UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☑
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Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | ||||
☐ | Confidential, | ||||
Definitive Proxy Statement | |||||
☐ | Definitive Additional Materials | ||||
☐ | Soliciting Material Pursuant to Section 240.14a-12 |
LANCASTER COLONY CORPORATION |
(Name of Registrant as Specified inIn Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Fee paid previously with preliminary materials. | |||||||||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act | ||||||||||
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![lanc-def14a_img001a02.jpg](/files/DEF 14A/0000057515-23-000023/lanc-20231006_g1.jpg)
380 Polaris Parkway, Suite 400
Westerville, Ohio 43082
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On November 10, 20218, 2023
The Annual Meeting of Shareholders (the “Annual Meeting”) of Lancaster Colony Corporation (the “Corporation”) will be held exclusively online at 1:00 p.m. Eastern Standard Time on November 10, 2021,8, 2023, or at any adjournment or postponement thereof. Shareholders of record will be able to attend, vote shares and submit questions electronically during the Annual Meeting by visiting www.virtualshareholdermeeting.com/LANC2021LANC2023 and entering the 16-digit control number included on their proxy card or in the instructions accompanying their proxy materials. A live webcast of the Annual Meeting will also be available to the general public at www.lancastercolony.com.www.lancastercolony.com. There is no physical location for the Annual Meeting.
The meeting will be held for the following purposes:
1.To elect three directors, each for a term that expires in 2026;
2.To approve, by non-binding vote, the compensation of the Corporation’s named executive officers;
3.To recommend, by non-binding vote, the frequency of future non-binding votes on the compensation of the Corporation’s named executive officers;
4.To ratify the selection of Deloitte & Touche LLP as the Corporation’s independent registered public accounting firm for the year ending June 30, 2024; and
5.To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
By action of the Board of Directors, only shareholders of record at the close of business on September 13, 202111, 2023 will be entitled to receive notice of and vote at the Annual Meeting.
Your vote is important, regardless of the number of shares you own. own. On behalf of the Board of Directors, we request that you sign, date and return the enclosed proxy card as soon as possible, even if you plan to attend the Annual Meeting. This will not prevent you from voting electronically at the Annual Meeting but will ensure that your vote is counted if you are unable to attend. A self-addressed envelope with pre-paid postage is enclosed for your convenience in returning the proxy. Alternatively, internet voting is available, as described in the proxy voting instructions on your proxy card. If you are the beneficial owner of shares held in “street name,” then the broker, bank or nominee, as the record holder of the shares, should have enclosed a voting instruction card for you to use in directing it on how to vote your shares.
John B. Gerlach, Jr. | |||||||
Executive Chairman of the Board |
October 12, 202110, 2023
LANCASTER COLONY CORPORATION
380 Polaris Parkway, Suite 400
Westerville, Ohio 43082
PROXY STATEMENT
General Information
This Proxy Statement is furnished to the shareholders of Lancaster Colony Corporation (the “Corporation”) in connection with the solicitation by the Board of Directors of the Corporation (the “Board”) of proxies to be used in voting at the Annual Meeting of Shareholders, which will be held exclusively online at www.virtualshareholdermeeting.com/LANC2021LANC2023 at 1:00 p.m. Eastern Standard Time on November 10, 2021,8, 2023, or any adjournment or postponement thereof (the “Annual Meeting”). The proposals referenced on the enclosed proxy card are described in this Proxy Statement. This Proxy Statement and enclosed proxy card are first being mailed to shareholders on or about October 12, 2021.10, 2023.
By signing and returning the enclosed proxy card to the Corporation prior to the Annual Meeting, or by voting electronically or by telephone in a timely manner, a shareholder authorizes the Board, of Directors’through its designees, to represent and vote that shareholder’s shares at the Annual Meeting in accordance with the shareholder’s instructions. The authorized designees of the Corporation may vote those shares to adjourn the meeting and will be authorized to vote those shares at any postponements or adjournments of the meeting.meeting. A shareholder’s proxy may be revoked at any time before the vote at the Annual Meeting. To be effective, any revocation must be communicated to the Secretary or Assistant Secretary of the Corporation prior to the vote at the Annual Meeting. The mere (online) presence of a shareholder (online) at the Annual Meeting will not revoke that shareholder’s proxy unless specific notice of revocation is given to the Secretary or Assistant Secretary of the Corporation. To be effective, any revocation must be communicated to the Secretary or Assistant Secretary of the Corporation prior to the vote at the Annual Meeting.
The Corporation will bear the cost of soliciting proxies, including any charges and expenses of brokerage firms and others for forwarding solicitation material to the beneficial owners of the Corporation’s shares. Proxies may be solicited by personal interview, mail, telephone and electronic communications through the efforts of employees of the Corporation.
By action of the Board, only the Corporation’s shareholders of record at the close of business on September 13, 202111, 2023 are entitled to receive notice of and vote at the Annual Meeting (online) or any adjournments or postponements thereof. As of September 13, 2021,11, 2023, the Corporation had outstanding 27,529,76727,518,405 common shares without par value (“Common Stock”), with each such share of Common Stock entitling its holder to one vote. The Corporation has no other class of stock outstanding.
The presence, in person (online) or by proxy, of a majority of the outstanding shares of Common Stock of the Corporation is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Proxies reflecting abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum. Broker non-votes occur when brokers holding their customers’ shares in “street name” sign and submit proxies for those shares but fail to vote on some matters.
Beneficial owners of shares held in “street name” should receive a voting instruction card from their broker, bank or nominee, as the record holder of the shares, to direct the record holder on how to vote such shares.
Voting Requirements
The election of the director nominees requires the favorable vote of a plurality of all votes cast by the holders of the Common Stock at a meeting at which a quorum is present. Broker non-votes and proxies marked “Withhold” will not be counted towardhave no effect on the election of the director nominees specified in the form of proxy.nominees. Any director nominee who receives more “Withhold” votes than “For” votes in an uncontested election such as this oneelection is expected to tender his or her resignation for consideration by both the Nominating and Governance Committee and the Board pursuant to the Board’s policy summarized herein under “Corporate Governance – Majority Voting Policy in Uncontested Elections.”
The non-binding approval of the compensation of our named executive officers (“NEOs”) and the ratification of the Corporation’s independent registered public accounting firm for the year ending June 30, 20222024 require the favorableaffirmative vote of a majority of all votes castoutstanding shares by the holders of the Common Stock at a meeting at which a quorum is present. Broker non-votes and abstentions will have the effect of a vote “Against” these proposals.
The non-binding shareholder recommendation on the frequency of future votes on the compensation of our NEOs requires the favorable vote of a plurality of all votes cast by the holders of the Common Stock at a meeting at which a quorum is present. The frequency (every year, every two years or every three years) that receives a plurality of all votes cast by the holders of the Common Stock at a meeting at which a quorum is present will be considered the frequency recommended by the shareholders. Broker non-votes and abstentions will have no effect on the outcome of these proposals.this proposal.
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PROPOSALONE
NOMINATION AND ELECTION OF DIRECTORS
The Board currently consists of ten members and is divided into two classes of three members and one class of four members. The members of the three classes are elected to serve for staggered terms of three years.
Each of the nominees is a current director of the Corporation whoand has consented to stand for re-election to the Board with a term expiring at the Corporation’s 20242026 Annual Meeting of Shareholders. In the event that any of the nominees becomes unavailable to serve as a director before the Annual Meeting, the Board may designate a new nominee, and the persons named as proxies will vote for that substitute nominee.
The Board of Directors recommends a vote “FOR” the election of each of the nominees listed below by executing and returning the enclosed proxy card before the Annual Meeting.
Nominees for Term to Expire in 20242026
Name | | | Position with the Corporation | | | Age | | | Director Since |
Neeli Bendapudi | | | Director of the Corporation | | | 58 | | | 2005 |
William H. Carter | | | Director of the Corporation | | | 68 | | | 2015 |
Michael H. Keown | | | Director of the Corporation | | | 59 | | | 2018 |
Name | Position with the Corporation | Age | Director Since | |||||||||||||||||
Robert L. Fox | Director of the Corporation | 74 | 1991 | |||||||||||||||||
John B. Gerlach, Jr. | Director and Executive Chairman of the Board | 69 | 1985 | |||||||||||||||||
Robert P. Ostryniec | Director of the Corporation | 62 | 2014 |
Continuing Directors – Term to Expire in 20222024
Name | | | Position with the Corporation | | | Age | | | Director Since |
Barbara L. Brasier | | | Director of the Corporation | | | 63 | | | 2019 |
David A. Ciesinski | | | Director, Chief Executive Officer and President of the Corporation | | | 55 | | | 2017 |
Elliot K. Fullen | | | Director of the Corporation | | | 56 | | | 2021 |
Alan F. Harris | | | Director of the Corporation | | | 67 | | | 2008 |
Name | Position with the Corporation | Age | Director Since | |||||||||||||||||
Zena Srivatsa Arnold | Director of the Corporation | 45 | 2023 | |||||||||||||||||
Michael H. Keown | Director of the Corporation | 61 | 2018 | |||||||||||||||||
George F. Knight III | Director of the Corporation | 66 | 2023 |
Continuing Directors – Term to Expire in 20232025
Name | | | Position with the Corporation | | | Age | | | Director Since |
Robert L. Fox | | | Director of the Corporation | | | 72 | | | 1991 |
John B. Gerlach, Jr. | | | Director and Executive Chairman of the Board | | | 67 | | | 1985 |
Robert P. Ostryniec | | | Director of the Corporation | | | 60 | | | 2014 |
Name | Position with the Corporation | Age | Director Since | |||||||||||||||||
Barbara L. Brasier | Director of the Corporation | 65 | 2019 | |||||||||||||||||
David A. Ciesinski | Director, Chief Executive Officer and President of the Corporation | 57 | 2017 | |||||||||||||||||
Elliot K. Fullen | Director of the Corporation | 58 | 2021 | |||||||||||||||||
Alan F. Harris | Director of the Corporation | 69 | 2008 |
The following information is provided for each continuing director and each person nominated for election as a director and includes their principal occupations during the past five years; their specific experiences, qualifications, attributes or skills that qualify them to serve as directors; and certain other information.
Robert L. Fox currently serves as an Account Executive at Boenning & Scattergood, Inc.,Thurston Springer Financial, a stock brokerage firm, and has held that position since August 2019.January 2023. He previously served as an Account Executive with Boenning & Scattergood, Inc., a stock brokerage firm, from August 2019 to December 2022, as Financial Adviser at Sweney Cartwright & Co., a stock brokerage firm, from November 2014 to August 2019, as Financial Adviser for Wells Fargo Advisors, a stock brokerage firm, from July 2008 to November 2014, as Financial Adviser for A.G. Edwards & Sons, Inc., a stock brokerage firm, from 2005 to July 2008, and as Financial Adviser for Advest, Inc., a stock brokerage firm, from 1978 to 2005. Mr. Fox has over 40 years of experience in the securities industry analyzing and evaluating the financial, operational and managerial capabilities of public companies. This experience enables Mr. Fox to better view the Corporation from a shareholder’s perspective and contribute that perspective to the Board. As a long-standing member of the Board, Mr. Fox demonstrates an extensive knowledge of our business, our history and the markets we serve. Mr. Fox’s significant ownership interest in the Corporation assures that his interests are directly aligned with those of our shareholders.
John B. Gerlach, Jr. currently serves as Executive Chairman of the Board of the Corporation and has held that position since July 2017. He served as Chief Executive Officer of the Corporation from 1997 until June 2017. Mr. Gerlach brings significant leadership and operational management experience to the Board. Mr. Gerlach has demonstrated strong executive leadership skills through over 35 years of executive officer service with the Corporation, including over 20 years as CEO. Mr. Gerlach is the Corporation’s longest-serving director. This experience, combined with his prior service on the board of Huntington Bancshares Incorporated and numerous nonprofit organizations, provides Mr. Gerlach with vast board level leadership capabilities. Perhaps most importantly, Mr. Gerlach’s significant ownership interest in the Corporation ensures that top leadership is directly aligned with the interests of our shareholders.
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Robert P. Ostryniec retired from full-time employment in March 2017. He served as Chief Product Supply Officer for Keurig Green Mountain, Inc. from 2013 until March 2017. He also served as Global Supply Chain Officer for H.J. Heinz Company from 2010 to 2013 and Supply Chain Vice President of H.J. Heinz Company from 2003 to 2010. Mr. Ostryniec has 34 years of experience as an executive in manufacturing, purchasing, supply chain and logistics roles for publicly traded, consumer-focused companies including General Electric Company, Stanley Black & Decker, Inc., H.J. Heinz Company and Keurig Green Mountain, Inc. Mr. Ostryniec’s significant management experience, particularly in manufacturing, purchasing, supply chain and logistics, enables him to provide valuable perspective and insight to the Board.
Zena Srivatsa Arnold is a marketing and general management executive in the consumer packaged goods, retail and technology industries. She currently serves as Chief Marketing Officer of Sephora, leading all marketing and communications functions to drive business growth, and has held that position since June 2023. Ms. Arnold also led PepsiCo’s U.S. Carbonated Soft Drinks business from March 2022 to December 2022 and served as Chief Digital and Marketing Officer at Kimberly-Clark, leading its global marketing organization from April 2020 to February 2022. Prior to that, Ms. Arnold spent more than six years at Google in both general management and marketing roles on the ChromeOS and Google Play products from October 2013 to March 2020. The early years of her career were at Procter & Gamble and Kellogg's where she held a series of brand and portfolio management roles on their biggest brands like Olay, Folgers, Pop-Tarts and more, overseeing current business, upstream innovation and shopper marketing. Ms. Arnold also serves on the board of EZCORP as a non-executive director. She holds a degree in computer science from The Ohio State University. Her executive leadership skills and breadth of experience in marketing and management in the consumer packaged goods and technology industries further strengthen the expertise of the Board in these areas.
Michael H. Keown has 39 years of experience in the consumer packaged goods industry with the last 19 years in CEO/C-Suite roles in both larger public, and smaller privately held, food and beverage companies. He currently works as an adviser to several smaller high-growth companies in the natural/organic food industry. Prior to that, Mr. Keown served as Chief Executive Officer at Quinn Snacks, a natural food snack company, from December 2021 through September 2022. From August 2019 to December 2021, he served as Chief Executive Officer of Honey Stinger, a sports nutrition brand which provides athletes natural energy to improve performance. He served as President, Chief Executive Officer and Director of Farmer Brothers, a national coffee roaster and distributor of coffee, tea and culinary products, from March 2012 through May 2019. Prior to that, he was at WhiteWave Foods Company, a subsidiary of Dean Foods, from 2004 to March 2012. Most notably, he served as President, Indulgent Brands from 2006 to March 2012. He was also responsible for WhiteWave’s alternative channel business, which was largely foodservice. From 2003 to 2006, Mr. Keown served in various executive capacities at Dean Foods and WhiteWave Foods. Mr. Keown joined Dean Foods from The Coca-Cola Company, where he served as Vice President and General Manager of the Shelf Stable Division of The Minute Maid Company. Mr. Keown started his career having held various sales and marketing positions of escalating responsibility with E&J Gallo Winery and Procter & Gamble. He served on the Board of Directors of Welch Foods Inc. from 2015 to 2018. Mr. Keown’s significant management experience in the food industry provides valuable perspective to the Board.
George F. Knight III retired from full-time employment after serving as Executive Vice President and Chief Financial Officer of the chemical company Hexion, Inc. from January 2016 until May 2022. During his 25-year tenure at Hexion and its predecessor company, Borden, Inc., he held roles of increasing responsibility including Vice President of Mergers and Acquisitions, Vice President of Finance, and Senior Vice President and Treasurer. Mr. Knight previously held senior finance roles at Duracell, Inc. and worked as a Senior Audit Manager for Deloitte & Touche LLC. The Board believes Mr. Knight’s expertise with mergers and acquisitions, as well as his deep financial knowledge, will help grow our business and deliver value for the Corporation’s stakeholders.
Barbara L. Brasier retired in April 2018 as Chief Financial Officer and Senior Vice President of Herc Rentals, Inc., an equipment rental company, after leading its spinoff from Hertz Global Holdings, Inc. beginning in 2015. She served as Senior Vice President, Tax and Treasury for Mondelez International (successor to Kraft Foods, Inc.) from 2012 to 2015 and as a Senior Vice President of Kraft Foods Inc. in several finance roles from 2009 to 2012. In addition, she served as Vice President and Treasurer of Ingersoll Rand, a diversified industrial company, from 2004 to 2008. Prior to that, Ms. Brasier held various leadership roles at Mead Corporation, a packaging and forest product company, including service as a divisional President. She currently serves as Chairperson of the Audit Committee of the Board of Directors of John Bean Technologies Corporation, as a member of the Audit Committee and the Compensation Committee of the Board of Directors of Molina Healthcare Inc., and as a member of the Audit Committee of the Board of Directors of Henny Penny Corporation. Ms. Brasier’s executive leadership of a diverse portfolio of international public companies over a 38-year career and her current service as a director of three companies with a class of securities registered pursuant to Section 12 of the Exchange Act (our Corporation, John Bean Technologies Corporation and Molina Healthcare Inc.) and one private company provides the Board with valuable insight and expertise in numerous areas, including strategic planning, change management, mergers and acquisitions, accounting, tax and audit.
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Alan F. Harris has been retired from full-time employment since 2007. He served as Executive Vice President and Chief Marketing and Customer Officer of Kellogg Company, a food products company, from 2003 to 2007, and Executive Vice President and President, Kellogg Company International Division from 2000 to 2003. With over 23 years of experience at Kellogg in a variety of positions, Mr. Harris possesses extensive domestic and international experience in the retail food industry, as well as considerable consumer marketing expertise. In addition, Mr. Harris embodies many other desirable qualities that contribute to the leadership of the Corporation, including strong general management breadth and experience and significant strategic acumen. Mr. Harris has made significant contributions to the Board in key areas of oversight, including strategic planning, risk assessment and product development.
The following table presents gender and demographic information relating to our directors and director nominees as of the date of this report. Each of the categories listed in the below table has the meaning ascribed to it in Nasdaq Rule 5605(f).
Board Diversity Matrix | ||||||||
Female | Male | |||||||
Total Number of Directors | 10 | |||||||
Part 1: Gender Identity | ||||||||
Directors | 2 | 8 | ||||||
Part II: Demographic Background | ||||||||
African American or Black | — | 1 | ||||||
Asian | 1 | — | ||||||
White | 1 | 7 |
CORPORATE GOVERNANCE
The Board has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Executive Committee. In addition, the Board has adopted a Corporate Governance Program that includes Corporate Governance Principles, a Code of Business Ethics, Standards of Conduct and an Insider Trading Policy. Each of these documents and the charters of the Board Committees are posted on the Corporation’s web sitewebsite at www.lancastercolony.com/investors/corporate-governance/governance-documents/default.aspx.
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Director Independence — The Board and the Nominating and Governance Committee have reviewed and evaluated transactions and relationships with Board members and Board nominees to determine the independence of each of the members or nominees. The Board does not believe that any of its nonemployee members or nominees have relationships with the Corporation that would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director. The Board and the Nominating and Governance Committee have determined that a majority of the Board’s members are “independent directors,” as that term is defined in the applicable Nasdaq Global Select Market (“Nasdaq”) listing standards. The Board has identified and determined that Dr. Bendapudi, Ms.Mses. Arnold and Brasier and Messrs. Carter, Fox, Fullen, Harris, Keown, Knight and Ostryniec are independent directors. Mr. Kenneth L. Cooke was also an independent director for the duration of his service on the Board from 2010 until his death in September 2020.
Board Attendance — Each member of the Board is expected to make a reasonable effort to attend all meetings of the Board, all applicable committee meetings, and each annual meeting of shareholders. All members of the Board at the time of our virtual 20202022 Annual Meeting attended the meeting, and each of the current members of the Board is expected to attend the 20212023 Annual Meeting online.Meeting. The Board held a total of fiveseven meetings during fiscal 2021.2023. Each director attended at least 75% of the aggregate meetings of the Board and the committees on which he or she served in fiscal 2021.2023.
Board Leadership Structure — Mr. John B. Gerlach, Jr. currently serves as the Executive Chairman of the Board. Mr. David A. Ciesinski currently serves as the Corporation’s Chief Executive Officer (“CEO”). The Board believes that the Corporation and its shareholders are best served by retaining the Board’s flexibility to allocate the responsibilities of Executive Chairman of the Board and CEO in any way that is in the best interests of the Corporation at any future point in time.
•works closely with the Chairman to approve the information presented to the Board and set and approve meeting agendas and meeting schedules;
•chairs meetings of the Board in the absence of the Chairman;
•oversees meetings of the independent directors, including executive sessions of the nonemployee directors;
•serves as the principal liaison between the independent directors and the Chairman;
•takes a leading role in the Board evaluation process; and
•has the authority to call meetings of the independent directors from time to time.
Mr. Gerlach, in his capacity as Executive Chairman, serves as a bridge between the Board and management and provides critical leadership for executing the Corporation’s strategic initiatives and confronting its challenges. As an Executive Chairman who is both a member of the management team and a significant shareholder, he is well-situated to assess the Corporation’s strategy and maximize shareholder value. The Board believes that Board independence and oversight of management are effectively maintained through the Board’s current composition, committee structure and the position of Lead Independent Director.
Board Role in Risk Oversight — The Board, together with the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee are responsible for overseeing the Corporation’s risk management. The full Board periodically receives an overview of key risks from various members of senior management. In addition, the Compensation Committee oversees risk requiring its expertise, such as those related to incentive compensation programs and policies. The Nominating and Governance Committee monitors compliance with the Corporate Governance Principles and reviews the Corporation’s management of risks related to corporate social responsibility, including with respect to sustainability and the environment.
Although the Board and its committees oversee risk management for the Corporation, management is responsible for the day-to-day management and mitigation of the Corporation’s risks. We believe this division of responsibility reflects the appropriate roles of the Board and management in assessing and managing risks and has no effect on the Board’s leadership structure. Management of the Corporation has formed an Enterprise Risk Management Committee (“ERM Committee”) consisting of the CEO, CFO, Chief Information Officer, Chief Supply Chain Officer, Director
of Internal Audit, General Counsel, Assistant General Counsel, and Vice President of Infrastructure and Security. The primary responsibility of the ERM Committee is to promote the development of sound policies, procedures and practices for managing the Corporation’s material risks and to report the results of the ERM Committee’s activities to the Audit Committee. The ERM Committee provides the Audit Committee with reports on a periodic basis regarding the Corporation’s major financial, litigation and enterprise risk exposures, including those relating to corporate social responsibility, information security, technology, and cybersecurity risks, and the actions management has taken to monitor and control such risks. The full Board periodically receives an overview of key risks from various members of senior management. In addition, the Compensation Committee oversees risk requiring its expertise, such as those related to incentive compensation programs and policies. The Nominating and Governance Committee monitors compliance with the Corporate Governance Principles and reviews the Corporation’s management of risks related to corporate social responsibility, including with respect to sustainability and the environment.
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Director Qualifications — The Nominating and Governance Committee looks for candidates who possess qualifications that meet our strategic needs, who maintain the highest personal and professional ethics, integrity and values, who understand our business, who have diverse backgrounds and experiences in key business, financial and other challenges that are faced by publicly held corporations with a consumer focus, who contribute a diverse frame of reference or point of view by virtue of ethnicity, age, gender or otherwise, and who represent the long-term interestinterests of our shareholders. In particular, the Nominating and Governance Committee looks for candidates with experience in areas such as: management of public companies or other large organizations; consumer packaged goods, particularly retail food companies; investment banking or the banking industry; accounting and finance; technology; supply chain; and retail/mass marketing experience. The Corporation’s long-standing commitment to diversity was reinforced in 2020 with the adoption of a rule in its Corporate Governance Principles requiring the Board to include highly qualified women and minority candidates infor the pool offrom which director candidates considered for nomination as directors.are chosen. Each director is expected to represent all shareholders rather than special interest groups or any specific group of shareholders.
Corporate Governance Principles — We operate under a set of Corporate Governance Principles designed to promote good corporate governance and align the interests of our Board and management with those of our shareholders. The Corporate Governance Principles relate to the role, composition, structure and functions of the Board and the Corporation. The Nominating and Governance Committee is responsible for periodically reviewing these Corporate Governance Principles and recommending any changes to the Board.
Majority Voting Policy in Uncontested Elections — Pursuant to our Corporate Governance Principles, in an uncontested election of directors (i.e., an election where the number of nominees does not exceed the number of directors to be elected), a nominee who receives more “Withhold” votes than “For” votes in such election is expected to promptly tender his or her resignation as a director. The Nominating and Governance Committee will consider each tendered director resignation and recommend to the Board whether to accept or reject it. After considering the recommendation of the Nominating and Governance Committee and any other information the Board deems appropriate, and within 90 days following the certification of the election results, the Board will act to accept or reject each tendered director resignation and promptly disclose its decision.
If a director’s resignation is rejected, the Board will disclose the reasons for its decision, and the director will continue to serve the remainder of his or her term until his or her successor is duly elected or until his or her earlier death, resignation or removal. If a director’s resignation is accepted, the Board, in its sole discretion, may fill any resulting vacancy or decrease the size of the Board, in each case to the extent permitted by the Corporation’s Amended and Restated Code of Regulations.
Any director who tenders a resignation under this policy may not participate in the Nominating and Governance Committee recommendation or the action of the Board regarding whether to accept or reject such tender of resignation.
Code of Business Ethics and Standards of Conduct — The Corporation has adopted a Code of Business Ethics and Standards of Conduct that inform the Corporation’s directors and employees of their legal and ethical obligations to the Corporation and set a high standard of business conduct. The Code of Business Ethics and
Standards of Conduct apply to all employees and, where applicable, to directors of the Corporation. The Corporation intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver from, any provision (including the standards listed under Item 406(b) of Regulation S-K) of the Code of Business Ethics that applies to the Corporation’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on the Corporation’s website at www.lancastercolony.com/investors/corporate-governance/default.aspx.
Shareholder Communication with the Board — Any of the directors may be contacted by writing to them at: Board of Directors, c/o Corporate Secretary’s Office, Lancaster Colony Corporation, 380 Polaris Parkway, Suite 400, Westerville, Ohio 43082. The directors have requested that the Secretary of the Corporation act as their agent in processing any communication received. All communications that relate to matters that are within the scope of responsibilities of the Board and its committees will be forwarded to the Board of Directors. Communications relating to matters within the responsibility of one of the committees of the Board will be forwarded to the Chairperson of the appropriate committee. Communications relating to ordinary business matters are not within the scope of the Board’s responsibility and will be forwarded to the appropriate officer at the Corporation. Solicitations, advertising materials, and frivolous or inappropriate communications will not be forwarded.
BOARD COMMITTEES AND MEETINGS
Audit Committee — The Board has established an audit committee (the “Audit Committee”) that currently consists of Ms. Brasier and Messrs. Carter,Fullen, Harris and Ostryniec. Mr. CarterMs. Brasier serves as Chairperson of the Audit Committee and has done so since October 2020.June 2023. Mr. CookeCarter served as Chairperson until his deathretirement from the Board in September 2020.May 2023. The Board has determined that each member of the Audit Committee meets Nasdaq independence requirements and that Ms. Brasier and Messrs. Carter Cooke and Harris qualified as “audit committee financial experts,” as defined in Item 407(d)(5) of Regulation S-K. With respect to its assessment of whether Ms. Brasier and Messrs. Carter Cooke and Harris qualified as “audit committee financial
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experts,” the Board considered, among other things, their business experience and background. The duties of the Audit Committee include the responsibility of reviewing financial information (both external and internal) about the Corporation and its subsidiaries to ensure that:that (i) the overall audit coverage of the Corporation and its subsidiaries is satisfactory and appropriate to protect the shareholders from undue risks, and (ii) an adequate system of internal financial control has been designed and implemented throughout the Corporation and is being effectively maintained. Additionally, the Audit Committee has sole authority and direct responsibility with respect to the appointment, compensation, retention and oversight of the Corporation’s independent registered public accounting firm or independent auditor. Also, as part of its duties, the Audit Committee has adopted procedures for receiving and acting on complaints received by the Corporation regarding accounting, internal controls and auditing issues. Such complaints should be sent to the attention of the Corporate Secretary’s Office, Lancaster Colony Corporation, 380 Polaris Parkway, Suite 400, Westerville, Ohio 43082. The Audit Committee annually reviews the Audit Committee charter and annually evaluates the Audit Committee’s performance. The Audit Committee held four meetings during fiscal 2021.2023.
Compensation Committee — The Board has established a compensation committee (the “Compensation Committee”) that currently consists of Dr. BendapudiMs. Brasier and Messrs. Carter, Fox and Ostryniec. Mr. Cooke served on the Compensation Committee until his death in September 2020. Dr. Bendapudi currentlyOstryniec serves as Chairperson of the Compensation Committee and has done so since February 2021. Mr. Carter previouslyJanuary 2023. Dr. Bendapudi served as Chairperson until her resignation from the Compensation Committee Chairperson.Board in December 2022. It has been determined by the Board that each member ofwho served on the Compensation Committee meetsduring fiscal 2023 met Nasdaq independence requirements. The duties of the Compensation Committee include: annually determining the compensation of the Chief Executive Officer and other key executives and reviewing and approving goals and objectives relevant to their activities; reviewing and approving the Chief Executive Officer’s recommendations as to the compensation of other executive officers of the Corporation; reviewing and approving offers to potential executive officers to join the Corporation; reviewing and approving perquisite policies; reviewing and approving employment agreements, severance or retention plans or agreements, and severance or termination payments;payments for executive officers; having direct responsibility to retain, compensate and oversee independent compensation consultants and other advisors; overseeing regulatory compliance regarding compensation matters; establishing and evaluating performance goals and the level of achievement of such goals; reviewing and offering advice regarding direct compensation, equity-based compensation and retirement pay programs; administering equity-based compensation plans and approving equity awards; reporting its activities to the Board; reviewing and discussing the Compensation Discussion and Analysis with the Corporation’s management; determining whether to recommend to the Board that the Compensation Discussion and Analysis be included in the Corporation’s Annual Report on Form 10-K and Proxy Statement; preparing a Compensation Committee Report for inclusion in the Corporation’s Annual Report on Form 10-K and Proxy Statement; periodically reviewing director compensation in relation to other comparable companies and in light of other facts the Compensation Committee finds appropriate; annually reviewing the Compensation Committee charter; and annually evaluating the Compensation Committee’s performance. The charter does not provide the Compensation Committee with any delegation authority regarding its duties, except for the ability to delegate authority to approve equity awards to a subcommittee of the Compensation Committee. See the discussion below under “Compensation Discussion and Analysis” and “Compensation of Directors” for more information about the Compensation Committee’s processes and procedures. The Compensation Committee held four meetings during fiscal 2021.2023.
Nominating and Governance Committee — The Board has established a nominating and governance committee (the “Nominating and Governance Committee”) that currently consists of Dr. Bendapudi and Messrs. Fox, Fullen, Harris and Keown. Mr. Fox serves as Chairperson of the Nominating and Governance Committee. It has been determined by the Board that each member of the Nominating and Governance Committee meets Nasdaq independence requirements. The duties of the Nominating and Governance Committee include the identification and nomination of candidates to the Board for election as directors of the Corporation, the annual review of its charter, and the development and review of a set of Corporate Governance Principles. The Nominating and Governance
Committee has reviewed the Corporate Governance Principles and found them to be acceptable in scope and application and has so reported to the Board. The Nominating and Governance Committee also reviews the Corporation’s policies and activities regarding corporate social responsibility, including policies regarding sustainability matters and the environment, and generally considers the subject of diversity as further described in this section and in the “Corporate Governance – Director Qualifications” section of this Proxy Statement. The Nominating and Governance Committee held fourseven meetings during fiscal 2021.2023.
The Nominating and Governance Committee uses various sources to identify Board candidates, including the Corporation’s executive officers, current members of the Board and independent third-party search firms. The Nominating and Governance Committee also considers the nomination of director candidates recommended by shareholders in conformance with the tests and standards outlined in the Nominating and Governance Committee’s charter and the Corporation’s Amended and Restated Code of Regulations. Section 2.03 of the Corporation’s Amended and Restated Code of Regulations authorizes director nominations to be made by shareholders if the conditions specified therein are met, including the provision of advance notice, certain personal background information, and a written statement from the proposed candidate agreeing to be identified in the Proxy Statement as a nominee and, if elected, to serve as a director. Recommendations to the Nominating and Governance Committee from shareholdersa shareholder regarding one or more candidates must generally be delivered to the Corporation’s
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Corporate Secretary between 60-90 days prior to the meeting in which such shareholder proposes that the recommended candidatecandidate(s) stand for election.
The Nominating and Governance Committee has not established specific, minimum qualifications or criteria for nominees that it proposes for Board membership, but it evaluates the entirety of each candidate’s credentials, believing that the Corporation will be best served if its directors bring a variety of experiences and backgrounds and demonstrate integrity, executive leadership, and financial, marketing, technology, supply chain or business knowledge and experience, among other things. Highly qualified women and minority candidates, as well as highly qualified candidates with other diverse backgrounds, will be included in the pool of potential candidates considered for nomination as directors. The Nominating and Governance Committee uses the same manner and process for evaluating every candidate for Board membership, regardless of the original source of the candidate’s nomination.
Executive Committee — The Board has established an executive committee (the “Executive Committee”) that currently consists of Messrs. Gerlach, Fox and Harris. No particular director serves as Chairperson of the Executive Committee. The Executive Committee operates pursuant to resolutions that were adopted by the Board in February 2008. The Executive Committee exercises the power and authority of the Board in managing the business and affairs of the Corporation (other than any power or authority specifically precluded by applicable law, the Corporation’s Articles of Incorporation or Amended and Restated Code of Regulations, or by limiting resolutions of the Board), but the Executive Committee acts only in the intervals between meetings of the Board. Furthermore, all acts of the Executive Committee must be reported at the next Board meeting. The Executive Committee met one timedid not meet during fiscal 2021.
To the Corporation’s knowledge, based solely on its review of copies of forms filed with the Securities and Exchange Commission (“SEC”), all filing requirements applicable to the officers, directors and beneficial owners of more than 10% of the outstanding Common Stock under Section 16(a) of the Securities Exchange Act of 1934, as amended, were complied with during the fiscal year ended June 30, 2023, except that there was one untimely report on Form 4 for Kristin Bird, President of Foodservice of T. Marzetti Company, the specialty foods subsidiary of the Corporation, which was filed on August 24, 2022 with respect to one transaction, and one untimely report on Form 4 for David A. Ciesinski, Director, Chief Executive Officer and President of the Corporation, which was filed on August 31, 2022 with respect to four transactions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following shareholders have beneficial ownership, directly or indirectly, of more than five percent of the outstanding Common Stock as of September 13, 2021:11, 2023:
Name and Address of Beneficial Owner | | | Nature of Beneficial Ownership | | | Amount of Beneficial Ownership | | | Percent of Class(1) |
John B. Gerlach, Jr.(2) c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | | | Direct and indirect | | | 7,684,944 | | | 27.9% |
Dareth A. Gerlach(3) c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | | | Direct and indirect | | | 5,923,117 | | | 21.5% |
John B. Gerlach Trust A-1(2) c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | | | Direct | | | 5,737,602 | | | 20.8% |
BlackRock, Inc.(4) 55 East 52nd Street New York, NY 10055 | | | Direct and indirect | | | 2,230,823 | | | 8.1% |
The Vanguard Group(5) 100 Vanguard Blvd. Malvern, PA 19355 | | | Direct and indirect | | | 2,049,860 | | | 7.4% |
Name and Address of Beneficial Owner | Nature of Beneficial Ownership | Amount of Beneficial Ownership | Percent of Class(1) | |||||||||||||||||
John B. Gerlach, Jr.(2) | Direct and indirect | 7,621,353 | 27.7% | |||||||||||||||||
c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | ||||||||||||||||||||
Dareth A. Gerlach(3) | Direct and indirect | 5,925,022 | 21.5% | |||||||||||||||||
c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | ||||||||||||||||||||
John B. Gerlach Trust A-1(2) | Direct | 5,737,602 | 20.9% | |||||||||||||||||
c/o Lancaster Colony Corporation 380 Polaris Parkway, Suite 400 Westerville, Ohio 43082 | ||||||||||||||||||||
BlackRock, Inc.(4) | Direct and indirect | 2,411,196 | 8.8% | |||||||||||||||||
55 East 52nd Street New York, NY 10055 | ||||||||||||||||||||
The Vanguard Group(5) | Direct and indirect | 2,117,894 | 7.7% | |||||||||||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||||||||||
State Street Corporation(6) | Direct and indirect | 1,739,306 | 6.3% | |||||||||||||||||
1 Lincoln Street Boston, MA 02111 |
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(1)Percentages based upon 27,518,405 shares outstanding as of September 11, 2023.
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(4)BlackRock, Inc. filed a Schedule 13G/A with the SEC on January 25, 2023 indicating that, as of December 31, 2022, BlackRock, Inc. has sole voting power with respect to 2,365,390 shares and sole dispositive power with respect to 2,411,196 shares.
(5)The Vanguard Group filed a Schedule 13G/A with the SEC on February 9, 2023 indicating that, as of December 30, 2022, The Vanguard Group has sole dispositive power with respect to 2,067,327 shares, shared dispositive power with respect to 50,567 shares, and shared voting power with respect to 31,245 shares.
(6)State Street Corporation filed a Schedule 13G/A with the SEC on February 8, 2023 indicating that, as of December 31, 2022, State Street Corporation has shared dispositive power with respect to 1,739,306 shares and shared voting power with respect to 1,676,639 shares.
The following information indicates the beneficial ownership of outstanding Common Stock as of September 13, 202111, 2023 by all executive officers and directors of the Corporation as a group, each individual director, each individual director nominee, and each named executive officerNEO in the 20212023 Summary Compensation Table:
Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | Percent of Class(1) | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||||||||||||||||||
Neeli Bendapudi | | 9,583 | | shares | | * | |||||||||||||||||||||||
Zena Srivatsa Arnold | Zena Srivatsa Arnold | — | shares | * | |||||||||||||||||||||||||
Kristin J. Bird | | 2,805 | | shares(2) | | * | Kristin J. Bird | 4,137 | shares | (2) | * | ||||||||||||||||||
Barbara L. Brasier | | 1,189 | | shares | | * | Barbara L. Brasier | 2,370 | shares | * | |||||||||||||||||||
William H. Carter | | 3,883 | | shares | | * | |||||||||||||||||||||||
David A. Ciesinski | | 55,450 | | shares(2) | | * | David A. Ciesinski | 57,209 | shares | (2) | * | ||||||||||||||||||
Robert L. Fox | | 1,058,014 | | shares(3) | | 3.8% | Robert L. Fox | 1,018,526 | shares | (3) | 3.7 | % | |||||||||||||||||
Elliot K. Fullen | | 422 | | shares | | * | Elliot K. Fullen | 1,603 | shares | * | |||||||||||||||||||
John B. Gerlach, Jr. | | 7,684,944 | | shares(2)(4) | | 27.9% | John B. Gerlach, Jr. | 7,621,353 | shares | (4) | 27.7 | % | |||||||||||||||||
Alan F. Harris | | 18,728 | | shares(5) | | * | Alan F. Harris | 23,104 | shares | (5) | * | ||||||||||||||||||
Michael H. Keown | | 1,716 | | shares | | * | Michael H. Keown | 2,897 | shares | * | |||||||||||||||||||
George F. Knight III | George F. Knight III | — | shares | * | |||||||||||||||||||||||||
David S. Nagle | | 6,359 | | shares(2) | | * | David S. Nagle | — | shares | * | |||||||||||||||||||
Robert P. Ostryniec | | 5,243 | | shares | | * | Robert P. Ostryniec | 6,424 | shares | * | |||||||||||||||||||
Thomas K. Pigott | | 5,677 | | shares(2) | | * | Thomas K. Pigott | 12,617 | shares | * | |||||||||||||||||||
Carl R. Stealey | | 3,779 | | shares(2) | | * | Carl R. Stealey | 5,925 | shares | (2) | * | ||||||||||||||||||
All executive officers and directors as a group (14 persons) | | 8,237,670 | | shares(6) | | 29.9% | |||||||||||||||||||||||
Luis Viso | Luis Viso | 2,598 | shares | * | |||||||||||||||||||||||||
All executive officers and directors as a group (15 persons) | All executive officers and directors as a group (15 persons) | 8,138,641 | shares | (6) | 29.6 | % |
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* Less than 1%
(1)Aside from Ms. Bird and Messrs. Ciesinski and Stealey, individual percentages based upon 27,518,405 shares outstanding as of September 11, 2023. Percentages for Ms. Bird and Messrs. Ciesinski and Stealey are based on 27,518,541 shares; 27,521,260 shares; and 27,518,812 shares, respectively, which include the individual amounts noted in (2) below. Percentages for the group are based on 27,521,803 shares, which includes the total amount noted in (2) below.
(2)Includes 136 shares, 2,855 shares and 407 shares available from vested stock appreciation rights for Ms. Bird and Messrs. Ciesinski and Stealey, respectively, assuming exercise on September 11, 2023.
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(5)Includes 22,539 shares held as trustee for which Mr. Harris has the sole power to vote and dispose of these shares.
(6)For purposes of this calculation, the 620,122 shares held by Lehrs, Inc. have only been counted once.
COMPENSATION DISCUSSION AND ANALYSIS
In this section, we discuss the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. We provide qualitative information regarding the manner and context in which compensation is awarded to and earned by our named executive officersNEOs to give perspective to the data we present in the compensation tables below, as well as the narratives that follow the tables.
Executive Officers
The following is a list oftable indicates the names and ages of all of the executive officers of the Corporation indicatingand all positions and offices held by each such person and each person’s principal occupation or employment during the past five years.years at minimum. The executive officers are appointed annually by the Board:Board.
Name | | Principal Occupation | | Age | | Executive Officer Since | Name | Principal Occupation | Age | Executive Officer Since | |||||||||||||||||||
David A. Ciesinski | | Chief Executive Officer of the Corporation since 2017; President of the Corporation since 2016; President of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2016 | | 55 | | 2016 | David A. Ciesinski | Chief Executive Officer of the Corporation since 2017; President of the Corporation since 2016; President of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2016 | 57 | 2016 | |||||||||||||||||||
Thomas K. Pigott | | Chief Financial Officer, Vice President and Assistant Secretary of the Corporation since 2019; Vice President, Finance and Chief Financial Officer of MGP Ingredients, Inc. from 2015 to 2019 | | 56 | | 2019 | Thomas K. Pigott | Chief Financial Officer, Vice President and Assistant Secretary of the Corporation since 2019; Vice President, Finance and Chief Financial Officer of MGP Ingredients, Inc. from 2015 to 2019 | 58 | 2019 | |||||||||||||||||||
David S. Nagle | | Chief Supply Chain Officer of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2019; Senior Vice President of Supply Chain of T. Marzetti Company from 2017 to 2019; Chief Operating Officer of Phillips Pet Food & Supply from 2014 to 2017 | | 57 | | 2017 | |||||||||||||||||||||||
Kristin J. Bird | Kristin J. Bird | President, Foodservice Division of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2019; General Manager of Basic American Foods from 2018 to 2019; Vice President and Senior Vice President, Foodservice Channel Development of Tyson Foods from 2008 to 2018 | 52 | 2019 | |||||||||||||||||||||||||
Carl R. Stealey | | President, Retail Division of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2018; General Manager and Vice President of Conagra Brands from 2016 to 2018; Vice President, U.S. Marketing of Mead Johnson Nutrition from 2010 to 2016 | | 50 | | 2018 | Carl R. Stealey | President, Retail Division of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2018; General Manager and Vice President of Conagra Brands from 2016 to 2018; Vice President, U.S. Marketing of Mead Johnson Nutrition from 2010 to 2016 | 52 | 2018 | |||||||||||||||||||
Kristin J. Bird | | President, Foodservice Division of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2019; General Manager of Basic American Foods from 2018 to 2019; Vice President and Senior Vice President, Foodservice Channel Development of Tyson Foods from 2008 to 2018 | | 50 | | 2019 | |||||||||||||||||||||||
Luis Viso* | Luis Viso* | Chief Supply Chain Officer of T. Marzetti Company, the specialty foods subsidiary of the Corporation, since 2023; Executive Vice President, Global Operations of Monster Energy Company from 2018 to 2023; Chief Operating Officer of Diamond Crystal from 2016 to 2018 | 63 | 2023 | |||||||||||||||||||||||||
John B. Gerlach, Jr. | | Executive Chairman of the Board of the Corporation since 2017; Chairman of the Board and Chief Executive Officer of the Corporation from 1997 to 2017; President of the Corporation from 1997 to 2016 | | 67 | | 1982 | John B. Gerlach, Jr. | Executive Chairman of the Board of the Corporation since 2017; Chairman of the Board and Chief Executive Officer of the Corporation from 1997 to 2017; President of the Corporation from 1997 to 2016 | 69 | 1982 |
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* Mr. Viso became an executive officer of the Corporation effective May 1, 2023.
Executive Summary
During 2021,fiscal 2023, we continued the three-pillar growth strategy we believe will best increase long-term shareholder value: (1) accelerate our base business growth; (2) simplify our supply chain to reduce our costs and grow our margins; and (3) identifyexpand our core business with our Retail licensing program and execute complementary mergers and acquisitions. Although
In fiscal 2023, we continued to experience significant inflationary costs for commodities, particularly soybean oil, eggs, and flour, in addition to higher costs for packaging, labor and warehousing. However, our pricing actions served to offset these inflationary costs. In addition, the operating environment stabilized as we did not complete any acquisitions during fiscal 2021, we continue to evaluate acquisition opportunities that fit our strategic goals.
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During fiscal 2021,2023, we achieved the following financial outcomes from continuing operationsresults (as compared to fiscal 2020,2022, where applicable):
◦Foodservice segment net sales increased 2.9%13% to $638.1a record $857.2 million driven by higher demandinflationary pricing and volume gains from certain quick-service restaurant and pizzacustomers in our mix of national chain customers combined with inflationary pricing.restaurant accounts. Fiscal 2023 sales were unfavorably impacted by an estimated $14 million in Foodservice net sales grew significantly inattributed to advance ordering that occurred near the last four monthsend of fiscal 2021 as we began to lap2022 ahead of our ERP go-live. This shift in orders resulted in lower Foodservice net sales during the large declinesfirst quarter of fiscal 2020 attributed to the impacts of COVID-19. Excluding all sales attributed to a temporary supply agreement in connection with the November 2018 acquisition of Omni Baking that ended on October 31, 2020,2023. Foodservice segment net sales volumes, measured in pounds shipped, decreased 5% in fiscal 2023. Sales volumes were unfavorably impacted by the advance ordering ahead of our ERP go-live and our decision to exit some less profitable SKUs during fiscal 2022. In fiscal 2022, Foodservice sales volumes increased 6.1%2%.
•Operating income increased 5.6%26% to $141.5 million in fiscal 2023 driven by the impact ofincrease in gross profit as our pricing actions served to offset the higher sales,significant inflationary costs we experienced for commodities, packaging, labor and warehousing. Operating income also benefited from a more favorablestable operating environment, improved manufacturing efficiencies and decreased reliance upon co-manufacturers. Higher SG&A expenses partially offset these positive factors. SG&A expenses increased 5% or $10.0 million due to increased investments in personnel and IT, higher brokerage costs associated with the increased sales, mix, a favorable adjustment related to Bantam Bagel’s contingent considerationhigher travel expenses, and our ongoing cost savings programs. These positive factors weresome nonrecurring legal charges for closed operations, partially offset by increaseda $9.5 million reduction in our expenditures for our enterprise resource planning systemERP initiative, Project Ascent. Additionally, operating income in fiscal 2023 was unfavorably impacted by the advance ordering that occurred near the end of fiscal 2022 ahead of our ERP go-live which accounted for an estimated $5 million in operating income. Operating income also benefited from a reduced level of restructuring and related initiatives (“Project Ascent”), higher manufacturing costs attributedimpairment charges, which declined from $35.2 million to the impacts of COVID-19, increased commodity costs and investments in various initiatives to support future growth.$25.0 million.
•Net income and net income per common share (fully diluted) each increased by 4%24%, as impacted by the factors described above.
•We demonstrated continued financial strength with a year-end cash balance of $188.1$88.5 million and no debt.
•Return on beginning shareholders’ equity was 18.2%13.2%. This figure also represents our return on capital given that we have no debt.
| | Executive Pay Decisions - Increases/Decreases in Fiscal 2021 | | | |||||||||||
Executive | | | Salary | | | Annual Incentive | | | Long-Term Incentive | | | Total Direct Compensation | | | Notes |
Mr. Ciesinski | | | 2.5% | | | 25.2% | | | 4.8% | | | 9.5% | | | Based on financial performance and continued movement of total compensation toward market competitive pay |
Mr. Pigott | | | 2.9% | | | 25.0% | | | 0.0% | | | 9.4% | | | Based on financial performance |
Ms. Bird | | | 4.6% | | | 49.8% | | | -25.0% | | | 6.1% | | | Based on financial performance, full year annual incentives in fiscal 2021 versus partial year in fiscal 2020, and two equity grants in fiscal 2020 versus one grant in fiscal 2021 |
Mr. Stealey | | | 2.9% | | | 25.0% | | | 0.0% | | | 9.5% | | | Based on financial performance |
Mr. Nagle | | | 9.0% | | | 31.2% | | | 0.0% | | | 13.2% | | | Based on financial performance, increased responsibilities and continued movement toward market competitive pay |
Aggregate | | | 4.0% | | | 28.9% | | | 0.0% | | | 9.5% | | |
Executive Compensation Program Philosophy and Objectives
The primary objective of our key executive compensation program is to reward our named executive officersNEOs for their efforts in:
•attaining market or above-market financial results;
•achieving our strategic goals; and
•increasing long-term shareholder value.
As a result, our executive compensation philosophy is focused on “pay for performance.”
For the Corporation, a “pay for performance” philosophy means providing competitive compensation outcomes when performance meets our expectations, but also realizing that results above or below our expectations may result in above-market or below-market compensation outcomes. To further this philosophy, we have designed our executive compensation program to:
•motivate our named executive officersNEOs to achieve superior financial and operational performance;
•align our named executive officers’NEOs’ compensation interests with our goal of creating long-term shareholder value; and
•attract and retain key executive talent.
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We believe our executive compensation program should promote long-term shareholder value and should not be overly influenced by the short-term performance of our stock. In our experience, salary, annual cash incentive awards and long-term equity-based awards, as the primary elements of our executive compensation program, are the best vehicles to align our executives’ interests with our goal of promoting long-term shareholder value. We also understand our executive compensation programs provide a starting point, or baseline of comparison, for the compensation we pay to our other employees. For this reason, we believe our executive compensation program should strike an appropriate balance among rewards, incentives and expectations.
Executive Compensation Program Overview
% of FY23 Pay Mix | ||||||||||||||||||||||||||||||||||||||
Element | Form | Purpose | Metrics | Time-Period | CEO | Other NEOs | ||||||||||||||||||||||||||||||||
Base Salary | Cash | To attract and retain and to provide a steady source of annual cash income | — | 1-Year | 18% | 35% | ||||||||||||||||||||||||||||||||
Annual Incentive Plan (“AIP”) | Cash | To incentivize for certain annual financial, operational, and individual objectives | 70% Financial (70% Adj. Operating Income, 30% Adj. Net Sales) | 1-Year Performance Period | 29% | 36% | ||||||||||||||||||||||||||||||||
20% Personal | ||||||||||||||||||||||||||||||||||||||
10% Operational (ERP Go-Live) | ||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Plan (“LTIP”) | Performance Share Units (“PSUs”) | To incentivize for certain long-term financial performance objectives and drive long-term shareholder value | 27.5% Net Sales Growth | 3-Year Performance Period | 53% | 29% | ||||||||||||||||||||||||||||||||
27.5% Relative TSR (“rTSR") vs. S&P 1500 Packaged Foods & Meats Index | 3-Year Performance Period | |||||||||||||||||||||||||||||||||||||
Restricted Stock | To align executives’ interests with shareholders and promote retention | 45% Time-based | 3-Year Cliff Vest |
The above data in the Pay Mix columns shows that most of the compensation provided to Mr. Ciesinski and the other NEOs is annual and long-term incentives, which we think serves to focus their attention on achieving strong financial and long-term shareholder returns. Mr. Viso was included at his annualized base salary, annualized actual annual incentive, and 2023 grant value of restricted stock. Mr. Nagle was excluded from the other NEOs for this calculation.
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We have developed a series of “What We Do” and “What We Don’t Do” principles in connection with our executive compensation program. These principles are summarized in the table below.
Executive Compensation Practices at a Glance | ||||||||||||||
What We Do | What We Don't Do | |||||||||||||
ü | DO align pay with performance by linking incentive compensation to the achievement of performance goals tied to the Corporation’s strategic objectives and financial metrics | O | NO guaranteed cash incentives, equity compensation or salary increases | |||||||||||
✓ | DO conduct annual compensation review and approval of our compensation philosophy and strategy | O | NO compensation or incentives that encourage unnecessary or excessive risk taking | |||||||||||
✓ | DO cap payouts for annual incentive and performance-based equity awards at 200% of target | O | NO acceleration of PSUs without regard to performance goals | |||||||||||
✓ | DO maintain robust stock ownership guidelines for executive officers and directors | O | NO executive pension plans or post-retirement health coverage for our NEOs | |||||||||||
✓ | DO require double-trigger change-in-control vesting provisions | O | NO single trigger acceleration of equity awards upon a change-in-control | |||||||||||
✓ | DO pay a substantial portion of executive compensation in the form of at-risk equity grants | O | NO significant or excessive perquisites for NEOs | |||||||||||
✓ | DO appoint a Compensation Committee consisting solely of independent directors | O | NO pledging our securities by directors, executive officers or other employees as collateral for a loan | |||||||||||
✓ | DO use an independent compensation consultant engaged by our Compensation Committee | O | NO hedging or derivative transactions by our directors, NEOs or other employees involving our securities | |||||||||||
✓ | DO have a majority of executive compensation at risk based on corporate performance | O | NO tax gross ups |
While these broad concepts generally govern our executive compensation program, we also account for specific factors particular to each executive officer when making individual compensation decisions, which we describe in detail below. These factors include the executive’s range of responsibilities and related performance measures and other individual factors affecting each executive’s performance. We also engage in a general “double-check”an annual competitive compensation review of our executive compensation levels againstrelative to amounts paid to executive officers with similar responsibilities in similarly situated companies, but we do not specifically benchmark compensation against percentiles or ranges of compensation provided by such companies.
At our 20202022 Annual Meeting, our executive compensation program received approval from 99.1%97.0% of our shareholders casting votes on the matter, indicating strong shareholder support for the Compensation Committee’s executive compensation decisions and policies. There are many factors contributing to the Compensation Committee’s decision on whether to make significant changes to our compensation mix, including shareholder approval, peer group actions, target pay levels, performance metrics, and other compensation policies. The Compensation Committee will continue to consider results from future shareholder advisory votes which will be held annually until the next shareholder advisory vote in 2023 on the frequency of future votes on executive compensation, in its ongoing evaluation of our executive compensation programs and practices.
Compensation Administration and Consultant
The Compensation Committee reviews and determines the compensation for our named executive officers.NEOs. The compensation we paid our named executive officersNEOs for fiscal 20212023 is disclosed in detail in the tables and narratives below under the heading “Executive Compensation.” Our Compensation Committee is also responsible for, among other duties, structuring and administering the compensation programs and plans in which our named executive officersNEOs participate.
During fiscal 2021,2023, the Compensation Committee retained the services of an independent executive compensation consultant, Pay Governance LLC (“Pay Governance”). Pay Governance reports directly to the
Compensation Committee and did not provide any other types of service to the Corporation during fiscal 2021.2023. The Compensation Committee believes there were no conflicts of interest between Pay Governance and the Compensation Committee during fiscal 2021.2023. In reaching this conclusion, the Compensation Committee considered the compensation consultant independence factors set forth in Rule 10C-1(b)(4) of the Securities Exchange Act of 1934, as amended.
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Pay Governance reevaluated our peer group and, based on its recommendations, the Compensation Committee adopteddid not make any changes to the peer group established in May 2021February 2022 as described below. In addition, Pay Governance provided information regarding medianmarket compensation for our named executive officers duringNEOs to support compensation decisions for fiscal 2021.2023. The information was used by the Compensation Committee to obtain a general understanding of current compensation practices in our competitive market rather than for benchmarking purposes. Pay Governance also worked with the Compensation Committee to prepare the 20212023 AIP as described in more detail below. Pay Governance, in conjunction with the Compensation Committee and management, also helped to design and implement a new long-term equity incentive plan for fiscal 2022, which was based onconsistent with the incentive structure implemented in fiscal 2019, as2023 program and is described in more detail below.
Over time, the Compensation Committee has worked to include peer companies with the following characteristics:
•annual revenues, generally between 50%market cap, and 250%enterprise value within a reasonable range of the Corporation’s annual revenues;Corporation; and
•companies primarily competing in the Packaged Foods and Meats category and other related categories; and
For fiscal 2021,2023, we used the following peer group (the “2021“2023 Peer Group”) to determine competitive pay levels for input into the Compensation Committee’s decision-making process:
• | B&G Foods, Inc. | ||||||||||||||||
Calavo Growers, Inc. | |||||||||||||||||
• | Cal-Maine Foods, Inc. | ||||||||||||||||
Flowers Foods, Inc. | |||||||||||||||||
• | The Hain Celestial Group, Inc. | Hostess Brands, Inc. | |||||||||||||||
• | J&J Snack Foods Corp. | John B. Sanfilippo & Son, Inc. | |||||||||||||||
• | Lamb Weston Holdings, Inc. | Sanderson Farms, Inc. | |||||||||||||||
• | SunOpta Inc. | ||||||||||||||||
• | Tootsie Roll Industries, Inc. | • | Treehouse Foods, Inc. |
As of the date on which the 20212023 Peer Group was evaluated for purposes of providing input with respect to fiscal 20212023 compensation, our Corporation had the following financial characteristics compared to our 2021the Peer Group: our revenuesnet sales were at the 62nd56th percentile; market cap was at the 8086th percentile; and total enterprise value was at the 7879th percentile. Total enterprise value is defined as market capitalizationcap plus long-term debt, less cash.
Compensation Processes, Procedures and Comparison to Peer Group
Generally, our Compensation Committee establishes salaries for the current fiscal year and annual cash incentive award payouts for the prior fiscal year at its regularly scheduled August meeting. Historically, at this meeting, our Compensation Committee reviews the elements of each named executive officer’sNEO’s total compensation during the previous fiscal year. Our Chief Executive Officer then makes compensation recommendations to our Compensation Committee with respect to the members of senior management who report to him, but those executives are not present in the meeting during compensation deliberations.
The Compensation Committee Chairperson then makes compensation recommendations in executive session to our Compensation Committee with respect to our Chief Executive Officer, who is absent from the meeting at that time. Our Compensation Committee also comparesreviews our named executive officers’NEOs’ compensation along with that offered to executive officers employed by companies in our peer group, based on information about the peer group companies suppliedas prepared by Pay Governance, during the first part of the review process as a “double-check” against market compensation practices rather than as a formal benchmarking process.Governance.
Our Compensation Committee may accept or adjust the recommendations it receives in establishing the final compensation for each named executive officer.NEO. In general, when setting each component of compensation for our named executive officers,NEOs, our Compensation Committee considers the following performance factors:
•our previous year’s operating results and achievement of our performance objectives;
•the relative value of the executive’s unique skills, competencies and institutional knowledge, including time in current position;
•the executive’s performance of his or her responsibilities; and
•the executive’s contribution toward our long-term strategic objectives and our goal of creating long-term shareholder value.
We believe the total cashtarget compensation paid tofor our named executive officers (the combination of salary and annual cash incentives)NEOs for fiscal 20212023 was in line with market median compensation paid for executives holding similar positions in our 20212023 Peer Group based on the Compensation Committee’s general understanding of current compensation practices in our competitive market.
Primary Elements of Compensation
As noted, we have established executive compensation objectives primarily focused on helping to create long-term shareholder value. We believe we can best achieve our executive compensation program objectives by offering competitive short-term cash compensation combined with appropriate long-term equity-based compensation tied to our operating results and
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our achievement of incremental shareholder value. To this end, the primary elements of our executive compensation program are salary, annual cash incentive awards and long-term equity-based incentive awards, which are described in detail below. Generally, we look at our named executive officers’NEOs’ compensation arrangements in total when establishing salaries, annual cash incentive awards and long-term equity incentive awards. Our NEOs during fiscal 2023 were Ms. Bird and Messrs. Ciesinski, Pigott, Stealey, Nagle and Viso.
Salaries. We provide our named executive officersNEOs with annual salaries to attract and retain the executives and to provide them with a steady source of annual cash income. For each named executive officer,NEO, salary represents a risk-free cash compensation component. We establish salaries to reward our named executive officersNEOs for their overall level of expertise, responsibilities, experience and other factors unique to each individual executive officer, as determined by our Compensation Committee. However, our general policy is the salaries for our named executive officersNEOs should not exceed median salaries for executive officers with similar responsibilities within our peer group.
For fiscal 2021,2023, the amount of each continuing named executive officer’sNEO’s salary increase expressed as a percentage of such officer’s fiscal 20202022 salary was as follows: Mr. Ciesinski, 2.5%,5.3%; Mr. Pigott, 2.9%,5.5%; Mr. Stealey,
Annual Cash Incentive Awards. We also provide our named executive officersNEOs with annual cash incentive awards based on the 20212023 AIP designed to motivate them to help achieve our annual financial goals. The annual cash incentive award represents a performance-based, variable and “at-risk” cash component of compensation for each named executive officer.NEO. Under this program, our named executive officersNEOs were each provided the opportunity to earn an annual cash incentive payment for fiscal 20212023 based on achievement of certain financial, operational and individual objectives. We granted these awards to our named executive officersNEOs because of their overall responsibilities for achieving annual financial and operating results and driving the creation of long-term shareholder value. An annual cash incentive payment, if earned, is made early in the following fiscal year. Annual cash incentive payments earned by our named executive officersNEOs for fiscal 20212023 appear in the “Non-Equity Incentive Plan Compensation” column of our 20212023 Summary Compensation Table.
As a starting point for the 20212023 AIP, each named executive officerNEO was assigned a target cash incentive award under the 20212023 AIP expressed as a percentage of salary as follows:
•Mr. Ciesinski – 100%115% of salary
•Mr. Pigott – 80% of salary
•Mr. Stealey – 70% of salary
•Ms. Bird – 70% of salary (increased from her 2020 AIP target of 65% based upon her role as President of one of our operating segments)
•Mr. Nagle – 65% of salary (pro-rated to account for his February 2023 termination date)
•Mr. Viso – 70% of salary (pro-rated to account for his May 2023 start date)
The 20212023 AIP providesprovided rewards for the achievement of two key financial metrics: adjusted net sales and adjusted operating income, as well as for achievement against a key operational objective of the Corporation and personal objectives developed for each named executive officer.NEO. The financial performance metrics arewere weighted as 70% of the total incentive, while the achievement of personal objectives iswas weighted 30%as 20%, and the successful implementation of the ERP go-live was weighted as 10%.
All participants have a significant weighting in consolidated financial outcomes, which promotes teamwork and cooperation across business units and with the corporate functional groups. The weighting on personal objectives isare designed to drive personal responsibilities, and most personal objectives, if achieved, are expected to have a positive impact on current and future financial outcomes.
The weighting assigned to the ERP go-live implementation ensured management’s continued focus on this critical initiative, which the Compensation Committee made a change for the 2021 AIP based on the impact of the COVID-19 pandemic, specifically widening the range between threshold and target and target and maximum to +/- 10% for net sales (i.e., 90% - 110% of target) and to +/-15% for operating income (i.e., 85% - 115% of target). Prior ranges were +/-5% for net sales (95% - 105% of target) and +/-10% for operating income (90% - 110% of target). This change was made due to the uncertain operating environmentultimately believes results in the context of the ongoing COVID-19 pandemic.long-term shareholder value creation.
As noted above, the key financial metrics are adjusted net sales and adjusted operating income.Adjusted operating income is weighted 70% and adjusted net sales is weighted 30%, reflecting the importance our Compensation Committee places on each metric. At the beginning of the 20212023 fiscal year, the Compensation Committee set the following targets, thresholds and maximums for corporate adjusted net sales and adjusted operating income:
Fiscal Year 20212023 Corporate AIP Performance Metrics
($ in millions)
| | Adjusted Net Sales | | Percentage of Target | | Adjusted Operating Income | | Percentage of Target | Adjusted Net Sales | Percentage of Target | Adjusted Operating Income | Percentage of Target | |||||||||||||||||||||||
Threshold | | $1,233.6 | | 90% | | $174.3 | | 85% | Threshold | $1,700.4 | 95% | $167.0 | 90% | ||||||||||||||||||||||
Target | | $1,370.7 | | 100% | | $205.0 | | 100% | Target | $1,789.9 | 100% | $185.6 | 100% | ||||||||||||||||||||||
Maximum | | $1,507.8 | | 110% | | $235.8 | | 115% | Maximum | $1,879.4 | 105% | $204.2 | 110% |
Payouts to the named executive officersour NEOs are 20% of target opportunities at threshold and 200% at maximum.
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At the time the Compensation Committee set the above performance metrics and targets, it also determined to make certain adjustments to the Corporation’s net sales and operating income, as reported under United States generally accepted accounting principles, in the context of determining the performance metrics and incentives to be paid to the named executive officers.our NEOs. Such adjustments included:
Fiscal Year 20212023 Adjusted Financial Results
($ in millions)
Performance Measure | Corporate | Percentage of Target | ||||||||||||
Net Sales: | Reported FY 2023 Results | $ | 1,822.5 | |||||||||||
Net Sales for 2023 AIP Purposes | $ | 1,822.5 | 101.8% | |||||||||||
Operating Income: | Reported FY 2023 Results | $ | 141.5 | |||||||||||
Adjusted Operating Income for 2023 AIP Purposes | $ | 196.3 | 105.8% |
Performance Measure | | | Corporate | | | Percentage of Target | |||
Net Sales: | | | Reported FY 2021 Results | | | $1,467.1 | | | |
| | Adjusted Net Sales for 2021 AIP Purposes | | | $1,463.4 | | | 106.8% | |
Operating Income: | | | Reported FY 2021 Results | | | $185.9 | | | |
| | Adjusted Operating Income for 2021 AIP Purposes | | | $219.2 | | | 107.0% |
We compared these adjusted results to the thresholds, targets and maximums set previously and accounted for the various weighting factors related to the 20212023 AIP, including:
•the weighting between operating income and net sales (70%/30%, respectively); and
•the overall weighting between financial, and personal performance, (also 70%and ERP go-live factors (70%/30%20%/10%, respectively).
Specifically, the above outcomes resulted in a payout on net sales of 136.5% of target and a payout on adjusted operating income of 157.9% of target.Overall financial performance was 151.5% of target.
We then calculated a personal performance outcome for each of the named executive officersour NEOs participating in the 20212023 AIP. This personal performance outcome was based on objective criteria designed to support our overall financial goals and was weighted at 30%20% of the total annual incentive opportunity. In general, payout opportunities for personal performance lie between 0% at minimum, 20% at threshold and 200% at maximum, identical to the financial performance payout opportunities. For fiscal 2021,2023, the personal performance outcomeoutcomes for each ofour NEOs ranged from 100% to 125%, and the named executive officersoperational metric was establishedpaid at 152%.100% because the ERP go-live implementation progressed in fiscal 2023 with no major disruptions.
Finally, we added the financial, operational and personal performance factors together and multiplied by each named executive officer’sNEO’s total target incentive to derive a total annual incentive payout for the 20212023 AIP. We believe the outcomes fairly represent both the financial and operational performance of the Corporation and the achievements of our named executive officersNEOs in achieving their personal performance goals and objectives. As a result of this performance, Mr. Ciesinski received a total annual incentive payout of $1,252,960;$1,443,340; Mr. Pigott received a total annual incentive payout of $574,092;$648,664; Ms. Bird received a total annual incentive payout of $446,516;$451,649; Mr. Stealey received a total annual incentive payout of $446,516; and$451,649; Mr. Nagle received a total annual incentive payout of $406,492.$257,624; and Mr. Viso received a total annual incentive payout of $78,149. Note that Mr. Nagle’s annual incentive payout was pro-rated for his termination date during the 2023 fiscal year and Mr. Viso’s annual incentive payout was pro-rated for his start date during the 2023 fiscal year.
Long-Term Equity-Based Incentive Awards. During At the beginning of fiscal 2021, we granted2022, the Compensation Committee, with input from Pay Governance and senior management, implemented a new long-term equity incentivesequity-based incentive plan to replace the prior long-term equity-based incentive plan which had been in place for many years.This new design, which was consistent for the formfiscal 2023 plan (“2023 LTIP”), was developed with the following objectives:
•Drive performance;
•Correlate with shareholder value creation;
•Support positive say-on-pay outcomes by aligning plan design with shareholder expectations;
•Promote retention; and
•Ensure a competitive compensation design and reward structure.
The current long-term equity-based incentive program consists of stock-settled stock appreciation rights and time-based restricted stock includingand PSUs. The PSUs are earned based on two financial/shareholder performance measures over a three-year performance period:
•Net sales growth; and
•Relative total shareholder return (“rTSR”) versus a pre-selected peer group.
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The PSUs and restricted stock are designed to meet the following grantsmajor objectives:
•PSUs – net sales growth – to drive long-term increases in the Corporation’s net sales over a three-year performance period which, in turn, are thought to drive increases in long-term shareholder value
•PSUs – rTSR – to focus attention on achieving long-term total shareholder returns over a three-year measurement period in excess of those achieved by competitors which may represent alternative investments for shareholders
•Restricted Stock – to promote retention for senior executives driven by a three-year cliff vesting period
The performance period for the 2023 PSUs noted above covers our named executive officers:
| | Appreciation Rights | | | Restricted Shares | | | Total Grant Value (‘000s) | |||||||
Named Executive | | | Grant Value (‘000s) | | | # Rights | | | Grant Value (‘000s) | | | # Shares | | ||
Mr. Ciesinski | | | $1,430.0 | | | 39,416 | | | $770.0 | | | 4,326 | | | $2,200.0 |
Mr. Pigott | | | $292.5 | | | 8,063 | | | $157.5 | | | 885 | | | $450.0 |
Ms. Bird | | | $195.0 | | | 5,374 | | | $105.0 | | | 590 | | | $300.0 |
Mr. Stealey | | | $195.0 | | | 5,374 | | | $105.0 | | | 590 | | | $300.0 |
Mr. Nagle | | | $195.0 | | | 5,374 | | | $105.0 | | | 590 | | | $300.0 |
•Time-based restricted stock: 45% of total 2023 LTIP value
Consistent with the practice initiated in fiscal 2022, the 2023 LTIP awards were granted in August 2022, shortly after the start of the fiscal year.
Performance Share Values and Units | Time-Based Restricted Stock Values and Shares | |||||||||||||||||||||||||||||||||||||||||||
Net Sales Growth | rTSR | Total Grant Value | ||||||||||||||||||||||||||||||||||||||||||
Name | ($) | (#) | ($) | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||||||||||||
Mr. Ciesinski | $714,930 | 4,724 | $714,908 | 3,506 | $1,170,010 | 7,731 | $2,599,848 | |||||||||||||||||||||||||||||||||||||
Mr. Pigott | $164,961 | 1,090 | $164,963 | 809 | $269,991 | 1,784 | $599,915 | |||||||||||||||||||||||||||||||||||||
Ms. Bird | $98,976 | 654 | $99,100 | 486 | $161,934 | 1,070 | $360,010 | |||||||||||||||||||||||||||||||||||||
Mr. Stealey | $98,976 | 654 | $99,100 | 486 | $161,934 | 1,070 | $360,010 | |||||||||||||||||||||||||||||||||||||
Mr. Nagle* | $82,480 | 545 | $82,584 | 405 | $134,995 | 892 | $300,059 | |||||||||||||||||||||||||||||||||||||
Mr. Viso | — | — | — | — | $359,982 | 1,721 | $359,982 |
*Mr. Nagle was awarded a restricted stock grant and have moved the annualPSU grants with a total grant date to Augustfair value of each year. See$300,059. This amount was forfeited upon Mr. Nagle’s termination effective February 28, 2023.
For all except Mr. Viso, PSUs based on net sales growth and the “2022 Executive Pay Changes” section below.
The Compensation Committee granted new awards of restricted stock on the same day as the appreciation rights awards. Unlike the appreciation rights, the shares ofPSU grants. The restricted stock do not vest ratably, but vestvests in totalfull on the third anniversary of the grant date, although a portion of the shares may vest at retirement as described below. Thisdate. The restricted stock will vest earlier upon a change in control of the Corporation if it isthey are not assumed by the acquiring or surviving company, or if it isthey are assumed and the grantee’s employment is, within 24 months following the change in control, terminated by the Corporation other than for cause or terminated by the grantee for good reason. Once vested, the restricted stock may be traded in the same manner as other shares. Each recipient of restricted stock will receive dividends on the restricted stock during the vesting period but will generally forfeit all unvested restricted stock upon termination of employment unless his or her termination is a result of death or disability or as otherwise determined by the administrator. Two exceptionsDividends will be accrued on the PSUs but will only be paid to the general forfeiture rule apply for unvested restricted stock granted under 2019 award agreements: (1) vesting is accelerated upon a termination byrecipients at the Corporation without cause or byend of the recipient for good reason, as described in more detail in the award agreement,three-year performance period and (2) vesting is acceleratedonly upon the employee’s retirement if at the date of grant an employee has reached the age of 63PSUs that are earned and has at least 10 years of service with the Corporation, in which event one-third will vest if the employee retires after the first anniversary of the grant date but before the second anniversary of the grant date, and two-thirds will vest if the employee retires after the second anniversary of the grant date but before full vesting of the award.vested.
The Compensation Committee may considerconsiders, but does not expressly rely upon, any specific formulas, mathematical calculations or peer group comparisons when determining the value of equity grants to individual employees, including our named executive officers.NEOs. The 20212023 grants were made based on the Compensation Committee’s judgment, which in turn was based on the Compensation Committee’s desire to award each employee enough value to achieve our retention and motivation objectives discussed above.
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In the Compensation Committee’s view, the amounts awarded in 2021fiscal 2023 were necessary to retain executive talent and provide incentives for our executives to create long-term shareholder value. Long-term equity awards for Ms. Bird and Messrs. Ciesinski, Pigott, Stealey, Nagle and PigottViso were based on the Compensation Committee’s desire to retain them over the long term,and assist