 2012 concluded on May 27, 2012, and was even more challenging than management originally expected. The pace of input cost inflation accelerated throughout the fiscal year and reached its highest rate, 11%, for the Consumer Foods segment in our third fiscal quarter, surpassing the high rates experienced in fiscal 2011. With cost increases that exceeded our plans, and consumers continuing to look for value, our profits were negatively impacted. In our Commercial Foods segment, we successfully turned around the Lamb Weston specialty potato operations and delivered strong sales and profit growth, driven by favorable volumes and product mix as well as improved operating conditions. However, the strong profit growth in the Lamb Weston operations was partially offset by profit declines in our milling operations, which experienced some headwinds due to unfavorable market conditions. The marketplace dynamics made it difficult to deliver, but our team Growing our Core and Adjacencies: Pricing and our core: We demonstrated our ability to responsibly increase prices across a significant portion of our core portfolio – Consumer Foods and Commercial Foods – during fiscal 2012, which was a necessary step to address escalating inflation of input costs. We also successfully turned around the Lamb Weston specialty potato operations of our Commercial Foods segment and delivered strong sales and profit growth in this business. Acquisitions: We invested in our core and expanded in adjacencies through acquisitions. Early in fiscal 2012, we acquired theMarie Callender’s brand trademarks for approximately $58 million in cash, plus assumed liabilities. We had previously used the trademark under a licensing agreement. Full ownership of the trademarks reflected our commitment to investing in this important brand. Later in fiscal 2012, we acquired Odom’s Tennessee Pride, a leading producer of frozen and refrigerated breakfast sandwiches and sausage, for approximately $95 million in cash, plus assumed liabilities. Frozen breakfast is a large, growing category, adjacent to our existing frozen portfolio. Ownership of the Odom’s Tennessee Pride assets will enable further innovation and growth in the frozen case, helping us win with customers and consumers. Innovation: We successfully leveraged our innovation capabilities to grow our core and expand into adjacencies during fiscal 2012. For example, we created platforms for growth withMarie Callender’s multi-serve meals, which use Micro-Rite1 tray technology, and expanded our steaming platform technology in frozen foods. We also introduced mini, microwavableMarie Callender’s desserts to capitalize on the large and growing frozen dessert category. Growing our International Business: Our team was also successful in building our international business during fiscal 2012: Transactions: During fiscal 2012, we acquired Del Monte Canada, a leading Canadian provider and marketer of packaged fruits and vegetables, for approximately $186 million in cash, plus assumed liabilities. This acquisition increased the size of our Canadian business by approximately 40%, creating greater scale in categories where we have existing relationships with customers. We also increased our ownership stake in Agro Tech Foods Ltd. in fiscal 2012, and we now own a majority of the company. Agro Tech Foods Ltd. is an Indian company that markets food and food ingredients in India, primarily edible oils and popcorn, and more recently peanut butter, cooking sprays and shelf-stable pudding. These transactions position us for success in fiscal 2013 and beyond and meaningfully contribute to our goal of becoming a more global company in the years to come. Organic Growth: We also grew our international business organically during fiscal 2012. Lamb Weston’s potato operations continue to focus on growing with key customers and delivered strong share gains across several regions in fiscal 2012. Lamb Weston is capitalizing on its already strong foothold in international markets, and is continually responding to the needs of its key customers by providing product solutions for further international market penetration. Lamb Weston is focused on MicroRite® (trademark and technology) is owned by Graphic Packaging International, Inc. (GPI) growth in Asian markets, where per capita consumption of frozen potato products is expected to grow, and where Lamb Weston is positioned to provide this market with innovative product solutions. Growing our Private Label Business: We also demonstrated our commitment to the attractive private label sector during fiscal 2012: Acquisitions: We made two key acquisitions in the private-label salty snacks area during fiscal 2012, National Pretzel Company, a leading provider of private label pretzels, which we acquired for approximately $302 million in cash, plus assumed liabilities, and the pita chip business of Kangaroo Brands, which we acquired for approximately $48 million in cash, plus assumed liabilities. Sales of private label pretzels and pita chips are growing within the salty snacks category, and we are excited to leverage our innovation, selling and supply chain capabilities to further the growth of these businesses. Innovation: Our fiscal 2012 focus on store brands also included organic growth investments. We collaborated with a key retailer during fiscal 2012 to launch a line of store brand health and nutrition bars in a very short time frame. Early results for the product line are positive. Investing in People and Corporate Citizenship: We also made progress against our Recipe for Growth’s goals related to investing in our people and corporate citizenship. We are proud to have achieved a Dow Jones Sustainability Index listing, for North America, during fiscal 2012. This achievement recognizes our strong commitment to sustainable business practices. We also invested in our people during fiscal 2012. We continued to improve our people safety performance during fiscal 2012, with Smartly Deploying Capital:We also managed our resources well, deploying capital with a balanced approach: We successfully renegotiated our $1.5 billion unsecured, revolving credit facility during the year, and repaid approximately $364 million of debt. Our Board of Directors raised the company’s annualized dividend by 4% during fiscal 2012. The Board approved a $750 million increase to the company’s existing share repurchase authorization. We returned more than $352 million to stockholders through share repurchases during fiscal 2012. As noted above, we invested approximately $694 million during the fiscal year in acquisitions. Our performance during fiscal 2012 resulted in the following financial performance versus our goals: From a three-year The performance results discussed here drove the Compensation Discussion &and AnalysisExecutive Summary primary focus of the ConAgra Foods executive compensation program is to encourage and reward behavior that promotes attainment of our annual and long-term business goals. The business goals are set by management, under the oversight of the Board of Directors, and are designed to promote sustainable growth in stockholder valuevalue. As stockholders themselves, our leaders are keenly focused on achieving these goals and growing stockholder value. The executive compensation programs for fiscal 2012, and payouts under the long-term incentive program covering the three-year period ending with fiscal 2012, align with this approach.attainmentescalating input cost inflation that exceeded our expectations and created a significant challenge for us and our peers. We took effective and responsible pricing actions, despite the continued weak consumer environment, turned around our Lamb Weston specialty potato business, invested for the future and delivered full year growth in earnings per share, adjusted for items impacting comparability (EPS), for our stockholders.annual and long-term goals. This focus is intended to limit speculative rewards for short-term results.Fiscal 2009 was Chief Executive Officer Gary Rodkin’s third fullthe fiscal year, which informed the Committee’s decisions regarding compensation opportunities for our senior leaders. It also discusses the challenges and successes during fiscal 2012 and the three-year period ending with fiscal 2012, and the company. Under Mr. Rodkin’s direction,actual compensation earned by our senior management has beenleaders.transforming ConAgra Foods into one integrated operating companyand committed to delivering sustainable, profitable growth. Lategrowth in fiscal 2006, Mr. Rodkin2012 while simultaneously making the right investments for the long-term health of our business. We announced the following as significant fiscal 2012 performance goals:Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ his seniormarketing and innovation investments. It states that over the five-year time frame beginning with fiscal 2012, we aspire to accomplish the following – through organic growth and acquisitions:Ÿ Ÿ Ÿ Incentive Program Targeted Performance Measure Fiscal 2012 Management Incentive Plan (annual cash incentive program) To earn a target award, management would need to deliver on its fiscal 2012 profit commitments to stockholders. The plan included a fiscal 2012 ConAgra Foods, Inc. profit before tax goal that correlated with our EPS guidance. Fiscal 2012 – 2014 Long-Term Incentive: Performance Shares After analyzing our long-term incentive program during fiscal 2011, the Committee made a change to the metrics in our performance share plan for cycles beginning with fiscal 2012. Noting the importance of sales growth, and the strong correlation between cash flow from operations and stockholder value creation, the Committee set three-year goals for cash flow return on operations (a measure of operating cash flow as a percentage of invested capital), which we refer to as CRO, as the primary metric in our performance share plan. The plan also includes a secondary metric, net sales growth, with goals aligned with our long-term net sales growth target. Fiscal 2012 – 2014 Long-Term Incentive: Stock Options The Committee believes in linking management compensation with stock price appreciation. Options to acquire shares of our common stock with an exercise price equal to the closing market price of our stock on the date of grant ensures that stock price appreciation is a prerequisite to management receiving value for these awards. sharedremained focused on the Recipe for Growth and achieved much in fiscal 2012:Ÿ Ÿ Ÿ Ÿ Ÿ 1 Ÿ Ÿ investors35 facilities logging no recordable injuries. In addition, during fiscal 2012, our employees helped make a difference in their local communities. With our second annual “Week of Service,” our employees showed up in record numbers, volunteering more than 3,400 hours to help end child hunger in the communities where they live and work. Nearly 2,000 employees packed or served 108,504 meals and donated 69,654 pounds of food to families in need. Our employees also joined us in our Child Hunger Ends Here campaign in an effort to surpass our fiscal 2011 campaign, in which we donated the monetary equivalent of 2.5 million meals to Feeding America.Ÿ Ÿ Ÿ Ÿ Targeted Performance Actual Performance Low- to mid-single digit growth in diluted EPS (adjusted for items impacting comparability), over our comparable
fiscal 2011 EPSWe delivered mid-single digit fiscal 2012 EPS growth (adjusted for items impacting comparability) over comparable fiscal 2011 EPS. For incentive compensation purposes, this level of growth was in line with our expectations, but below our target Revenue growth in the mid-single-digits Fiscal 2012 revenue growth was approximately 7.8%, which was in line with, and slightly higher than, our target Operating cash flows in the range of $1.2 billion to $1.3 billion We delivered operating cash flows of $1.05 billion, which was on target after taking into account the impact of a discretionary contribution to our pension plans in the amount of $326 million strategic planperspective, we had strongly varied business performance in the fiscal 2010 through 2012 period. As we have previously discussed in prior years’ CD&As, fiscal 2010 was a strong year, marked by share growth in our Consumer Foods segment, strong cost savings, strong performance in the milling operations of our Commercial Foods segment and a new, state-of-the-art sweet potato production facility for movingour Lamb Weston business. However, a weak consumer environment and rapid escalation of input cost inflation, hallmarks of both fiscal years 2011 and 2012, dampened profit growth over this period. Our return on average invested capital (or ROAIC) exceeded internal plans over this three-year period, but the company through that transformation. The strategicdesign of our long-term incentive plan for fiscal years 2007 to 2009 was centered on changing the company’s culture, divesting non-core businesses, developing a “fewer, bigger, better” approach to innovation, developing more effective marketing, improving in-store execution, and achieving significant cost savings, primarily2010 through supply chain improvements. The company believed that successful execution of the plan would create stockholder value by growing metrics including2012 required profit growth (measured with earnings before interest and taxes, and return on average invested capital. As such,or EBIT) at a rate higher than we were able to deliver.Committee concurrently redesigned the company’s long-term incentive plan to provide financial rewards if growth in these metrics was achieved.In each of fiscal years 2007, 2008 and 2009, the company’s long-term strategic plan was considered when designing the annual operating plan. The fiscal 2009 operating plan focused on delivering our “fewer, bigger, better” promise, particularly in the Consumer Foods business, continuing the operating excellence in our Commercial Foods business, and completing the divestiture of the non-core Trading and Merchandising reporting segment and effectively redeploying the sale proceeds. The Committee designed an annual incentive plan to provide financial rewards if management achieved the profit targets associated with the operating plan initiatives. As fiscal 2009 progressed, input cost inflation exceeded expectations and the outlook dimmed for the broader economy. The company lowered its profit forecast as a result. However, the Committee did not adjust the performance targets in the annual incentive plan.Over the last three fiscal years, the company has accomplished many of the goals outlined in its fiscal 2007 to 2009 strategic plan, including:• Established a new cultural focus, based around our operating principles of simplicity, accountability and collaboration, that is creating better execution by a more engaged team;• Divested approximately $3.2 billion of net assets, including those of the Trading and Merchandising business and businesses with little competitive advantage while simultaneously investing approximately $320 million (exclusive of assumed liabilities) to acquire businesses more closely aligned with our long-term goals;• Delivered winning innovation and world-class marketing;• “Rewired” business processes to enable faster and more informed business decisions, including through 23 successful implementations of SAP at company locations;• Attacked our cost structure and overhead costs to generate significant dollars for reinvestment in the business; and26
| Ÿ | awarded fiscal 2012 management incentive plan payouts to our named executive officers in amounts ranging from 70% to 100% of the targeted opportunity, in line with plan formulas and financial results; |
| Ÿ | determined that no payouts to our named executive officers were warranted under the fiscal 2010 to 2012 cycle of the performance share plan. This result was in line with plan formulas that required EBIT growth of at least 4.5% for a payout to occur, regardless of strong ROAIC performance, during the three-year performance period. Actual EBIT growth during the period failed to achieve this level; and |
| Ÿ | increased fiscal 2013 base salaries of several named executive officers as follows: Mr. Rodkin to $1,100,000 per year; Mr. Gehring to $525,000 per year; Mr. Hawaux to $660,000 per year; and Mr. Maass to $525,000 per year. These increases were made after the Committee considered several factors further described below under “Named Executive Officer Considerations”. |
The Committee believes that these actions appropriately reflect its commitment to rewarding executives based on actual performance results.
Objectives of ConAgra Foods’Our Compensation Program?Program
Our executive compensation program is designed to support fourencourage and reward behavior that promotes sustainable growth in stockholder value. The Committee believes that for the program to do so, it must accomplish five objectives:
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| Ÿ | Reward performance and | ||
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The Committee believes that designing the compensation program with multiple objectives in mind mitigates the risk that employees will take unnecessary and excessive risks that threaten the long-term health and viability of the company. Between March and May of 2012, with the assistance of management, including Finance, Human Resources and Legal department personnel, and Frederic W. Cook & Co., Inc., the Committee’s
independent compensation consultant, the Committee undertook a comprehensive risk review of our compensation programs for employees generally. As a result of this review, the Committee concluded that our employees are not incented by our compensation policies and practices to take actions that may conflict with our long-term best interests. For example, our programs:
| Ÿ | focus employees on a balance of short- and long-term goals; |
| Ÿ | consider a mix of financial and non-financial goals to prevent over-emphasis on any single metric; |
| Ÿ | allow for discretionary adjustments to ultimate incentive plan payouts, to ensure linkage between payouts and the “quality” of performance; |
| Ÿ | employ a greater portion of fixed pay (in other words, salaries) at less senior levels of the organization; even our most senior leaders other than the CEO receive at least 20% of pay opportunity in the form of salary; |
| Ÿ | cap maximum incentive opportunities; |
| Ÿ | require stock ownership for approximately 180 of our most senior employees; |
| Ÿ | prohibit directors and executive officers, including our named executive officers, from hedging their ownership of ConAgra Foods stock, including trading in publicly-traded options, puts, calls, or other derivative instruments related to ConAgra Foods stock or debt; |
| Ÿ | require excess amounts paid to any of our senior officers under our incentive compensation programs to be recovered in the event of a material restatement of our financial statements for fiscal 2013 or later fiscal years, resulting from the fraudulent, dishonest or reckless actions of the senior officer; |
| Ÿ | are overseen by the Committee and the Board, which have a range of processes and controls in place to enable diligent and prudent decision-making; and |
| Ÿ | pay incentive compensation only after our financial results are complete and the Committee has certified our performance results. |
Based on the review described above, we believe our compensation policies and practices are balanced and do not create risks that are reasonably likely to have a material adverse effect on the company. We believe our compensation programs encourage and reward prudent business judgment and appropriate risk-taking over the long-term.
How is theDesign and Approval of Our Fiscal 2012 Executive Compensation Program Designed and Approved?
Human Resources Committee
company and individual performance in prior years, and | |||
external and internal pay comparisons; | |||
individual pay histories; |
the general business environment in which | |||
the level of risk-taking the program would reward; |
| Ÿ | practices and developments in compensation | ||
the potential complexity of |
27At our 2011 annual meeting of stockholders, we provided our stockholders the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers, as disclosed in the Proxy Statement for that meeting. At the 2011 annual meeting, our stockholders approved the compensation of
our named executive officers, with almost 87% of shares cast voting in favor of approving such compensation. As the stockholder advisory vote was held after the Committee and the Board had determined the compensation opportunities for our named executive officers for fiscal 2012, the Committee and the Board did not take those results into account in determining executive compensation for fiscal 2012. However, in determining and deciding on executive compensation for fiscal 2013, the Committee took into account the results of the 2011 advisory vote, particularly the strong support expressed by our stockholders, as one of many factors considered. The Committee also considered the importance of aligning our practices with developments in corporate governance. Accordingly, the Committee made a few changes to our compensation programs for fiscal 2013, including the adoption of clawback and hedging policies and a prospective change to the term of our stock options from seven years to ten years. These changes are discussed in detail later in this CD&A.
External Comparisons.As mentioned above, the Committee considers external pay comparisons when setting pay. The Committee does not set our named executive officers’ total compensation at any specific percentile of an externalhas used peer group’s compensation levels but does find external paygroup data informative. Specifically, the Committee reviews– as well as general industry data and data from a customized survey of companies in the food and consumer products industry, andindustries – as a surveymarket check on its compensation decisions.
The Committee’s first step in using external data for fiscal 2012 was the identification of aan appropriate “peer group” of consumer product companies. Towers Perrin provides the Committee with this market information and assists the Committee in understanding the competitive market for the company’s executive positions.
| Ÿ | operations (similar scale and industry); |
| Ÿ | talent (similar labor and customer markets); and |
| Ÿ | investment profile (similar performance characteristics, growth orientation and volatility). |
At the Committee’s direction, the consultant recommended companies with annual revenues between one-third to three times our own. However, if a larger or smaller company was sufficiently similar and comparable to ConAgra Foods and with whom we competeus in other respects, such as operations or talent pool, the consultant was permitted to include it. To further enhance the comparability of the companies included in the peer group, the consultant used regression analysis, adjusting the compensation data for talent.certain survey companies to provide comparable ranges for similar positions in the industry. The Committee works with Towers Perrinalso asked the consultant to ensure that the peer group iswould be large enough to withstand unanticipated changes in the included companies’ structure or compensation programs.
Shortly before the start of the fiscal year,2012, the Committee approved the following peer group composition for fiscal 2009:
| Campbell Soup | ||||
| The Hershey Company | ||||
| McCormick & Company, Inc. | ||||
| Clorox Company | H.J. Heinz Company | Molson Coors Brewing Company | ||
| The Coca-Cola Company | Hormel Foods Corporation | PepsiCo, Inc. | ||
| Colgate-Palmolive Company | Kellogg Company | Sara Lee Corporation | ||
| Dean Foods Company |
| Kimberly-Clark Corporation | |||||
| Kraft Foods Inc. |
To maximize year-over-year comparability, the fiscal 2010 peer group as a result of being acquired.
appropriateness. The peer group has been consistent from year to year. Thesince fiscal 20082010 and 2009the Committee approved this same peer groups were identical.group for fiscal 2013. The median revenue of the peer group listed above is similar to ours. We use regression analysisours; overall, the companies fall within a range of approximately one-quarter to adjustthree and one-half times our annual revenue.
During fiscal 2011, the Committee, with the assistance of its consultant, undertook an ordinary course review of its pay for performance philosophy, including the key objectives of our executive compensation program included on pages 17 and 18. As part of this review, the Committee reaffirmed its multi-faceted approach to setting compensation opportunities. The Committee also articulated directional market positioning ranges for our named executive officers’ salaries (50th percentile), annual incentive opportunities (50th to 60th percentile), long-term incentive opportunities (65th to 75th percentile), and total direct compensation levels (60th to 70th percentile). These directional market positioning ranges were derived from peer group data as well as general industry data and data from a customized survey of companies in the food and consumer products industries provided and recommended to the Committee by its compensation consultant. What is actually paid relative to incentive opportunities is based entirely on the performance of the individual and the company, and our incentive programs are designed in a manner intended to prevent named executive officers from receiving above-market payouts without strong performance.
It is very important to note that the ranges remainonly one of a number of analytical tools and reference points used by the Committee. The Committee believes that the potential for significant differences exist between peer pay programs, and our executive compensation program, both in the degree of “stretch” inherent in incentive plan performance targets and in program design. For example, with respect to our long-term incentive opportunity, the Committee believes a stronger market positioning level is appropriate to reflect (a) the amount of risk inherent in the components of our program (options and performance shares) versus its understanding of the mix of long-term components at some peer companies, (b) the extent to which our named executive officer pay mix is weighted to long-term incentives (more than half of the opportunity, see page 21), while some peer companies award a greater proportion of fixed pay, and (c) to focus our leadership on long-term, sustainable growth.
Because of significant differences in peer pay programs, the Committee doesnot view these directional market positioning ranges as a prescriptive determinant of individual compensation. Rather, they are used by the Committee as a general guide in its decisions on the amount and mix of individual pay opportunity. Ultimately, pay opportunities for our named executive officers are based on our Committee’s decisions, taking into account factors further described in this CD&A that are particular to our company revenues.
Choosing Performance Metrics and Assessing Results. Another critical component in the process of designing the fiscal 2012 compensation program and making fiscal 2012 pay decisions was selecting the correct performance metrics for incentive plans and considering the extent to which the company and our executive officers performperformed against expectations is also a critical componentthose metrics at the end of the pay process. We discuss the link between company financialappropriate performance and our incentive compensation plans laterperiods. This is an area in this Compensation Discussion & Analysis.which Mr. Rodkin contributes to compensation decisions by providingwas consulted. In particular, the Committee withasked Mr. Rodkin to provide his views on the appropriate company goals to use for fiscal 2012 incentive plans based on his understanding of investor expectations and how those expectations are reflected in incentiveour operating plans. At the end of anthe incentive plan’s performance period, he contributes by offeringoffered the Committee his views of the company’s actual performance. Inperformance against expectations. The Committee had sole authority to approve the program metrics and payouts, but found Mr. Rodkin’s views regarding how the business performed during the fiscal 2009, the Committee used his input when determining the extent of discretion to apply to the annual incentive plan’s funding level.
Individual Performance.With respect to individual performance, which also informed fiscal 2012 compensation decisions, the Committee reliesrelied on regular performance evaluations.evaluations of the senior leadership team and focused on the outcome of strategic projects and initiatives, whether organizational goals were met, and the leadership behaviors exhibited. The full Board participatesparticipated in a formal evaluation of Mr. Rodkin’s performance each year.for fiscal 2012. As a part of this process, Mr. Rodkin providesprovided the Board with a self-assessment. For the other named executive officers, none of whom reports directly to the Board, Mr. Rodkin sharesshared his assessment of their performance against individual objectives.with the Committee. As part of this assessment, Mr. Rodkin providesprovided his view on the level of salary and incentive compensation that the Committee should consider awarding to the other named executive officers.individuals. Neither Mr. Rodkin nor any other individual named executive officer plays a direct role in his or her own compensation determination.
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What Were the Key Elements of theour Fiscal 20092012 Executive Compensation Program?Program
The fiscal 20092012 pay packages for our named executive officers consisted of salary, shortshort- and long-term incentive opportunities and other benefits discussed below. The Committee determined the mix of salary and at-risk pay (targeted short-term incentive levels as a percentage of salary, option grants and targeted performance shares) based primarily on its review of the executive’s position within the company, internal pay equity, and market data provided by Towers Perrin. The Committee believes that using a mix of compensation types (for example, salary,(salary, cash incentives, and equity) and performance periods (for example, one-year(one-year and three-year periods) promotes behavior consistent with our long-term strategic plan and minimizes the likelihood of executives having significant motivation to pursue risky and unsustainable results.
By design, targeted at-risk payincentive compensation for the named executive officers for fiscal 20092012 was a significant percentage – more than 75% – of the total opportunity.compensation. This is shown in the charts below. The Committee’s general policy is to provide the greatest percentage of this at-risk paythe incentive opportunity in the form of long-term compensation payable in shares of our common stock. The Committee believes thisthe emphasis on stock-based compensation is the best method of aligning management interests with those of our stockholders.
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Named Executive Officer Considerations. The Committee specifically considered the following when setting compensation opportunities and determining final payouts for each of our named executive officers for fiscal 2012:
Mr. Gary M. Rodkin. Mr. Rodkin has been our Chief Executive Officer and President since 2005. The Committee believes that within the company, Mr. Rodkin should have the highest ratio of incentive pay to salary and largest aggregate compensation opportunity. For fiscal 2009,2012, consistent with previous years and based onthis belief, the factors described above,Committee set Mr. Rodkin’s salary, annual incentive opportunity (which we refer to and discuss below asunder the Management Incentive Plan, or MIP)MIP, and long-term incentives (comprised of performance shares and an option award) were largerstock options) at a level higher than the comparable opportunities for the other named executive officers. The Committee took into account Mr. Rodkin’s leadership, value to the company and accountability for the performance of the entire organization. The Committee also reviewed market data relatedrelevant to Mr. Rodkin’s role. For fiscal 2012, Mr. Rodkin’s targeted total direct compensation opportunity was below the Committee’s directional market positioning range. For fiscal 2013, the Committee recommended to the full Board, and the full Board approved an increase in Mr. Rodkin’s base salary. Mr. Rodkin had not received a base salary increase since he joined the company in 2005.
Mr. John F. Gehring. Mr. Gehring has served as our Executive Vice President and Chief Financial Officer since 2009. Since he joined ConAgra Foods in 2002, Mr. Gehring has held roles with increasing responsibilities within our Finance organization and subsequently added oversight responsibility for our Information Technology function. Today, Mr. Gehring has responsibility for key areas such as Accounting, Treasury, Risk, Investor Relations, Information Technology, Enterprise Business Services and Aviation. The Committee considered the broad scope of his responsibilities, his tenure, internal equity, and external market data in setting his compensation opportunities for fiscal 2012. For fiscal 2012, Mr. Gehring’s targeted total direct compensation opportunity was
below the Committee’s directional market positioning range. Mr. Gehring received a base salary increase for fiscal 2013, following the Committee’s consideration of his growth and fiscal 2012 performance and, to a lesser extent, directional market positioning ranges.
Mr. Andre J. Hawaux. Mr. Hawaux has been the President of our Consumer Foods business since 2009. Our Consumer Foods business represented almost two-thirds of our fiscal 2012 net sales. From 2006 to 2009, Mr. Hawaux was our Executive Vice President, Chief Financial Officer. In setting Mr. Hawaux’s compensation opportunities for fiscal 2012, the Committee considered the significant responsibilities held by Mr. Hawaux, including the size of his business, as well as his tenure, fiscal 2011 business performance, internal equity, and external market data. For fiscal 2012, Mr. Hawaux’s targeted total direct compensation opportunity was below the Committee’s directional market positioning range. Mr. Hawaux received a salary increase for fiscal 2013, as a wholeresult of the Committee’s consideration of the size and strategic importance of the Consumer Foods business and his performance in the face of challenging business conditions.
Mr. Brian L. Keck. Mr. Keck has served as our Executive Vice President and Chief Administrative Officer since 2010, when he joined the company. He has responsibility for each component,our Human Resources, Communications and found them reasonable versus the peer group.External Relations, Facilities and Real Estate functions. The Committee believesconsidered Mr. Keck’s extensive prior experience, responsibilities, market data and internal pay equity in setting his compensation opportunities for fiscal 2012. For fiscal 2012, Mr. Keck’s targeted total direct compensation opportunity was above the Committee’s directional market positioning range. Mr. Keck did not receive any compensation opportunity adjustment for fiscal 2013.
Mr. Paul Maass. Mr. Maass has been the President of our Commercial Foods business and the interim president of its Lamb Weston operation, since 2010. Since he joined ConAgra Foods in 1988 as a commodity merchandiser, he quickly progressed through leadership roles within our Commercial Foods businesses. Our Commercial Foods business represented slightly more than one third of our fiscal 2012 net sales. The Committee considered Mr. Maass’ tenure in a senior leadership role, internal equity, and external market data in setting his compensation opportunities for fiscal 2012, including his long-term incentive opportunity, which was slightly lower than that within the company, Mr. Rodkin should have the highest ratio of at-risk pay to salary and largest aggregate compensation opportunity.
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Below is a more detailed analysis of each element of the fiscal 20092012 compensation program for our named executive officers.
Salaries. We pay salaries to the company, recruitment and retention pressures, the executive’s contribution to the company and the market data supplied by Towers Perrin. The Committee does not automatically set salary as a percentile versus the peer group or other market data. Salary levels depend foremost on individual experience and performance, company priorities, internal equity and overall reasonableness versus the market.
Named Executive Officer | Fiscal 2011 Salary Rate | Fiscal 2012 Salary Rate | ||
| Mr. Rodkin | $1,000,000 | There were no changes in named executive officer salaries for fiscal 2012. | ||
| Mr. Gehring | $ 500,000 | |||
| Mr. Hawaux | $ 640,000 | |||
| Mr. Keck | $ 525,000 | |||
| Mr. Maass | $ 475,000 |
Incentive Programs. Consistent with its overall compensation objectives, the Board appointed Andre J. Hawaux (our former Chief Financial Officer) to the position of President, Consumer Foods, giving him responsibility for leading the businesses comprising the company’s Consumer Foods reporting segment. Mr. Hawaux also has responsibility for our information technology function. Mr. Hawaux’s salary was increased from $525,000 to $600,000 with this significant change in his responsibilities.
Annual Incentive Plan.Plan. The fiscal 20092012 MIP provided a cash incentive opportunity to aboutapproximately 2,000 employees, includingemployees. For each of the named executive officers, the Committee used the terms of the fiscal 2012 MIP to guide its determination of the annual incentive amounts payable to each of the named executive officers. The fiscal 2012 MIP payments were based on:
our fiscal | |||
the method in which | |||
each participant’s (1) performance against his |
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First Consideration: Were Pre-Established Performance Goals Met? The Committee designed the fiscal 2009 MIP to reward achievement of company-wide PBT goals. At the start of fiscal 2009,2012, the Committee authorizedapproved PBT goals under the MIP, and developed threshold, target and maximum PBT goals, and correlated senior management incentive opportunities with thoseat corresponding levels of PBT. The Committee hasretained discretion to exclude items impacting comparability from company-wide PBT goals pursuantresults according to the terms of the plan. The PBT goals for the fiscal 20092012 MIP were:
Threshold PBT to Earn a Fiscal 2012 MIP Payment: | $ | 1,053 million | ||
Target PBT for Fiscal 2012 MIP: | $ | 1,170 million | ||
PBT to EarnMaximumPayouts under Fiscal 2012 MIP: | $ | 1,404 million | ||
The target PBT was established to align with our guidance to stockholders that fiscal 2012 diluted EPS, adjusted for items impacting comparability, was expected to grow low- to mid- single digits over comparable fiscal 2011 EPS. Target PBT correlated to EPS on the high end of the range. The following table shows the ranges of authorized payments (expressed as a percentage of salary) for the named executive officers atfor the various levels ofthreshold, target and maximum PBT goals approved for the fiscal 20092012 MIP. ThePayouts were to be interpolated between the PBT markers according to a Committee authorized a range ofapproved payout options at each level of PBT to maximize its flexibility to determine awards while still preserving the tax deductibility of these awards. The named executive officers were made aware that absent extraordinary performance, the Committee authorized these ranges with the intent of making payouts that were adjusted downward toward the low-end of each range. As a result, the Committee believes that no incentive is guaranteed, each named executive officer’s targeted MIP opportunity is a reference to the low-end of the range identified in column (2) of the following table, and each executive officer’s maximum MIP opportunity is a reference to the high-end of the range identified in column (3) of the following table.
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Named Executive Officer | Threshold MIP Award (PBT of $1,053 million) | Target MIP Award (PBT including and between | Maximum MIP Award (PBT at or above $1,404 million) | |||
| Mr. Rodkin(1) | ||||||
| Up to | ||||||
| Up to | ||||||
| Mr. Gehring | ||||||
| Up to | ||||||
| Up to | ||||||
| Mr. Hawaux | ||||||
| Up to | ||||||
| Up to |
| salary | ||||||
| 25% of salary | Up to 100% of salary | Up to 200% of salary | ||||
| Mr. Maass | 25% of salary | Up to 100% of salary | Up to 200% of salary |
| 1. | Mr. Rodkin’s employment agreement leaves his MIP opportunity uncapped, but | |
The fiscal 20092012 MIP defined PBT as the company’s income tax expense plus its net income from continuing operations before cumulative effect of changes in accounting. In order tooperations. 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 plan payouts, the terms of the planfiscal 2012 MIP allowed PBT to be adjusted for specific restructuring or unusual items that occurred during the year. For fiscal 2009,2012, the
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pension-related amortization expense and created an incremental change to earnings in fiscal 2012 for the immediate recognition of certain actuarial gains and losses in pension liabilities and assets. For purposes of the fiscal 2012 MIP, we excluded the impact of expenses incurred in connection with a debt refinancing transaction, a litigation related charge,this change. For fiscal 2012, the Committee also approved adjustments to eliminate the impacts during the year of restructuring costs and a gainevents, gains on the saleacquisition of a small business.
The company achieved fiscal 20092012 PBT of $1,048.8$1,117 million for MIP purposes, which was abovebetween threshold but less than targeted performance. Payouts upand target performance levels. According to the high-endpre-established goals, this performance level equated to a payout of the levels indicated in column (1)78% of the above table were thus permitted, but, as discussed below, not ultimately approved.
Second Consideration:How was the Business Plan Delivered? Once the PBT review was complete, the Committee considered the manner in which management executed the operating plan during the year. The fiscal 20092012 MIP gave the Committee discretion to reduce executive officermodify payouts by up to 25% based on this assessment.
Mr. Rodkin provided his views to the Committee during this process. Mr. Rodkin recognized that the companywe did not achieve the company-wide PBT target set at the start of the fiscal year, and communicated his strong belief that pay levels should be commensurate with performance. He noted the challenges experienced by the business, and his disappointment with the company’s below-target PBT results. Mr. Rodkin advised the Committee, of his beliefhowever, that whileeven with below-target PBT performance, the company had many successes during the year, such as (1) the strong turn-around of the company’s businesses faced challenges at times during the year, the company’s ConAgra MillsLamb Weston business, (which is a part(2) effective pricing initiatives designed to offset input cost inflation, (3) $694 million in portfolio investments from acquisitions, (4) successful performance against cost savings and operating cash flow goals and (5) accomplishments of the Commercial Foods segment) excelled consistently. He also discussed his views of the importance to the long-term success of the company of building momentum in the Consumer Foodsvarious business and its impressive second half results, as well as of the Commercial Foods business’ ability to navigate the difficult economic environment.functions. Mr. Rodkin advisedrecommended that payouts fund at the Committee that each of these factors contributed to78% level authorized under the company’s ability to achieve its revised profit targets for the year.
Third Consideration: How Did Each Named Executive Officer Perform?The Committee’s final consideration in determining each named executive officer’s fiscal 20092012 MIP payout was an assessment of the executive’shis individual performance. Mr. Rodkin’s input on the individual contribution of each other named executive officer in fiscal 2009these leaders assisted the Committee in approving specific MIP payouts. In line with the company’s strong pay for performance philosophy, Mr. Rodkin shared his perspective that given the overall performance of the company, the formulaically derived payouts were appropriate for these individuals.Messrs. Gehring and Keck. He shared his views that Mr. Maass should be rewarded at a level above 78% of target, given the strong turn-around of the Lamb Weston operations under his effective leadership. Likewise, he shared his belief that despite the many accomplishments of the Consumer Foods segment in the face of external challenges in fiscal 2012, a slight reduction below the 78% level for Mr. Hawaux would be warranted given the performance of the segment. The Committee agreed, and approved MIP payouts to the named executive officers ranging from 70% to 100% of the targeted opportunity. The full Board’s performance evaluation of Mr. Rodkin was used in determining his payout.
The Committee believes that the MIP awards paid to the named executive officers for fiscal 20092012 are consistent with the level of accomplishment by the company and theeach named individuals.
| Maximum MIP Award Authorized | ||||||||
| Named | For Performance Between | Actual MIP Payout | ||||||
Executive Officer | Threshold and Target | ($) | ||||||
| Gary M. Rodkin | $ | 2,000,000 | $ | 1,100,000 | ||||
| John F. Gehring | $ | 366,600 | $ | 220,000 | ||||
| Andre J. Hawaux | $ | 600,000 | $ | 390,000 | ||||
| Scott Messel | $ | 242,900 | $ | 160,300 | ||||
| Peter M. Perez | $ | 344,000 | $ | 200,000 | ||||
| Robert F. Sharpe, Jr. | $ | 675,000 | $ | 450,000 | ||||
Named Executive Officer | Award Authorized for PBT | Actual MIP Payout | ||
| Mr. Rodkin | $1,560,000 | $1,560,000 | ||
| Mr. Gehring | $ 390,000 | $ 390,000 | ||
| Mr. Hawaux | $ 499,200 | $ 450,000 | ||
| Mr. Keck | $ 409,500 | $ 409,500 | ||
| Mr. Maass | $ 370,500 | $ 475,500 |
Long-Term Incentive Plan. Working closely with Towers Perrin, the Committee redesigned ourPlan. The long-term incentive plan for senior officers in fiscal 2007. In each year of the program to date (2007, 2008 and 2009), the plan has includedincludes an annual award of stock options and an annual award of performance shares that are settled in shares of common stock and that are focusedbased on results over the ensuinga three-year performance period (in other words, the fiscal 2007 to 2009 performance period, the fiscal 2008 to 2010 performance period and the fiscal 2009 to 2011 performance period).period. The performance shares reward the improvementachievement over the three-year
performance period inof metrics likely to have a significant impact on enterprise value: growth in earnings from
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The Committee firmly believes in aligning our senior officers’ interests with those of our stockholders. The significant extent to which equity is included in both the executive pay program overall and this program in particular evidences this belief. We describe each component of the plan below.
Stock Options. The use of stock options directly aligns the interests of the named executive officers with those of our stockholders. TheAll options granted in July 2008 to our named executive officers for fiscal 20092012 have a seven-year term, an exercise price atequal to the company’s closing market price of our common stock on the date of grant, ($21.26),a seven-year term, and vestedvest 40% on the first anniversary of the grant date.date, subject to the executive’s continued employment with the company. The remaining portion of the stock option award vests in equal installments on the second and third anniversaries of the grant date, subject to the executive’s continued employment with the company. As noted in the table below, Messrs. Gehring and Hawaux received incremental stock option grants in January 2009 in connection with their promotions.employment. The accounting expense associated withgrant date fair value of the stock options awarded to our named executive officers for fiscal 2009 is included in the “Option Awards” column of the Summary Compensation Table.Table – Fiscal 2012 on page 32. The number of options granted to each named executive officer under the fiscal 20092012 option program is set forth below. The number of options awarded to our named executive officers has not changed year-to-year according to stock price fluctuations, as follows:
Named Executive Officer | ||||
Stock Options | ||||
Granted For Fiscal | ||||
| 500,000 | ||||
| 160,000 | ||||
| Mr. Hawaux(1) | 160,000 | |||
| Mr. Keck(1) | 160,000 | |||
| Mr. Maass(1) | 120,000 | |||
| 1. |
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| Performance Shares | Performance Shares | Performance Shares | ||||||||||
| Named | Granted for Fiscal | Granted for Fiscal | Granted for Fiscal | |||||||||
Executive Officer | 2009 to 2011 Program | 2008 to 2010 Program | 2007 to 2009 Program(2) | |||||||||
| Gary M. Rodkin | 100,000 | 100,000 | 300,000 | |||||||||
| John F. Gehring (1) | 29,000 | 16,000 | 48,000 | |||||||||
| Andre J. Hawaux | 32,000 | 32,000 | 80,000 | |||||||||
| Scott Messel | 12,000 | 12,000 | 36,000 | |||||||||
| Peter M. Perez | 24,000 | 24,000 | 72,000 | |||||||||
| Robert F. Sharpe, Jr. | 32,000 | 32,000 | 96,000 | |||||||||
Named Executive Officer | Performance Shares Granted for Fiscal 2012 to 2014 Program | Performance Shares Granted for Fiscal 2011 to 2013 Program | Performance Shares Granted for Fiscal 2010 to 2012 Program | |||
| Mr. Rodkin | 100,000 | 100,000 | 100,000 | |||
| Mr. Gehring | 32,000 | 32,000 | 32,000 | |||
| Mr. Hawaux | 32,000 | 32,000 | 32,000 | |||
| Mr. Keck | 32,000 | 32,000 | —(1) | |||
| Mr. Maass | 24,000 | 24,000(1) | 8,000 |
| 1. | ||
The accounting expense associated with thesegrant date fair value of the performance share awardsshares, granted in July 2011 for the fiscal 2012 to 2014 cycle is based on the probable outcome of the performance conditions, and is included in the “Stock Awards” column of the Summary Compensation Table. More specific information aboutTable – Fiscal 2012. The Committee considered the performance shares follows.
As indicated in the table above. Theabove, the number of targeted performance shares, granted under the fiscal 2007 to 2009 program is greater than that provided under the other outstanding cycles (by a factor of approximately three) because it was the first cycle of the new program. The Committee viewed a larger grant as appropriate for the first year to provide an effective transition from prior programs and serve as a retention tool. In each of fiscal years 2008 and 2009, the award sizes, by named executive officer, havehas been approximately flat, (excluding the impact of promotions). In lieuother than in connection with promotions. Instead of determining performance share grant sizes using a targeted dollar value, and then dividing that value by our stock price on the date of grant, the Committee usesused a fixed share approach.approach to determine target awards in each of the outstanding cycles. For fiscal 2009, this meantthese performance cycles, the Committee concluded that notwithstanding a lowertargeted dollar value approach would inappropriately skew the number of performance shares awarded (particularly during a recessed stock price atmarket). Instead, the timeCommittee awarded the same number of grant as comparedtarget performance shares to fiscal 2008 (a closing market price of $21.26 per share in July 2008 vs. a closing market price of $26.80 per share in July 2007), the named executive officers received approximatelyeach year, with the same numberpremise that the market will normalize over the three-year performance period of targeted performance shares.the awards. The Committee believedwill continue to evaluate its approach, and ensure that this approach was appropriate because the executives should earn their way into higher levels of compensation by achieving the company’s long-term plantargeted awards are appropriately sized.
Fiscal 2010 to 2012 and creating stockholder value.
| Ÿ | EBIT: Net interest expense + income tax expense + income from continuing operations. Similar to the MIP, adjustments may be made for unusual items. |
| Ÿ | ROAIC: (EBIT x (1- the company’s tax rate)) / average invested capital. Average invested capital is the thirteen-month rolling average of the total assets less cash and cash equivalents and non-interest bearing liabilities. Adjustments may be made to these calculations for unusual items. |
The following table includes performance targets for the three cycles are set forth in the following table. Results at the target
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| 3-Year Compound | 3-Year Average ROAIC | |||||||
| EBIT Growth Target | Target | |||||||
| Fiscal 2007 to 2009 cycle | 6 | % | 10.5 | % | ||||
| Fiscal 2008 to 2010 cycle | 6 | % | 11.6 | % | ||||
| Fiscal 2009 to 2011 cycle | 14 | % | 10.6 | % | ||||
The fiscal 2010 to 2012 cycle required EBIT growth of at least 4.5% for a payout in any cycleto occur, regardless of ROAIC performance. Because our results were short of the program. In each case,required EBIT growth goal, no actual payout of performance shares occurred under this cycle. Similarly, the fiscal 2011 to 2013 cycle requires EBIT growth of at least 4.0% for a payout to occur, regardless of ROAIC performance.
| 3-Year Compound EBIT Growth Target | Minimum EBIT Growth for Payout to Occur (regardless of ROAIC performance) | 3-Year Average ROAIC Target | ||||
Fiscal 2010 to 2012 cycle | 8% | 4.5% | 11% | |||
Fiscal 2011 to 2013 cycle | 8% | 4.0% | 13% |
The maximum number of shares that maycould be earned under the plan is 300% of the original grant.
Fiscal 2012 to 2014 cycle: For the fiscal 2012 to 2014 cycle of the performance share plan, the Committee approved a change to the lossperformance metrics. In lieu of EBIT from the Trading and Merchandising business. Accordingly,ROAIC goals, the Committee authorized continued inclusionapproved goals based on our three-year average cash flow return on operations, which we refer to as CRO, and three-year average net sales growth. The Committee made this change following an extensive review, throughout fiscal 2011, with management and its compensation consultant’s assistance, of financial metrics that would ensure strong alignment between participant incentives and the behaviors necessary to drive business success in line with investor expectations. Although EBIT and ROAIC remain important metrics and continue to be the performance objectives for the outstanding fiscal 2011 to 2013 cycle of the fiscal 2008 earnings fromperformance share plan, the business in the EBIT calculationCommittee ultimately determined that a set of metrics with strong emphasis on net sales growth, return on investments, and operating cash flow growth were preferable for the two cycles, notwithstanding that the segment’s results were movedfiscal 2012 to discontinued operations in connection with the sale. However, no adjustment was made to the EBIT calculation for either cycle to compensate2014 cycle.
The primary metric for the impactfiscal 2012 to 2014 cycle, CRO, is calculated by dividing operating cash flow by average invested capital as follows:
Primary Metric based on CRO (0% to 200% of Target Payout) | ||||||
Operating Cash Flow | = | Net income from continuing operations + Depreciation and amortization expense +/- change (current fiscal year vs. prior fiscal year) in average “Trade Working Capital” (13 point average) | ||||
Average Invested Capital | = | Interest bearing debt + Equity (13 point average) | ||||
Achievement of three-year average CRO of 12.0%, which is the threshold CRO for the fiscal 2012 to 2014 cycle, results in a payout equal to 25% of each participant’s approved target opportunity. Target CRO for the fiscal 2012 to 2014 cycle is 14.4% and could result in a payout equal to 100% of each participant’s approved target opportunity, subject to application of Committee discretion.
If threshold CRO of 12.0% is achieved, an additional payout may be made based on our fiscal 2009 EBIT froma secondary metric of three-year average net sales growth. The additional payout under this secondary metric can be up to a maximum of 20% of target, if average net sales growth of 6% or more is achieved. Average net sales growth during the sale of the business. period below 2% is not rewarded.
As a result of the sale, for fiscal 2009, both income from operationstwo-metric structure, high levels of financial performance can result in payouts up to a total of 220% of targeted amounts, 200% based on the primary metric, CRO, and the gain from the sale (both recorded in discontinued operations) of the Trading and Merchandising reporting segment were excluded from EBIT, resulting in an adverse impact20% based on EBITaverage net sales growth. As contemplated in the pre-specified formula,
For all cycles, the Committee reducedmaintains the denominator in the ROAIC calculation by the amount of the net proceeds from the sale. The authorization covered the calculation of fiscal 2008 and 2009 ROAIC under the fiscal 2007ability to 2009 cycle, and the calculation of fiscal 2008, 2009 and 2010 ROAIC under the fiscal 2008adjust financial metrics to 2010 cycle.
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With respect to the fiscal 20082011 to 20102013 program and fiscal 20092012 to 20112014 program, the cycles are ongoing and thus no payouts have yet been earned.
Other Features. Performance shares that have not been paid at the time of a participant’s termination of employment are forfeited. An exception allows for pro-rata payouts in the event of death, disability or retirement. The Committee has also retained the discretion to provide for payouts on termination when it finds it appropriate and in the best interest of the company. To date, however, the Committee has not used this discretion. Both this exception and discretion are subject to satisfaction of the performance goals. Dividend equivalents are paid on the portion of performance shares actually earned, and are paid at the regular dividend rate in shares of our stock.
Other Fiscal 2012 Compensation.The long-term plan approvedadditional elements of our compensation program for the named executive officers during fiscal 2010 to 2012 performance period is substantially similar to the prior years’ cycles. It does not have an interim payout feature.
Other Fiscal 2009 Compensation.
Benefit Programs. We offer a package of core employee benefits to our employees, including our named executive officers. This includesWith respect to health and welfare benefits, we offer health, dental and vision coverage, and life insurance and disability insurance. The company and employee participants share in the cost of these programs. Each of the named executive officers was also entitled to participate in an executive physical program together with his spouse, during fiscal 2009. 2012.
The company coverscovered the cost of these physicals,the physical, although the executive iswas responsible for the taxes associated with this expense. the program. As an alternative to participation in the executive physical program, each of the named executive officers was entitled to elect participation in a medical access program, with the cost of the program imputed to the executive as taxable income. We also offer a matching-gifts program through our ConAgra Foods Foundation. To maximize community impact, the ConAgra Foods Foundation will match, dollar for dollar, donations employees make to eligible organizations, up to $1,000 in a calendar year. Donations made by the Foundation on behalf of a named executive officer are shown in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2012.
With respect to retirement
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Some of the named executive officers and other employees at various levels of the organization participate in a non-qualified pension plan, non-qualified 401(k) plan andand/or voluntary deferred compensation plan. The non-qualified pension and non-qualified 401(k) plans permit us to pay retirement benefits to certain named executive officers in amounts that exceed the limitations imposed by the Internal Revenue Code, which we refer to as the Code, under our qualified plans. With respect to the non-qualified pension plan, ourthe employment agreementsagreement entered into with Messrs.Mr. Rodkin and Sharpe provideupon his hiring in 2005 provides that subject to service requirements and various exceptions, years of service for purposes of calculating benefits will be credited at athree-for-one rate until the executivehe has service credit of thirty years. Mr. Rodkin’s agreement also provides that the annual earnings amount to be used in the pension benefit formula under the non-qualified pension plan will be no less than $3.0 million.
The company’s deferred compensation plan allows the named executive officers, as well as a broader group of approximately 800 employees, to defer receipt of up to 50% of their base salary and 85% of their annual cash incentive cash compensation. The program permits executives to save for retirement in a tax-efficient way at minimal administrative cost to the company. Executives who participate in the program are not entitled to above-market (as defined by the SEC) or guaranteed rates of return on their deferred funds.
We show contributions made by the company to the named executive officers’ 401(k) plan and non-qualified 401(k) plan accounts in the “All Other Compensation” column of the Summary Compensation Table.Table – Fiscal 2012. We provide a complete description of these retirement programs under the headings “Pension Benefits —– Fiscal 2009”2012” and “Non-Qualified Deferred Compensation —– Fiscal 2009”2012” below.
Perquisites.
The Committee has determined it appropriate to cover Mr. Rodkin by our security policy. As a result, he is required to take corporate aircraft for all business and personal air transportation. To offset a portion of the incremental cost to the company of Mr. Rodkin’s personal use of corporate aircraft, the company hasin 2007 we entered into an aircraft timesharetime share agreement with Mr. Rodkin. The Committee also authorized a timeshare agreement for Mr. Sharpe. Under the agreements, the executives areagreement, Mr. Rodkin is responsible for reimbursing the company,us, in cash, in an amount approximately equalamounts to help offset a portion of our incremental costs of personal flights, consisting of the variable cost of operatingfuel and incidentals such as landing and parking fees, airport taxes and catering costs for such flights. We do not charge Mr. Rodkin for the fixed costs that would be incurred in any event to operate company aircraft (for example, aircraft purchase costs, maintenance, insurance and flight crew salaries).
Relocation Benefits. We offer relocation benefits to employees at many levels in our organization. These benefits are available upon hire or an internal movement requiring a change in primary business location. Mr. Keck received relocation benefits in fiscal 2011 upon hire that are consistent with our standard relocation package. In fiscal 2012, the company incurred incremental costs related to Mr. Keck’s relocation in the form of charges by the relocation company that administered Mr. Keck’s home sale. These costs are included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2012 for each personal flight he takes.
Change in Control/of Control / Severance Benefits.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 inof control. The Committee routinely evaluates participation in this program and theits benefit levels contained therein to ensure their reasonableness.
Following a review of market practices during fiscal 2012, the Committee adopted a policy that any future change in control benefits will be structured without any excise tax gross-up protection. For example, if the company promotes or hires an individual to a position that is, in the Committee’s view, appropriate for change of control program participation, the individual will not be 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 future participants would be 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 “Potential Payments uponUpon Termination or Change inof Control”.
We have also adopted a broad severance plan applicable to most 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 with our named executive officers. Our existing severance arrangements with the named executive officers are also described under the heading “Potential Payments Upon Termination or Change of Control”.
Employment and Letter Agreements. We are a party to an employment agreement with Mr. Rodkin. Mr. Rodkin’s employment agreement generally describes his duties and responsibilities, provides for a minimum base salary and vacation allowance, and subjects Mr. Rodkin to our stock ownership guidelines and to customary confidentiality and one-year non-competition and non-solicitation restrictions. The agreement also provides for indemnification, participation in our annual incentive program at a minimum target opportunity of 200% of base salary, and participation in our long-term incentive programs, our employee and executive pension and deferred compensation plans, our 401(k) plan and our welfare benefit plans and programs. For more information about the terms of Mr. Rodkin’s participation in our pension plans and deferred compensation plans, as provided for in the agreement, see below under the headings “Pension Benefits – Fiscal 2012” and “Non-Qualified Deferred Compensation – Fiscal 2012”. The agreement also provides for severance, termination and change of control benefits further described below under the heading “Potential Payments Upon Termination or Change of Control”.
We are also a party to letter agreements with each of Messrs. Hawaux and Keck. Mr. Hawaux’s 2006 letter agreement and Mr. Keck’s 2010 letter agreement provide for a minimum base salary and the officers’ participation in our annual and long-term incentive programs, our employee and executive pension plans, our 401(k) plan and our welfare benefit plans and programs. These letter agreements also provide for severance, termination and change of control benefits further described below under the heading “Potential Payments Upon Termination or Change of Control”. Mr. Keck’s letter agreement also provided for a grant of 40,000 restricted stock units that vest over three years, as described further in the Outstanding Equity Awards at Fiscal Year-End – Fiscal 2012 table below, provides for repayment of a portion of his sign-on bonus under certain termination scenarios, and subjects him to our stock ownership guidelines.
Fiscal 2013 Programs
The Committee reviewed and approved fiscal 2013 compensation opportunities for our executive and senior officers in July 2012. As noted previously, the Committee approved increases to base salaries for Messrs. Rodkin, Gehring, Hawaux and Maass.
The Committee also approved a change to the design of the fiscal 2013 MIP to provide for performance metrics that more closely align with the company’s growth goals. Payouts to the named executive officers under the fiscal 2013 MIP require the achievement in fiscal 2013 of (1) a threshold level of diluted earnings per share from continuing operations (“EPS”) and (2) company-wide goals for net income and net sales. The named executive officers will be entitled to a payout equal to 75% of their approved target incentive if the company achieves a threshold level of performance in both EPS and net income and a payout equal to 25% of their approved target incentive if the company achieves a threshold level of performance in both EPS and net sales. No portion of the incentive is guaranteed. High levels of financial performance can result in payouts up to 200% of targeted amounts. The Committee retained the discretion to modify final payout levels based on (1) the methods by which
actual financial results are achieved, (2) individual performance and (3) extraordinary corporate events. The Committee made this change in plan metrics after extensive review with management’s and its compensation consultant’s assistance.
With respect to long-term incentives, the Committee approved grants of performance shares and stock options for our named executive officers as it has in the past. The structure of the performance share plan remains materially unchanged from the fiscal 2012 to 2014 cycle described above. However, after reviewing market data and discussing the matter with its compensation consultant, the Committee did approve a change to the term of stock option grants from seven years to ten years. This change is prospective only, and does not affect any previously granted awards.
There was no material change in the compensation elements described under “Other Fiscal 2012 Compensation” above.
Committee’s Views on Executive Stock Ownership?Ownership
The Committee has adopted stock ownership guidelines forapplicable to approximately 180 of our senior employees and the company’s senior officersguidelines, represented as a percentage of salary, increase with greater responsibility within the company. The Committee has adopted these guidelines because it believes that management stock ownership causespromotes alignment with stockholder interests. The number of shares of ConAgra Foods common stock that our named executive officers are required to hold is set at a multiple of their salary and increases with greater responsibility within the company. The named executive officers are expected to reach the set leveltheir respective ownership requirement within a reasonable period of time after appointment. Shares personally acquired by the executive through open market purchases or through our 401(k) plan or employee stock
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| Stock Ownership | Actual | |||||||
| Named | Guideline | Ownership | ||||||
Executive Officer | (% of salary) | (% of fiscal 2009 salary) (1) | ||||||
| Gary M. Rodkin | 600 | 1,170 | ||||||
| John F. Gehring | 400 | 465 | ||||||
| Andre J. Hawaux | 400 | 379 | ||||||
| Scott Messel | 200 | 309 | ||||||
| Peter M. Perez | 300 | 463 | ||||||
| Robert F. Sharpe, Jr. | 400 | 412 | ||||||
Named Executive Officer | Stock Ownership Guideline (% of Salary) | Actual Ownership (% of Salary)(1) | ||
| Mr. Rodkin | 600% | 1,880% | ||
| Mr. Gehring | 400% | 710% | ||
| Mr. Hawaux | 400% | 650% | ||
| Mr. Keck(2) | 400% | 260% | ||
| Mr. Maass(2) | 300% | 70% |
| 1. | Based on the average daily price of our common stock on the NYSE for the |
| 2. | Mr. Keck joined the |
What are the Committee’s Practices Regarding the Timing of Equity Grants?Grants
We do not backdate stock options or grant stock options retroactively. We do not coordinate grants of stock options with disclosures of positive or negative information. All stock options are granted with an exercise price equal to the closing price of our common stock on the NYSE on the date of grant. The vast majority of our stock option grants for a fiscal year are made in July, at a regular Committee meeting. When management proposes a meritan off-cycle award or sign-on grant for a non-executive officer, the Committee considers approval of the grant at a regularly scheduled Committee meeting. In the event management proposes a sign-on grant for a senior officer and a grant-related decision is necessary between regularly scheduled Committee meetings, the Committee may hold a special meeting to consider the grant. If approved, the grant date will be the first trading day of the month on or following the officer’s date of hire.
What are the Key Tax and Accounting Implications of the Committee’s Compensation Decisions?Decisions
U.S. federal income tax law prohibits the company from taking a tax deduction for certain compensation paid in excess of $1 million to the company’s chief executive officer or any of the company’s three other most highly compensated executive officers, generally other than the chief financial officer, who are employed as of the end of the calendar year. This limitation does not apply to qualified performance-based compensation under thefederal tax law. Generally, this is compensation paid only if the individual’s performance meets pre-established, objective goals based on performance goalsmetrics approved by our stockholders. The Committee’s intent is to structure our executive compensation programs so that payments will generally be fully tax deductible. For fiscal 2012, all annual incentive and performance share awards to covered employees were subject to, and made in accordance with, performance-based compensation arrangements that were intended to qualify as tax deductible. In order to achieve this result, the Committee approved a framework in which (1) maximum awards under these incentive programs would be authorized upon attainment of diluted EPS of $0.50 (compared to actual fiscal 2012 diluted EPS of $1.12) and (2) negative discretion would be applied by the Committee to decrease authorized awards based upon the program frameworks described above (that is, based on PBT results for the MIP, and either EBIT and ROAIC or CRO and net sales growth results for the performance share plan). The request for stockholder approvalCommittee intends to continue using this type of approach to preserve the 2009 Stock Plan and EIP, for example, are a parttax deductibility of this effort.its compensation arrangements in the future. However, the Committee maydoes retain the discretion to occasionally make payments or grants of equity that are not fully deductible, if,for example, its decision to raise Mr. Rodkin’s salary for fiscal 2013 to $1,100,000 when, in its judgment, those payments or grants are needed to achieve its overall compensation objectives.
39
The Human Resources Committee has reviewed and discussed the company’s Compensation Discussion &and Analysis with management. Based upon suchthis review and discussions,discussion, the Committee recommended to the Board of Directors that the company’s Compensation Discussion &and Analysis be included in this proxy statementProxy Statement and incorporated by reference in the company’s Annual Report onForm 10-K for the fiscal year ended May 31, 2009.
ConAgra Foods, Inc. Human Resources Committee
Steven F. Goldstone
Joie A. Gregor
W.G. Jurgensen
Ruth Ann Marshall
Ken Stinson, Chairman
40
The table below presents compensation information for individuals who served as our Chief Executive Officer and Chief Financial Officer during fiscal 2012 and for each of the other three most highly-compensated executive officers who were serving as executive officers at the end of fiscal 2012. Mr. Keck was not a named executive officer in fiscal 2010 and Mr. Maass was not a named executive officer in fiscal 2011 or fiscal 2010; information about their compensation for those fiscal years is not included. The amounts set forth in the following Summary Compensation Table and Grants of Plan Based Awards table for Messrs. Rodkin, Hawaux and Sharpe are based in part on written agreements in place between ConAgra Foods and eachcertain of these individuals. The impact of these agreements onindividuals as discussed in the various elements of compensation reported in these tables is incorporated into the “Compensation Discussion & Analysis”. The terminationCD&A and severance benefit provisions of these agreements are described under the heading “Potential Payments Upon Termination or Change inof Control”.
| Change in | |||||||||||||||||||||||||||||||||||||||||||||
| Pension | |||||||||||||||||||||||||||||||||||||||||||||
| Value and | |||||||||||||||||||||||||||||||||||||||||||||
| Non- | |||||||||||||||||||||||||||||||||||||||||||||
| Non-Equity | qualified | ||||||||||||||||||||||||||||||||||||||||||||
| Incentive | Deferred | All | |||||||||||||||||||||||||||||||||||||||||||
| Plan | Compen- | Other | |||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | Compen- | sation | Compen- | |||||||||||||||||||||||||||||||||||||||||
| Salary | Bonus | Awards | Awards | sation | Earnings | sation | Total | ||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Year | ($)(2) | ($) | ($)(3)(4) | ($)(3)(5) | ($)(6) | ($)(7) | ($)(8) | ($) | ||||||||||||||||||||||||||||||||||||
| Gary M. Rodkin | 2009 | 1,019,231 | — | 1,622,222 | 3,774,612 | 1,100,000 | 1,127,311 | 187,596 | 8,830,972 | ||||||||||||||||||||||||||||||||||||
| CEO and President | 2008 | 1,000,000 | — | 4,756,417 | 3,303,303 | 1,800,000 | 1,424,127 | 297,526 | 12,581,373 | ||||||||||||||||||||||||||||||||||||
| 2007 | 1,000,000 | — | 5,572,974 | 2,825,033 | 3,600,000 | 1,099,253 | 343,247 | 14,440,507 | |||||||||||||||||||||||||||||||||||||
| John F. Gehring | 2009 | 425,962 | — | 634,663 | 289,653 | 220,000 | 46,742 | 28,595 | 1,645,615 | ||||||||||||||||||||||||||||||||||||
| EVP and CFO | 2008 | 400,000 | — | 1,233,070 | 342,894 | 345,600 | 33,903 | 35,682 | 2,391,149 | ||||||||||||||||||||||||||||||||||||
| 2007 | 400,000 | — | 1,465,535 | 231,888 | 576,000 | 42,077 | 18,755 | 2,734,255 | |||||||||||||||||||||||||||||||||||||
| Andre J. Hawaux (1) | 2009 | 562,500 | — | 864,493 | 632,112 | 390,000 | 49,303 | 42,984 | 2,541,391 | ||||||||||||||||||||||||||||||||||||
| President, Consumer | 2008 | 483,173 | — | 2,041,238 | 546,278 | 525,000 | 62,705 | 147,489 | 3,805,883 | ||||||||||||||||||||||||||||||||||||
| Foods | 2007 | 242,308 | 135,000 | 875,421 | 226,403 | 810,000 | 7,178 | 300,482 | 2,596,792 | ||||||||||||||||||||||||||||||||||||
| Scott Messel, | 2009 | 353,673 | — | 422,219 | 208,184 | 160,300 | 14,319 | 13,696 | 1,172,391 | ||||||||||||||||||||||||||||||||||||
| SVP, Treasurer, and | 2008 | 344,058 | 731,822 | 229,751 | 196,700 | 3,404 | 7,836 | 1,513,571 | |||||||||||||||||||||||||||||||||||||
| Asst Corp Secretary | 2007 | 330,000 | 117,200 | 890,562 | 146,496 | 396,000 | 21,327 | 7,888 | 1,909,473 | ||||||||||||||||||||||||||||||||||||
| Peter M. Perez | 2009 | 435,577 | — | 544,375 | 416,368 | 200,000 | 22,526 | 16,610 | 1,635,456 | ||||||||||||||||||||||||||||||||||||
| EVP, Human Resources | 2008 | 410,000 | — | 1,357,884 | 459,502 | 295,200 | 14,462 | 20,877 | 2,557,925 | ||||||||||||||||||||||||||||||||||||
| Robert F. Sharpe, Jr. (1) | 2009 | 687,981 | — | 519,110 | 1,234,278 | 450,000 | 513,920 | 65,426 | 3,470,715 | ||||||||||||||||||||||||||||||||||||
| EVP, External Affairs | 2008 | 662,019 | — | 1,522,053 | 1,080,768 | 725,000 | 601,416 | 175,027 | 4,766,283 | ||||||||||||||||||||||||||||||||||||
| and President, | 2007 | 600,000 | 150,000 | 1,783,352 | 895,206 | 1,200,000 | 399,717 | 112,797 | 5,141,072 | ||||||||||||||||||||||||||||||||||||
| Commercial Foods | |||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compen- sation ($)(5) | Change in Pension Value and Non- qualified Deferred Compen- sation Earnings ($)(6) | All Other Compen- sation ($)(7) | Total ($) | |||||||||||||||||||||||||||
Gary M. Rodkin | 2012 | 1,000,000 | — | 2,615,000 | 1,630,000 | 1,560,000 | 3,384,557 | 76,570 | 10,266,127 | |||||||||||||||||||||||||||
CEO and President | 2011 | 1,000,000 | — | 2,136,000 | 1,675,000 | 440,000 | 3,081,026 | 174,954 | 8,506,980 | |||||||||||||||||||||||||||
| 2010 | 1,000,000 | — | 1,905,000 | 1,351,850 | 3,200,000 | 2,178,843 | 124,612 | 9,760,305 | ||||||||||||||||||||||||||||
John F. Gehring | 2012 | 500,000 | — | 836,800 | 521,600 | 390,000 | 234,903 | 30,690 | 2,513,993 | |||||||||||||||||||||||||||
EVP and CFO | 2011 | 494,231 | — | 683,520 | 536,000 | 110,000 | 221,123 | 45,019 | 2,089,893 | |||||||||||||||||||||||||||
| 2010 | 450,000 | — | 609,600 | 432,592 | 750,000 | 139,679 | 42,430 | 2,424,301 | ||||||||||||||||||||||||||||
Andre J. Hawaux | 2012 | 640,000 | — | 836,800 | 521,600 | 450,000 | 189,806 | 34,438 | 2,672,644 | |||||||||||||||||||||||||||
President, Consumer | 2011 | 629,231 | — | 683,520 | 536,000 | 140,800 | 188,675 | 63,624 | 2,241,850 | |||||||||||||||||||||||||||
Foods | 2010 | 600,000 | — | 609,600 | 432,592 | 1,100,000 | 111,900 | 59,010 | 2,913,102 | |||||||||||||||||||||||||||
Brian L. Keck(1) | 2012 | 525,000 | — | 836,800 | 521,600 | 409,500 | 49,588 | 67,984 | 2,410,472 | |||||||||||||||||||||||||||
EVP and Chief | 2011 | 381,635 | 100,000 | 1,476,480 | 440,000 | 115,500 | — | 299,918 | 2,813,533 | |||||||||||||||||||||||||||
Administrative Officer | ||||||||||||||||||||||||||||||||||||
Paul T. Maass(1) | 2012 | 475,000 | — | 627,600 | 391,200 | 475,000 | 332,138 | 41,398 | 2,342,336 | |||||||||||||||||||||||||||
President, Commercial | ||||||||||||||||||||||||||||||||||||
Foods | ||||||||||||||||||||||||||||||||||||
| 1. | Mr. |
| 2. | During fiscal 2011, a $100,000 sign-on bonus was awarded to Mr. Keck as a recruitment tool when he | |
| 3. |
| 4. | Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the stock options granted during the reported fiscal years. Assumptions used in |
| 5. | For |
41
| 6. | ||
| The measurement date for fiscal |
| 7. | The components of fiscal |
| Perquisites and Personal Benefits (a) | (Column 5) | |||||||||||||||||||||||||||
| (Column 1) | (Column 3) | (Column 4) | Company | |||||||||||||||||||||||||
| Relocation | Personal | Exec Physical/ | Contribution to | (Column 6) | (Column 7) | |||||||||||||||||||||||
| Related | (Column 2) | Use of | Security | Defined | Tax | Group | ||||||||||||||||||||||
| Ground | Relocation | Company | Costs/ | Contribution | Reimburse- | Term Life | ||||||||||||||||||||||
| Transportation | Expenses | Aircraft | Home Office | Plans | ments | Insurance | ||||||||||||||||||||||
Named Executive Officer | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| Gary M. Rodkin | (b) | (b) | 48,806 | (b) | 109,836 | — | (b) | |||||||||||||||||||||
| John F. Gehring | — | — | — | (b) | 22,157 | — | (b) | |||||||||||||||||||||
| Andre J. Hawaux | — | — | — | — | 32,831 | (b) | (b) | |||||||||||||||||||||
| Scott Messel | — | — | — | (b) | (b) | — | (b) | |||||||||||||||||||||
| Peter M. Perez | — | — | — | (b) | (b) | — | (b) | |||||||||||||||||||||
| Robert F. Sharpe, Jr. | — | — | (b) | — | 40,632 | — | (b) | |||||||||||||||||||||
Named Executive Officer | Perquisites and Personal Benefits(a) | (Column 5) Company Contribution to Defined Contribution Plans $ | (Column 6) Group Term Life Insurance $ | |||||||||||||||||
| (Column 1) Relocation Expenses ($) | (Column 2) Personal Use of Aircraft $ | (Column 3) Exec Physical / Security Costs / Home Office $ | (Column 4) Matching Gifts $ | |||||||||||||||||
Mr. Rodkin | — | (b | ) | (b) | — | $ | 42,916 | (b) | ||||||||||||
Mr. Gehring | — | (b | ) | (b) | — | $ | 17,137 | (b) | ||||||||||||
Mr. Hawaux | — | (b | ) | (b) | (b | ) | $ | 23,426 | (b) | |||||||||||
Mr. Keck | $ | 39,732 | — | (b) | — | $ | 19,078 | (b) | ||||||||||||
Mr. Maass | — | — | (b) | — | (b | ) | (b) | |||||||||||||
| (a) | All amounts shown are valued at the incremental cost to | |
| (b) | For Columns |
42
The following table sets forthpresents information about grants of plan-based awards (equity and non-equity) during the fiscal 20092012 to the named executive officers. All equity-based grants were made under the stockholder-approved ConAgra Foods 20062009 Stock Plan.
| All | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All | Awards: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | Number | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Possible Payouts | Estimated Future | Stock | of Securi- | Exercise | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Under Non-Equity | Payouts Under Equity | Awards: | ties | or Base | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Incentive Plan Awards (1) | Incentive Plan Awards (2) | Number | Under- | Price of | Grant Date Fair | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Thres- | Thres- | of Shares | lying | Option | Value of Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Grant | hold | Target | Maximum | hold | Target | Maximum | of Stock | Options | Awards | and Option | |||||||||||||||||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | or Units (#) | (#)(3) | ($/Sh) | Awards(4) | ||||||||||||||||||||||||||||||||||||||||||||
| Gary M. Rodkin | 7/16/08 | — | 2,000,000 | 4,000,000 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 100,000 | 300,000 | $ | 6,378,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 500,000 | 21.26 | $ | 1,425,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| John F. Gehring | 7/16/08 | — | 227,292 | 595,200 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 16,000 | 48,000 | $ | 1,020,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 80,000 | 21.26 | $ | 228,136 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/16/09 | — | 139,308 | 364,800 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/16/09 | 13,000 | 39,000 | $ | 662,610 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/16/09 | — | 40,000 | 16.99 | $ | 81,616 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Andre J. Hawaux (1) | 7/16/08 | — | 32,000 | 96,000 | $ | 2,040,960 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 160,000 | 21.26 | $ | 456,272 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/16/09 | — | 600,000 | 1,800,000 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/16/09 | — | 100,000 | 16.99 | $ | 204,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Scott Messel | 7/16/08 | — | 242,900 | 728,700 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 12,000 | 36,000 | $ | 765,360 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 60,000 | 21.26 | $ | 171,102 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Peter M. Perez | 7/16/08 | — | 344,000 | 1,032,000 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 24,000 | 72,000 | $ | 1,530,720 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 120,000 | 21.26 | $ | 342,204 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Robert F. Sharpe, Jr. | 7/16/08 | — | 675,000 | 2,025,000 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 32,000 | 96,000 | $ | 2,040,960 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/16/08 | — | 180,000 | 21.26 | $ | 513,306 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date |
Estimated Possible Payouts | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Option Awards: Number of Securi- ties Under- lying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||||||||||||||||||||||||
| Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||
Mr. Rodkin | 7/11/11 | 500,000 | 2,000,000 | 4,000,000 | N/A | |||||||||||||||||||||||||||||||||
| 7/11/11 | 25,000 | 100,000 | 220,000 | 2,615,000 | ||||||||||||||||||||||||||||||||||
| 7/11/11 | 500,000 | 26.15 | 1,630,000 | |||||||||||||||||||||||||||||||||||
Mr. Gehring | 7/11/11 | 125,000 | 500,000 | 1,000,000 | N/A | |||||||||||||||||||||||||||||||||
| 7/11/11 | 8,000 | 32,000 | 70,400 | 836,800 | ||||||||||||||||||||||||||||||||||
| 7/11/11 | 160,000 | 26.15 | 521,600 | |||||||||||||||||||||||||||||||||||
Mr. Hawaux | 7/11/11 | 160,000 | 640,000 | 1,280,000 | N/A | |||||||||||||||||||||||||||||||||
| 7/11/11 | 8,000 | 32,000 | 70,400 | 836,800 | ||||||||||||||||||||||||||||||||||
| 7/11/11 | 160,000 | 26.15 | 521,600 | |||||||||||||||||||||||||||||||||||
Mr. Keck | 7/11/11 | 131,250 | 525,000 | 1,050,000 | N/A | |||||||||||||||||||||||||||||||||
| 7/11/11 | 8,000 | 32,000 | 70,400 | 836,800 | ||||||||||||||||||||||||||||||||||
| 7/11/11 | 160,000 | 26.15 | 521,600 | |||||||||||||||||||||||||||||||||||
Mr. Maass | 7/11/11 | 118,750 | 475,000 | 950,000 | N/A | |||||||||||||||||||||||||||||||||
| 7/11/11 | 6,000 | 24,000 | 52,800 | 627,600 | ||||||||||||||||||||||||||||||||||
| 7/11/11 | 120,000 | 26.15 | 391,200 | |||||||||||||||||||||||||||||||||||
| 1. | Amounts reflect grants made under the fiscal | |
| 2. | Amounts reflect the performance shares granted under our long-term incentive program for the fiscal | |
43
| 3. | Amounts are computed in accordance with |
| Option Awards | Stock Awards | |||||||||||||||
| Number of Shares | ||||||||||||||||
| Acquired | Value Realized | Number of Shares | Value Realized | |||||||||||||
| on Exercise | on Exercise | Acquired on Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) (1)(2) | ($) | ||||||||||||
| Gary M. Rodkin | — | — | 280,000 | 5,205,200 | ||||||||||||
| John F. Gehring | — | — | 82,566 | 1,516,902 | ||||||||||||
| Andre J. Hawaux | — | — | 88,000 | 1,635,920 | ||||||||||||
| Scott Messel | — | — | 42,483 | 789,759 | ||||||||||||
| Peter M. Perez | — | — | 81,083 | 1,496,883 | ||||||||||||
| Robert F. Sharpe, Jr. | — | — | 89,600 | 1,665,664 | ||||||||||||
44For more information about the material terms of our employment agreement with Mr. Rodkin, our letter agreements with Messrs. Hawaux and Keck and our change of control agreements with each of our named executive officers, see “Employment Agreement and Letter Agreements” in the CD&A above and “Potential Payments Upon Termination or Change of Control” below. For more information about our named executive officers’ mix of base salary and annual incentive compensation to their total compensation, see the discussion under “Key Elements of our Fiscal 2012 Executive Compensation Program” in CD&A above.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
| Equity Incentive | Equity Incentive | |||||||||||||||||||||||||||||||||||||||
| Plan Awards: | Plan Awards: | |||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Market Value | Number of | Market or Payout | |||||||||||||||||||||||||||||||||||
| Securities | Securities | Shares or | of Shares or | Unearned Shares, | Value of Unearned | |||||||||||||||||||||||||||||||||||
| Underlying | Underlying | Option | Units of Stock | Units of Stock | Units, or Other | Shares, Units, or | ||||||||||||||||||||||||||||||||||
| Unexercised | Unexercised | Exercise | Option | That Have | That Have Not | Rights that Have | Other Rights that | |||||||||||||||||||||||||||||||||
| Options (#) | Options (#) | Price | Expiration | Not Vested | Vested | Not Vested | Have Not Vested | |||||||||||||||||||||||||||||||||
| Name | Exercisable | Unexercisable (1) | ($) | Date | (#)(2) | ($)(3) | (#)(4) | ($)(3) | ||||||||||||||||||||||||||||||||
| Gary M. Rodkin | 1,000,000 | 0 | 22.83 | 8/30/2015 | ||||||||||||||||||||||||||||||||||||
| 480,000 | 0 | 22.72 | 5/25/2016 | |||||||||||||||||||||||||||||||||||||
| 500,000 | 0 | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||||||||||
| 350,000 | 150,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 500,000 | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||||||||||
| 300,000 | 5,577,000 | |||||||||||||||||||||||||||||||||||||||
| 300,000 | 5,577,000 | |||||||||||||||||||||||||||||||||||||||
| John F. Gehring | 20,000 | 0 | 24.19 | 2/13/2012 | ||||||||||||||||||||||||||||||||||||
| 8,883 | 0 | 25.36 | 7/11/2012 | |||||||||||||||||||||||||||||||||||||
| 80,000 | 0 | 23.14 | 7/24/2015 | |||||||||||||||||||||||||||||||||||||
| 80,000 | 0 | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||||||||||
| 56,000 | 24,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 80,000 | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||||||||||
| 0 | 40,000 | 16.99 | 1/15/2016 | |||||||||||||||||||||||||||||||||||||
| 20,000 | 371,800 | |||||||||||||||||||||||||||||||||||||||
| 48,000 | 892,320 | |||||||||||||||||||||||||||||||||||||||
| 87,000 | 1,617,330 | |||||||||||||||||||||||||||||||||||||||
| Andre J. Hawaux | 80,000 | 0 | 25.76 | 11/30/2013 | ||||||||||||||||||||||||||||||||||||
| 70,000 | 30,000 | 25.76 | 11/30/2013 | |||||||||||||||||||||||||||||||||||||
| 112,000 | 48,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 160,000 | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||||||||||
| 0 | 100,000 | 16.99 | 1/15/2016 | |||||||||||||||||||||||||||||||||||||
| 10,000 | 185,900 | |||||||||||||||||||||||||||||||||||||||
| 96,000 | 1,784,640 | |||||||||||||||||||||||||||||||||||||||
| 96,000 | 1,784,640 | |||||||||||||||||||||||||||||||||||||||
| Scott Messel | 10,000 | 0 | 22.00 | 9/26/2011 | ||||||||||||||||||||||||||||||||||||
| 9,000 | 0 | 25.90 | 9/25/2012 | |||||||||||||||||||||||||||||||||||||
| 40,000 | 0 | 23.14 | 7/24/2015 | |||||||||||||||||||||||||||||||||||||
| 60,000 | 0 | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||||||||||
| 42,000 | 18,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 60,000 | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||||||||||
| 36,000 | 669,240 | |||||||||||||||||||||||||||||||||||||||
| 36,000 | 669,240 | |||||||||||||||||||||||||||||||||||||||
| Peter M. Perez | 70,000 | 0 | 26.17 | 2/11/2014 | ||||||||||||||||||||||||||||||||||||
| 80,000 | 0 | 23.14 | 7/24/2015 | |||||||||||||||||||||||||||||||||||||
| 120,000 | 0 | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||||||||||
| 84,000 | 36,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 120,000 | 7/15/2015 | ||||||||||||||||||||||||||||||||||||||
| 72,000 | 1,338,480 | |||||||||||||||||||||||||||||||||||||||
| 72,000 | 1,338,480 | |||||||||||||||||||||||||||||||||||||||
| Robert F. Sharpe, Jr. | 300,000 | 0 | 21.51 | 11/30/2015 | ||||||||||||||||||||||||||||||||||||
| 160,000 | 0 | 22.72 | 5/25/2016 | |||||||||||||||||||||||||||||||||||||
| 160,000 | 0 | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||||||||||
| 126,000 | 54,000 | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||||||||||
| 0 | 180,000 | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||||||||||
| 96,000 | 1,784,640 | |||||||||||||||||||||||||||||||||||||||
| 96,000 | 1,784,640 | |||||||||||||||||||||||||||||||||||||||
45
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights that Have Not Vested ($)(3) | ||||||||||||||||||||||||
Mr. Rodkin | 1,000,000 | — | 22.83 | 8/30/2015 | ||||||||||||||||||||||||||||
| 480,000 | — | 22.72 | 5/25/2016 | |||||||||||||||||||||||||||||
| 500,000 | — | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||
| 500,000 | — | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||
| 500,000 | — | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||
| 350,000 | 150,000 | 19.05 | 7/14/2016 | |||||||||||||||||||||||||||||
| 200,000 | 300,000 | 23.93 | 7/24/2017 | |||||||||||||||||||||||||||||
| — | 500,000 | 26.15 | 7/10/2018 | |||||||||||||||||||||||||||||
| 200,000 | 5,050,000 | |||||||||||||||||||||||||||||||
| 220,000 | 5,555,000 | |||||||||||||||||||||||||||||||
Mr. Gehring | 80,000 | — | 23.14 | 7/24/2015 | ||||||||||||||||||||||||||||
| 80,000 | — | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||
| 80,000 | — | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||
| 40,000 | — | 16.99 | 1/15/2016 | |||||||||||||||||||||||||||||
| 112,000 | 48,000 | 19.05 | 7/14/2016 | |||||||||||||||||||||||||||||
| 64,000 | 96,000 | 23.93 | 7/24/2017 | |||||||||||||||||||||||||||||
| — | 160,000 | 26.15 | 7/10/2018 | |||||||||||||||||||||||||||||
| 64,000 | 1,616,000 | |||||||||||||||||||||||||||||||
| 70,400 | 1,777,600 | |||||||||||||||||||||||||||||||
Mr. Hawaux | 80,000 | — | 25.76 | 11/30/2013 | ||||||||||||||||||||||||||||
| 100,000 | — | 25.76 | 11/30/2013 | |||||||||||||||||||||||||||||
| 160,000 | — | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||
| 80,000 | — | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||
| 100,000 | — | 16.99 | 1/15/2016 | |||||||||||||||||||||||||||||
| 112,000 | 48,000 | 19.05 | 7/14/2016 | |||||||||||||||||||||||||||||
| 64,000 | 96,000 | 23.93 | 7/24/2017 | |||||||||||||||||||||||||||||
| — | 160,000 | 26.15 | 7/10/2018 | |||||||||||||||||||||||||||||
| 64,000 | 1,616,000 | |||||||||||||||||||||||||||||||
| 70,400 | 1,777,600 | |||||||||||||||||||||||||||||||
Mr. Keck | 64,000 | 96,000 | 22.13 | 9/30/2017 | ||||||||||||||||||||||||||||
| — | 160,000 | 26.15 | 7/10/2018 | |||||||||||||||||||||||||||||
| 40,000 | 1,010,000 | |||||||||||||||||||||||||||||||
| 64,000 | 1,616,000 | |||||||||||||||||||||||||||||||
| 70,400 | 1,777,600 | |||||||||||||||||||||||||||||||
Mr. Maass | 7,000 | — | 25.90 | 9/25/2012 | ||||||||||||||||||||||||||||
| 8,000 | — | 21.34 | 9/24/2013 | |||||||||||||||||||||||||||||
| 15,000 | — | 27.52 | 7/8/2014 | |||||||||||||||||||||||||||||
| 15,000 | — | 22.99 | 7/7/2015 | |||||||||||||||||||||||||||||
| 15,000 | — | 22.00 | 7/12/2013 | |||||||||||||||||||||||||||||
| 40,000 | — | 26.80 | 7/16/2014 | |||||||||||||||||||||||||||||
| 40,000 | — | 21.26 | 7/15/2015 | |||||||||||||||||||||||||||||
| 28,000 | 12,000 | 19.05 | 7/14/2016 | |||||||||||||||||||||||||||||
| 16,000 | 24,000 | 23.93 | 7/24/2017 | |||||||||||||||||||||||||||||
| 32,000 | 48,000 | 22.61 | 10/13/2017 | |||||||||||||||||||||||||||||
| — | 120,000 | 26.15 | 7/10/2018 | |||||||||||||||||||||||||||||
| 48,000 | 1,212,000 | |||||||||||||||||||||||||||||||
| 52,800 | 1,333,200 | |||||||||||||||||||||||||||||||
| 1. | All 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. The vesting schedule for options that were outstanding but |
| Unexercis- | Vesting Schedule | ||||||||||||
able at FYE | # of Shares | Vesting Date | |||||||||||
| Rodkin | 150,000 | 150,000 | 05/30/10 | ||||||||||
| 500,000 | 200,000 | 07/16/09 | |||||||||||
| 150,000 | 07/16/10 | ||||||||||||
| 150,000 | 07/16/11 | ||||||||||||
| Gehring | 24,000 | All | 05/30/10 | ||||||||||
| 80,000 | 32,000 | 07/16/09 | |||||||||||
| 24,000 | 07/16/10 | ||||||||||||
| 24,000 | 07/16/11 | ||||||||||||
| 40,000 | 16,000 | 01/16/10 | |||||||||||
| 12,000 | 01/16/11 | ||||||||||||
| 12,000 | 01/16/12 | ||||||||||||
| Hawaux | 30,000 | All | 12/01/09 | ||||||||||
| 48,000 | All | 05/30/10 | |||||||||||
| 160,000 | 64,000 | 07/16/09 | |||||||||||
| 48,000 | 07/16/10 | ||||||||||||
| 48,000 | 07/16/11 | ||||||||||||
| 100,000 | All | 01/16/12 | |||||||||||
| Messel | 18,000 | All | 05/30/10 | ||||||||||
| 60,000 | 24,000 | 07/16/09 | |||||||||||
| 18,000 | 07/16/10 | ||||||||||||
| 18,000 | 07/16/11 | ||||||||||||
| Perez | 36,000 | All | 05/30/10 | ||||||||||
| 120,000 | 48,000 | 07/16/09 | |||||||||||
| 36,000 | 07/16/10 | ||||||||||||
| 36,000 | 07/16/11 | ||||||||||||
| Sharpe | 54,000 | All | 05/30/10 | ||||||||||
| 180,000 | 72,000 | 07/16/09 | |||||||||||
| 54,000 | 07/16/10 | ||||||||||||
| 54,000 | 07/16/11 | ||||||||||||
| Unexercis- able at FYE | Vesting Schedule | Unexercis- able at FYE | Vesting Schedule | |||||||||||||||||||||||||
| # of Shares | Vesting Date | # of Shares | Vesting Date | |||||||||||||||||||||||||
Rodkin | 150,000 | 150,000 | 7/15/12 | Keck | 96,000 | 48,000 | 10/1/12 | |||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 300,000 | 150,000 | 7/25/12 | 48,000 | 10/1/13 | ||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 150,000 | 7/25/13 | 160,000 | 64,000 | 7/10/12 | ||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 500,000 | 200,000 | 7/10/12 | 48,000 | 7/10/13 | ||||||||||||||||||||||||
| 150,000 | 7/10/13 | 48,000 | 7/10/14 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 150,000 | 7/10/14 | |||||||||||||||||||||||||||
Gehring | 48,000 | 48,000 | 7/15/12 | Maass | 12,000 | 12,000 | 7/15/12 | |||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
| 96,000 | 48,000 | 7/25/12 | 24,000 | 12,000 | 7/25/12 | |||||||||||||||||||||||
| 48,000 | 7/25/13 | 12,000 | 7/25/13 | |||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
| 160,000 | 64,000 | 7/10/12 | 48,000 | 24,000 | 10/14/12 | |||||||||||||||||||||||
| 48,000 | 7/10/13 | 24,000 | 10/14/13 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 48,000 | 7/10/14 | 120,000 | 48,000 | 7/10/12 | ||||||||||||||||||||||||
Hawaux | 48,000 | 48,000 | 7/15/12 | 36,000 | 7/10/13 | |||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 96,000 | 48,000 | 7/25/12 | 36,000 | 7/10/14 | ||||||||||||||||||||||||
| 48,000 | 7/25/13 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
| 160,000 | 64,000 | 7/10/12 | ||||||||||||||||||||||||||
| 48,000 | 7/10/13 | |||||||||||||||||||||||||||
| 48,000 | 7/10/14 | |||||||||||||||||||||||||||
| 2. | Reflects 40,000 restricted stock units awarded to Mr. | |
| 3. | The market value of unvested | |
| 4. | Reflects, on separate lines, as of May |
The following table summarizes the option awards exercised during fiscal 2012 for each of the named executive officers. No payouts were made under the fiscal 2010 to 2012 cycle of our performance share plan and accordingly, no shares of stock were acquired upon vesting by our named executive officers during fiscal 2012. Name Mr. Rodkin Mr. Gehring Mr. Hawaux Mr. Keck Mr. Maass Pension Benefits – Fiscal ConAgra Foods maintains a non-contributory defined benefit pension plan for all eligible employees, which we refer to as the Qualified Pension. Employees eligible to participate in the Qualified Pension are salaried employees, including the named executive officers, and certain hourly and union employees. Employees hired before June 1, 2004 were given a one-time opportunity during 2004 to choose between (A) the benefit formulas in the Qualified Pension and qualified 401(k) plan at that time and (B) effective October 1, 2004, a new Qualified Pension formula plus an enhanced company match in our qualified 401(k) plan. Employees hired on or after June 1, 2004 were automatically enrolled in option (B) effective upon their date of hire. With respect to the named executive officers, Option Exercises and Stock Vested – Fiscal 2012 Option Awards Number of Shares
Acquired
on Exercise
(#) Value Realized
on Exercise
($) — — 108,883 401,931 80,000 417,859 — — 5,000 9,531 20092012Mr.Messrs. Hawaux and Keck joined the company after June 1, 2004 and waswere automatically enrolled in option (B). Messrs. Gehring Messel, and PerezMaass were employed prior to June 1, 2004 and each electedwere enrolled in option (A). Although Mr. Rodkin and Mr. Sharpe areis enrolled in option (B) for purposes of the Qualified Plan (due to commencement of employment after June 1, 2004), theirhis employment agreements entitle themagreement entitles him to a total pension benefit equal to the option (A) calculation.46
Under both option (A) and option (B), the pension benefit formula is determined by adding three components:
A multiple of Average Monthly Earnings (up to the integration level) multiplied by years of credited service (up to 35 years of credited service). This multiple is 1.0% for option (A) and 0.9% for option (B). | |||
A multiple of Average Monthly Earnings (over the integration level) multiplied by years of credited service (up to 35 years of credited service). This multiple is 1.44% for option (A) and 1.3% for option (B). | |||
A multiple of Average Monthly Earnings multiplied by years of credited service over 35 years. This multiple is |
“Average Monthly Earnings” is the monthly average of the executive’s annual compensation from the company for the highest five consecutive years of the final ten years of his or her service. Only salary and annual incentive payments (reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table)Table – Fiscal 2012) are considered for the named executive officers in computing Average Monthly Earnings. The integration level is calculated by the Internal Revenue Service by averaging the last 35 years of Social Security taxable wages, up to and including the year in which the executive’s employment ends.
Participants are vested in a benefit once they have five years of vesting service with the company. Benefits become payable for option (A) participants at the normal retirement age of 65, or age 60 if the participant has 25 or more years of service. Normal retirement age for option (B) participants is 65. Under either option, the QualifiedQuali-
fied Plan defines early retirement as age 55 with 10 years of service. 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 officerofficers would receive.
Certain of the named executive officers also participate in a supplemental retirement plan (which we refer to in the table below as the Non-Qualified Pension). To the extent that a named executive officer’s benefit under the Qualified Pension exceeds the limit on the maximum annual benefit payable under the Employee Retirement Income Security Act of 1974 or such officer’s Average Monthly Earnings exceeds the limit under the Code on the maximum amount of compensation that can be taken into account under the Qualified Pension, payments are made under the Non-Qualified Pension. The retirement age and benefit formulas are the same as those used for the Qualified Plan except as described in the following paragraphs.
Generally, an executive’s benefit under the Non-Qualified Pension is payable in installments beginning in January following the executive’s separation from service or disability, but the executive may also elect to receive payment as a lump sum and elect a specified year in which payment will be made or commence, or elect to receive his or her benefit in the form of annuity payments. Elections regarding the time and form of payment are intended to comply with Section 409A of the Code which we refer to as Section 409A of the Code, and certain payments to executives meeting the definition of a “specified employee” under Section 409A of the Code will be delayed for six months after the date of the separation from service.
Mr. Rodkin’s employment agreement with the company, entered into in 2005, entitles him to participate in the Non-Qualified Pension with years of service, for purposepurposes of calculating benefits under the plan, credited at athree-for-one rate until he has service credit of thirty years. He is entitled to annual pensionable earnings for use in calculating his benefit of no less than $3 million. However, ifIf Mr. Rodkin terminates his employment voluntarily or retires prior to age 60, a crediting rate oftwo-for-one is applied. Further, if Mr. Rodkin voluntarily terminates employment with the company or retires prior to August 31, 2010, and the termination or retirement is not approved by the Board of Directors, or he is terminated at any time for “cause,” he will forgo all benefits under the Non-Qualified Pension. Any benefits payable to Mr. Rodkin under the Non-Qualified Pension are subject to offset for benefits paid or payable to him under supplemental pension plans his prior employer may have maintained for his benefit. Mr. Rodkin’s employment agreement was recently amended and restated for compliance with Section 409A of the Code.
47
| Number of Years | Present Value of | ||||||||||||
| Credited Service | Accumulated Benefit | ||||||||||||
| Name | Plan Name (1) | (# ) (2) | ($) (3) (4) | ||||||||||
| Gary M. Rodkin | Qualified Pension | 3.8 | 60,156 | ||||||||||
| Non-Qualified Pension | 11.3 | 4,463,852 | |||||||||||
| John F. Gehring | Qualified Pension | 7.4 | 69,930 | ||||||||||
| Non-Qualified Pension | 7.4 | 180,114 | |||||||||||
| Andre J. Hawaux | Qualified Pension | 2.6 | 23,347 | ||||||||||
| Non-Qualified Pension | 2.6 | 111,745 | |||||||||||
| Scott Messel | Qualified Pension | 7.8 | 85,272 | ||||||||||
| Non-Qualified Pension | 7.8 | 26,342 | |||||||||||
| Peter M. Perez | Qualified Pension | 5.5 | 86,288 | ||||||||||
| Non-Qualified Pension | 5.5 | 26,657 | |||||||||||
| Robert F. Sharpe, Jr. | Qualified Pension | 3.6 | 57,751 | ||||||||||
| Non-Qualified Pension | 10.7 | 1,657,377 | |||||||||||
| Name | Plan Name(1) | Number of Years Credited Service (#)(2) | Present Value of Accumulated Benefit ($)(3)(4) | |||||||
Mr. Rodkin | Qualified Pension | 6.7 | 192,721 | |||||||
| Non-Qualified Pension | 20.2 | 12,975,713 | ||||||||
Mr. Gehring | Qualified Pension | 10.4 | 220,896 | |||||||
| Non-Qualified Pension | 10.4 | 624,853 | ||||||||
Mr. Hawaux | Qualified Pension | 5.5 | 108,179 | |||||||
| Non-Qualified Pension | 5.5 | 517,294 | ||||||||
Mr. Keck | Qualified Pension | 1.7 | 49,588 | |||||||
| Non-Qualified Pension | — | — | ||||||||
Mr. Maass(5) | Qualified Pension | 24.0 | 584,272 | |||||||
| Non-Qualified Pension | 24.0 | 112,425 | ||||||||
| 1. | Qualified Pension refers to the ConAgra Foods, Inc. Pension Plan for Salaried Employees and Non-Qualified Pension refers to the ConAgra Foods, Inc. Nonqualified Pension Plan. There were no plan payments for fiscal | |
| 2. | The number of years of credited service is calculated as of May | |
| 3. | As of the pension plan measurement date, under the Non-Qualified Pension, Mr. Rodkin had | |
| 4. | The valuation methodology and all material assumptions applied in quantifying the present value of the accumulated benefit are |
| 5. | Mr. Maass is eligible for a non-qualified pension benefit that was closed and grandfathered in 2001. This benefit is calculated based on earnings of up to $280,000 per year under the terms of the grandfathered plan and is calculated based upon actual years of service. |
The table following The Non-Qualified CRISP is a benefit provided to certain of the named executive officers and other eligible executives. The program supplements our qualified 401(k) plan available to a broad base of salaried and hourly employees. Under our qualified 401(k) plan, for employees enrolled in option (A) under the Qualified Plan, the company will match the first 50% of the first 6% of Non-Qualified Deferred Compensation – Fiscal 20092012tablethe summary of our non-qualified deferred compensation plans shows the non-qualified deferred compensation activity for each named executive officer during fiscal 2009.2012. The amounts shown include company contributions into ouramounts deferred under the non-qualified 401(k) plan, which we refer to as the Non-Qualified ConAgra Retirement Income Savings Plan, or Non-Qualified CRISP, and for Mr. Rodkin, Mr. Hawaux and Mr. Messel, employee contributions into our voluntary deferred compensation plan, which we refer to as the Voluntary Deferred Comp plan. The amounts shown for the Non-Qualified CRISP include company contributions during fiscal 2012. It also includes amounts deferred by Mr. Maass under a mandatory deferred compensation plan in which he participated in a prior role.paysalary and bonus the employee contributes to the48
The company contribution to the Non-Qualified CRISP is made annually on or about December 31st.31st and a participant must be employed on that date to receive the contribution. The value of each account is automatically linked to the value of our common stock. Account values are updated daily based on the closing market price of our common stock on the NYSE on such day.
Generally, an executive’s account balance under the Non-Qualified CRISP is payable in cash in a lump sum in January following the executive’s separation from service, but executives meeting certain qualifications may also elect to receive payment in the form of installments. Executives may also elect to receive payment within 90 days following the earlier of separation from service or either the occurrence of a change inof control or 18 months following the occurrence of a change inof 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 “specified employee” under Section 409A of the Code will be delayed for six months after the date of the separation from service.
Our voluntary deferred compensation plan allows management-level employees (including(those above a certain salary grade, which includes the named executive officers) whose salary is $125,000 or more per year to defer receipt of 5% to 50% of their salary and effective January 1, 2009, up to 85% of their annual incentive payment. The investment alternatives for deferred amounts are an interest bearing account (with interest accruing at a rate equal to 25 basis points over the one-year H15 Treasury constant maturity rate), a ConAgra Foods stock account, or other investment options mirrored from our qualified 401(k) plan, which we refer to as the ConAgra Foods Retirement Income Savings Plan, (the “Qualified CRISP”).or the Qualified CRISP. Amounts deferred into the interest bearing account, together with earnings thereon, are ultimately distributed in cash. The stock account includes a dividend reinvestment feature that converts dividends into additional shares. Amounts deferred into the stock account, together with earnings and dividends thereon, are ultimately distributed in shares of ConAgra Foods common stock. Amounts deferred into accounts mirroring the Qualified CRISP funds, together with any dividends, are ultimately distributed in cash. An election to participate in the plan must be timely filed with the company in accordance with Internal Revenue Service requirements.
An executive who is not retiring or eligible for early retirement under the Qualified Pension is required to take distribution of certain amounts earned and vested prior to 2005, which we refer to as grandfathered amounts, in a lump sum payment in the year of termination, while anquarter end following the individual’s separation from service. An executive who is eligible to retire early under the Qualified Pension will receive his or her grandfathered amounts in annual installments. In general, all amounts other than the grandfathered amounts, which we refer to as the other amounts, will be distributed in cash in a lump sum in January following the executive’s separation from service. Executives may also elect to receive the other amounts at certain other times, including within 90 days following the earlier of separation from service or either the occurrence of a change inof control or 18 months following the occurrence of a change inof 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 of the Code will be delayed for six months after the date of the separation from service. Additionally, executivesExecutives may make hardship withdrawals under certain circumstances.
49
| Aggregate | Aggregate | ||||||||||||||||||||||
| Executive | Registrant | Earnings | Balance | ||||||||||||||||||||
| Contributions in | Contributions | in Last | at Last | ||||||||||||||||||||
| Last FY | in Last FY | FY | FYE | ||||||||||||||||||||
| Name | Plan (1) | ($) (2) | ($) (3) | ($)(4) | ($)(5) | ||||||||||||||||||
| Gary M. Rodkin | Non-Qualified CRISP | — | 100,324 | (21,889 | ) | 260,658 | |||||||||||||||||
| Voluntary Deferred Comp | 900,000 | — | (570,142 | ) | 3,119,583 | ||||||||||||||||||
| John F. Gehring | Non-Qualified CRISP | — | 15,244 | (7,568 | ) | 56,069 | |||||||||||||||||
| Andre J. Hawaux | Non-Qualified CRISP | — | 21,977 | (2,676 | ) | 48,876 | |||||||||||||||||
| Voluntary Deferred Comp | 22,500 | — | (129,021 | ) | 464,877 | ||||||||||||||||||
| Scott Messel | Voluntary Deferred Comp | 31,291 | — | (2,513 | ) | 126,445 | |||||||||||||||||
| Peter M. Perez | — | — | — | — | — | ||||||||||||||||||
| Robert F. Sharpe, Jr. | Non-Qualified CRISP | — | 32,324 | (9,804 | ) | 94,662 | |||||||||||||||||
| Name | Plan(1) | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($)(4) | Aggregate Balance at Last FYE ($)(5) | ||||||||||||||||
Mr. Rodkin | Non-Qualified CRISP | — | 32,916 | 3,053 | — | 571,011 | ||||||||||||||||
| Voluntary Def Comp | — | — | 209,793 | — | 4,733,370 | |||||||||||||||||
Mr. Gehring | Non-Qualified CRISP | — | 10,791 | 546 | — | 132,485 | ||||||||||||||||
| Voluntary Def Comp | — | — | (9,437 | ) | — | 705,400 | ||||||||||||||||
Mr. Hawaux | Non-Qualified CRISP | — | 13,426 | 526 | — | 146,381 | ||||||||||||||||
| Voluntary Def Comp | — | — | 8,641 | — | 723,819 | |||||||||||||||||
Mr. Keck | Non-Qualified CRISP | — | 9,278 | (404 | ) | — | 8,874 | |||||||||||||||
| Voluntary Def Comp | — | — | — | — | — | |||||||||||||||||
Mr. Maass(4) | Non-Qualified CRISP | — | — | — | — | — | ||||||||||||||||
| Voluntary Def Comp | — | — | — | — | — | |||||||||||||||||
| Mandatory Def Comp | — | — | — | 368,161 | — | |||||||||||||||||
| 1. | Non-Qualified CRISP refers to the ConAgra Foods, Inc. Nonqualified CRISP Plan and Voluntary | |
| 2. | ||
| All Non-Qualified CRISP amounts are included in the “All Other Compensation” column of the Summary Compensation |
| 3. | Our deferred compensation plans do not offer above market earnings (as defined by SEC rules). As a result, none of these earnings |
| 5. | The following amounts from this column were reported in Summary Compensation Tables for prior fiscal |
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 acceleration of 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. The tables following the narrative discussion summarize amounts payable upon termination or a change of control under varying circumstances, assuming that the change of control occurred on or that the executive’s employment terminated on the last Severance Plan We maintain a severance pay plan that provides severancePotential Payments Upon Termination or Change of Controlday business day of our 2009 fiscal year —2012 – May 29, 2009.25, 2012. Other key assumptions used in compiling the tables are set forth immediately preceding them. 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. benefit guidelines for all salaried employees. Any benefits payable under the program are at the sole and absolute discretion of ConAgra Foods and for any particular employee, the company may elect to provide severance as suggested by the plan, or provide greater or lesser benefits. Because of individual agreements with the other named executive officers, only Messrs. Gehring Messel and PerezMaass are potentially covered by the plan. Under the plan, the severance plan50
Messrs. Rodkin, SharpeHawaux and Hawaux’sKeck’s severance benefits would be paid in accordance with their agreements with the company, as further described below, and not the severance pay plan.
Agreements with Named Executive Officers
ConAgra Foods is party to an employment agreement with Mr. Rodkin and letter agreements with Messrs. RodkinHawaux and Sharpe and a letter agreement with Mr. Hawaux.Keck. In each case, the agreement addresses such matters as the executive’s salary, participation in our annual and long-term incentive plans and participation in employee and executive pension, profit sharing, 401(k) and welfare benefit plans and other benefit programs and arrangements. The agreements also address these executives’ severance benefits and right to participate in the company’s change of control benefit program.
Mr. Rodkin and Mr. Sharpe. Many of theThe severance benefit provisions of our agreementsagreement with Messrs.Mr. Rodkin and Sharpe are similar. They can be summarized as set forth in the following table. The references to “2010” in this table are references to August 31, 2010 for Mr. Rodkin and November 7, 2010 for Mr. Sharpe, which represents the fifth anniversary of their employment agreements, respectively, which have been subsequently amended and restated.
Since August 31, 2010, Mr. Rodkin’sRodkin has been early and normal retirement eligible under our non-qualified pension plan and under all welfare benefit and equity incentive plans and programs in which he is eligible to participate. We have therefore omitted discussion of the provisions of his agreement further defines “Good Reason” as failingrelated to nominate him to our Board. Mr. Sharpe’s agreement further defines “Good Reason” as changing his reporting relationship to other thana voluntary separation from the chief executive officercompany that does not include retirement or Chairman.
51
| Involuntary with Cause | Involuntary w/o Cause or Voluntary w/Good Reason | Retirement | ||||||||||||||
| Death or Disability | ||||||||||||||||
Salary | Paid through month of termination | Paid through month of termination, plus lump sum | Paid through month of termination | Paid through month of the event | ||||||||||||
Annual Incentive Plan | Not eligible for a payment | Paid pro-rated award for the year of termination based on our actual | If approved by the HR Committee, a pro-rated award may be paid based on our actual results | Paid a pro-rated amount disability) | ||||||||||||
Performance | Shares | Unvested performance shares are forfeited | “Retirement” treatment applies | Performance shares earned based on our actual results are paid, but are pro-rated for the full years of completed service | “Retirement” treatment applies in the case of disability; in the case of death, performance shares paid at target and pro-rated based on full years of completed service | |||||||||||
Stock Options | Options terminate; all unexercised options lapse | “ | ||||||||||||||
Non-Qualified CRISP | No benefits paid | “Retirement” treatment applies | Account balance paid based on participant’s advance election | “Retirement” treatment applies | ||||||||||||
Non-Qualified Pension | No benefits paid | See discussion on pages | and target bonus | See discussion on pages | 39 | See discussion on pages | ||||||||||
52
Health and Welfare Benefits | Benefits paid according to plan provisions | Two years of coverage for executive and dependents unless | Until executive and spouse attain age 65, | “Retirement” treatment applies | |||||||||||
Mr. Rodkin’s agreement provides that all cash payments are generally payable in a lump sum within fifteen days following termination of employment; provided, thatemployment. However, payments under the annual incentive plan and the long termlong-term incentive plan are payable following the end of the fiscal year or other performance period at the same time as such payments are made to the other senior executive officers. Certain payments toIf Mr. Rodkin is a “specified employee” within the meaning of Section 409A of the Code willat the time of his separation, certain payments would be delayed for six months after the date of the separation from service.
Mr. Rodkin’s agreement provides the executivehim the right to participate in our change of control benefits programsprogram as modified from time to time and provides minimum change of control benefits if a superior program is not then in place. The company currently maintains a separate change of control program, discussed below. The agreementsagreement also provideprovides that if benefits become payable under multiple plans, programs and agreements, the more favorable program terms must be applied.
Either party to thesethe employment agreementsagreement may terminate the agreement at any time. In each case, the executiveMr. Rodkin has agreed to non-competition, non-solicitation and confidentiality provisions.
Mr. Hawaux. Under Mr. Hawaux’s letter agreement with the company, he is provided with a severance benefit equal to 24 months (two years) of salary continuation. This amount is payable only in the event of termination for reasons other than cause or a change of control of the company. Cause is not defined.
With respect to a termination related to a change of control of the company, Mr. Hawaux’s severance would be governed by the change of control agreementsagreement described below.
Annual Incentive PlanMr. Keck
If Mr. Keck retires from the company with the consent of the Board or its HR Committee prior to being vested in the Qualified Pension, his options that are vested at the time incentive awards are paid, or he or she forfeitsof his separation will remain exercisable for the award. shorter of three years following his approved retirement and the original expiration date of the option.
With respect to a termination related to a change of control of the company, Mr. Keck’s severance would be governed by the change of control agreement described below.
Annual Incentive Plan (the “MIP”)
The following plan terms of the MIP govern the impact of specific separation events not covered by an individual employment agreement:
Involuntary termination due to position elimination: If a participant’s position is eliminated during the fourth quarter of the fiscal year (for business reasons not related to performance), he or she would | |||
Termination due to | |||
Termination due to death: Any incentive payment for which a participant would have been eligible would be pro-rated to the date of death and paid to his or her estate. |
Except as might otherwise be required by law, in the absence of one of the foregoing events (or a specific agreement with the company), a participant would forfeit his or her fiscal 2012 MIP award if he or she failed to be an active employee in good standing at the end of the fiscal year.
Any pro-rated award is based on actual performance for the fiscal year and is payable after the end of such fiscal year when payments are made to other participants.
53
Restricted Stock Units
Mr. Keck received a grant of 40,000 restricted stock units as a sign-on inducement. These restricted stock units fully vest on the third anniversary of the date of grant, or earlier upon certain circumstances. Specifically, if Mr. Keck’s employment is terminated by the company for reasons other than “Cause” or a change in control, or if Mr. Keck terminates his employment within 45 days of the occurrence of “Good Reason” (with Cause and Sharpe’s severance benefits are paidGood Reason as defined in accordancehis letter agreement), the unvested restricted stock units will vest one-third for each full year of service on the grant date anniversary. See “Potential Payments Upon Termination or Change of Control – Agreements with their agreements withNamed Executive Officers” above for the company.
Long-Term Incentive Plan – Performance Shares
The following terms of the performance share plan terms govern the impact of a separation from the company on the performance shares granted under the fiscal 20072011 to 2009,2013, fiscal 20082012 to 2010,2014, and fiscal 20092013 to 20112015 performance periods:
Termination for any reason other than death, disability or retirement: The participant forfeits all performance shares granted that have not been paid at the date of termination, whether the shares are earned as of that date or not. The HR Committee has the discretion to pay out some or all of the forfeited performance shares if | |||
Termination due to disability or retirement: Earned but unpaid performance shares are paid out as soon as reasonably practicable after the termination based on our actual performance for the performance period ending on or immediately before the event. No distribution would be made with respect to the fiscal year in which the termination of employment occurs, unless the date of termination is the last day of the applicable fiscal year. | |||
Termination due to death: A payout would be made at targeted levels for outstanding performance shares, in each case pro-rated to reflect the number of full fiscal years in the performance period | |||
Upon a change of control, the Board or HR Committee may exercise its discretion to pay a participant all or a portion of the outstanding performance shares. Change of control under this program has the same definition as in the change of control agreements described below. |
Outstanding Equity AwardsLong-Term Incentive Plan – Stock Options
The following terms govern the impact of a separation from the company on outstanding equity awards:
Termination for any reason other than death, disability or retirement: |
Termination due to disability: |
54
Termination due to |
Termination due to normal retirement: All unvested options would automatically vest and remain exercisable for three years following termination (but not beyond the end of the seven-year or |
Each of the agreements evidencing outstanding awards of restricted stock, RSUs, and stock options provides that the vesting of the award will accelerate upon a change of control. The treatment of Messrs. RodkinMr. Rodkin’s equity awards and Sharpe’s equity awardsMr. Keck’s initial RSU grant upon a separation areis further governed by their agreementseach individual’s agreement with the company.
Retirement Benefits
Our Qualified Pension, Non-Qualified Pension, Non-Qualified CRISP and Voluntary Deferred Comp plans contain provisions relating to the termination of the participants’ employment. These payments are described more fully in the disclosure provided in connection with the “Pension Benefits”Benefits – Fiscal 2012” and “Non-Qualified Deferred Compensation”Compensation – Fiscal 2012” tables beginning on page 48.38. Benefits provided to Messrs.Mr. Rodkin and Sharpe are further governed by their agreementshis agreement with the company.
Change of Control Program
The change of control program for senior executives and implemented new change of control agreements with reduced benefits with a small group of senior officers. The agreements were recently amended and restated for compliance with Section 409A of the Code. The agreements areis designed to encourage management to continue performing its responsibilities in the event of a pending or potential change of control. During fiscal 2009,2012, this program covered each of the named executive officers.
Generally, a change of control under these agreements occurs if one of the following events occurs:
Individuals who constitute the Board, which, for these purposes, we refer to as the Incumbent Board, cease for any reason to constitute at least a majority of the Board. Anyone who becomes a director and whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board is considered a member of the Incumbent Board. | |||
Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were our stockholders immediately prior to the transaction do not, immediately thereafter, own more than fifty percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company. | |||
A liquidation or dissolution of the company or the sale of all or substantially all of the company’s assets. |
The agreements provide that upon a change of control, ConAgra Foods may (at the sole and absolute discretion of the Board or HR Committee) pay each executive all or a pro-rated portion of the executive’s shortand/or long-term incentive for the year in which the change of control occurs, and the terms of the company’s stock plan govern the treatment of equity awards upon a change of control. With these exceptions, theThe agreements are otherwise double-trigger arrangements, requiring both a change of control event and a qualifying termination of employment to trigger benefits. A qualifying termination event occurs if, within three years of a change of control, (1) the executive’s employment is involuntarily terminated without “cause” or (2) the executive terminates his or her employment for “good reason.” Executives entitled to severance benefits under
55
a lump sum cash payment equal to a multiple of the executive’s base salary and annual bonus (calculated using the executive’s highest annual bonus for the three fiscal years preceding the change of control or the executive’s current target bonus, whichever is greater). The multiples range from one to three (three for | |||
continuation for three years of medical, dental, disability, basic and supplemental life insurance to the extent such benefits remain in effect for other executives, with premiums paid by the executive. ConAgra Foods must pay the executive a single lump sum payment equal to an amount to offset taxes plus the executive’s estimated cost to participate in the medical and dental | |||
benefits under our Non-Qualified Pension commensurate with |
are determined by | |
a supplemental benefit under our Non-Qualified CRISP plan equal to three times the maximum company contribution that the executive could have received under the Qualified CRISP and Non-Qualified CRISP in the year in which the change of control occurs; and | |||
outplacement assistance not exceeding $30,000. |
Generally, a termination for “cause” under the agreementsagreement requires (1) the willful failure by the executive to substantially perform his or her duties, (2) the willful engaging by the executive in conduct that is demonstrably and materially injurious to the company or (3) the executive’s conviction of a felony or misdemeanor that impairs his or her ability substantially to perform duties for the company. A right of the executive to terminate with “good reason” following a change of control is generally triggered by (1) any failure of the company to comply with and satisfy the terms of the change of control agreement, (2) a significant involuntary reduction of the authority, duties or responsibilities held by the executive immediately prior to the change of control, (3) any involuntary removal of the executive from an officer position held by the executive immediately prior to the change of control, except in connection with promotions, (4) any involuntary reduction in the aggregate compensation level of the executive, (5) requiring the executive to become based at a new location or (6) requiring the executive to undertake substantially greater amounts of business travel.
Certain payments to a “specified employee” within the meaning of Section 409A of the Code will be delayed for six months after the date of the separation from service.
For agreements in place prior to July 2011, the agreements also entitle each executive to an additional payment, if necessary, to make the executive whole as a result of any excise and related taxes imposed by the Code on any change of control benefits received. If the safe harbor amount at which the excise tax is imposed is not exceeded by more than 10%, the benefits will instead be reduced to avoid the excise tax. The benefit reduction does not apply to Mr. Rodkin.
Following a review of market practices in July 2011, the Committee adopted a policy that any future change in control benefits will be structured without any excise tax gross-up protection. For example, if the company promotes or hires an individual to a position that is, in the Committee’s view, appropriate for change in control program participation, the individual will not be 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 future participants would be inappropriate relative to best executive pay practices.
Each change of control agreement terminates, in the absence of a change of control, when the executive’s employment as a full-time employee of the company is terminated or the executive enters into a written separation agreement with the company. In addition, we may unilaterally terminate each agreement prior to a change of control following six months prior written notice to the executive.
Summary of Possible Benefits
The first table below summarizes estimated incremental amounts payable upon termination under various hypothetical scenarios. A second table summarizes estimated incremental amounts payable upon a hypothetical change of control and upon termination following a change of control. We have not included in the tables amounts
56
each triggering event occurred on May | |||
with respect to salary continuation, if an executive did not have a right to salary continuation under a stand-alone agreement with the company, the severance pay plan guidelines applied; | |||
with respect to the annual incentive plan, awards were earned at target levels and where the HR Committee had discretionary authority to award a payout, except in the cases of involuntary termination with cause and voluntary termination without good reason, it exercised that authority (including in the change of control scenario); | |||
with respect to the annual incentive plan, in the case of an involuntary termination not for cause without a change of control, the termination was due to a position elimination in the fiscal | |||
with respect to performance shares, awards were earned at target | |||
with respect to performance shares in the change of control scenario, the Committee exercised its discretionary authority to award a pro-rata payout and did so at target levels; | |||
Non-Qualified Pension amounts reflect the present value of benefits applicable in a scenario, less the present value of accrued benefits to which the executive was entitled under the plan at May | |||
in the normal retirement scenarios, an executive attained the normal retirement age of 65 by fiscal year end | |||
in the disability scenarios, the disabling event lasted one year into the future. |
57
| Involuntary with Cause or Voluntary w/o Good Reason $ | Involuntary w/o Cause or Voluntary w/ Good Reason $ | Normal Retirement $ | Death or Disability $(1) | |||||||||||||
Gary M. Rodkin | ||||||||||||||||
Salary Continuation | 10,959 | 2,010,959 | 10,959 | 10,959 | ||||||||||||
Annual Incentive Plan | — | 6,000,000 | 2,000,000 | 2,000,000 | ||||||||||||
Performance Shares | — | 5,595,678 | 5,595,678 | 5,595,678 | ||||||||||||
Accelerated Stock Options | — | 1,326,000 | 1,326,000 | 1,326,000 | ||||||||||||
Non-Qualified Pension | — | 6,467,601 | — | — | ||||||||||||
Benefits Continuation | — | 30,090 | — | — | ||||||||||||
Death Benefits | — | 3,144 | — | 1,000,000 | ||||||||||||
Disability Benefits | — | 1,396 | — | 575,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 10,959 | 21,434,868 | 8,932,637 | 10,507,637 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
John F. Gehring | ||||||||||||||||
Salary Continuation | — | 596,154 | — | — | ||||||||||||
Annual Incentive Plan | — | 500,000 | 500,000 | 500,000 | ||||||||||||
Performance Shares | — | — | 1,790,629 | 1,790,629 | ||||||||||||
Accelerated Stock Options | — | — | 424,320 | 424,320 | ||||||||||||
Benefits Continuation | — | 15,066 | — | — | ||||||||||||
Death Benefits | — | — | — | 1,000,000 | ||||||||||||
Disability Benefits | — | — | — | 325,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | — | 1,111,220 | 2,714,949 | 4,039,949 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| Involuntary with Cause or Voluntary w/o Good Reason $ | Involuntary w/o Cause or Voluntary w/ Good Reason $ | Normal Retirement $ | Death or Disability $(1) | |||||||||||||
Andre J. Hawaux | ||||||||||||||||
Salary Continuation | — | 1,280,000 | — | — | ||||||||||||
Annual Incentive Plan | — | 640,000 | 640,000 | 640,000 | ||||||||||||
Performance Shares | — | — | 1,790,629 | 1,790,629 | ||||||||||||
Accelerated Stock Options | — | — | 424,320 | 424,320 | ||||||||||||
Benefits Continuation | — | 25,272 | — | — | ||||||||||||
Death Benefits | — | — | — | 1,000,000 | ||||||||||||
Disability Benefits | — | — | — | 395,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | — | 1,945,272 | 2,854,949 | 4,249,949 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Brian L. Keck | ||||||||||||||||
Salary Continuation | — | 1,050,000 | — | — | ||||||||||||
Annual Incentive Plan | — | 525,000 | 525,000 | 525,000 | ||||||||||||
Performance Shares Performance Shares | — | — | 888,245 | 888,245 | ||||||||||||
Accelerated Stock Options | — | — | 299,520 | 299,520 | ||||||||||||
Accelerated RSUs | — | 336,658 | 1,010,000 | 1,010,000 | ||||||||||||
Benefits Continuation | — | 9,895 | — | — | ||||||||||||
Death Benefits | — | — | — | 1,000,000 | ||||||||||||
Disability Benefits | — | — | — | 337,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | — | 1,921,553 | 2,722,765 | 4,060,265 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Paul T. Maass | ||||||||||||||||
Salary Continuation | — | 694,231 | — | — | ||||||||||||
Annual Incentive Plan | — | 380,000 | 380,000 | 380,000 | ||||||||||||
Performance Shares | — | — | 891,780 | 891,780 | ||||||||||||
Accelerated Stock Options | — | — | 232,800 | 232,800 | ||||||||||||
Benefits Continuation | — | 18,467 | — | — | ||||||||||||
Death Benefits | — | — | — | 950,000 | ||||||||||||
Disability Benefits | — | — | — | 312,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | — | 1,092,698 | 1,504,580 | 2,767,080 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| Involuntary w/o | ||||||||||||||||||||
| Cause or | ||||||||||||||||||||
| Voluntary w/o | Voluntary W/ | Normal | Death or | |||||||||||||||||
| Good Reason $ | Good Reason $ (1) | For Cause $ | Retirement $ | Disability $ (2) | ||||||||||||||||
Gary M. Rodkin | ||||||||||||||||||||
| Salary continuation | — | 2,000,000 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 6,000,000 | — | 2,000,000 | 2,000,000 | |||||||||||||||
| Performance Shares | — | 4,052,620 | — | 4,052,620 | 4,052,620 | |||||||||||||||
| Non-Qualified Pension | — | 5,616,171 | — | — | — | |||||||||||||||
| Benefits Continuation | — | 26,757 | — | — | — | |||||||||||||||
| Death Benefits | — | 2,544 | — | — | 1,000,000 | |||||||||||||||
| Disability Benefits | — | 170 | — | — | 225,000 | |||||||||||||||
Total | 0 | 17,698,262 | 0 | 6,052,620 | 7,277,620 | |||||||||||||||
John F. Gehring | ||||||||||||||||||||
| Salary continuation | — | 510,577 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 450,000 | — | 450,000 | 450,000 | |||||||||||||||
| Performance Shares | — | — | — | 732,743 | 732,743 | |||||||||||||||
| Accelerated Stock Options | — | — | — | 64,000 | 64,000 | |||||||||||||||
| Accelerated Restricted Stock | — | — | — | 74,360 | 74,360 | |||||||||||||||
| Benefits Continuation | — | 13,084 | — | — | — | |||||||||||||||
| Death Benefits | — | — | — | — | 900,000 | |||||||||||||||
| Disability Benefits | — | — | — | — | 225,000 | |||||||||||||||
Total | 0 | 973,661 | 0 | 1,321,103 | 2,446,103 | |||||||||||||||
Andre J. Hawaux | ||||||||||||||||||||
| Salary continuation | — | 1,200,000 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 600,000 | — | 600,000 | 600,000 | |||||||||||||||
| Performance Shares | — | — | — | 1,455,876 | 1,455,876 | |||||||||||||||
| Accelerated Stock Options | — | — | — | 160,000 | 160,000 | |||||||||||||||
| Accelerated Restricted Stock | — | — | — | 61,347 | 61,347 | |||||||||||||||
| Benefits Continuation | — | 23,063 | — | — | — | |||||||||||||||
| Death Benefits | — | — | — | — | 1,000,000 | |||||||||||||||
| Disability Benefits | — | — | — | — | 225,000 | |||||||||||||||
Total | 0 | 1,823,063 | 0 | 2,277,223 | 3,502,223 | |||||||||||||||
Scott Messel | ||||||||||||||||||||
| Salary continuation | — | 393,712 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 242,900 | — | 242,900 | 242,900 | |||||||||||||||
| Performance Shares | — | — | — | 486,296 | 486,296 | |||||||||||||||
| Non-Qualified Pension | — | — | — | — | — | |||||||||||||||
| Benefits Continuation | — | 13,084 | — | — | — | |||||||||||||||
| Death Benefits | — | — | — | — | 694,000 | |||||||||||||||
| Disability Benefits | — | — | — | — | 225,000 | |||||||||||||||
Total | 0 | 649,696 | 0 | 729,196 | 1,648,196 | |||||||||||||||
58
| Involuntary w/o | ||||||||||||||||||||
| Cause or | ||||||||||||||||||||
| Voluntary w/o | Voluntary W/ | Normal | Death or | |||||||||||||||||
| Good Reason $ | Good Reason $ (1) | For Cause $ | Retirement $ | Disability $ (2) | ||||||||||||||||
Peter M. Perez | ||||||||||||||||||||
| Salary continuation | — | 471,346 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 344,000 | — | 344,000 | 344,000 | |||||||||||||||
| Performance Shares | — | — | — | 972,610 | 972,610 | |||||||||||||||
| Benefits Continuation | — | 7,812 | — | — | — | |||||||||||||||
| Death Benefits | — | — | — | — | 860,000 | |||||||||||||||
| Disability Benefits | — | — | — | — | 225,000 | |||||||||||||||
Total | 0 | 823,158 | 0 | 1,316,610 | 2,401,610 | |||||||||||||||
Robert F. Sharpe, Jr. | ||||||||||||||||||||
| Salary continuation | — | 1,350,000 | — | — | — | |||||||||||||||
| Annual Incentive Plan | — | 2,025,000 | — | 675,000 | 675,000 | |||||||||||||||
| Performance Shares | — | 1,296,820 | — | 1,296,820 | 1,296,820 | |||||||||||||||
| Non-Qualified Pension | — | 2,416,949 | — | — | — | |||||||||||||||
| Benefits Continuation | — | — | — | — | — | |||||||||||||||
| Death Benefits | — | 2,544 | — | — | 1,000,000 | |||||||||||||||
| Disability Benefits | — | 170 | — | — | 225,000 | |||||||||||||||
Total | 0 | 7,091,483 | 0 | 1,971,820 | 3,196,820 | |||||||||||||||
| 1. | ||
| Amounts shown as benefits from the |
In the table that follows, if, following a change of control, any of Messrs. Gehring, Hawaux, MesselKeck or PerezMaass was terminated for “Cause” or voluntarily terminated employment without “Good Reason,” hethe individual would not receive any benefits incremental to those shown in the “No Termination” column. Messrs.Mr. Rodkin and Sharpe would be entitled to salary continuation per their employment agreements through the end of the month of the event. For fiscal 2009, the last day of the fiscal year was at the end of the month; therefore, Mr. Rodkin’s and Mr. Sharpe’s salary continuation in this scenario would be $0.
59
Change of Control and: | No Termination | Involuntary w/o Cause or Voluntary w/Good Reason | ||||||
Gary M. Rodkin | ||||||||
Salary Continuation | — | 3,010,959 | ||||||
Annual Incentive Plan | 2,000,000 | 8,000,000 | ||||||
Performance Shares | 5,595,678 | 5,595,678 | ||||||
Accelerated Stock Options | 1,326,000 | 1,326,000 | ||||||
Non-Qualified CRISP | — | 129,600 | ||||||
Non-Qualified Pension | — | 6,467,601 | ||||||
Benefits Continuation | — | 45,135 | ||||||
Death/Disability Benefit | — | 6,810 | ||||||
Outplacement | — | 30,000 | ||||||
Excise Tax Gross-Up | — | 10,854,312 | ||||||
Total | 8,921,678 | 35,465,105 | ||||||
John F. Gehring | ||||||||
Salary Continuation | — | 1,500,000 | ||||||
Annual Incentive Plan | 500,000 | 2,000,000 | ||||||
Performance Shares | 1,790,629 | 1,790,629 | ||||||
Accelerated Stock Options | 424,320 | 424,320 | ||||||
Non-Qualified CRISP | — | 54,900 | ||||||
Non-Qualified Pension | — | 361,503 | ||||||
Benefits Continuation | — | 45,135 | ||||||
Death/Disability Benefit | — | 6,819 | ||||||
Outplacement | — | 30,000 | ||||||
Excise Tax Gross-Up(1) | — | 2,417,447 | ||||||
Total | 2,714,949 | 8,630,753 | ||||||
Andre J. Hawaux | ||||||||
Salary Continuation | — | 1,920,000 | ||||||
Annual Incentive Plan | 640,000 | 2,560,000 | ||||||
Performance Shares | 1,790,629 | 1,790,629 | ||||||
Accelerated Options | 424,320 | 424,320 | ||||||
Non-Qualified CRISP | — | 70,200 | ||||||
Non-Qualified Pension | — | 564,927 | ||||||
Benefits Continuation | — | 45,135 | ||||||
Death/Disability Benefit | — | 6,810 | ||||||
Outplacement | — | 30,000 | ||||||
Excise Tax Gross-Up(1) | — | 3,539,667 | ||||||
Total | 2,854,949 | 10,951,688 | ||||||
Change of Control and: Brian L. Keck Salary Continuation Annual Incentive Plan Performance Shares Accelerated Stock Options Non-Qualified CRISP Accelerated RSUs Benefits Continuation Death/Disability Benefit Outplacement Excise Tax Gross-Up(1) Total Paul T. Maass Salary Continuation Annual Incentive Plan Performance Shares Accelerated Stock Options Non-Qualified CRISP Benefits Continuation Non-Qualified Pension Death/Disability Benefit Outplacement Excise Tax Gross-Up(1) Total No Termination Involuntary w/o Cause or
Voluntary w/Good Reason — 1,575,000 525,000 2,100,000 888,245 888,245 299,520 299,520 — 57,645 1,010,000 1,010,000 — 30,096 — 6,810 — 30,000 — 2,198,589 2,722,765 8,195,905 — 1,425,000 380,000 1,520,000 891,780 891,780 232,800 232,800 — 29,400 — 44,373 — 134,554 — 6,573 — 30,000 — 3,946,963 1,504,580 8,261,443
| Involuntary w/o Cause or | ||||||||
Change of Control and: | No Termination $ | Voluntary w/ Good Reason $ | ||||||
Gary M. Rodkin | ||||||||
| Salary Continuation | — | 3,000,000 | ||||||
| Annual Incentive Plan | 2,000,000 | 8,000,000 | ||||||
| Performance Shares | 4,052,620 | 4,052,620 | ||||||
| Non-Qualified CRISP | — | 329,508 | ||||||
| Non-Qualified Pension | — | 5,616,171 | ||||||
| Benefits Continuation | — | 40,135 | ||||||
| Death/Disability Benefit | — | 4,071 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up | 9,370,713 | |||||||
Total | 6,052,620 | 30,443,218 | ||||||
John F. Gehring | ||||||||
| Salary Continuation | — | 1,350,000 | ||||||
| Annual Incentive Plan | 450,000 | 1,800,000 | ||||||
| Performance Shares | 732,743 | 732,743 | ||||||
| Accelerated Stock options | 64,000 | 64,000 | ||||||
| Accelerated Restricted Stock | 74,360 | 74,360 | ||||||
| Non-Qualified CRISP | — | 66,471 | ||||||
| Non-Qualified Pension | — | 208,477 | ||||||
| Benefits Continuation | — | 40,135 | ||||||
| Death/Disability Benefit | — | 3,689 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up | — | 1,374,204 | ||||||
Total | 1,321,103 | 5,744,079 | ||||||
Andre J. Hawaux | ||||||||
| Salary Continuation | — | 1,800,000 | ||||||
| Annual Incentive Plan | 600,000 | 2,400,000 | ||||||
| Performance Shares | 1,455,876 | 1,455,876 | ||||||
| Accelerated Stock Options | 160,000 | 160,000 | ||||||
| Accelerated Restricted Stock | 61,347 | 61,347 | ||||||
| Non-Qualified CRISP | — | 98,493 | ||||||
| Non-Qualified Pension | — | 271,308 | ||||||
| Benefits Continuation | — | 40,135 | ||||||
| Death/Disability Benefit | — | 4,071 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up | — | 2,038,711 | ||||||
Total | 2,277,223 | 8,359,941 | ||||||
60
| Involuntary w/o Cause or | ||||||||
Change of Control and: | No Termination $ | Voluntary w/ Good Reason $ | ||||||
Scott Messel | ||||||||
| Salary Continuation | — | 347,000 | ||||||
| Annual Incentive Plan | 242,900 | 485,800 | ||||||
| Performance Shares | 486,296 | 486,296 | ||||||
| Non-Qualified CRISP | — | 21,759 | ||||||
| Non-Qualified Pension | — | 26,034 | ||||||
| Benefits Continuation | — | 39,297 | ||||||
| Death/Disability Benefit | — | 2,903 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up(1) | — | — | ||||||
Total | 729,196 | 1,439,089 | ||||||
Pete Perez | ||||||||
| Salary Continuation | — | 1,290,000 | ||||||
| Annual Incentive Plan | 344,000 | 1,376,000 | ||||||
| Performance Shares | 972,610 | 972,610 | ||||||
| Non-Qualified CRISP | — | 22,881 | ||||||
| Non-Qualified Pension | — | 114,808 | ||||||
| Benefits Continuation | — | 26,945 | ||||||
| Death/Disability Benefit | — | 3,536 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up(1) | — | — | ||||||
Total | 1,316,610 | 3,836,780 | ||||||
Robert F. Sharpe, Jr. | ||||||||
| Salary Continuation | — | 2,025,000 | ||||||
| Annual Incentive Plan | 675,000 | 2,700,000 | ||||||
| Performance Shares | 1,296,820 | 1,296,820 | ||||||
| Non-Qualified CRISP | — | 121,896 | ||||||
| Non-Qualified Pension | — | 2,416,949 | ||||||
| Death/Disability Benefit | — | 4,071 | ||||||
| Outplacement | — | 30,000 | ||||||
Excise TaxGross-Up | — | 3,867,405 | ||||||
Total | 1,971,820 | 12,462,141 | ||||||
| 1. | As described on page |
Non-Employee Director Compensation
We use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on our Board of Directors. In setting director compensation, the Committee receives input from Frederic W. Cook & Co., Inc., its independent compensation consultant. It also considers the time commitment and skill level required to serve on our Board.
Non-Employee Director Compensation – Other than the Chairman
The following table summarizes the compensation programs for our non-employee directors other than the Chairman in effect during fiscal 2012:
| Fiscal 2012 | ||
Annual Cash Retainer | $85,000 per year | |
Annual Committee Chair Retainer(1) | $15,000 for each Committee Chair | |
Meeting Fees | None, unless the director’s attendance is required at more than 24 total meetings in a year. A fee of $1,500 will be | |
Equity Compensation | A grant of restricted stock units, which we refer to |
61
| 1. | Excludes the Executive Committee. No retainer is paid for service to this Committee. |
The number of RSUs is determined by dividing $125,000 by the average of the closing stock price of our common stock on the NYSE for the thirty trading days prior to the grant date (May 31, 2011 for fiscal 2012 (the first trading day of fiscal 2012)). RSUs vested one year from the date of grant, and were subject to continued service during the entire term. Vesting is accelerated in the event of death or permanent disability or, in the event the director is no longer serving one year from the date of grant, vesting is prorated 25% for each fiscal quarter during which the director was serving on the first day of the fiscal quarter. Dividend equivalents are paid on the RSUs, and are paid at the regular dividend rate in shares of our stock.
Compensation of the Non-Employee Chairman
Director Stock Ownership Requirements
The Board has adopted stock ownership requirements for the non-employee directors. All non-employee directors, including the Chairman, are expected to acquire and hold shares of ConAgra Foods common stock during their tenure with a value of at least five times the amount of the annual cash retainer paid to non-employee directors other than the Chairman (in other words, $425,000). All directors must acquire this ownership level within five years following first election to the Board, or September 25, 2014, whichever is later. Shares personally acquired by the non-employee directors through open market purchases, as well as RSUs, and shares acquired upon the deferral of fees are counted toward the ownership requirement. Unexercised stock options are not counted.
Director | Stock Ownership Guideline | Actual Ownership(1) | ||||||
Mr. Bay | $ | 425,000 | $ | 1,336,589 | ||||
Mr. Butler | $ | 425,000 | $ | 1,187,377 | ||||
Mr. Goldstone | $ | 425,000 | $ | 1,514,339 | ||||
Ms. Gregor | $ | 425,000 | $ | 678,349 | ||||
Mr. Johri | $ | 425,000 | $ | 530,736 | ||||
Mr. Jurgensen | $ | 425,000 | $ | 2,044,288 | ||||
Mr. Lenny | $ | 425,000 | $ | 512,846 | ||||
Ms. Marshall | $ | 425,000 | $ | 981,887 | ||||
Mr. Schindler | $ | 425,000 | $ | 590,045 | ||||
Mr. Stinson | $ | 425,000 | $ | 1,630,698 | ||||
| 1. | Based on the average daily price of our common stock on the NYSE for the 12 months ended July 27, 2012 ($25.3892). |
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:
| Ÿ | medical plan access, with the cost of the premium borne entirely by the director; |
| Ÿ | a matching gifts program, under which ConAgra Foods matches up to $10,000 of a director’s charitable donations per fiscal year; |
| Ÿ | a non-qualified deferred compensation plan, through which non-employee directors can defer receipt of their cash or stock compensation. This program does not provide above-market earnings (as defined by SEC rules); and |
| Ÿ | for directors elected to the Board prior to 2003, the Directors’ Charitable Award Program (which was discontinued in 2003). Participating directors nominate one or more tax-exempt organizations to which ConAgra Foods will contribute an aggregate of $1 million in four equal annual installments following the death of the director. ConAgra Foods maintains insurance on the lives of participating directors to fund the program. |
Director Compensation Table – Fiscal 2012
Name | Fees Earned or Paid in Cash($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||
Mogens C. Bay | 100,000 | 125,006 | 10,000 | 235,006 | ||||||||||||
Stephen G. Butler | 100,000 | 125,006 | 10,000 | 235,006 | ||||||||||||
Steven F. Goldstone | — | 374,992 | — | 374,992 | ||||||||||||
Joie A. Gregor | 85,000 | 125,006 | 10,000 | 220,006 | ||||||||||||
Rajive Johri | 85,000 | 125,006 | 10,000 | 220,006 | ||||||||||||
W.G. Jurgensen | 85,000 | 125,006 | — | 210,006 | ||||||||||||
Richard H. Lenny | 85,000 | 125,006 | 10,000 | 220,006 | ||||||||||||
Ruth Ann Marshall | 85,000 | 125,006 | 10,000 | 220,006 | ||||||||||||
Andrew J. Schindler | 85,000 | 125,006 | — | 210,006 | ||||||||||||
Kenneth E. Stinson | 100,000 | 125,006 | 10,000 | 235,006 | ||||||||||||
| 1. | This column reflects the grant date fair value (computed in accordance with FASB ASC Topic 718) of the stock awards made to non-employee directors during fiscal 2012. No awards of stock options were made to non-employee directors during fiscal 2012. |
At fiscal year-end, the aggregate number of outstanding stock awards and outstanding unexercised option awards held by each non-employee director was as set forth below:
Name | Outstanding Stock Awards Held at FYE (#) | Outstanding Stock Options Held at FYE (#) | ||||||
Mogens C. Bay | 30,471 | 78,000 | ||||||
Stephen G. Butler | 19,671 | 69,000 | ||||||
Steven F. Goldstone | 23,600 | 482,850 | ||||||
Joie A. Gregor | 10,071 | 15,000 | ||||||
Rajive Johri | 10,221 | 21,750 | ||||||
W.G. Jurgensen | 21,471 | 78,000 | ||||||
Richard H. Lenny | 9,921 | 20,250 | ||||||
Ruth Ann Marshall | 12,471 | 33,000 | ||||||
Andrew J. Schindler | 12,471 | 33,000 | ||||||
Kenneth E. Stinson | 30,471 | 78,000 | ||||||
| 2. | The amount reported reflects the amount paid to a designated charitable organization on the director’s behalf under the matching gifts program described above. |
The table below shows the shares of ConAgra Foods common stock beneficially owned as of July 27, 2012 by: (1) owners of more than 5% of our outstanding common stock, (2) our current directors, (3) our “named executive officers” for purposes of this Proxy Statement, and (4) all current directors and executive officers as a group. As discussed in this Proxy Statement, our directors and executive officers are committed to owning stock in ConAgra Foods. Both groups have stock ownership requirements that preclude them from selling any ConAgra Foods stock in the market until they have enough shares to meet and maintain their stock ownership guidelines pre- and post-sale. To better show the financial stake of our directors and executive officers in the company, we have included a “Share Units” column in the table. The column, which is not required under SEC rules, shows deferred shares owned by non-employee directors through the ConAgra Foods, Inc. Directors’ Deferred Compensation Plan and deferred shares owned by executive officers through the ConAgra Foods, Inc. Voluntary Deferred Compensation Plan. Although these shares will ultimately be settled in shares of common stock, they currently have no voting rights, nor will they be settled within 60 days of July 27, 2012. Name BlackRock, Inc.(1) 40 East 52nd Street New York, NY 10022 Capital Research Global Investments(2) 333 South Hope Street Los Angeles, CA 90071 State Street Corporation(3) State Street Financial Center One Lincoln Street Boston, MA 02111 Mogens C. Bay Stephen G. Butler Steven F. Goldstone Joie A. Gregor Rajive Johri W.G. Jurgensen Richard H. Lenny Ruth Ann Marshall Gary M. Rodkin Andrew J. Schindler Kenneth E. Stinson John F. Gehring Andre J. Hawaux Brian L. Keck Paul T. Maass All Directors and Current Executive Officers as a Group (19 people) Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and persons who own more than 10% of a registered class of our equity securities file with the SEC reports of ownership and changes in beneficial ownership of our common stock. Directors, executive officers and greater than 10% owners are required to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of copies of these reports furnished to us or written representations that no other reports were required, we believe that during fiscal 2012, all required reports were filed on a timely basis. Audit / Finance Committee Report The Audit / Finance Committee assists the Board of Directors in fulfilling its oversight responsibilities by reviewing (1) the integrity of the financial statements of the company, (2) the qualifications, independence and performance of the company’s independent auditor and internal audit department, and (3) compliance by the company with legal and regulatory requirements. The Audit / Finance Committee acts under a written charter, adopted by the Board of Directors, a copy of which is available on our website. ConAgra Foods’ management is responsible for the company’s financial reporting process and internal controls. The independent auditor is responsible for performing an independent audit of the company’s consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles and assessing the effectiveness of the company’s internal control over financial reporting. The Audit / Finance Committee oversees the company’s financial reporting process and internal controls on behalf of the Board of Directors. The Audit / Finance Committee has sole authority to retain, compensate, oversee and terminate the independent auditor. The Audit / Finance Committee reviews the company’s annual audited financial statements, quarterly financial statements, and other filings with the SEC. The Audit / Finance Committee reviews reports on various matters, including: (1) critical accounting policies of the company; (2) material written communications between the independent auditor and management; (3) the independent auditor’s internal quality-control procedures; (4) significant changes in the company’s selection or application of accounting principles; and (5) the effect of regulatory and accounting initiatives on the financial statements of the company. The Audit / Finance Committee also has the authority to conduct investigations within the scope of its responsibilities and to retain legal, accounting and other advisors to assist the Audit / Finance Committee in its functions. During the last fiscal year, the Audit / Finance Committee met and held discussions with representatives of ConAgra Foods management, its internal audit staff, and KPMG LLP, independent auditor. Representatives of financial management, the internal audit staff, and the independent auditor have unrestricted access to the Audit / Finance Committee and periodically meet privately with the Audit / Finance Committee. The Audit / Finance Committee reviewed and discussed with ConAgra Foods’ management and KPMG the audited financial statements contained in the company’s Annual Report on Form 10-K for the fiscal year ended May 27, 2012. The Audit / Finance Committee also discussed with the independent auditor the matters required to be discussed by the auditor with the Audit / Finance Committee under the Statement on Auditing Standards No. 61, as amended (relating to communication with audit committees) as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit / Finance Committee also reviewed and discussed with KPMG its independence and, as part of that review, received the written disclosures required by applicable professional and regulatory standards relating to KPMG’s independence from ConAgra Foods, including those of the Public Company Accounting Oversight Board pertaining to the independent accountant’s communications with the Audit / Finance Committee concerning independence. The Audit / Finance Committee also considered whether the provision of non-audit services provided by KPMG to the company during fiscal 2012 was compatible with the auditor’s independence. Based on these reviews and discussions, and the report of the independent auditor, the Audit / Finance Committee recommended to the Board of Directors, and the Board approved, that the audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended May 27, 2012 for filing with the Securities and Exchange Commission. ConAgra Foods, Inc. Audit / Finance Committee Stephen G. Butler, Chair Richard H. Lenny Voting Item #2: Ratification of the Appointment of Independent Auditor The Audit / Finance Committee has appointed KPMG LLP, an independent registered public accounting firm, as our independent auditors for fiscal 2013 to conduct the audit of our financial statements. KPMG LLP has conducted the audits of our financial statements since fiscal 2006. The Audit / Finance Committee and the Board of Directors request that the stockholders ratify this appointment. Representatives from KPMG are expected to be present at the annual meeting. The representatives will have the opportunity to make a statement and will be available to respond to appropriate questions. In the event the stockholders do not ratify the appointment, the Audit / Finance Committee will reconsider the appointment. Even if the appointed auditor is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in the company’s and its stockholders’ best interests. Fees billed by KPMG for services provided for fiscal years 2012 and 2011 were as follows: Audit Fees Audit-Related Fees Tax Fees All Other Fees Total Fees Audit Feesconsist of the audits of our fiscal years 2012 and 2011 annual financial statements and the review of our quarterly financial statements during fiscal years 2012 and 2011. Audit-Related Feesin fiscal years 2012 and 2011 consisted of other attestation services. Tax Feesin fiscal year 2012 consisted of tax consultation and tax compliance services. All Other Feesin fiscal year 2012 consisted of services related to review of prescription drug contract compliance and a license for accounting research software. All other fees in fiscal year 2011 related to a license for accounting research software. The Audit / Finance Committee pre-approves all audit and non-audit services performed by the independent auditor. The Audit / Finance Committee will periodically grant general pre-approval of categories of audit and non-audit services. Any other services must be specifically approved by the Audit / Finance Committee, and any proposed services exceeding pre-approved cost levels must be specifically pre-approved by the Audit / Finance Committee. In periods between Audit / Finance Committee meetings, the Chairman of the Audit / Finance Committee has the delegated authority from the Committee to pre-approve additional services, and his pre-approvals are then communicated to the full Audit / Finance Committee at its next meeting. The Audit / Finance Committee approved 100% of the services performed by KPMG relating to audit fees, audit-related fees, tax fees and all other fees during fiscal years 2012 and 2011. The Board of Directors recommends a vote “FOR” the Ratification of the Appointment of KPMG LLP as Independent Auditor for Fiscal 2013. Voting Item #3: Advisory Vote to Approve Named Executive Officer Compensation Consistent with our stockholders’ preference as indicated at our 2011 annual meeting, our stockholders are being given an opportunity to vote, on a non-binding advisory basis, to approve the compensation of our named executive officers at the 2012 Annual Meeting. We currently conduct our advisory votes to approve the compensation of our named executive officers on an annual basis, and the next such advisory vote is expected to be conducted at our 2013 annual meeting of stockholders. The 2012 vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to the compensation of our named executive officers as we have described it in the “Executive Compensation” section of this Proxy Statement, beginning on page 13. At the 2011 annual meeting, our stockholders approved the compensation of our named executive officers, with almost 87% of shares cast voting in favor of approving such compensation. While this vote is advisory and not binding on our company, the Board and the Human Resources Committee value the opinions of our stockholders and expect to consider the outcome of the vote, along with other relevant factors, when considering named executive officer compensation decisions after the 2012 Annual Meeting. As described in detail in the CD&A, our executive compensation program is designed to encourage and reward behavior that promotes sustainable growth in stockholder value. The Human Resources Committee believes that for the program to do so, it must accomplish five objectives: Incent the right results for the long-term health of the business,without creating unnecessary or excessive risks to the company. Reward performance and be strongly aligned with stockholders, to inspire and reward behavior that promotes sustainable growth in stockholder value. Remain externally competitive to aid talent attraction and retention, because the achievement of our strategic plans requires us to attract and retain talented leaders who have the skills, vision and experience to lead our company. Promote internal pay equity and consistency, recognizing that individual pay will reflect differences in experience, performance, responsibilities and market considerations, but that programs should be sufficiently similar to promote decisions that better the company as a whole. Promote and reward long-term commitment,and longevity of career with the company. The Board believes that the Human Resources Committee effectively adhered to these objectives in awarding fiscal 2012 compensation to our named executive officers. In particular, pay was closely linked to performance and reflected the challenging year we experienced. With consumers struggling and an external environment marked by a continuation of the escalating input costs we saw in fiscal 2011, our profits were negatively impacted in fiscal 2012. However, we successfully delivered growth in diluted earnings per share, adjusted for items impacting comparability, and placed the company on solid ground as we entered fiscal 2013. Key accomplishments during fiscal 2012 are set forth in our Proxy Statement Summary (page i) and CD&A (pages 13 to 31), and include such items as: Successfully turning around our Lamb Weston specialty potato operations. Investing for the future through acquisitions, using approximately $694 million of cash on hand to acquire assets in large and fast-growing categories (for example, frozen breakfast, private label pretzels and private label pita chips) and an international market where we already have a presence, Canada. We also acquired a majority ownership position in Agro Tech Foods Ltd., an Indian food company in which we have had an equity interest since 1997. Effectively leveraging our strong innovation capabilities. Responsibly deploying our capital: Our Board of Directors raised the company’s annualized dividend by 4% during fiscal 2012, to its current annualized rate of $0.96 per share; and Our Board of Directors approved a $750 million increase to the company’s existing share repurchase authorization. We returned more than $352 million to stockholders through share repurchases during fiscal 2012. The fiscal 2012 pay packages for our named executive officers consisted of salary, short- and long-term incentive opportunities and other benefits discussed in the CD&A (pages 13 to 31). You can read about our Human Resources Committee’s methodology for setting pay opportunities and approving actual payouts, and learn more about our compensation plans and programs, in that section. In summary, however, it is worth noting that in determining the amount of compensation paid to our named executive officers, the Human Resources Committee focuses intently on aligning pay and performance. As such: our fiscal 2012 performance results were in line with our expectations but slightly short of our target. Payouts under our fiscal 2012 annual incentive plan reflected our performance and ranged from 70% to 100% of targeted amounts, with most awards paying out at 78% of targeted amounts; and from a three-year perspective, fiscal years 2010 through 2012 represented a period of volatility in our business performance. The performance share component of our long-term incentive program for the named executive officers for that three-year period included a profit growth threshold that was not met. As a result, our named executive officers received no payout under the performance share component of the plan. The Committee believes that these actions appropriately reflect its commitment to rewarding executives based on actual performance results. With these decisions and results in mind, we are asking our stockholders to once again indicate their support for the compensation of our named executive officers as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation program and practices described in this Proxy Statement. Accordingly, we are asking our stockholders to vote on the following resolution: “RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in this Proxy Statement, is hereby APPROVED.” The Board of Directors recommends a vote “FOR” the Resolution Approving the Compensation of our Named Executive Officers. Information About the 2012 Annual Meeting Revoking a Proxy You can revoke your proxy before your shares are voted if you (1) are the record owner of your shares and submit a written revocation to our Corporate Secretary at or before the meeting (mail to: ConAgra Foods, Inc., Attn: Corporate Secretary, One ConAgra Drive, Omaha, Nebraska 68102), (2) submit a timely later-dated proxy (or voting instruction card if you hold shares through a broker, bank or nominee), or (3) provide timely subsequent Internet or telephone voting instructions. You may also attend the meeting in person and vote in person, subject to the legal proxy requirement noted on page 1 for street name owners. For Participants in the ConAgra Foods Retirement Income Savings Plan If you hold shares in the ConAgra Foods Retirement Income Savings Plan, your voting instruction card covers the shares credited to your plan account. The plan’s trustee must receive your voting instructions by 11:59 p.m. Eastern Time on Tuesday, September 18, 2012. If the plan trustee does not receive your instructions by that date, the trustee will vote the shares held by the ConAgra Foods Retirement Income Savings Plan in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received. Proxy Solicitation We have engaged Innisfree M&A Incorporated as our proxy solicitor for the annual meeting at an estimated cost of approximately $9,000 plus disbursements. Our directors, officers and other employees may also solicit proxies in the ordinary course of their employment. ConAgra Foods will bear the cost of the solicitation, including the cost of reimbursing brokerage houses and other custodians for their expenses in sending proxy materials to you. Quorum A majority of the shares of common stock outstanding on the record date must be present in person or by proxy at the meeting to constitute a quorum. The inspectors of election intend to treat properly executed proxies marked “abstain” as “present” for purposes of determining whether a quorum has been achieved. The inspectors will also treat proxies held in “street name” by brokers where the broker indicates that it does not have authority to vote on one or more of the proposals coming before the meeting (“broker non-votes”) as “present” for purposes of determining whether a quorum has been achieved. Vote Requirements and Manner of Voting Proxies If a quorum is present: We will hold an election of directors. Each outstanding share is entitled to cast one vote for each director position. A director will be elected if he or she receives the affirmative vote of a majority of the votes cast in the election. An incumbent director nominee who does not receive the affirmative vote of a majority of the votes cast in the election is required to tender his or her resignation to the Board, and the resignation will be accepted or rejected by the Board as more fully described in the “Corporate Governance” section of this Proxy Statement. Abstentions and broker non-votes are not treated as votes cast and therefore will not affect the outcome of the election of directors. We will vote on ratification of the appointment of the independent auditor. The appointment of the independent auditor for fiscal 2013 will be ratified if approved by a majority of the shares present and entitled to vote on the matter. Abstentions will be counted; they will have the same effect as a vote against the matter. Because the ratification of the appointment of the independent auditor is considered a “routine” matter, there will be no broker non-votes with respect to the matter. We will hold a vote, on a non-binding advisory basis, to approve our named executive officers’ compensation. The non-binding advisory resolution to approve the compensation of the company’s named executive officers, as described in the “Compensation Discussion and Analysis” and tabular compensation disclosure in this Proxy Statement will be considered adopted if approved by a majority of the shares present and entitled to vote on the matter. Abstentions will be counted; they will have the same effect as a vote against the matter. Broker non-votes will be disregarded and therefore will not affect the outcome of the votes on this matter. The shares represented by all valid proxies received by Internet, by telephone or by mail and not properly revoked will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted: “For” the election of all of the nominees for director named in this Proxy Statement; “For” the ratification of the appointment of our independent auditor for fiscal 2013; and “For” the resolution to approve the compensation of the company’s named executive officers. If any matter not described above is properly presented at the meeting, the proxy gives authority to the persons named on the proxy card to vote as recommended by the Board of Directors on such other matters. Attendance at the Meeting Admission to the meeting will be by ticket or confirming bank/brokerage statement only, and those attending the meeting must bring some form of government-issued photo identification. If your ConAgra Foods shares are registered in your name, the top half of your proxy card or the Notice of Internet Availability of Proxy Materials is your admission ticket. If your ConAgra Foods shares are registered in your name and you received your proxy materials electronically, your admission ticket is a print-out of the e-mail that links you to the materials. If your ConAgra Foods shares are held in street name (through a bank or brokerage account), bring a recent bank or brokerage statement to the meeting showing that you owned ConAgra Foods common stock on July 27, 2012. Multiple Stockholders Sharing an Address We are allowed to deliver a single annual report and Proxy Statement to a household at which two or more stockholders reside when we believe those stockholders are members of the same family. We believe this rule benefits everyone. It eliminates duplicate mailings that stockholders living at the same address receive, and it reduces our printing and mailing costs. You will continue to receive individual proxy cards for each registered account. If you receive a single set of proxy materials but prefer to receive separate copies for each registered account in your household, please contact our agent, Broadridge, at: 1-800-542-1061, or in writing at: Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Broadridge will remove you from the householding program within 30 days after it receives your request, following which you will begin receiving an individual copy of the material for each registered account. You can also contact Broadridge at the phone number or address above if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future. Stockholder Proposals to be Included in our 2013 Proxy Statement To be considered for inclusion in next year’s Other Stockholder Proposals to be Presented at our 2013 Annual Meeting Our bylaws Information on Stock OwnershipProposalsVoting Securities of Directors, Officers and Greater Than 5% Owners Number of Shares
Owned(4) Right to
Acquire(5) Percent of
Class Share Units 29,509,014 — 7.3 % N/A 29,764,312 — 7.3 % N/A 22,572,095 — 5.6 % N/A 47,777 (6) 80,434 * — 30,877 (6) 71,434 * 11,023 14,600 490,150 * 30,445 6,000 17,434 * 15,851 — 24,184 * 16,037 46,677 80,434 * 28,974 9,921 22,684 * 5,206 4,560 35,434 * 29,246 623,350 4,980,000 (7) 1.4 % 189,289 1,800 35,434 * 16,573 59,361 80,434 * — 146,934 616,000 (7) * — 156,539 (6) 856,000 (7) * 13,196 351 141,333 (7) * — 14,763 288,000 (7) * — 1,276,768 8,478,709 (7) 2.4 % 356,184 * Represents less than 1% of common stock outstanding. 1. Based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 13, 2012, which Schedule specifies that BlackRock, Inc. has sole voting and dispositive power with respect to all of these shares. 2. Based on a Schedule 13G filed by Capital Research Global Investments with the SEC on February 14, 2012, which Schedule specifies that Capital Research Global Investments has sole voting and dispositive power with respect to all of these shares. 3. Based on a Schedule 13G filed by State Street Corporation and various subsidiaries with the SEC on February 9, 2012, which Schedule specifies that State Street Corporation has shared voting and dispositive power with respect to all of these shares. 4. For executive officers and directors, reflects shares that have been acquired through one or more of the following: (a) open market purchases, (b) vesting or exercise of share-based awards and (c) crediting to defined contribution plan accounts. 5. Reflects shares that the individual has the right to acquire within 60 days of July 27, 2012 through the exercise of stock options or vesting of restricted stock units. 6. For Mr. Bay, consists of 47,777 shares as to which he shares voting and investment power with his spouse. For Mr. Butler, includes 6,000 shares held in a trust for the benefit of his spouse, who resides with him. For Mr. Hawaux, includes 550 shares held by his spouse, who resides with him. 7. Reflects shares that the individual has the right to acquire within 60 days of July 27, 2012 through the exercise or vesting of the following: Mr. Rodkin, 4,980,000 options; Mr. Gehring, 616,000 options; Mr. Hawaux, 856,000 options; Mr. Keck, 128,000 options and 13,333 RSUs; Mr. Maass, 288,000 options; and current executive officers not individually named in this table, 659,320 options. Rajive Johri Andrew J. Schindler Fiscal 2012 Fiscal 2011 $ 5,508,000 $ 5,347,000 105,000 8,000 3,000 — 69,000 11,000 $ 5,685,000 $ 5,366,000 Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ proxy statement,Proxy Statement, stockholder proposals must be received at our principal executive offices no later than the close of business on April 14, 2010.8, 2013. Address proposals to the Corporate Secretary, ConAgra Foods, Inc., One ConAgra Drive, Omaha, Nebraska 68102.outlinerequire that any stockholder proposal that is not submitted for inclusion in next year’s Proxy Statement, but is instead sought to be presented directly at the process for stockholders to follow to nominate a director or present any other business at an2013 Annual Stockholders’ Meeting. Generally, a stockholder must give timely notice to the ConAgra Foods Corporate Secretary. To be timely, that notice for the 2010 annual meeting mustMeeting be received at our principal executive officesoffice not less than 90 nor more than 120 days prior to the first anniversary of the 20092012 annual meeting. However, ifIf the date of the 20092012 annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date, then the notice must be received not later than the 90th90th day prior to the meeting day or the tenth day following public announcement of the meeting date. TheOur bylaws also specify the information that must accompany any such stockholder notice. Our proxy statementcard for the 20102013 annual meeting will give discretionary authority with respect to all stockholder proposals properly brought before the 20102013 annual meeting that are not included in such proxy statement.Proposals, nominations and inquiries regarding these matters should be addressedthe 2013 annual meeting Proxy Statement. Address proposals to the Corporate Secretary, ConAgra Foods, Inc., One ConAgra Drive, Omaha, Nebraska 68102.62
CONAGRA FOODS, INC. ONE CONAGRA DRIVE OMAHA, NE 68102-5001 | VOTE BY INTERNET -www.proxyvote.com 1. Read the accompanying Proxy Statement and this voting instruction card. 2. Go to Website www.proxyvote.com. 3. Follow the instructions. VOTE BY PHONE - 1-800-690-6903 1. Read the accompanying Proxy Statement and this voting instruction card. 2. Call toll free 1-800-690-6903. 3. Follow the recorded instructions. VOTE BY MAIL 1. Read the accompanying Proxy Statement and this voting instruction card. 2. Mark, sign and date your voting instruction card. 3. Return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote by Phone or Internet, please do not mail this Voting Instruction Card. |
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
M48865-P29248 KEEP THIS PORTION FOR YOUR RECORDS | ||
| THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |
CONAGRA FOODS, INC. The Board of Directors recommends a vote FOR the | ||||||||||||||||||||||||||||
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||||||||
| 1. | Election of Directors | ¨ | ¨ | ¨ | ||||||||||||||||||||||||
01) Mogens C. Bay | 07) Richard H. Lenny | |||||||||||||||||||||||||||
| 02) Stephen G. Butler | 08) Ruth Ann Marshall | |||||||||||||||||||||||||||
| 03) Steven F. Goldstone | 09) Gary M. Rodkin | |||||||||||||||||||||||||||
| 04) Joie A. Gregor | 10) Andrew J. Schindler | |||||||||||||||||||||||||||
| 05) Rajive Johri | 11) Kenneth E. Stinson | |||||||||||||||||||||||||||
| 06) W.G. Jurgensen | ||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the | ||||||||||||||||||||||||||||
| For | Against | Abstain | ||||||||||||||||||||||||||
2. | Ratification of the | |||||||||||||||||||||||||||
| ¨ | ¨ | ¨ | ||||||||||||||||||||||||||
The Board of Directors recommends a | ||||||||||||||||||||||||||||
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3. | Advisory vote to approve named executive officer compensation | ||||||||||||||||||||||||
| ¨ | ¨ | ¨ | |||||||||||||||||||||||
NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the | |||||||||||||||||||||||||
Please indicate if you plan to | |||||||||||||||||||||||||
¨ | ¨ | ||||||||||||||||||||||||
Yes | |||||||||
No | |||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in | |||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||||||||||||||||||||||
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ADMISSION TICKET
ELIGIBILITY AND PARTICIPATIONFriday, September 21, 2012
1:30 p.m. CT
Witherspoon Concert Hall
Joslyn Art Museum
2200 Dodge Street
Omaha, Nebraska 68102
You must present this admission ticket, along with some form of government-issued photo identification such as a valid driver’s license or (ii) a designee to whom such authority has been delegated by the Committee pursuant to Section 4.4.
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Important Notice Regarding the Availability of Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of shares or other securities of ConAgra Foods, Inc., or for shares of stock or other securities of any other corporation (or new, different or additional shares or other securities of ConAgra Foods, Inc. or of any other corporation being received by the holders of outstanding shares of Stock), or a material change in the market value of the outstanding shares of Stock as a result of the change, transaction or distribution, then equitable adjustments shall be made by the Committee, as it determines are necessary and appropriate, in: (a) the aggregate number and type of shares of Stock (or other property) availableProxy Materials for the grant of Awards under Section 5.1, (b) the maximum number of shares of Stock (or other property) that can be granted to any individual in any fiscal year under Section 5.2, (c) the numberAnnual Meeting:
The Annual Report and type of shares (or other property) and exercise price with respect to outstanding Options and SARs, and (d) the number, prices and dollar value of other outstanding Awards. However, in no event shall this Section 5.4 be construed to permit a modification (including a replacement) of an Option or SAR if such modification either: (i) would result in accelerated recognition of income or imposition of additional tax under Code Section 409A; or (ii) would cause the Option or SAR subject to the modification (or cause a replacement Option or SAR) to be subject to Code Section 409A, provided that the restriction of this clause (ii) shall not apply to any Option or SAR that,Notice & Proxy Statement are available at the time it is granted or otherwise, is designated as being deferred compensation subject to Code Section 409A. Any adjustment by the Committee shall be conclusive and binding for all purposes of the Plan.
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 | VOTING INSTRUCTION CARD - CONAGRA FOODS, INC. | |||||||||||||||||
| Please vote and sign on reverse side | ||||||||||||||||||
This Proxy is Solicited by the Board of Directors for the September 21, 2012 Annual Meeting of Stockholders | ||||||||||||||||||
As a participant in the ConAgra Foods Retirement Income Savings Plan (the “CRISP”), I hereby direct State Street Bank and Trust Company as Trustee, to vote all shares held in this plan account as I instruct in the instructions listed on the reverse side. THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS CARD. IF YOU SIGN AND RETURN YOUR INSTRUCTION CARD BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE TRUSTEE WILL VOTE THE SHARESFOR ALL NOMINEES LISTED IN ITEM 1, ANDFOR ITEMS 2 AND 3. If you wish to direct the Trustee by mailing this voting instruction card, please mark the boxes accordingly, sign your name exactly as it appears on this card and mark, date and return it in the enclosed envelope. Information on telephonic and Internet voting is on the reverse side of this voting instruction card. If you are a current or former employee of ConAgra Foods, Inc. and have an interest in CRISP, your proportionate interest as of July 27, 2012 is shown on this voting instruction card and your instructions will provide voting instructions to the Trustee of the plan. If this card is not returned, the Trustee will vote the shares in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received, unless contrary to applicable law. Your telephone or Internet voting instruction authorizes State Street Bank and Trust Company to vote these shares in the same manner as if you marked, signed and returned your voting instruction card. Whether you vote by mail, telephone or via the Internet, your vote must be returned by 11:59 p.m. (ET) on September | ||||||||||||||||||
Continued and to be signed on reverse side | ||||||||||||||||||
CONAGRA FOODS, INC. ONE CONAGRA DRIVE OMAHA, NE 68102-5001 | VOTE BY 1. Read the accompanying Proxy Statement and this voting instruction card. 2. 3. Follow the | |
VOTE BY 1. Read the accompanying Proxy Statement and this voting instruction card. 2. 3. Follow the recorded instructions. | ||
VOTE BY MAIL 1. Read the accompanying Proxy Statement and this voting instruction card. 2. Mark, sign and date your 3. Return it in the | ||
| envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote by Phone or Internet, please do not mail this Voting Instruction Card. |
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||||||
| M48867-P29248 KEEP THIS PORTION FOR YOUR RECORDS | ||||||||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |||||||
CONAGRA FOODS, INC. The Board of Directors recommends a vote FOR the following: | For All | Withhold All | ||||||||||||||||||||||||||
| For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||||||||||
| 1. | Election of Directors | ¨ | ¨ | ¨ | ||||||||||||||||||||||||
01) Mogens C. Bay | 07) Richard H. Lenny | |||||||||||||||||||||||||||
| 02) Stephen G. Butler | 08) Ruth Ann Marshall | |||||||||||||||||||||||||||
| 03) Steven F. Goldstone | 09) Gary M. Rodkin | |||||||||||||||||||||||||||
| 10) Andrew J. Schindler | ||||||||||||||||||||||||||||||||
| Against | Abstain | |||||||||||||||||||||||||||||||
2. | Ratification of the appointment of Independent Auditor | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
The Board of Directors recommends a vote FOR the following proposal: | ||||||||||||||||||||||||||||||||
3. | Advisory vote to approve named executive officer compensation | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||
NOTE:The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this instruction card. | ||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting. | ¨ | |||||||||||||||||||||||||||||
¨ | ||||||||||||||||||||||||||||||
Yes | No | |||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. | ||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||
ConAgra Foods 20092012 Annual Stockholders’ Meeting
Friday, September 25, 2009
21, 2012
1:30 p.m. CT
Witherspoon Concert Hall
Joslyn Art Museum
2200 Dodge Street
Omaha, Nebraska 68102
You must present this admission ticket, along with some form of government-issued photo identification such as a valid driver’s license or passport, in order to gain admittance to the September 25, 200921, 2012 Annual Stockholders’ Meeting. This ticket is not transferable and admits only the stockholder(s) listed on the reverse side and one guest. Cameras, recording devices and large packages/containers will not be permitted at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholders’ Meeting:
The Annual Report and Notice and& Proxy Statement and Annual Report are available at http://investor.conagrafoods.com.
PROXY - CONAGRA | FOODS, INC. Please vote and sign on reverse side This Proxy is Solicited by the Board of Directors for the September 21, 2012 Annual Meeting of Stockholders The undersigned appoints each of Steven F. Goldstone and Gary M. Rodkin as proxies, with full power of substitution, to vote all shares of common stock of ConAgra Foods, Inc. that the undersigned would be entitled to vote at the Annual Stockholders’ Meeting and any adjournment thereof. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS PROXY. IF YOU SIGN AND RETURN YOUR PROXY BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE PROXIES WILL VOTE THE SHARES FOR ALL NOMINEES LISTED IN ITEM 1, AND FOR ITEMS 2 AND 3, AND AS RECOMMENDED BY THE BOARD OF DIRECTORS UPON SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL STOCKHOLDERS’ MEETING. If you wish to vote by mailing this proxy card, please mark the boxes accordingly. Indicate the date, sign your name exactly as it appears on this card and return it in the enclosed envelope. When signing as attorney, executor, administrator, trustee, guardian or officer of a corporation, please give your full title as such. Information on telephonic and Internet voting is on the reverse side of this proxy card. Your telephone or Internet vote authorizes the named proxies to vote these shares in the same manner as if you marked, signed and returned your proxy card. Telephone and Internet voting are available until 11:59 p.m. (ET) on September | |||
Continued and | ||||
| be signed on reverse side | ||||||||
