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 ☒
Filed by a partyParty other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
Conagra Brands, Inc.
(Name of Registrant as Specified In Itsin its Charter)
[NOT APPLICABLE]APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
| ☒ | No fee required |
|
|
|
|
|
|
| ☐ | Fee paid previously with preliminary materials. |
| ☐ |
|
|
|
|
|
 | Conagra Brands, Inc. | |
| 222 W. Merchandise Mart Plaza | ||
| Suite 1300 | ||
| Chicago, Illinois 60654 | ||
August 13, 202010, 2022
Dear Shareholders,
I am pleased to invite you to join us for the Conagra Brands Annual Meeting of Shareholders, or the Annual Meeting, which will be held virtually via live webcast on Wednesday, September 23, 2020,21, 2022, at 11:00 a.m. CDT. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/CAG2020CAG2022.
We have decided to holdwill be holding the Annual Meeting virtually again this year due to the uncertainty relating to the coronavirus (COVID-19) pandemic. In addition to supporting the health and well-being of our shareholders, employees, and their families, we believeyear. We have found that hosting a virtual Annual Meeting will enableenables greater shareholder access, attendance and participation, improveimproves meeting efficiency and our ability to communicate effectively with our shareholders, and reduce the cost of the Annual Meeting.reduces costs. The Annual Meeting will include a brief report on our business, a discussion of and voting on matters described in the Notice of 20202022 Annual Meeting of Shareholders and Proxy Statement, and a question-and-answer session.
Conagra’s performanceLooking back, fiscal 2022 was a year of continued volatility and dynamic conditions in fiscal 2020which inflation, supply chain challenges, and world events all contributed to a challenging external environment. I’m proud that our dedicated Conagra team was unprecedented. By leveragingable to remain focused on delivering innovation, value, and superior products to create lasting connections between consumers and our brands. As a result, we continued to deliver strong top-line growth, both in the brands, capabilities,absolute and culture built overrelative to our peers, as we grew share versus the last five years,competition across our team effectively respondedkey product categories, and continued to invest in the COVID-19 related increase in consumer demand forlong-term health of our products.business. We simultaneously strengthenedremain confident that our customers and consumers recognize the superior relative value of our products and that our business for the long-term. At all times, we did so with employee health and safety at the forefront. I am particularly thankful for the thousands of hardworking Conagra team memberswill continue to perform well in our manufacturing facilities across North America. Without their dedication, we could not have delivered for our consumers, customers, or shareholders.
these dynamic times. With fiscal 2021year 2023 now underway, we remain as confident as ever inare well-positioned to weather any coming storms and keep driving toward the long-term value creation potential ofbright future on the company. horizon.
On behalf of our entire organization, I thank you for your shared confidence that Conagra Brands continues to be a compelling investment opportunity.
Sincerely,
Sean Connolly
President and Chief Executive Officer
20202022 PROXY STATEMENT III
Notice of 2022 Annual Meeting of Shareholders and Proxy Statement
| When | Where | Who May Vote | ||
| Wednesday, | Online at | Shareholders of record as | ||
September 11:00 a.m. CDT | www.virtualshareholdermeeting.com | of the close of business on August | ||
ITEMS OF BUSINESS
| 1. |
|
| 2. |
|
| 3. |
|
| 4. |
|
| 5. | A shareholder proposal requesting that the Board adopt a policy to separate the office of the Chair and the office of the Chief Executive Officer, if properly presented; and |
| 6. | Transaction of any other business properly brought before the |
Colleen Batcheler
Carey Bartell
Executive Vice President, General Counsel
and Corporate Secretary
August 13, 202010, 2022
|
Attend Online
You are entitled to attend and participate in the |
Even if you plan to attend
YOUR VOTE IS IMPORTANT.
|
IV CONAGRA BRANDS
| 1 | ||||
Board of Directors & Corporate Governance
| ||||
VOTING ITEM #1: Election of | ||||
| Voting | ||||
| Who We Are | ||||
| How We Are Selected | ||||
| How We Govern | ||||
| How We Are | ||||
Audit Matters
| ||||
VOTING ITEM #2:
Ratification of the Appointment of KPMG LLP as Our Independent Auditor for Fiscal | ||||
| Audit / Finance Committee Report | ||||
20202022 PROXY STATEMENT V
Proxy Statement
We are providing the enclosed proxy materials to you in connection with the solicitation by the Board of Directors or the Board, of Conagra Brands, Inc. (referred to as Conagra Brands, Conagra or the company)Company) of proxies to be voted at the Annual Meeting of Shareholders to be held on September 23, 2020, or the 202021, 2022 (the 2022 Annual Meeting.Meeting). We began making our proxy materials available to shareholders on or about August 13, 2020.10, 2022.
This summary highlights some of the information contained in this proxy statement. You should read the entire proxy statement before voting.
Our Company
Conagra Brands (NYSE: CAG), headquartered in Chicago, is one of North America’s leading branded food companies. From our headquarters in Chicago and guidedGuided by an entrepreneurial spirit, we combinethe Company combines a rich heritage of making great food with a sharpened focus on innovation. OurThe Company’s portfolio evolvesis evolving to satisfy people’s changing food preferences. OurIts iconic brands such as Birds Eye®, Marie Callender’sDuncan Hines®, BanquetHealthy Choice®, Healthy ChoiceMarie Callender’s®, Slim Jim®, Reddi-wip®, and VlasicSlim Jim®, as well as emerging brands, including Angie’s® BOOMCHICKAPOP®, Duke’s®, Earth Balance®, Gardein®, and Frontera®, offer choices for every occasion.
1 CONAGRA BRANDS
Our Vision
At Conagra, we aspire to have the most impactful, energized, and inclusive culture in food. We seek to build a diverse team that embraces debate to challenge marketplace and business conventions. We strive to be respected for our great brands, great food, great margins, and consistent results.
By the Numbers
|
|
| ||||||
Number of |
Fiscal |
Number of | ||||||
~50 | ~$ | ~ |
1 CONAGRA BRANDS
Fiscal 20202022 Highlights
For Conagra Brands, fiscal 20202022 was a year of navigating unprecedented businesscontinued volatility and dynamic conditions in which inflation, supply chain challenges, and in the face of extraordinary uncertainty,world events all contributed to a challenging external environment. However, Conagra was able to remain focused on delivering for shareholders. We set rigorous goals that were communicatedinnovation, value, and superior products to investorscreate lasting connections between consumers and incorporated into our compensation programs in July 2019. Over the first two quarters of fiscal 2020, our business was on-track to meet expectations. We made progress strengthening our brands, introduced new product innovations, and identified cost synergies associated with the fiscal 2019 Pinnacle Foods acquisition in excess of prior plans. The third fiscal quarter, however, brought discrete headwinds; softness appeared in our foodservice business and in categories across our retail portfolio.brands. As a result of taking decisive actions throughout the year, we loweredcontinued to deliver strong top-line growth, both in the absolute and relative to our expectations forpeers, as we grew share versus the full fiscal year. Subsequently, atcompetition in each our key product categories, and continued to invest in the beginninglong-term health of our business. We remain confident that our customers and consumers recognize the fourth quarter, the COVID-19 pandemic drove a surgesuperior relative value of our products, and that our business will continue to perform well in consumer demand for our food. Our modernized portfolio, strong operational foundation, commitment to employee health and safety, agile culture, and dedicated team enabled us to respond effectively. these dynamic times.
Ultimately, we delivered results consistent with and in some instances above our originaladjusted guidance for the fiscal 2020 guidance.
Our Results:year.
3.1% |
11.7% |
$1.84 |
3.8% |
14.4% |
$2.36 |
Fiscal 2020 was our third consecutive year of organic net sales growth. We experienced strong growth in all three of our retail segments, driven by increased demand due to COVID-19, growth in e-commerce sales, and a robust innovation slate.
Our adjusted operating margin grew again in fiscal 2020. We delivered operating margin of 13.1% and adjusted operating margin of 16.5%1.
We reduced our debt by $1.8 billion between the closing of the Pinnacle acquisition in October 2018 and the end of fiscal 2020. We remained on track against our deleveraging targets during fiscal 2020, resulting in a net leverage ratio2 of 4.0x at the end of fiscal 2020. We remain committed to achieving our net leverage target3 of 3.5x to 3.6x by the end of fiscal 2021.
We continued our portfolio sculpting work in fiscal 2020. We completed the divestiture of two smaller, non-core businesses: our direct store delivery snacks business and our Lender’s Bagel business. We also exited our private label peanut butter business.
We paid $413.6 million in cash dividends during fiscal 2020.
During fiscal 2020, we continued our work to cultivate an energized and enthusiastic team of employees who bring an externally focused, entrepreneurial spirit to their work every day. We also launched efforts to amplify our commitment to a diverse and inclusive workforce. During the fourth quarter, we began to partner with an external diversity and inclusion consultancy to identify specific opportunities that will have the most impact. This work remains underway as we begin fiscal 2021.
| 1 | A reconciliation of this non-GAAP measure to the most directly comparable GAAP measure is included in Appendix A to this Proxy Statement. |
| 2 |
|
| 3 |
|
20202022 PROXY STATEMENT 2
WithSpecific performance highlights from fiscal 2022 include the following:
We experienced strong organic net sales growth in all three of our retail segments in fiscal 2022, driven by growing and gaining share versus our competitors, as well as growth in e-commerce sales, and a robust innovation slate.
We delivered operating margin of 11.7% and adjusted operating margin of 14.4%4, successfully implementing inflation-driven pricing in the face of historic inflation.
We paid $582 million in cash dividends in fiscal 2022.
During fiscal 2022, we continued our work to nourish an inclusive culture that encourages openness, acceptance, and individual authenticity by introducing our multi-year Diversity and Inclusion learning journey. This important framework is rooted in our Timeless Values and in our five inclusive behaviors of genuine listening, civility, mutual respect, healthy debate, and compromise.
| 4 | A reconciliation of this non-GAAP measure to the most directly comparable GAAP measure is included in Appendix A to this Proxy Statement. |
Investing in Our Culture: Our vision is to have the most impactful, energized, and inclusive culture in food. We believe that a diverse team and inclusive culture are key enablers of shareholder value creation. During fiscal 2022, we continued our work to deliver against our vision. Our Diversity and Inclusion Leadership Council, comprised of our Chief Executive Officer (CEO), his Senior Leadership team, and members of our Human Resources team continued to expand and refine our diversity and inclusion (or “D&I”) strategy, track our progress, and advance execution of our D&I goals.
The Council executed the company’s plan to focus on recruiting, advocating for, and developing diverse talent. The Council and the company re-affirmed the following goals for expanding diversity in our organization:
2025 Goal At least 40% of management-level roles held by women | 2025 Goal Double people of color representation in management and middle-management roles |
In support of the achievement of our goals, we undertook a variety of initiatives in fiscal 2022, including:
| • | Launching our “Experience Inclusion” corporate website in December 2021 to highlight our D&I commitment and journey and our initiatives to enhance recruitment of diverse talent. |
| • | Expanding our diversity recruitment strategies focused on strengthening the diversity of candidate slates at the early talent (recent college graduates) and experienced hire levels. This year, Conagra was recognized by the Talent Board for our inclusive candidate experience, Eightfold for being a leader in the diversity recruitment space, and Mogul for our inclusive recruitment practices. |
| • | Partnering with Sounding Board, Inc. to launch an external coaching program to advance professional development for underrepresented talent, and expanding our internal mentoring program to our Latinx Employee Resource Group. |
| • | Awarding the “Conagra Refuse-to-Lose Scholarship” to 30 students from the Thurgood Marshall College Fund and Hispanic Scholarship Fund. All scholarship recipients were invited to participate in a mentorship program launched in May 2022. |
| • | Expanding our community partnerships with social justice organizations to support food vulnerable and diverse communities. Our community partners include the Chinese American Service League, Brave Space Alliance, La Casa Norte, Project Hood Communities, the Latino Center of the Midlands (formerly known as Chicano Awareness Center), the Intercultural Senior Center, the American Civil Liberties Union, and Human Rights Watch. |
3 CONAGRA BRANDS
| • | Throughout fiscal 2022, the Human Resources Committee of our Board (the HR Committee) continued to receive regular reports from management on our D&I progress. The HR Committee has embedded D&I topics into its standing agenda and intends to continue discussing the topic regularly at all scheduled meetings in fiscal 2023. |
Fiscal 2020—2022
We maintain a long-term strategic plan at Conagra and strive to set rolling three-year financial targets that the HR Committee of our Board can incorporate into long-term incentive compensation plans for our most senior executives. The three-years endedending with fiscal 2022 were far more dynamic than originally expected. We initially focused fiscal 2020 on integrating the Pinnacle Foods, Inc. (Pinnacle) business and delivering turn-around plans for several large brands acquired in the Pinnacle transaction. However, by the end of the third quarter of fiscal 2020, the company made significant progress on its transformation.COVID-19 pandemic had introduced new challenges. During fiscal 2018, the company continued its efforts to strengthen the legacy Conagra portfolio through investments in innovation, retailer marketing investments and the value over volume playbook. The company also acquired the Angie’s® BOOMCHICKAPOP® popcorn business and Sandwich Bros. of Wisconsin frozen sandwich business. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and breadth of our portfolio. And during fiscal 2020,2021, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers, and shareholders.shareholders while keeping our employees safe. We expected fiscal 2022 to be focused on navigating increased supply chain challenges posed by the pandemic and meeting increased customer and consumer demand driven by sustained elevated levels of at-home dining. However, fiscal 2022 introduced the additional challenges of historic and persistent inflation and supply chain headwinds stemming from geopolitical turmoil. In response to these challenges, we invested in our supply chain operations and successfully implemented inflation-driven pricing, while continuing to invest in our innovation pipeline.
As a result of our focus on reshaping the Conagra Brands portfolioteam’s agility and results-orientation over the last severalthree years, and our accomplishments in fiscal 2020, we believe that we enter fiscal 20212023 with a solid foundation from which to continue to deliver for investors.
Fiscal 20202022 Compensation
For fiscal 2020,2022, the Human ResourcesHR Committee of our Board of Directors established an executive compensation program that was designed to promote attainment of our fiscal 20202022 operating plan and fiscal 2022 to 2024 long-term goals. More specifically, the program contained the following elements:
|
Incentive Compensation:
| |
• Base Salary
| • Fiscal
| |
• Health and Welfare Benefits
| • Fiscal 2022 – 2024 Long-term Incentive Plan (stock settled)
| |
• Retirement Benefits
|
|
2022 PROXY STATEMENT 4
In designing the program, the HR Committee chose to include a mix of compensation types (salary, benefits, cash-based incentives, and equity-based incentives) and a mix of performance periods (single year and multi-year) to promote long-term, strategic decision-making. This approach was also intended to minimize the likelihood that our executives would be motivated to pursue overly risky initiatives or unsustainable results.
89% Percentage of our CEO’s FY22 | 6x Our CEO’s stock ownership | >92% Level of shareholder support for our | ||||
Hedging or pledging of |
Clawback Policy in place to recoup |
|
|
As more fully described in the “Compensation Discussion and Analysis” section of thethis Proxy Statement, beginning on page 40, our Human Resourcesthe HR Committee considered the positive business outcomes described above in determining final payouts under our incentive programs with performance periods concluding in fiscal 2020.2022. The HR Committee further considered the importance of maintaining employee motivation and the impact that payouts under our fiscal year 2022 annual incentive plan might have on Conagra’s ability to retain and reward those employees necessary to help Conagra meet its financial and business objectives; the many operational and strategic accomplishments during fiscal 2022 in the face of evolving and dynamic challenges; and management’s decisive actions to partially mitigate the negative impacts of various external factors that were generally outside management’s control, including unexpected historic levels of input cost inflation and elevated supply chain operating costs that drove operating results to deviate from the plan. In light of these many considerations, the HR Committee applied 10.6 points of positive discretion to increase the payout from 89.4% to 100% under the fiscal year 2022 annual incentive plan pursuant to the original design of the plan. Our Chief Executive OfficerCEO and other senior executives named in this Proxy Statement received above100% target payouts subject in some instance to an individual performance modifier under both the fiscal year 20202022 annual incentive plan and no payout under the fiscal year 20182020 to fiscal year 20202022 cycle of the long-term performance share plan.
The Human ResourcesHR Committee believes that its fiscal 20202022 compensation decisions appropriately reflect its pay-for-performance philosophy.
3 CONAGRA BRANDS
Voting Items and Recommendations
At the 20202022 Annual Meeting of Shareholders, we are asking shareholders to vote on the following items:
| Proposal | Board’s Voting Recommendation | |||
| The election of 10 director nominees | FOR each nominee | |||
| ||||
| ||||
| ||||
| FOR | |||
| |||||
| FOR | ||||
The approval of an amendment to our Certificate of Incorporation to allow shareholders to act by written consent | FOR | ||||
| A shareholder proposal regarding the office of the Chair and the office of the Chief Executive Officer | AGAINST | ||||
5 2020 PROXY STATEMENTCONAGRA BRANDS 4
Our Corporate Citizenship
Our Environmental and Social Responsibility
At Conagra, we believe that when our people, our communities, and the environment are nourished and thriving, so are we. As a result, we take a strategic approach to corporate citizenship. We publish a Citizenship Report each yearfocus our efforts on the topics we believe are most material to the food industry, to our business, and make it available onto our website at https://www.conagrabrands.com/our-company/corporate-social-responsibility. The report details our citizenship strategy, which covers four focus areas:stakeholders: Good Food, Better Planet, Responsible Sourcing, and Stronger Communities. It also summarizes our accomplishments. We encourage you to read our entire Citizenship Report; a
A few highlights of our work follow.
Good Food
Consumers around the globe are increasingly focused on the sustainability of their diets. Conagra recognizes the Food and Agriculture Organization of the United Nations’ definition of sustainable diets, which takes into consideration the nutritional value, cultural context, and economic, social, and environmental impacts of consumer food choices. As part of our ongoing effort to promote the adoption of sustainable diets in the markets we serve, Conagra offers a variety of products made with plant protein. Plant-based brands and platforms are now significant parts of our business; in fiscal 2021, Conagra’s total ingredient buy by volume was approximately 79% plant-based. In October 2021, Conagra was acknowledged for our work in this area, receiving recognition by FAIRR as the top-ranked U.S. company in efforts to diversify toward more sustainable proteins.
|
| |
|
 |
Climate Change Mitigation-Our 2030 greenhouse gas emissions goals supplement the work we’ve been doing for years. Since 2009, we haveConagra has decreased Conagra’sour carbon footprint by 189,280nearly 300,000 metric tons by engaging the employees closest to the opportunities in our efforts. Our Sustainable Development Awards program is a cornerstone of our climate change mitigation strategy and uses an annual internal competition to recognize innovative ideas related to sustainable production. Conagra Brands is also a signatory of the Science-Based Targets Initiative, and we are in the process of setting science-based climate change targets in line with the Initiative’s protocols.tons.
Water Conservation – Our water conservation projects have conserved 3.53.6 billion gallons of water since 2009, including 12064 million gallons of water in fiscal year 2020. More2022. During fiscal 2022, more than 85% of our operational water comescame from areas on the lower end of the World Resources Institute water risk spectrum.
Zero Waste - In fiscal year 2020, eight2022, ten of our manufacturing facilities diverted more than 95% of waste materials from landfills through recycling and other innovative waste reduction measures.
A key enabler of our sustainability work is the direct engagement of those closest to our operations: our employees. Our Sustainable Development Awards program is a cornerstone of our Better Planet strategy and uses an annual, internal competition to recognize innovative projects related to sustainable production. Each year, our employees identify, design, implement, and then submit for recognition projects that save energy, conserve water, and reduce waste.
2022 PROXY STATEMENT 6
| Responsible Sourcing |
All of ourWe source goods and services are sourced in accordance with our Supplier Code of Conduct, under which suppliers are required to: reduce environmental impacts such as deforestation, greenhouse gas emissions, and waste generation; protect water resources through restorative or conservation efforts; support social needs in the communities in which they operate though philanthropic investment, diversity and inclusion efforts, and human rights practices; and support efforts to implement traceability of goods and services throughout the supply chain.
Conagra’sOur approach to product packaging takes environmental impacts into account while continuing to ensureprioritize food quality and safety. We are striving toward making 100%also focused on encouraging our supply chain partners to engage in sustainable agriculture practices. We recently partnered with U.S. Farmers and Ranchers in Action and other stakeholders to create the Decade of Ag Vision, a collaborative effort to restore our current plastic packaging renewable, recyclable or compostable by 2025.
5 CONAGRA BRANDS
 | Stronger Communities |
Corporate Ethics and Culture - Our Code of Conduct provides guideposts for how our employees and Board members mustare expected to conduct themselves when representing Conagra both inside and outside the workplace.company. We conduct annual trainings to ensure that employees are aware of our expectations and their obligations under the Code of Conduct.
We take pride in our culture—the most energized, high-impact culture in the food industry. We call it the Conagra Experience—a culture that supports and enableswe’re guided by our six Timeless Values:
Integrity: Doing the right things and doing things right
| • | Integrity: Doing the right things and doing things right |
External focus: Centering on the consumer, customer, competitor and investor
| • | External focus: Centering on the consumer, customer, competitor, and investor |
| • | Broad-mindedness: Seeking out and respecting varied perspectives; embracing collaboration and assuming positive intent |
Broad-mindedness: Rejecting silos and embracing disciplined curiosity
| • | Agility: Converting insights into action with the speed of an entrepreneur |
Agility: Converting insights into action with the speed of an entrepreneur
| • | Leadership by all: Simplifying, making decisions, inspiring others, and acting like an owner |
Leadership by all: Simplifying, making decisions, inspiring others, and acting like an owner
Focus on results: Leveraging a “refuse-to-lose” obsession with impact and value creation
| • | Focus on results: Leveraging a “refuse-to-lose” obsession with impact and value creation |
Human Rights, Diversity and Inclusion - We seek to leverage theour differences we bring to the table as a competitive advantage.
In fiscal year 2020,2022, Conagra received a perfect score of 100% on the Human Rights Campaign’s Corporate Equality Index for the sixtheighth year in a row.
Our CEO is an original signatory to |
During the fourth quarterCEO Action for Diversity and Inclusion™ Pledge.
As discussed above, we have developed a comprehensive strategy designed to support our efforts to increase representation of people of color and women in management roles and have published five-year representation goals for our workforce, including striving to double our people of color representation in management and middle-manager level roles versus our fiscal 2020 we beganbaseline, and striving to have 40% of our management level roles held by people identifying as women. We plan to use recruitment, advocacy, and development initiatives to enhance the diversity of our talent and create a process, currently underway, leveraging an external diversity and inclusion consultancy to identify specific opportunities that will have the most impact on our diversity and inclusion journey.
more inclusive workplace for all.
Employee Health & Safety - Our global Environment, Occupational Health and Safety Philosophy drives us towards continuous environment, health, and safety (“EH&S”) improvement, as measured by our leading environmental and safety indicators and implemented through our EH&S management approach. During fiscal year 2020, ourOur Occupational Safety & Health Administration incident rate during fiscal 2022 was 1.981.67 incidents per 100 full-time workers, which iswas below the industry average of 4.215.10 for companies in the food manufacturing sector.
2020 PROXY STATEMENT 6
Community Impact & Philanthropy - We believe in giving back to the communities in which we live and work. Employee volunteerism, product donations, and financial contributions are all a part of our community impact approach. Each year Conagra Brands employees participate in activities to recognize Hunger Action Month in September, participate in our United for Change fundraising campaign during the fall, and volunteer during our annual Month of Service in April. While we engage on an array of topics, we recognize the unique opportunity we have to a make a difference in the global effort to end food insecurity.
7 CONAGRA BRANDS
Conagra |
In fiscal |
Our Commitment to Good Governance
Our Board is committed to performing its responsibilities in a manner consistent with sound governance practices. It routinely reviews its processes, assesses the regulatory and legislative environment, communicates with investors, and adapts governance practices as needed to support informed, competent, and independent oversight on behalf of our shareholders. Examples of practices discussed in more detail throughout this proxy statement include the following:
Independent Board Leadership | The Board believes that independent Board leadership is a critical component of our governance structure. Since 2005, our Board Chair and CEO roles have been separate, The Board will select a lead director from the independent directors if the positions of Board Chair and CEO are held by the same person in the future. | |
Majority Voting in Uncontested Director Elections | To be elected in an uncontested election, a director nominee must receive the affirmative vote of a majority of the votes cast in the election. If an incumbent nominee is not elected, they must promptly tender their resignation, subject to acceptance by the Board. | |
Proxy Access | Our Amended and Restated Bylaws, (the “Bylaws”) permit shareholders to nominate directors through proxy access. Any shareholder, or group of up to 20 shareholders collectively, owning at least 3% of the outstanding shares of Conagra Brands common stock continuously for at least three years may nominate director candidates for inclusion in our proxy materials. | |
Board Refreshment | As of August 10, 2022, the average tenure of our Board members was approximately 6 years. No director may be nominated to a new term if he or she would be over age 72 at the time of the election. |
2022 PROXY STATEMENT 8
Board Diversity | The Board values diversity and strives to build a group that delivers diverse views, perspectives, backgrounds, and experiences. As of August 10, 2022: • 69% of the Board was female or ethnically diverse • Our average age was approximately 64 • 75% of our Board’s leadership positions were held by women | |
Board’s Role in Risk Oversight | Each of the Board and its key standing committees plays an active part in overseeing enterprise risk. The Board and its Committees routinely receive updates from management and external advisors on critical risk areas, including, but not limited to, overall enterprise risk, financial risk, cybersecurity and information technology risk, operational risk, food safety risk, human capital management risk, compliance risk, industry risk, climate risk, and ESG (as defined below) risk. | |
Board’s Role in Overseeing Environmental, Social, and Governance Issue (“ESG”) | The Nominating and Corporate Governance Committee is responsible for reviewing with management investor and other stakeholder expectations for the company’s ESG goals, policies and practices, and the company’s progress against ESG goals (except as reviewed by another committee), as well as its material corporate citizenship and social responsibility reports. | |
Board’s Role in Overseeing Human Capital Management | The HR Committee’s is responsible for reviewing, directly or with the full Board, human capital management programs and processes for the company, including the company’s approach to the following items for the Senior Leadership Team and employees generally: • talent acquisition, development, assessment, and retention; • employee health and wellness; • �� diversity and inclusion initiatives, goals and results; • employee policies and related compliance matters; and • the company’s culture and its connection to the company’s overall strategy. |
9 CONAGRA BRANDS
| ||||
“
– Sean Connolly
| ||||
|
7 CONAGRA BRANDS2022 PROXY STATEMENT 10
Currently, the Board consists of 1113 directors whose terms expire at the 20202022 Annual Meeting. Ms. Joie Gregor, Mr. Stephen Butler, oneRajive Johri and Mr. Craig Omtvedt, three of the Company’s current independentour directors, hashave turned 72, Conagra’s retirement age under its Corporate Governance Principles. As a result, Mr. Butler has not been re-nominated as a director andthese directors will not stand for re-election at the 20202022 Annual Meeting and their terms on the Board will expire at the conclusion of the 2022 Annual Meeting. Our Board thanks Ms. Gregor, Mr. ButlerJohri, and Mr. Omtvedt for histheir many years of exemplary service.service to Conagra.
Based on the recommendation of the Board’s Nominating and Corporate Governance Committee, the Board has nominated 10ten current directors, as named in this Proxy Statement, for election at the 20202022 Annual Meeting. Information about
The following biographies detail the age and principal occupations during at least the past five years for each ofdirector nominee; the 10 nominees is set forth on pages 9-17. year the nominee was first appointed to the Board; and the public company directorships they now hold and have held.
If elected, each of the directors will hold office until the Conagra Brands 20212023 Annual Meeting of Shareholders, and until their successors have been elected and qualified. We have no reason to believe that any of the nominees for director will be unable to serve if elected.
Anil Arora
Age:
Director Since:
July 17, 2018
Independent
Board Committees:
• At the conclusion of the 2022 Annual Meeting Mr. Arora will begin serving as a member of the Nominating and Corporate Governance Committee.
| Other public company directorships:
• Ping Identity Holding Corp. from 2022 to present • ON24, Inc. from 2022 to present • Envestnet, Inc. to 2021 • Yodlee, Inc. (as Chairman)
Experiences, qualifications, and skills considered in re-nominating Mr. Arora:
•Public Company Experience; Former C-Suite
•Technology
• M&A | Mr. Arora served as Vice
Prior to joining Yodlee, Inc. Mr. Arora served in various positions with Gateway, Inc.
Earlier in his career, Mr. Arora served in various strategy and marketing positions for The Pillsbury Company
|
9 CONAGRA BRANDS2022 PROXY STATEMENT 12
Thomas “Tony” K. Brown
Age:
Director Since:
October 15, 2013
Independent
Board Committees:
• Audit / Finance Committee • Nominating and Corporate Governance Committee | Other public company directorships:
• 3M Company
• Tower International, Inc.
Experiences, qualifications, and skills considered in re-nominating Mr. Brown:
• Public Company Experience; Former C-Suite Executive:Understanding of governance issues facing public companies from his board service to other public companies; broad leadership capabilities and insights from his experience in leadership roles at Ford Motor Company and other companies.
• International Expertise:Vast experience in global purchasing and supply chain at Ford Motor Company and other companies. | Mr. Brown served as Group Vice President, Global Purchasing with Ford Motor Company
Prior to joining Ford Motor Company, Mr. Brown served in leadership positions at United Technologies Corporation |
2020 PROXY STATEMENT 10
|
|
|
1113 CONAGRA BRANDS
Age:
Director Since:
February
Independent
Board Committees:
•
| Other public company directorships:
•
• PVH Corp. from 2005 until 2021 Experiences, qualifications, and skills considered in
• Public Company Experience; Former C-Suite Executive:Strong leadership capabilities and insights from experiences as Chair, CEO of PVH Corp. and through additional executive positions with PVH Corp. over two decades. Broad understanding of governance issues facing public companies from
• Market Facing
•Finance / Capital Management Expertise; Risk Management Expertise: Deep expertise in •M&A Experience: Significant transactional experiences as an executive and board member. |
| Mr. Chirico served as
Prior to joining PVH Corp., Mr. Chirico was a Partner at Ernst & Young LLP and ran its Retail and Apparel Practice Group. |
20202022 PROXY STATEMENT 1214
Connolly
Age:
Director Since:
Not Independent Board Committees: • Executive Committee | Other public company directorships: • The Hillshire Brands Company from June 2012 to August 2014 Experiences, qualifications, and skills considered in re-nominating Mr. Connolly: •Public Company Experience; Active C-Suite Executive: Broad understanding of governance issues facing public companies from his board service to other public companies as well as from his current board service to privately held S.C. Johnson & Son, Inc.; closest knowledge of our business and operations as a result of his service as the CEO and President of Conagra Brands. •Market Facing Experience: Extensive career focused on and committed to building leading consumer brands in the food industry. •M&A Experience: Transactional experience during his tenure with several companies in the consumer packaged goods industry. | Mr. Connolly has served as our President and CEO and a member of the Board since April 6, 2015. Previously, he served as President and CEO and as a director of The Hillshire Brands Company from June 2012 to August 2014. Before becoming CEO of Hillshire, Mr. Connolly served as Executive Vice President of Sara Lee Corporation and CEO, Sara Lee North American Retail and Foodservice. Prior to joining Sara Lee in anticipation of the spin-off of Hillshire, Mr. Connolly served as President of Campbell North America, the largest division of Campbell Soup Company; President, Campbell USA; and President, North American Foodservice for Campbell. Before joining Campbell in 2002, he served in various marketing and brand management roles at The Procter & Gamble Company. |
15 CONAGRA BRANDS
George Dowdie Age: 67 Director Since: March 1,
Independent
Board Committees:
• Audit / Finance Committee | Other public company directorships: • None Experiences, qualifications, and skills considered in re-nominating Mr. Dowdie: •Public Company Experience; Active C-Suite Executive: Strong leadership capabilities and insights from his experience in various leadership roles at Starbucks, Campbell Soup Company, Seagram Co., Ltd. and Frito-Lay; broad understanding of governance issues facing public companies from his tenure with other public companies. •Market Facing Experience: Significant experience in managing product development and innovation for leading consumer products in the food and beverage industries. •International Expertise: Substantial international business and management experience from leading supply chain, product development and food safety operations in organizations with operations in various geographic regions. | Mr. Dowdie has been the Executive Vice President of Global Supply Chain of Starbucks, Corp. since October 2020. His prior role with Starbucks was as the Senior Vice President of Global Food Safety, Quality & Regulatory (from January 2013 to October 2020). Prior to joining Starbucks, Mr. Dowdie held leadership roles at Campbell Soup Company, Seagram Co., Ltd., and Frito-Lay, related to supply chain management, food safety and quality strategy, research and development, new product development and commercialization, innovation management, and new business development. |
2022 PROXY STATEMENT 16
Fran Horowitz Age: 58 Director Since: August 2, 2021 Independent Board Committees: • Audit / Finance Committee
| Other public company directorships:
•
Experiences, qualifications, and skills considered in re-nominating • Public Company Experience;
• Finance / Capital Management
• International Expertise: Substantial international business and management experience from Abercrombie & Fitch Co. and prior service to
|
Hollister from October 2014 to December 2015. Prior to joining |
1317 CONAGRA BRANDS
Richard H. Lenny
Age:
Director Since:
March 17, 2009
Non-Executive
May 28, 2018
Independent
Board Committees:
• Executive Committee (Chair)
• Human Resources Committee
• Nominating and Corporate Governance Committee As Board Chair, Mr. Lenny is also deemed an ex-officio member of the Audit / Finance Committee. At the conclusion of the 2022 Annual Meeting Mr. Lenny will begin serving as Chair of the Nominating and Corporate Governance Committee.
| Other public company directorships:
• Discover Financial Services
• Illinois Tool Works Inc.
• McDonald’s Corporation
Experiences, qualifications, and skills considered in re-nominating Mr. Lenny:
•Public Company Experience; Former C-Suite Executive: Broad understanding of governance issues facing public companies from his board service to other public companies; strong leadership capabilities and insights, particularly with major consumer brands based on his lengthy career in the food industry.
•Market Facing Experience; International Expertise:Deep knowledge of strategy, marketing, and business development in the consumer products food industry domestically and abroad from his lengthy career in leadership roles in global food companies. | Mr. Lenny served as
Prior to joining The Hershey Company, Mr. Lenny served as Group Vice President of Kraft Foods, Inc.
Mr. Lenny served as non-executive |
20202022 PROXY STATEMENT 1418
Melissa Lora
Age:
Director Since:
January 4, 2019
Independent
Board
• Audit / Finance Committee (Chair) • Executive Committee
| Other public company directorships:
• KB Home
• MGIC Investment Corporation
Experiences, qualifications, and skills considered in re-nominating Ms. Lora:
•Public Company Experience; Former C-Suite Executive: Strong leadership capabilities and insights from her experience in various leadership roles at Taco Bell Corp.; broad understanding of governance issues facing public companies from her board service to other public companies, including as lead independent director of KB Home.
•Market Facing Experience; International Expertise: Substantial international business and management experience from service as President of Taco Bell International.
•Finance / Capital Management Expertise; Risk Management Expertise: Deep expertise in finance, risk, and compliance oversight | Ms. Lora served as President of Taco Bell International, a segment of Taco Bell Corp. |
1519 CONAGRA BRANDS
Ruth Ann Marshall
Age:
Director Since:
May 23, 2007
Independent
Board Committees:
• Executive Committee
• Human Resources Committee (Chair)
• Nominating and Corporate Governance Committee | Other public company directorships:
• Global Payments Inc.
• Regions Financial Corporation
Experiences, qualifications, and skills considered in re-nominating Ms. Marshall:
• Public Company Experience; Former C-Suite Executive: Strong leadership capabilities and insights from her service to MasterCard International, Inc., including marketing, account management and customer service; broad understanding of governance issues facing public companies from her board service to other public companies.
• Market Facing Experience; International Expertise; Technology Expertise: Significant domestic and international experience in growing the MasterCard Americas business, including through new product
• Finance / Capital Management Expertise; Risk Management Expertise: Expertise in finance from her service to MasterCard and on the Audit Committee of Regions | Ms. Marshall was President of the Americas at MasterCard International, Inc.
Prior to joining MasterCard International, Inc., Ms. Marshall served as Senior Executive Vice President of Concord EFS, Inc. |
20202022 PROXY STATEMENT 1620
Age:
Director Since:
Independent
Board Committees:
• Audit / Finance Committee
| Other public company directorships:
•
Experiences, qualifications, and skills considered in re-nominating
• Public Company Experience;
• Finance / Capital Management |
| ||||||||||
|
| Ms. Paulonis has served as President and CEO of Sally Beauty Holdings, Inc. since October 2021. Prior to Sally Beauty, Ms. Paulonis was CFO of Sprouts Farmers Market from February 2020 to October 2020. Prior to Sprouts Farmers Market, from September 2014 to January 2020, she held various leadership roles within the finance and IT functions at The Michaels Companies, including serving as EVP and CFO from August 2016 to January 2020. Prior to joining The Michaels Companies, Ms. Paulonis held leadership roles within the finance, financial planning, and strategy functions of PepsiCo, and worked for McKinsey & Co., driving strategic and operational transformation for companies in the consumer product and retail industries. |
|
1721 CONAGRA BRANDS
Our SkillsThe Board desires that its membership collectively hold a broad range of skills, education, experiences, qualifications, and Qualifications
We seek independent directors withcharacteristics, including diversity, that can be leveraged for the benefit of the company and its shareholders. Not only must individuals exhibit high standards for ethics and integrity. Individualsintegrity to be nominated for Board service, they must be willing to commit the time needed to faithfully carry out their directora director’s duties, including overseeing our strategy, CEO succession planning, and director refreshment. refreshment processes.
We also seek directorsto maintain a Board comprised predominately of independent directors. In addition to independence, we seek individuals with experience in the following areas:experiences, skills, and characteristics:
|
|
|
|
|
|
|
| |||||||
| Public company board experience | Active or former C-Suite executive | Market-facing experience | International expertise | Finance/capital management expertise | M&A experience | Technology expertise | Risk management expertise |
Our Nominating and Corporate Governance Committee plays a key role in identifying candidates for the Board who fulfill these requirements. More information on director recruitment and selection processes can be found in the “Director Nomination Process” section of this Proxy Statement.
The following matrix summarizes, ourfor each director nominees’ individual experiences,nominee and as of August 10, 2022, the skills and characteristics. This summary is not an exhaustive list of each nominee’s contributionsthey bring to the Board.Board, their age and Board tenure, their independence, and other qualities and characteristics that contribute to our goal of building a Board of diverse views, perspectives, backgrounds, and experiences.
Director
| Experiences and Skills
| Age
| Tenure (Years)
| Independent
|
Race / Ethnic
| Gender
| LGBTQ+1
| |||||||
Arora |         | 61 | 4 |  |
|
|
| |||||||
Brown | | 66 | 9 | | |
|
| |||||||
Chirico | | 65 | 2 | |
|
|
| |||||||
Connolly | | 57 | 7 | CEO |
|
|
| |||||||
Dowdie | | 67 | <1 | | |
|
| |||||||
Horowitz | | 58 | 1 | |
| |
| |||||||
Lenny | | 70 | 13 | |
|
|
| |||||||
Lora | | 60 | 3 | |
| |
| |||||||
Marshall | | 68 | 15 | |
| | | |||||||
Paulonis | | 50 | <1 | |
| |
| |||||||
Average/Total |
| 62 | 6 | 9 (90%) | 3 (30%) | 4 (40%) | 1 (10%) | |||||||
| 1 | Based on director nominees’ self-identified characteristics.
|
|
|
|
|
|
|
| ||||||||
|  | | | | | | | | ||||||||
| | | | | | | | |||||||||
| | | | | | | | |||||||||
| | | | | | | ||||||||||
| | | | | | | | | ||||||||
| | | | | | | ||||||||||
| | | | | | | | | ||||||||
| | | | | | | | |||||||||
| | | | | | | ||||||||||
| | | | | |
20202022 PROXY STATEMENT 1822
The Board also values diversity and strives to build a Board of diverse views, perspectives, backgrounds and experiences. While diversity is viewed broadly at Conagra Brands, the Board also measures its diversity along more traditional lines, including by examining:
|
|
|
|
|
|
|
|
 |
|
|
19 CONAGRA BRANDS
Director Refreshment
TheAs noted in the table above, our Board desires that its membership collectively holdrepresents a broad rangemix of skills, education,long-tenured directors and new perspectives, insights, expertise, and experiences, with six of our director nominees having a tenure on our Board of less than five years, and qualifications that can be leveraged for the benefit of the company and its shareholders. this is intentional.
The Board uses refreshment processes to enable it to evaluate the continued alignment of the Board’s membership with the needs of Conagra Brands. The Board’s refreshment processes involve reviewing and modifying the skills and characteristics required for membership. The Board also enables planned refreshment through its maintenanceretirement policy, pursuant to which no director may be nominated to a new term if he or she would be over age 72 at the time of a mandatory retirement agethe election. In accordance with this policy, Ms. Joie Gregor, Mr. Rajive Johri, and Mr. Craig Omtvedt have not been nominated for directors. As a result of our refreshment processes, our Board represents a mix of long-tenuredre-election as directors and directors who provide new and different insights, expertise and experiences. In fact, five of our current directors (including our CEO) are new toat the Board since 2015.2022 Annual Meeting.
For additional information on the director nomination process, please see “How We Govern – Nominating and Corporate Governance Committee – Director Nomination Process” below.
Director Independence
To be considered independent, the Board must affirmatively determine that a director has no material relationship with Conagra Brands. The Board has determined that 9 of our 10 nominees for director – directors Arora, Brown, Gregor, Johri, Lenny, Lora, Marshall, Omtvedt and Ostfeld – have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board also determined that Stephen Butler, who served as a director during fiscal 2020 but who will not stand for re-election at the 2020 Annual Meeting, has no material relationships with Conagra Brands and is independent within the meaning of applicable independence standards. Mr. Connolly is not considered to be independent due to his employment with Conagra Brands.
In making its independence determinations, the Board appliedapplies the listing standards of the New York Stock Exchange or NYSE,(the NYSE), and the categorical independence standards contained in our Corporate Governance Principles. The Board considers even immaterial relationships, including transactions, relationships, and arrangements with the company, in its decision-making process to ensure a complete view of each director’s independence.
The Board has determined that 12 of our 13 current directors – directors Arora, Brown, Chirico, Dowdie, Gregor, Horowitz, Johri, Lenny, Lora, Marshall, Omtvedt, and Paulonis – have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board has also determined that 9 of our 10 nominees for director - directors Arora, Brown, Chirico, Dowdie, Horowitz, Lenny, Lora, Marshall, and Paulonis - have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board also determined that Scott Ostfeld, who served as a director until April 2022, had no material relationships with Conagra Brands and was independent within the meaning of applicable independence standards. Mr. Connolly is not considered to be independent due to his employment with Conagra Brands.
To take a holistic approach to its independence determinations, the Board also reviewed our commercial relationships withbetween Conagra Brands and companies on whose boards members of the Boardour nominees served during fiscal 2020.2022. The relationships with these companies involved Conagra Brands’ purchase or sale of products and services in the ordinary course of business on arm’s-length terms in amounts and under other circumstances that did not affect the relevant directors’ independence under our Corporate Governance Principles or under applicable law and NYSE listing standards.
In addition to satisfying our independence standards, each member of the Audit / Finance Committee of the Board must satisfy an additional Securities and Exchange Commission or SEC,(SEC) independence requirement. This requirement provides that the member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than his or her director’s compensation and may not be an “affiliated person” of Conagra Brands. Each member of the Audit / Finance Committee satisfies this additional independence requirement.
The SEC and NYSE have also adopted heightened standards relating to the independence of members of the Human Resources Committee, which we refer to as the HR Committee. These standards require consideration of the source of HRHuman Resources Committee members’ compensation, including any consulting, advisory or other compensatory fees paid to an HRa Human Resources Committee member, and each HRHuman Resources Committee member’s affiliation with us, any of our subsidiaries or any affiliates of our subsidiaries. Each member of the HRHuman Resources Committee satisfies these additional independence requirements.
23 2020 PROXY STATEMENTCONAGRA BRANDS 20
The Board is committed to performing its responsibilities in a manner consistent with sound governance practices. It routinely reviews its processes, assesses the regulatory and legislative environment, communicates with investors, and adoptsadapts its governance practices as needed thatto support informed, competent, and independent oversight on behalf of our shareholders. Our Corporate Governance Principles provide a summary of these practices and are available on our website at http://www.conagrabrands.com/investor-relations/corporate-governance/principles. Highlights of our corporate governance practices include the following:
Fully Independent Key Committees
| Critical aspects of the Board’s work are handled by three key standing committees, each of which is comprised solely of independent directors: an Audit/Finance Committee, a Human Resources Committee, and a Nominating and Corporate Governance Committee.
| |
Annual Election of Directors
|
To promote
| |
Majority Voting in Uncontested Director Elections |
To be elected in an uncontested election, a director nominee must receive the affirmative vote of a majority of the votes cast in the election. If an incumbent nominee is not elected, he or she is required to promptly tender a resignation to the Board, subject to acceptance
| |
Regularly-Scheduled Executive Sessions |
The Board meets on a
|
21 CONAGRA BRANDS
90% Director Independence |
The Board has determined that 9 of our 10 nominees for
|
2022 PROXY STATEMENT 24
Independent Board Leadership |
The Board believes that independent Board leadership is a critical component of our governance structure. Since 2005, our Board Chair and CEO roles have been separate. The Board will select a lead director from the independent directors if the positions of Board Chair and CEO are held by the same person in the future.
| |
Director Attendance |
During fiscal
Board members are required to attend the company’s annual meeting of shareholders each year. All
| |
Board, Committee, | Each of the Board, the Audit / Finance Committee, the HR Committee, and the Nominating and Corporate Governance Committee conducts a self-evaluation of its performance on an annual basis. In addition, individual director evaluations are conducted
| |
Retirement Age
|
No director may be nominated to a new term if he or she would be over age 72 at the time of the election. As previously noted, in accordance with this policy, current
|
2020 PROXY STATEMENT 22
Orientation and Continuing Education |
We conduct an orientation program for each new director as soon as possible following his or her election or appointment. The orientation includes presentations by senior management with respect to a wide range of topics, including our strategic plans, governance practices, control environment, and human capital management priorities.
Board members receive materials and briefing sessions to continue their education on subjects that assist them in the discharge of their duties. We also provide reimbursement of expenses associated with our independent directors’ attendance at one outside director education program each fiscal year.
|
25 CONAGRA BRANDS
| Proxy Access |
Our
|
Board Leadership Structure
The Board believes that independent Board leadership is a critical component of our governance structure. Our Corporate Governance Principles require us to have either an independent Board Chair or, if the positions of Board Chair and Chief Executive OfficerCEO are held by the same person, aan independent lead independent director. Since 2005, our Board Chair and CEO roles have been separate. With separateThe Board believes this current structure of separating the roles of Chair and CEO roles,allows our CEO canto focus his time and energy on setting the strategic direction for the company, overseeingoversee daily operations, engagingengage with external constituents, developingdevelop our leaders, build our culture, and promotingpromote employee engagement at all levels of the organization. Meanwhile, this structure allows our independent Board Chair leadsto lead the Board in the performance of its duties by establishing agendas and ensuring appropriate meeting content, engaging with the CEO and senior leadership team between Board meetings on business developments, and providing overall guidance to our CEO as to the Board’s views and perspectives, particularly on the strategic direction of the company.
23 CONAGRA BRANDS
The Board also believes this leadership structure, coupled with independent directors serving as Chairs of each of our three key standing Board committees, enhances the Board’s effectiveness in providing independent oversight of material risks affecting the company and fulfilling its risk oversight responsibility.
Board Committees – Overview
The Board has established four standing committees: the Audit / Finance Committee, the Executive Committee, the HR Committee, and the Nominating and Corporate Governance Committee. The Audit / Finance Committee, HR Committee and Nominating and Corporate Governance Committee operate under written charters that have been approved by the full Board; each of these three committees is comprised entirely of independent directors.
2022 PROXY STATEMENT 26
Membership on each of the Board’s standing committees as of August 3, 202010, 2022 is as follows:
| Name | Audit / Finance Committee | Executive Committee | HR Committee | Nominating and
| ||||
Anil Arora | | |||||||
Thomas K. Brown | | | ||||||
Stephen G. Butler(1) | Chair | |||||||
Sean M. Connolly | | |||||||
Joie A. Gregor | | | Chair | |||||
Rajive Johri | | | ||||||
Richard H. Lenny | ex officio | Chair | | | ||||
Melissa Lora(1) | | |||||||
Ruth Ann Marshall | | Chair | | |||||
Craig P. Omtvedt | | |||||||
Scott Ostfeld | | |||||||
Total Meetings in FY2020 | 10 | -- | 4 | 4 | ||||
| Name | Audit / Finance Committee | Executive Committee | HR Committee | Nominating and Corporate Governance Committee | ||||
Anil Arora | | |||||||
Tony Brown | | | ||||||
Manny Chirico | | |||||||
Sean M. Connolly | | |||||||
George Dowdie | | |||||||
Joie A. Gregor(1) | | | Chair | |||||
Fran Horowitz | | |||||||
Rajive Johri(1) | | | ||||||
Richard H. Lenny | Chair | | | |||||
Melissa Lora | Chair | | ||||||
Ruth Ann Marshall | | Chair | | |||||
Craig P. Omtvedt(1) | | |||||||
Denise A. Paulonis(2) | | |||||||
Total Meetings in FY2022 | 10 | -- | 5 | 6 | ||||
| (1) |
|
| (2) | Ms. Paulonis became a member of the |
Executive Committee
The Executive Committee exists to act on behalf of the Board between meetings as exigency requires or at the request of the full Board. Its membership includes the Board Chair, the Chairs of each other standing Committee, and the CEO. During fiscal 2022, its membership was comprised of Directors Connolly, Gregor, Lenny (who served as Committee Chair), Lora, and Marshall. It did not meet.
27 2020 PROXY STATEMENTCONAGRA BRANDS 24
Audit / Finance Committee
Committee Members:
| Primary Responsibilities
| |||||||
George Dowdie Fran Horowitz*
Rajive
Melissa
Craig P.
Denise A. Paulonis
* |
| |||||||
Financial Expertise and Financial Literacy
Each member ofThe Board has determined that each director who served on the Audit / Finance Committee during fiscal 2022 is financially literate within the meaning of NYSE rules and the Board has determined that directors Arora, Butler, Johri, Lora and Omtvedt are qualified as audit committee financial experts within the meaning of SEC regulations. All directors serving on the Audit / Finance Committee are independent in accordance with SEC rules, NYSE listing standards, and the company’s independence standards. The Board also determined that directors Chirico, Johri, Lora, Omtvedt, and Paulonis are qualified as audit committee financial experts within the meaning of SEC regulations.
Related-Party Transactions
The Audit / Finance Committee has adopted a written policy regarding the review, approval, and ratification of related-party transactions. the Audit / Finance Committee’s responsibility for the review, approval, ratification, and oversight of related-party transactions (generally, transactions involving an amount in excess of $120,000 in which the company was, is, or will be a participant and in which a related persondirector, director nominee, executive officer, more than 5% shareholder, or immediate family member of any of the foregoing had, has or will have a direct or indirect material interest). Under the
2022 PROXY STATEMENT 28
policy, all related-party transactions must be pre-approvedare subject to reasonable prior review and approval by the Audit / Finance Committee. In circumstances where it is not reasonable or practical to wait until the next Audit / Finance Committee unless circumstances make pre-approval impracticable. Inmeeting to review a proposed related-party transaction, the latter case, managementchair of the Audit / Finance Committee may enter into the transaction, but the transaction remains subjectreview and approve such related-party transaction. Any such approval must be reported to ratificationand ratified by the Audit / Finance Committee at its next regular, in-person meeting.
In determining whether to approve or ratify a related-party transaction, the Audit / Finance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related-party’s interest in the transaction. No director is permitted to participate in any approval of a related-party transaction in which he or she is a related party, except that the Board member will provide all material information concerning the related party transaction to the Audit / Finance Committee. On at least an annual basis, the Audit / Finance Committee reviews and assesses ongoing related-party transactions to determine whether they comply with the company’s guidelines and that the relationships remain appropriate. All related-party transactions are disclosed to the full Board.
25 CONAGRA BRANDS
During fiscal 2020, one2022, no related party transactiontransactions arose. David B. Biegger is the company’s Executive Vice President and Chief Supply Chain Officer. One of Mr. Biegger’s immediate family members is employed by the company as a Brand Manager and earned total compensation in excess of $120,000. The immediate family member’s position does not report, directly or indirectly, to Mr. Biegger. In addition, the individual is compensated in a manner that is appropriate for their responsibilities and experience and in accordance with standard compensation practices available to other individuals in comparable roles. The relationship described was reviewed and ratified in accordance with our policy for review of transactions with related persons.
Executive Committee
|
| |||||||
|
| |||||||
Human Resources Committee
Committee Members:
| Primary Responsibilities
| |||||||
Anil Arora Joie A.
Richard H. Lenny
Ruth Ann Marshall, Chair
|
| |||||||
29 2020 PROXY STATEMENTCONAGRA BRANDS 26
Executive and Director Compensation
The HR Committee has retained authority over the determination of executive and non-employee director compensation, subject only to the further involvement of the other independent directors with respect to the approval of the overall compensation for non-employee directors and any base salary change for the CEO.directors. The HR Committee may delegate its responsibilities to subcommittees comprised of one or more HR Committee members or to selected members of management, subject to requirements of our by-lawsBylaws and applicable laws, regulations, and the terms of shareholder-approved compensation plans. Additional information about the HR Committee’s processes for determining executive compensation, andas well as the role of executive officers and the HR Committee’s compensation consultant in those determinations, can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Human Capital Management
In addition to leading the Board’s oversight of senior executive succession planning, the HR Committee takes an active interest in making sureoversees management’s work related to helping employees at all employees arelevels of the company remain fully engaged and realizingrealize their potential. To accomplish this,The HR Committee’s review of the company’s human capital management initiatives includes, but is not limited to, the following items for the Senior Leadership Team and employees generally:
| • | talent acquisition, development, assessment, and retention; |
| • | employee health and wellness; |
| • | diversity and inclusion initiatives, goals and results; |
| • | employee policies and related compliance matters; and |
| • | the company’s culture, and its connection to the company’s overall strategy. |
The HR Committee receives regular reports from management and, for some topics, external advisors, on the diversity pipeline withincompany’s talent strategy. During fiscal 2022, the company and initiatives underway focused on improving the diversity of the company’s workforce. Committee reviewed topics including:
| • | our diversity and inclusion strategy; |
| • | trends in workforce and workplace management, particularly in light of COVID-19 and dynamic labor market; and |
| • | opportunities to further leverage technology in developing workforce analytics. |
The HR Committee also reviews the human capital strategic plan and progress on work underway to ensurehelp Conagra achievesachieve its vision of having the most energized, highest impact culture in food.
Compensation Committee Interlocks and Insider Participation
The Committee members set forthindividuals listed in the table above as well as Mr. Johri,are the only individuals to have served as members ofon the HR Committee during fiscal 2020.2022. During fiscal 2020, none2022, no member of the currentHR Committee was an employee, officer, or former officer of the company. None of our executive officers of Conagra Brands or any of its current employees served during fiscal 2022 on the compensation committee (or equivalent) or the board of directors or compensation committee (or other committee serving an equivalent function) of anotherany entity whosethat had an executive officer(s) served onofficer serving as a member of our Board or the HR Committee or the Board of Conagra Brands.Committee.
Additional information about the roles and responsibilities of the HR Committee is provided in the “Compensation Discussion and Analysis” section of this Proxy Statement.
2022 PROXY STATEMENT 30
Nominating and Corporate Governance Committee
Committee Members:
| Primary Responsibilities
| |||||||
Joie A. Gregor,
Rajive
Richard H.
Ruth Ann Marshall * Having reached Conagra’s standard retirement age for directors as of the 2022 Annual Meeting, Ms. Gregor and Mr. Johri are not eligible for nomination for re-election as directors at the 2022 Annual Meeting. At the conclusion of the 2022 Annual Meeting Mr. Lenny will begin serving as Chair of the Nominating and Corporate Governance Committee, and Mr. Anil Arora and Ms. Melissa Lora will begin serving as members of the Nominating and Corporate Governance Committee. |
| |||||||
27 CONAGRA BRANDS
Director Nomination Process
The Nominating and Corporate Governance Committee considers Board candidates suggested by Board members, management, and shareholders. During fiscal 2020,2022, the Nominating and Corporate Governance Committee also retained a third-party search firm to identify director candidates. The Nominating and Corporate Governance Committee provided the third-party search firm with guidance as to the skills, experience and qualifications that the Nominating and Corporate Governance Committee was seeking in potential candidates, including requesting that the initial pool of candidates presented by the third-party search firm include gender and racially/ethnically diverse candidates. Based on this guidance, the search firm identified candidates for the Nominating and Corporate Governance Committee’s consideration. Shareholders may also directly nominate candidates pursuant to our “proxy access” bylaws, as described below. Shareholders wishing to submit candidates for election as directors must notify our Corporate Secretary in writing by delivering or mailing a notice to our principal executive offices at 222 Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654. See “— Ability of Shareholders to Nominate Directors via Proxy Access” and “Our Annual Meeting of Shareholders — Our 2021 Annual Meeting of Shareholders” for further details regarding the procedures for submission of director nominations by shareholders.
When a potential candidate is brought to the Board’s attention, the Nominating and Corporate Governance Committee makes an initial determination as to whether to conduct a full evaluation of the individual. This initial determination is based on whether additional Board members are necessary or desirable. It is also based on whether,Also based on the information provided or otherwise available to the Nominating and Corporate Governance Committee, the initial determination is based on whether the prospective nominee is likely to satisfy the evaluation factors described below. If the Nominating and Corporate Governance Committee determines that additional consideration is warranted, it may request a third-party to gather additional information about the prospective director candidate. The Nominating and Corporate Governance Committee may also elect to interview a candidate.
Although the Nominating and Corporate Governance Committee does not have specific minimum qualifications that must be met for a candidate to be nominated as a director, the Nominating and Corporate Governance Committee evaluates each prospective director candidate against the following standards and qualifications, among others, including those set forth in our Corporate Governance Principles, including, but not limited to:Principles:
| • | Board skill needs, taking into account the qualifications and skills outlined in the “How We are Selected” section of this Proxy Statement and the experience of current Board members; |
| • | the candidate’s background, including demonstrated high standards of ethics and integrity, as well as the candidate’s ability to work toward business goals with other Board members; |
Board skill needs, taking into account the qualifications and skills outlined on page 18 of this Proxy Statement and the experience of current Board members; 31 CONAGRA BRANDS
the candidate’s background, including demonstrated high standards of ethics and integrity, as well as the candidate’s ability to work toward business goals with other Board members;
| • | diversity, including diversity of race, ethnicity, gender and age, and the extent to which the candidate reflects the composition of our constituencies; |
diversity, including the extent to which the candidate reflects the composition of our constituencies;
| • | whether the candidate has sufficient time to effectively carry out the duties of a director; |
whether the candidate has sufficient time to effectively carry out the duties of a director;
| • | the candidate’s qualifications as independent and ability to serve on various committees of the Board; and |
the candidate’s qualifications as independent and ability to serve on various committees of the Board; and
business experience, which should reflect a broad level of experience at the policy-making level.
| • | business experience, which should reflect a broad level of experience at the policy-making level. |
In evaluating potential director nominees, the Nominating and Corporate Governance Committee assesses whether the Board, collectively, represents diverse views, perspectives, backgrounds, and experiences that will enhance the Board’s and our effectiveness. The Nominating and Corporate Governance Committee seeks directors who have qualities to achieve the goal of a well-rounded, diverse Board as a whole, including through the consideration of diversity in professional experience, skills, board tenure, race, ethnicity, gender, and age.
After completing its evaluation process, the Nominating and Corporate Governance Committee makes a recommendation to the Board as to who should be nominated, and the Board determines the director nominees after considering the Nominating and Corporate Governance Committee’s recommendations.
This evaluation procedure is the same for all candidates, including director candidates identified by shareholders.
During fiscal 2022, George Dowdie joined the Board. Mr. Dowdie was identified as a director candidate by a third-party search firm. After evaluating Mr. Dowdie in the manner described above and considering input from our other independent directors and our CEO, the Nominating and Corporate Governance Committee identified Mr. Dowdie as a director candidate and recommended Mr. Dowdie as a nominee to the Board. The evaluation process for nomineesBoard unanimously approved the recommendation.
During early fiscal 2023 and prior to the filing of this Proxy Statement, Denise A. Paulonis joined the Board. Ms. Paulonis was identified as a director candidate by a third-party search firm. After evaluating Ms. Paulonis in the manner described above and considering input from our other independent directors and our CEO, the Nominating and Corporate Governance Committee identified Ms. Paulonis as a director candidate and recommended by shareholders does not differ fromMs. Paulonis to the process set forth above.Board. The Board unanimously approved the recommendation.
Ability of Shareholders to Nominate Directors via Proxy Access. Access or Advance Notice
Shareholders wishing to submit candidates for election as directors must notify our Corporate Secretary in writing by delivering or mailing a notice to our principal executive offices at 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654. Such submissions must comply with the requirements set forth in our Bylaws, including advance notice procedures.
If a shareholder or group of shareholders wishes to nominate a candidate directly, they may also do so in accordance with the provisions set forth in our by-laws. In July 2020,Bylaws. Specifically, our Board amended our by-laws toBylaws permit any shareholder, or group of up to 20 shareholders collectively owning 3% or more of our outstanding shares of common stock continuously for at least three years to nominate and include in our proxy materials director nominees for election to the Board. A shareholder or shareholders, as applicable, can nominate up to
2020 PROXY STATEMENT 28
the greater of:
20% of the total number of directors on the Board, rounding down to the nearest whole number, and
| • | 20% of the total number of directors on the Board, rounding down to the nearest whole number, and |
two directors,
| • | two directors, |
all in accordance with the requirements set forth more fully in our by-laws.Bylaws.
Under our by-laws,Bylaws, requests to include shareholder-nominated candidates for director in our proxy materials through this process must be received no earlier than 150 days and no later than 120 days beforeprior to the first anniversary of the date that we issuedon which our definitive proxy statement for the previousprior year’s annual meeting of shareholders.
See “Our Annual Meeting of Shareholders – Our 2021 Annual Meeting of Shareholders – Other Shareholder Proposalsshareholders was first released to be Presented at our 2020 Annual Meeting” for further details regarding the procedures for submission of director nominations by shareholders.
Forum Bylaw. In December 2019, our Board amended the by-laws to designate the Court of Chancery of the State of Delaware, or the federal district court for the District of Delaware if the Court of Chancery does not have jurisdiction, as the forum for litigation related to the following types of proceedings:
Derivative actions or proceedings brought on behalf of the Company
Actions asserting a claim of breach of fiduciary duty owed by any director, officer or other employee to the Company or its stockholders or creditors;
Any action asserting a claim under the General Corporation Law of the State of Delaware;
Any action asserting a claim under the Certification of Incorporation or Bylaws of the Company; and
Any action asserting a claim governed by the internal affairs doctrine.
The Company adopted this amendment because the Company believes the best courts to decide matters of Delaware law are the courts of Delaware. Additionally, the amendment is designed to reduce the cost and complexity of the Company’s defense of litigation. The Company had previously been sued on the same underlying facts in multiple courts and in multiple jurisdictions simultaneously.
The Board’s Role in Risk Oversight
Our senior leadership is responsible for identifying, assessing, and managing our exposure to risk. The Board and its committees play an active role in overseeing management’s activities and ensuring thatevaluating whether management’s plans are balanced from a risk/reward perspective. The Board and its committees perform this oversight through the followinga variety of mechanisms.
2022 PROXY STATEMENT 32
Board-Level Discussions
Each fiscal year, the Board reviews and discusses our strategic plan and the longer-term risks and opportunities we face. The Board routinely receives reports from significant business units and functions, and these presentations include a discussion of the business, regulatory, compliance, operational, and other risks associated with planned strategies and tactics. The Board also receives regular reports regarding the activities of management’s Enterprise Risk Management Committee, which focuses on assessing and monitoring enterprise-wide risk.risk, including cybersecurity and information technology risks.
Without the right talent, we cannot implement the strategies we devise. Oversight of the company’s approach to and investment in human capital management and talent development are thus key governance matters for the Board. Directly, and through its HR Committee, the Board engages regularly with management on human capital matters. Specific HR Committee activities (noted below) are supplemented by full Board actions. For example, the full Board receives an annual succession planning presentation from management during which potential successors to senior leadership roles are discussed, arranges opportunities to engage directly with emerging talent in the organization, and discusses the evolution of the ConagraConagra’s culture in the context of the CEO’s annual goals and objectives.
29 CONAGRA BRANDS
Audit / Finance Committee Oversight
The Audit / Finance Committee’s charter requires it to review our processes for identifyingreports from management and managingdiscussing policies with respect to significant enterprise-wide risks facing the company, including, but not limited to financial risks (suchsuch as derivative and treasury risks),risks and associated regulatory requirements, cybersecurity and information technology risks (including review of the state of the company’s cybersecurity, emerging cybersecurity developments and threats, and the company’s strategy to mitigate cybersecurity risks), and operational risks, and to oversee ourhow such risks are being identified, assessed and managed by the company and management. At least annually, the Audit / Finance Committee reviews and recommends for approval of the full Board the membership of the company’s Enterprise Risk Management Committee. In addition, the Audit / Finance Committee is responsible for overseeing risks related to the company’s financial condition (including matters such as liquidity, margin management, debt levels, credit ratings and interest rate risk exposure), capital structure including borrowing, liquidity,(including sources and allocationuses of capital.capital), and long-term financing strategy. The Audit / Finance Committee also oversees our management of financial risks by, among other things, reviewing our significant accounting policies and the activities of management’s Enterprise Risk Management Committee, and Risk Oversight Committee (which focuses on financial risk related to commodities, foreign currency, interest rate, credit, insurable risk, risk of loss and counterparty risk), maintaining oversight of our Internal Audit function, holding regular executive sessions with our Chief Financial Officer and Controller, our head of Internal Audit, and our independent auditors, and receiving regular legal and regulatory updates.updates from legal counsel. Our management provides an enterprise risk management report to the Audit / Finance Committee on a semi-annual basis.
The Chair of the Audit / Finance Committee reports to the Board on itsthe Committee’s activities.
Human Resources Committee Oversight
The HR Committee reviews the company’s leadership development activities to ensureshape appropriate succession planning occurs.planning. This includes the establishment of an emergency succession protocol in the event of the CEO’s sudden incapacity or departure.
33 CONAGRA BRANDS
The HR Committee also reviews the relationship between the company’s compensation programs and risk. The Chair of the HR Committee reports to the Board on its activities. The HR Committee has also adoptedrisk and maintains a series of policies and practices to reduce risk in our compensation programs. These policies and practices include, but are not limited to, the following:
| Annual Advisory Vote on Named Executive Officer Compensation |
Consistent with our shareholders’ preference, last indicated at the 2017 Annual Meeting of Shareholders, our shareholders are given an opportunity every year to vote, on an advisory basis, to approve our named executive officer compensation. | |||
Stock Ownership Guidelines for Directors and Senior Leaders | Directors and senior leaders across the company are subject to stock ownership guidelines. All non-employee directors are expected to acquire and hold during their tenure shares of our common stock with a value of at least $500,000.
Each senior leader across the company is subject to stock ownership guidelines equal to a multiple of that person’s salary. | |||
Anti-Pledging / Hedging Policy | Our directors and executive officers, including our named executive officers, are prohibited from pledging their shares of company stock or hedging their ownership of company stock, including by trading in publicly-traded options, puts, calls, or other derivative instruments related to company stock or debt. | |||
Clawback Policy | We have a clawback policy that requires excess amounts paid to any of our senior officers under our incentive compensation programs to be recovered in the event of a material restatement of our financial statements for fiscal 2013 or later fiscal years, when such restatement results from the fraudulent, dishonest, or reckless actions of the senior officer. | |||
2020 PROXY STATEMENT 30
The Chair of the HR Committee reports to the Board on the Committee’s activities.
Nominating and Corporate Governance Committee Oversight
The Nominating and Corporate Governance Committee assists the Board in managing risks associated with Board organization, membership, and structure. It
The Committee also assists management in the oversight of reputationalESG-related risks. The Committee reviews the company’s policies and programs related to material corporate citizenship and social responsibility and public policy issues, such as sustainability, environmental responsibilitysustainability and philanthropic activities.giving, and reviews with management progress against ESG goals. The Nominating and Corporate Governance Committee also oversees the modest political activities of the company, including political contributions and lobbying expenditures, to ensureconfirm they focus on adding shareholder value and enhancing our position as a good corporate citizen. We publish a report of these activities on our website.
2022 PROXY STATEMENT 34
The Chair of the Nominating and Corporate Governance Committee reports to the Board on itsthe Committee’s activities.
Because issues related to risk oversight often overlap, certain issues may be addressed at both the committee and Board level.
Investor Engagement
We conductOur management team conducts investor outreach throughout the year. Our efforts help ensure that management and the Board understand and consider the issues that matter most to our shareholders. Examples of our approach include the following:
| • | Management regularly attends investor conferences, holds one-on-one and small group meetings and calls with investors, and also interacts with investors and the analyst community during our quarterly earnings conference calls. |
| • | On three occasions over the last six calendar years, management has hosted a large-scale investor day event and webcast the presentations live. |
| • | Our Investor Relations team is available to respond to investor inquiries and can be reached via email at IR@conagra.com or by telephone at (312) 549-5002. |
| • | At each regular meeting of the Board of Directors, management apprises the Board of the most up-to-date perspectives of the investment community. |
We welcome opportunities to engage and receive feedback directly from our shareholders and allowother key stakeholders and believe that such engagement is critical to our effectiveness. You may contact any of our directors individually, any Committee of the Board, our independent directors as a group, our Chair of the Board, or the Board generally by writing to:
Chair of Conagra Brands Board of Directors
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Communications are reviewed by the Corporate Secretary and, if appropriate, by Internal Audit, and forwarded to the addressee(s). The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to Conagra Brands or our business, or determined to pose a possible security risk to the addressee.
You may also communicate with us by attending the 2022 Annual Meeting and voting. We encourage you to effectively address them. Management regularly attends investor conferences, holds one-on-one and small group meetings and calls with investors, and also hasshare your feedback by voting on the opportunity to directly interact with investors and analysts during our quarterly earnings conference calls. On two occasions over the last five years, management has also hosted a large-scale investor day event at our headquarters and webcast the presentations live. Investors and analysts may email IR@conagra.com or call (312) 549-5002 to contact our Investor Relations Team.items described in this Proxy Statement.
Corporate Governance Materials Available on Our Website
To learn more about our governance practices, you can review any of the following documents at http://www.conagrabrands.com/investor-relations/corporate-governance:corporate-governance:
• Audit / Finance Committee Charter | • | |
• Nominating and Corporate Governance Committee Charter | • | |
|
| |
| ||
• HR Committee Charter | • Political Activity Disclosure | |
• Code of Ethics for Senior Corporate Officers | • Code of Conduct | |
• Procedures for communicating with the Board | ||
| ||
We promptly post updates to these documents on our website. The information on our website is not, however, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference into any of our other filings with the SEC. These documents are also available in print to any shareholder who requests them from the Corporate Secretary.
31 35 CONAGRA BRANDS
We welcome opportunities to engage and receive feedback from our shareholders and other important stakeholders and believe that such engagement is critical to our effectiveness. You may contact any of our directors individually, any Committee of the Board, our independent directors as a group, our Chairman of the Board, or the Board generally by writing to:
Conagra Brands Board of Directors
c/o Corporate Secretary, Conagra Brands, Inc.
222 Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Communications are compiled by the Corporate Secretary and forwarded to the addressee(s). The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to Conagra Brands, or Conagra Brands’ business or determined to pose a possible security risk to the addressee.
You may also attend the 2020 Annual Meeting, reach out to our Shareholder Services line and share information with our Investor Relations team. See “Investor Engagement” above.
We encourage you to share your feedback by voting on the voting items described in this Proxy Statement. We are attuned to input from each of these sources and encourage your feedback.
We use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on the Board. On an annual basis, the HR Committee recommends the non-employee director compensation program to the Board for approval. In setting director compensation, the HR Committee receives input from FWFrederic W. Cook & Co., Inc. (or “FW Cook”), its independent compensation consultant, on factors including the time commitment and skill level required to serve on the Board, as well as broader market practices. In addition, our Conagra Brands, Inc. 2014 Stock Plan, as amended (“2014 Stock Plan”) places a limit on the equity awards that may be awarded to each non-employee director in any fiscal year.
A summary of non-employee director compensation for fiscal 20202022 is set forth below.
Non-Employee Director Compensation — Directors Other than the ChairmanBoard Chair
The following table summarizes the compensation program for our non-employee directors other than the ChairmanBoard Chair that was in effect during fiscal 2020. No changes were made to the compensation program described below from fiscal 2019 to fiscal 2020.2022.
Annual Cash Retainer: | $100,000 per year(1) | |
| Annual Committee Chair Retainer(2): |
$20,000 for each Committee Chair(1) | |
Meeting Fees: | None, unless the director’s attendance is required at more than a total of 24 Board and Committee meetings during a fiscal year. A fee of $1,500 is paid for each meeting attended in excess of 24 meetings and at which a director’s attendance was | |
2020 PROXY STATEMENT 32
| required. | ||
Equity Compensation: | A grant of restricted stock units, or RSUs, with a value equal to | |
| (1) | Directors who join the Board or who are elected as the Chair of a Committee after the start of a fiscal quarter receive a prorated retainer for that quarter based on the number of days served. |
| (2) | Excludes the Executive Committee. No retainer is paid for service to this Committee. |
| (3) | Directors who join the Board after the start of a fiscal year receive a prorated grant for that year based on the number of partial and full months served. |
All non-employee directors (other than the Chairman)Chair) serving as of the first trading day of fiscal 20202022 received 5,0544,367 RSUs on May 28, 2019June 1, 2021 (targeted value of $150,000)$165,000). These RSUs vested on May 28, 2020.June 1, 2022. In connection with her appointment to the Board in August 2021, Ms. Horowitz received 4,109 RSUs on September 1, 2021 (target value of $137,500), which RSUs are scheduled to vest on September 1, 2022. In connection with his appointment to the Board in March 2022, Mr. Dowdie received 1,242 RSUs on April 1, 2022 (target value of $41,250), which RSUs are scheduled to vest on April 1, 2023. In connection with her appointment to the Board in August 2022, Ms. Paulonis will receive a certain number of RSUs on September 1, 2022 with a target value of $137,500, which RSUs will be scheduled to vest on September 1, 2023. The exact number of RSUs to be granted to Ms. Paulonis will be determined on September 1, 2022.
Vesting of the RSUs in the non-employee director compensation program is accelerated in the event of death or permanent disability. If a director is no longer serving on the Board one year from the date of grant, vesting is prorated 25% for each fiscal quarter during which the director served for any amount of time.
Dividend equivalents are paid on the RSUs at the regular dividend rate in shares of our common stock.
2022 PROXY STATEMENT 36
Non-Employee Director Compensation — ChairmanBoard Chair
In lieu of the elements described above, the Chairman’sBoard Chair’s compensation for fiscal 20202022 consisted of a grant of RSUs with a targeted value equal to $425,000. The number of RSUs granted, 14,319,11,248, was determined by dividing $425,000 by the average closing price of our common stock on the NYSE for the 30 trading days prior to the grant date of May 28, 2019.June 1, 2021. The material terms of the RSUs were identical to those described above for the other non-employee directors other than the Chairman.directors.
Other Non-Employee Director Compensation Programs
In addition to the cash payments and equity awards described above, all non-employee directors were entitled to participate in the following programs during fiscal 2020:2022:
Medical plan access was available to directors who were enrolled in the plan by December 22, 2014, with the cost of the premium borne entirely by the director. Directors who were not enrolled by that date were not eligible to participate;
| • | A matching gifts program was available to all non-employee directors. Conagra Brands matched up to $10,000 of a director’s charitable donations made during the fiscal year; and |
A matching gifts program was available to all non-employee directors. Conagra Brands matched up to $10,000 of a director’s charitable donations made during the fiscal year; and
A nonqualified deferred compensation plan was available to all non-employee directors. This plan provided non-employee directors the ability to defer receipt of their cash or stock compensation. This program did not provide above-market or preferential earnings (as defined by SEC rules).
| • | A nonqualified deferred compensation plan was available to all non-employee directors. This plan provided non-employee directors the ability to defer receipt of their cash or stock compensation. This program did not provide above-market or preferential earnings (as defined by SEC rules). |
Director Stock Ownership Requirements
The Board has adopted stock ownership requirements for its non-employee directors. All non-employee directors including the Chairman, are expected to acquire and hold shares of common stock of Conagra Brands during their tenure with a value of at least $500,000. All directors must acquire this ownership level within five years following their first election to the Board. Shares personally acquired by the non-employee directors through open market purchases, orshares acquired upon settlement of RSUs, and shares acquired upon the deferral of fees, are counted toward the ownership requirement. Unexercised stock options are not counted. Prior to meeting the guideline, non-employee directors agree not to sell any shares of
3337 CONAGRA BRANDS
Non-employee directors agree not to sell any shares of company common stock until they have reached the guideline. AllDuring fiscal 2022, all of our Board members meetmet the stock ownership guidelines or have followed the retention requirements.requirement.
Non-Employee Director Compensation Table – Fiscal |
Name
| Fees Earned or Paid in
| Stock Awards ($)(1)
| All Other Compensation ($)(2)
| Total ($)
| Fees Earned or Paid in Cash ($)
| Stock Awards ($)(1)
| All Other Compensation ($)(2)
| Total ($)
| ||||||||
Anil Arora | 100,000 | 143,837 | 2,500 | 246,337 | 100,000 | 166,732 | 7,500 | 274,232 | ||||||||
Thomas K. Brown | 100,000 | 143,837 | 10,000 | 253,837 | 100,000 | 166,732 | - | 266,732 | ||||||||
Stephen G. Butler | 120,000 | 143,837 | 10,000 | 273,837 | ||||||||||||
Manny Chirico | 100,000 | 166,732 | - | 266,732 | ||||||||||||
George Dowdie (3) | 25,000 | 42,327 | - | 67,327 | ||||||||||||
Joie A. Gregor | 120,000 | 143,837 | 10,000 | 273,837 | 120,000 | 166,732 | 10,000 | 296,732 | ||||||||
Fran Horowitz (4) | 82,692 | 137,364 | 10,000 | 230,056 | ||||||||||||
Rajive Johri | 100,000 | 143,837 | 10,000 | 253,837 | 100,000 | 166,732 | 10,000 | 276,732 | ||||||||
Richard H. Lenny | — | 407,519 | 10,000 | 417,519 | - | 429,449 | 10,000 | 439,449 | ||||||||
Melissa Lora | 100,000 | 143,837 | 10,000 | 253,837 | 120,000 | 166,732 | 10,000 | 296,732 | ||||||||
Ruth Ann Marshall | 120,000 | 143,837 | 10,000 | 273,837 | 120,000 | 166,732 | 2,500 | 296,732 | ||||||||
Craig P. Omtvedt | 100,000 | 143,837 | 10,000 | 253,837 | ||||||||||||
Craig Omtvedt | 100,000 | 166,732 | 10,000 | 276,732 | ||||||||||||
Scott Ostfeld (3) | 100,000 | 143,837 | — | 243,837 | ||||||||||||
Scott Ostfeld (5) | 100,000 | 166,732 | - | 266,732 | ||||||||||||
| (1) | Reflects the grant date fair value (computed in accordance with Financial Accounting Standards Board Accounting Standards Codification, or FASB ASC, Topic 718) of the stock awards made to non-employee directors during fiscal |
| (2) | Reflects the amount paid to a designated charitable organization on the director’s behalf under the matching gifts program. |
| (3) | Mr. Dowdie was appointed to the Board effective March 1, 2022. |
| (4) | Ms. Horowitz was appointed to the Board effective August 2, 2021. |
| (5) | With the approval of the Board, Mr. Ostfeld |
At fiscal 2020 year-end, none of our non-employee directors had any outstanding stock awards or outstanding unexercised option awards.
20202022 PROXY STATEMENT 3438
The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee, and terminate our independent auditor. In addition, the Committee evaluates and ensures the rotation of the lead audit partner at our independent auditor and will, if it deems it advisable, consider the rotation of the audit firm.
The Audit / Finance Committee has appointed KPMG LLP, an independent registered public accounting firm, as our independent auditor for fiscal 20212023 to conduct the audit of our financial statements. KPMG LLP has conducted the audits of our financial statements since fiscal 2006. Since that time, fourfive different partners of the firm have served as the audit lead. The Audit / Finance Committee and the Board request that the shareholders ratify this appointment.
Representatives from KPMG LLP are expected to be present at the 2020 Annual Meeting. The representatives will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If shareholders do not ratify the appointment of KPMG LLP as our independent auditor, the Audit / Finance Committee will reconsider the appointment. Even if the appointment of KPMG LLP is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in the company’s and its shareholders’ best interests.
Fees billed by KPMG LLP for services provided for fiscal years 20202022 and 20192021 were as follows:
Fiscal 2020 | Fiscal 2019 | Fiscal 2022 | Fiscal 2021 | |||||||||||
Audit Fees | $5,737,000 | $7,108,000 | $5,189,000 | $5,664,000 | ||||||||||
Audit-Related Fees | 38,000 | 73,000 | 46,000 | 54,000 | ||||||||||
Tax Fees | 12,000 | 13,000 | 35,000 | 11,000 | ||||||||||
All Other Fees | 2,000 | — | 9,000 | 9,000 | ||||||||||
Total Fees | $5,789,000 | $7,194,000 | $5,280,000 | $5,739,000 | ||||||||||
Audit Fees. Audit fees consist of the audits of our annual financial statements, the reviews of our quarterly financial statements and foreign statutory audits.
| • | Audit Fees. Audit fees consist of the audits of our annual financial statements, the reviews of our quarterly financial statements and foreign statutory audits. |
Audit-Related Fees. In fiscal years 2020 and 2019, audit-related fees consisted of a pension plan audit as well as other attestation services.
| • | Audit-Related Fees. In fiscal 2022 and 2021, audit-related fees consisted of a pension plan audit, a compilation engagement, and other attestation services. |
Tax Fees. In fiscal years 2020 and 2019,
| • | Tax Fees. In fiscal 2022 and 2021, tax fees consisted of tax consultation and tax compliance services. |
| • | All Other Fees. In fiscal 2022 and 2021, other fees consisted of fees for access to an online accounting tool and training platform. |
The Audit / Finance Committee pre-approves all audit and non-audit services performed by our independent auditor. The Audit / Finance Committee will periodically grant a general pre-approval of categories of audit and non-audit services. Any other services must be specifically approved by the Audit / Finance Committee, and any proposed services exceeding pre-approved cost levels must be specifically pre-approved by the Audit / Finance Committee. In periods between Audit / Finance Committee meetings, the ChairmanChair of the Audit / Finance Committee has been delegated authority from the Audit / Finance Committee to pre-approve additional services; any such pre-approvals are subsequently communicated to the full Audit / Finance Committee at its next meeting.
The Audit / Finance Committee approved 100% of the services performed by KPMG LLP that were billed as Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees during fiscal years 20202022 and 2019.2021.
The Board of Directors recommends a vote “FOR” the ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2023.
20202022 PROXY STATEMENT 3640
Audit / Finance Committee Report
The Audit / Finance Committee assists the Board in fulfilling its oversight responsibilities by reviewing (1) the integrity of the financial statements of the company, (2) the qualifications, independence and performance of the company’s independent auditor and internal audit department, (3) the compliance by the company with legal and regulatory requirements, and (4) the company’s perspectives on financing strategies and capital structure, in light of its strategic long range plans. The Audit / Finance Committee acts under a written charter, adopted by the Board, a copy of which is available on our website.
Management is responsible for the company’s financial reporting process and internal controls. Our independent auditor is responsible for performing an independent audit of the company’s consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles and assessing the effectiveness of the company’s internal control over financial reporting. The Audit / Finance Committee oversees the company’s financial reporting process and internal controls on behalf of the Board.
The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee, and terminate our independent auditor. The Audit / Finance Committee reviews the company’s annual audited financial statements, quarterly financial statements, and other filings with the SEC. The Audit / Finance Committee reviews reports on various matters, including: (1) critical accounting policies of the company; (2) material written communications between our independent auditor and management; (3) our independent auditor’s internal quality-control procedures; (4) significant changes in the company’s selection or application of accounting principles; and (5) the effect of regulatory and accounting initiatives on the financial statements of the company. The Audit / Finance Committee also has the authority to conduct investigations within the scope of its responsibilities and to retain legal, accounting, and other advisors to assist the Audit / Finance Committee in its functions.
During the last fiscal year, the Audit / Finance Committee met and held discussions with representatives of Conagra Brands’ management, its internal audit staff, and KPMG LLP, Conagra Brands’ independent auditor. Representatives of financial management, the internal audit staff, and our independent auditor have unrestricted access to the Audit / Finance Committee and periodically meet privately with the Audit / Finance Committee. The Audit / Finance Committee reviewed and discussed with the company’s management and KPMG LLP the audited financial statements contained in the company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020.29, 2022.
The Audit / Finance Committee also discussed with our independent auditor the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board or the PCAOB,(the PCAOB) and the SEC. The Audit / Finance Committee also reviewed and discussed with KPMG LLP its independence and, as part of that review, received the written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Audit / Finance Committee concerning independence from Conagra Brands. The Audit / Finance Committee also considered whether the provision of non-audit services provided by KPMG LLP to the company during fiscal 20202022 was compatible with the auditor’s independence.
Based on these reviews and discussions and the report of our independent auditor, the Audit / Finance Committee recommended to the Board, and the Board approved, that the audited financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended May 31, 202029, 2022 for filing with the SEC.
Conagra Brands, Inc. Audit / Finance Committee
| George Dowdie | Fran Horowitz | |||||||
| Rajive Johri | Melissa Lora, Chair | Craig P. Omtvedt | ||||||
3741 CONAGRA BRANDS
As required by Section 14A of the Securities Exchange Act of 1934, as amended, we are asking you to approve, on an advisory basis, our named executive officer compensation. Consistent with our shareholders’ preference, last indicated at our 2017 Annual Meeting of Shareholders, we give our shareholders an opportunity to vote, on an advisory basis, to approve the compensation of our named executive officers on an annual basis. This vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to our named executive officer compensation as we have described it in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, beginning on pages 40 and 62, respectively.Statement.
Our executive compensation program is designed to reward performance, drive focus, engagement and execution, support our business strategies, discourage excessive risk-taking, make us competitive with other organizations for top talent, and align the interests of our executive officers with the long-term interests of our shareholders. A few notable items associated with our fiscal 20202022 program include the following:
Consistent with our pay-for-performance philosophy, more than 75% of our named executive officers’ targeted fiscal 2020 compensation was tied to company performance. For our CEO, incentive compensation represented 89% of his total compensation opportunity. For our other named executive officers, incentive compensation represented approximately 78% of their total opportunity.
| • | Consistent with our pay-for-performance philosophy, our named executive officers’ fiscal 2022 compensation opportunity was tied meaningfully to company performance. For our CEO, incentive compensation represented 89% of his fiscal 2022 total compensation opportunity. For our other named executive officers, incentive compensation represented approximately 78% of their total opportunity. |
Our fiscal 2020 Annual Incentive Plan funded and paid out above target for each named executive officer, aligned with our performance during the year.
| • | As more fully described in the “Compensation Discussion and Analysis” section of this Proxy Statement, the HR Committee applied 10.6 points of positive discretion to increase the payout under our fiscal 2022 Annual Incentive Plan from 89.4% to 100%, subject to individual performance modifiers in some instances, applying the same adjustment to all eligible employees, not just the named executive officers. The HR Committee determined that the use of positive discretion for fiscal 2022, as permitted under the Annual Incentive Plan design, best aligns pay with performance given the team’s strong performance in taking decisive actions to mitigate the impact of historic inflation and supply chain costs on operating results. |
The fiscal 2018 to 2020 cycle of our performance share plan concluded in fiscal 2020 with payouts at levels above target for each named executive officer, aligned to the impactful transformation accomplished over the last three years.
| • | The fiscal 2020 to 2022 cycle of our performance share plan concluded in fiscal 2022 with no payoutsfor each named executive officer, and no payouts of PBRSUs. |
Multiple performance metrics are utilized in our plans and programs to discourage excessive risk-taking. Our program’s design does not encourage excessive focus on a single performance goal to the detriment of other measures of success.
| • | Multiple performance metrics are utilized in our plans and programs to discourage excessive risk-taking. Our program’s design does not encourage excessive focus on a single performance goal to the detriment of other measures of success. |
Substantial stock ownership requirements ensure that our senior executives maintain a significant stake in our long-term success. They many not hedge or pledge their stock.
| • | Substantial stock ownership requirements to encourage our senior executives to maintain a significant stake in our long-term success. They may not hedge or pledge their Conagra stock. |
Our clawback policy allows recovery of certain incentive compensation payments from executives in the event of a material restatement of our financial statements resulting from their fraudulent, dishonest, or reckless actions.
| • | Our clawback policy allows recovery of certain incentive compensation payments from executives in the event of a material restatement of our financial statements resulting from their fraudulent, dishonest, or reckless actions. |
| • | We design our compensation programs to motivate our executives to successfully navigate marketplace or macroeconomic dynamics and to achieve our fundamental objectives of creating sustainable, profitable growth and long-term value for our shareholders. |
We design our compensation programs to motivate our executives to win regardless of marketplace or macroeconomic dynamics and to achieve our fundamental objectives of creating sustainable, profitable growth and long-term value for our shareholders.
Since we began seeking a shareholder vote on our named executive officer compensation,Year after year, shareholders have exhibited strong support of our executive compensation program. In each of the past five fiscal years, we have received over 92% approval on this voting item.
We are asking our shareholders to once again indicate their support for our named executive officer compensation as described in this Proxy Statement. Accordingly, we are asking our shareholders to vote to approve the following resolution:
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in this Proxy Statement, is hereby APPROVED.”
While this vote is advisory and not binding on our company, the Board and its HR Committee value the opinions of our shareholders and expect to consider the outcome of the vote, along with other relevant factors, when considering named executive officer compensation in the future. We expect to hold our next advisory vote at our 20212023 Annual Meeting of Shareholders.
The Board of Directors recommends a vote “FOR” the resolution approving our named executive officer compensation.
43 CONAGRA BRANDS
The Board is submitting for shareholder approval a proposal to amend our Amended and Restated Certificate of Incorporation to allow shareholders to act by written consent. Our Board has recommended that shareholders vote in favor of this voting item, which is an amendment to Article XIII of the Amended and Restated Certificate of Incorporation. At our 2021 Annual Meeting of Shareholders, we received a shareholder proposal requesting that the Board take the necessary steps to permit shareholders to act by written consent. The shareholder proposal was approved by a majority of the votes cast on the proposal. As part of our ongoing engagement efforts and in response to the vote, following the 2021 Annual Meeting of Shareholders, the Board directed company management to conduct shareholder outreach to investors representing approximately 50% of our outstanding shares to seek their feedback on a shareholder right to act by written consent as well as the potential for the company to be responsive to that proposal by implementing the right of shareholders to call special meetings. Company management presented the results of the outreach efforts to the Board. Some of these shareholders expressed the view that the company should adopt some form of the right to act by written consent, while others preferred that the company adopt a right of shareholders to call special meetings. Other shareholders we contacted had no stated preference between the two rights or did not see a need to change the existing provisions of our Amended and Restated Certificate of Incorporation.
After careful consideration of the feedback we heard from our shareholders, the Board is proposing an amendment to our Amended and Restated Certificate of Incorporation to permit shareholders to act by written consent. The proposed amendment includes various procedural and other safeguards, which the Board believes are in the best interests of the company and its shareholders, to address concerns that the written consent process could be abused:
| • | To reduce the risk that a small group of short-term, special interest or self-interested shareholders initiate actions that are not in the best interests of the company or its shareholders and reduce the financial and administrative burdens on the company, the proposed amendment requires that holders in the aggregate of at least 25% of outstanding shares request that the Board set a record date to determine the shareholders entitled to act by written consent. |
| • | To protect against shareholder disenfranchisement, written consents must be solicited from all shareholders and in accordance with Regulation 14A of the Securities Exchange Act of 1934, as amended, ensuring that a written consent solicitation statement is publicly filed and giving each shareholder the right to consider and act on a proposal. This protection would also eliminate the possibility that a small group of shareholders could act without a public and transparent discussion of the merits of any proposed action and without input from all shareholders. Moreover, any such small group of shareholders may not owe a fiduciary duty to all shareholders and could act without deliberation and comment from our management or our Board. Depriving shareholders of this important deliberative process, during which shareholders can consider the advice of directors who owe a fiduciary duty to all shareholders, is contrary to our culture of open communication and good corporate governance. |
| • | To provide transparency, shareholders requesting action by written consent must provide the company with approximately the same information currently required of any company shareholder seeking to nominate directors or propose action at a meeting. |
| • | To provide the Board with a reasonable timeframe to properly evaluate and respond to a shareholder request, the proposed amendment requires that the Board must act, with respect to a valid request, to set a record date by the later of (i) 10 business days after delivery of a valid request to set a record date and (ii) five business days after delivery by the shareholder(s) of any information requested by the company to determine the validity of the request for a record date or to determine whether the action to which the request relates may be effected by written consent. The record date must be no more than 10 days after the Board action to set a record date. Should the Board fail to set a record date by the required date, the record date will be the first date after the expiration of the 10-day period on which a signed shareholder written consent is delivered to the company. |
3945 CONAGRA BRANDS
| • | To ensure that shareholders have sufficient time to consider the proposal, as well as to provide the Board the opportunity to present its views regarding the proposed action, delivery of executed consents cannot begin until 45 days after the record date. To ensure that the written consent is in compliance with applicable laws and is not duplicative, the written consent process would not be available in a limited number of circumstances, including: |
| • | for matters that are not a proper subject for shareholder action under applicable law, or if the record date request was made in a manner that involved a violation of Regulation 14A under the Securities Exchange Act of 1934, as amended, or other applicable law, |
| • | if the request to set a record date is delivered to the company during the period beginning 90 days prior to the first anniversary of the date of the most recent annual meeting and ending on the date of the next annual meeting, |
| • | if a meeting of shareholders that included an item of business identical or substantially similar to the proposed action was held within 90 days before the company received the request for a record date, or if an identical or substantially similar item is included in our notice for a meeting of shareholders that has been called but not yet held, or will be included in the notice for a meeting that is called to be held within 60 days after the date the company received the request for a record date. |
The full text of the proposed amendment to the Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Annex A. The above summary of the amendment is qualified in its entirety by reference to the text of the proposed amendment attached as Annex A. The affirmative vote of a majority of the company’s outstanding shares entitled to vote is required to adopt the amendment to the Amended and Restated Certificate of Incorporation. If approved by the shareholders, the Board will make conforming changes to our Amended and Restated Bylaws.
The Board of Directors recommends a vote “FOR” the amendment to our Certificate of Incorporation to allow shareholders to act by written consent.
2022 PROXY STATEMENT 46
The following shareholder proposal will be voted upon at the 2022 Annual Meeting if such proposal is properly presented at the 2022 Annual Meeting by or on behalf of the stockholder proponent. Shareholders submitting a proposal must appear personally or by proxy at the 2022 Annual Meeting to move the proposal for consideration. The company has been advised that Mr. John Chevedden, as the proxy for Mr. Kenneth Steiner, beneficial owner of at least 250 shares of the company’s common stock, whose address is 14 Stoner Avenue, 2M, Great Neck, New York 11021, intends to present the proposal set forth below. As required by SEC rules, the proposal and supporting statement are presented below in the form received from the shareholder proponent. The Board and the company accept no responsibility for the contents of the following shareholder proposal or supporting statement. The graphic below was provided by the shareholder proponent and not the Company.
Proposal 5—Independent Board Chairman
The shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO as follows:
Selection of the Chairman of the Board The Board requires the separation of the offices of the Chairman of the Board and the Chief Executive Officer.
Whenever possible, the Chairman of the Board shall be an Independent Director.
The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an accelerated basis.
The Chairman shall not be a former CEO of the company.
This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Boeing then adopted this proposal topic in 2020.
The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. The job of the CEO is to manage the company. The job of the Chairman is to oversee the CEO and management.
An independent director can better manage the Board of Directors. Without an independent chairman shareholders have a greater need to monitor the directors.
This proposal is a step in the direction that the Board is already headed.
We are fortunate that the Conagra Board believes that independent Board leadership is a critical component of our governance structure. Since 2005, the Conagra Board Chairman and CEO roles have been separate. We need to make sure that when there is a change in leadership that this practice endures. Currently we have no policy to ensure a future CEOis not given the Chairman job.
This is a good governance shareholder proposal in the spirit of the 2021 shareholder proposal for a right for shareholders to act by written consent that won our 85% support.
Please vote yes:
Proposal 5—Independent Board Chairman
2022 PROXY STATEMENT 48
Statement of Opposition
After careful consideration, the Board has concluded that this proposal is not in the best interests of the Company and its shareholders. The Board recommends a vote AGAINST this proposal for the following reasons:
| • | Providing our Board the flexibility to determine our leadership structure at a given time and based on relevant circumstances best serves the Company and our shareholders. |
| • | Our Board regularly reviews the Company’s leadership structure and has had an independent Board Chair for the past 17 years. |
| • | Our existing governance practices and current leadership structure promote effective and independent Board oversight. |
Providing our Board the flexibility to determine our leadership structure at a given time and based on relevant circumstances best serves the Company and our shareholders.
Conagra’s Corporate Governance Principles allow the roles of Board Chair and CEO to be filled by the same or different individuals. Rather than taking a “one-size-fits-all” approach to Board leadership, our existing policies provide the Board flexibility to determine the most appropriate leadership structure to address the Company’s needs in light of the dynamic environment in which we operate. The most effective leadership structure at a given time will depend on a variety of factors, including the leadership, skills, and experience of each of the CEO, the Board Chair, and the other members of the Board, as well as the needs of the business and other factors. The Board has deep knowledge of the strategic goals of the Company, the unique opportunities and challenges it faces, and the various capabilities of our directors and management, and is therefore best positioned to determine the most effective leadership structure to protect and enhance long-term shareholder value.
The Board has a fiduciary duty to evaluate and determine the Board’s leadership structure based on what will best serve shareholders’ interests under the circumstances, not pursuant to an inflexible policy established in advance. No single, fixed leadership model is appropriate in all circumstances. If this proposal were to be approved and implemented, it would deprive the Board of important flexibility to utilize its business judgment to determine the most effective leadership structure to serve the interests of the Company and its shareholders.
Our Board regularly reviews the Company’s leadership structure and has had an independent Board Chair for the past 17 years.
The Board recognizes the importance of having in place a structure that allows it to function in an appropriately independent manner and believes that independent Board leadership is a critical component of its governance structure. Our Corporate Governance Principles require us to have either an independent Board Chair, or an independent lead director if the positions of Board Chair and CEO are held by the same person. The Board regularly reviews the Company’s leadership structure and currently believes that separating the roles of Board Chair and CEO is the most effective leadership structure for the Company to protect and enhance long-term shareholder value.
These roles have been separate for the past 17 years – meaning that the Board has already adopted a practice that is essentially the same as that requested by this proposal (without unduly depriving the Board of its flexibility). Pursuant to our Corporate Governance Principles, however, if the Board determines at some point in the future that combining the Board Chair and CEO roles is in the company’s best interest, the Board will then select a lead director from the Board’s independent directors, and this lead director will chair executive sessions of the Board and consult with the CEO on Board agendas, among other duties, to maintain appropriate independence in our leadership and governance structure.
Our existing governance practices and current leadership structure promote effective and independent Board oversight.
The Board believes that independent oversight involves not only having an independent Board leader, but also showing a commitment to strong corporate governance. Conagra’s strong corporate governance policies and practices, including the items outlined below, empower our independent directors to effectively oversee management.
| • | We have a diverse and experienced Board, whose members are elected annually by shareholders. |
| • | 92% of our current Board is comprised of independent directors. |
49 CONAGRA BRANDS
| • | The Board holds an independent executive session at every regularly scheduled meeting of the Board and its respective committees, providing a regular opportunity for the independent directors to discuss any matters that they deem relevant or appropriate. |
| • | Each of our three key standing committees – the Audit / Finance Committee, the HR Committee and the Nominating and Corporate Governance Committee are comprised solely of independent directors. |
| • | All directors have full access to all members of management, other Company employees and outside advisors, so the Board Chair is only one of the many sources of information for the directors. |
| • | The Board is committed to Board refreshment, and has added six independent Board members since 2016. |
See the “How We Govern” section of this Proxy Statement for more details on the Company’s commitment to strong corporate governance.
Summary
The proponent agrees that “the Conagra Board believes that independent Board leadership is a critical component of our governance structure,” and as indicated above, the Board has a long-standing history of strong corporate governance practices. The Board’s current structure, which is memorialized in Conagra Brands’ Corporate Governance Principles, provides for effective and independent Board oversight. In contrast, the proponent’s proposal calls for an inflexible policy that would restrict the Board’s discretion in meeting its fiduciary duty to evaluate and determine the appropriate structure to serve shareholder interests under the circumstances. Adoption of this policy is both unnecessary and would preclude the Board from exercising its independent judgment to determine the most effective leadership structure in the future. In light of the substantial independent oversight of management by the Board, the Company’s strong corporate governance practices, and the business success that the Board has fostered and overseen, the Board believes the inflexible standard that would be imposed under this proposal is neither necessary, nor in the best interests of the Company or its shareholders.
The Board of Directors recommends a vote “AGAINST” this proposal.
2022 PROXY STATEMENT 50
Compensation Discussion and Analysis
Introduction
At Conagra Brands, our fundamental objectives are to create sustainable, profitable growth and long-term value for our shareholders.shareholders, while providing innovative and quality food to customers and consumers. Management sets our annual and long-term business goals to support attainment of these objectives. The Board’s HR Committee (in this section, the Committee) oversees the design of our executive compensation program to promote achievement of our goals.
This Compensation Discussion and Analysis describes and analyzes our executive compensation program. Specifically, we describe and analyze the program’s application to the executive officers listed in the Summary Compensation Table; these are our “named executive officers.” For fiscal 2020,2022, or FY20,FY22, which began on May 27, 201931, 2021 and ended on May 31, 2020,29, 2022, our named executive officers were:
Name | Title | |
Sean M. Connolly | Chief Executive Officer and President | |
David S. Marberger | Executive Vice President and Chief Financial Officer | |
| ||
Thomas M. McGough | Executive Vice President and Co-Chief Operating Officer | |
Darren C. Serrao | Executive Vice President and Co-Chief Operating Officer | |
Alexandre O. Eboli | Executive Vice President and Chief Supply Chain Officer | |
We have provided a summary of our fiscal 20202022 executive compensation program and fiscal 20202022 performance in the “Executive Summary” below. For more complete information on the program and the Committee’s processes related to the program, we encourage you to read this entire Compensation Discussion and Analysis and the related sections of this Proxy Statement.
51 2020 PROXY STATEMENTCONAGRA BRANDS 40
Executive Summary
Our executive compensation program is designed to encourage and reward behavior that promotes attainment of our annual and long-term goals. In turn, those goals are intended to lead to sustainable, profitable growth, and long-term shareholder value. The elements of our fiscal 20202022 executive compensation program were as follows:
Base Salary and Benefits |
A fixed compensation program with salaries reviewed annually and adjusted as appropriate (as further described below). Benefit packages that are market competitive and generally broad-based in the company.
|
Annual Incentive Program
|
A cash-based annual incentive program based on a single year of performance results. Performance measures are aligned to our annual operating plan. Payouts in fiscal | ||
30% Weighting: Net sales, adjusted for items impacting comparability
| ||
Long-Term Incentive Program
A stock-based incentive program based on multi-year results or service. Pays out generally after three years.
| ||
Performance Shares
• Opportunity to earn shares of our common stock if we achieve pre-set performance goals over a three-year period.
• Performance
•
| Restricted Stock Units
• Opportunity to earn shares of our common stock if the employee generally remains with Conagra over the three-year vesting period of the award.
• Rewards stock price appreciation and tenure. | |
Fiscal 20202022 Highlights
For Conagra Brands, fiscal 20202022 was a year of navigating unprecedented businesscontinued volatility and dynamic conditions in which inflation, supply chain challenges, and inworld events all contributed to a challenging external environment. But Conagra was able to remain focused on the face of extraordinary uncertainty,fundamentals – delivering for shareholders. We set rigorous goals that were communicatedinnovation, value, and superior products to investorscreate lasting connections between consumers and incorporated into our compensation programs in July 2019. Over the first two quarters of fiscal 2020, our business was on-track to meet expectations. We made progress strengthening our brands, introduced new product innovations, and identified cost synergies associated with the fiscal 2019 Pinnacle Foods acquisition in excess of prior plans. The third fiscal quarter, however, brought discrete headwinds; softness appeared in our foodservice business and in categories across our retail portfolio.brands. As a result of taking decisive actions throughout the year, we loweredcontinued to deliver strong top-line growth, both in the absolute and relative to our expectations forpeers, as we grew share versus the full fiscal year. Subsequently, atcompetition and continued to invest in the beginninglong-term health of our business. We remain confident that our customers and consumers recognize the fourth quarter, the superior relative value of our products, and that our business will continue to perform well in these dynamic times.
COVID-192022 PROXY STATEMENT pandemic drove a surge in consumer demand for our food. Our modernized portfolio, strong operational foundation, commitment to employee health and safety, agile culture, and dedicated team enabled us to respond effectively. 52
Ultimately, we delivered results consistent with and in some instances above our originaladjusted guidance for the fiscal 2020 guidance.
41 CONAGRA BRANDS
Our Results:year.
3.1%
|
11.7%
|
$1.84
| ||||||
3.8%
|
14.4%
|
$2.36
|
Specific performance highlights from fiscal 2022 include the following:
Organic Net Sales Growth:Fiscal 2020 was our third consecutive year of We experienced strong organic net sales growth. We experienced strong growth in all three of our retail segments in fiscal 2022, driven by increased demand due to COVID-19,growing and gaining share versus our competitors, as well as growth in e-commerce sales, and a robust innovation slate.
| • | Operating |
|
Portfolio ChangesBuilding Culture:: We During fiscal 2022, we continued our portfolio sculpting work to nourish an inclusive culture that encourages openness, acceptance, and individual authenticity by introducing our multi-year Diversity and Inclusion learning journey. This important framework is rooted in fiscal 2020. We completed the divestitureour Timeless Values and in our five inclusive behaviors of two smaller, non-core businesses: our direct store delivery snacks businessgenuine listening, civility, mutual respect, healthy debate, and our Lender’s Bagel business. We also exited our private label peanut butter business.compromise.
Capital Returned to ShareholdersShareholders:: We paid $413.6$582 million in cash dividends duringin fiscal 2020.2022.
BuildingInvesting in Our Culture: Our vision is to have the most impactful, energized, and inclusive culture in food. We believe that a diverse team and inclusive culture are key enablers of shareholder value creation. During fiscal 2020,2022, we continued our work to cultivate an energizeddeliver against our vision. Our Diversity and enthusiastic teamInclusion Leadership Council, comprised of employees who bring an externally focused, entrepreneurial spirit to their work every day. We also launched efforts to amplify our commitment to a diverse and inclusive workforce. During the fourth quarter, we began to partner with an external diversity and inclusion consultancy to identify specific opportunities that will have the most impact. This work remains underway as we begin fiscal 2021.
With respect to the three-years ended with fiscal 2020, the company made significant progress on its transformation. During fiscal 2018, the company continued its efforts to strengthen the legacy Conagra portfolio through investments in innovation, retailer marketing investments and the value over volume playbook. The company also acquired the Angie’s® BOOMCHICKAPOP® popcorn business and Sandwich Bros. of Wisconsin frozen sandwich business. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and breadth of our portfolio. And during fiscal 2020, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers and shareholders.
As a result of our focus on reshaping the Conagra Brands portfolio over the last several years, and our accomplishments in fiscal 2020, we believe that we enter fiscal 2021 with a solid foundation from which to deliver for investors.
Fiscal 2020 Pay Outcomes
As more fully described in this Compensation Discussion and Analysis, the Committee considered the positive business outcomes described above in determining final payouts under incentive programs with performance periods concluding in fiscal 2020. Our Chief Executive Officer, his Senior Leadership team, and other senior executives namedmembers of our Human Resources team continued to expand and refine our D&I strategy, track our D&I progress, and ensure execution of our D&I goals. The Council executed the company’s plan to focus on recruiting, advocating for, and developing diverse talent. The Council and the company re-affirmed the following goals for expanding diversity in this Proxy Statement received above target payouts under both the fiscal year 2020 annual incentive plan and fiscal year 2018 to fiscal year 2020 cycle of the long-term performance share plan.our organization:
2025 Goal At least 40% of management-level roles held by | 2025 Goal Double people of color representation in |
| • | We launched our “Experience Inclusion” corporate website in December 2021 to highlight our D&I commitment and journey and our initiatives to enhance recruitment of diverse talent. |
| • | We expanded our diversity recruitment strategies focused on strengthening the diversity of candidate slates at the early talent (recent college graduates) and experienced hire levels. This year, Conagra was recognized by the Talent Board for our inclusive candidate experience, Eightfold for being a leader in the diversity recruitment space, and Mogul for our inclusive recruitment practices. |
| • | We partnered with Sounding Board, Inc. to launch an external coaching program to advance professional development for underrepresented talent and expanded our internal mentoring program to our Latinx Employee Resource Group. |
A reconciliation of this non-GAAP measure to the most directly comparable GAAP measure is included in Appendix A to this Proxy Statement. |
|
|
| 9 | A reconciliation of this non-GAAP measure to the most directly comparable GAAP measure is included in Appendix A to this Proxy Statement. |
53 2020 PROXY STATEMENTCONAGRA BRANDS 42
| • | We awarded the “Conagra Refuse-to-Lose Scholarship” to 30 students from the Thurgood Marshall College Fund and Hispanic Scholarship Fund. All scholarship recipients were invited to participate in a mentorship program launched in May 2022. |
| • | We expanded our community partnerships with social justice organizations to support food vulnerable and diverse communities. Our community partners include the Chinese American Service League, Brave Space Alliance, La Casa Norte, Project Hood Communities, the Latino Center of the Midlands (née Chicano Awareness Center), the Intercultural Senior Center, the American Civil Liberties Union, and Human Rights Watch. |
| • | Throughout fiscal 2022, the Human Resources Committee of our Board received regular reports from management on our D&I progress. The Committee has embedded D&I into its standing agenda and intends to continue discussing the topic regularly at all scheduled meeting it holds in fiscal 2023. |
Fiscal 2020 — 2022
We maintain a long-term strategic plan at Conagra and strive to set rolling three-year financial targets that the HR Committee of our Board can incorporate into long-term incentive compensation plans for our most senior executives. The three years ending with fiscal 2022 were more dynamic than originally expected. We initially focused fiscal 2020 on integrating the Pinnacle business and delivering turn-around plans for several large brands acquired in the Pinnacle transaction. However, by the end of the third quarter of fiscal 2020, the COVID-19 pandemic had introduced new challenges. During fiscal 2021, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers, and shareholders while keeping our employees safe. We expected fiscal 2022 to be focused on navigating increased supply chain challenges posed by the pandemic and meeting increased customer and consumer demand driven by sustained elevated levels of at-home dining. However, fiscal 2022 introduced the new and additional challenges of historic and persistent inflation and geopolitical turmoil impacting the supply, availability, and cost of raw materials. In response to these challenges, we invested in our supply chain operations and successfully implemented inflation-driven pricing, while continuing to invest in our innovation pipeline.
As a result of our team’s agility and results-orientation over the last three years, we believe that we enter fiscal 2023 with a solid foundation from which to continue to deliver for investors.
Fiscal 2022 Pay Outcomes
As more fully described in this Compensation Discussion and Analysis, the HR Committee considered the positive business outcomes described above in determining final payouts under incentive programs with performance periods concluding in fiscal 2022. Our Chief Executive Officer and other senior executives named in this Proxy Statement received 100% of target payout, subject in some instances to individual modifiers for performance under the fiscal 2022 annual incentive plan and zero payout under the fiscal 2020 to fiscal 2022 cycle of the long-term performance share plan. Our Chief Executive Officer and other senior executives named in this Proxy Statement received zero payout for the performance based restricted stock unit awards granted in fiscal 2019.
The HR Committee believes that its fiscal 20202022 compensation decisions appropriately reflect its pay-for-performance philosophy. This philosophy is focused on compensating executives based on actual company performance and aligning management’s interests with those of our shareholders.
Below is a more detailed analysis of the fiscal 20202022 compensation program for our named executive officers, as well as actual fiscal 20202022 payouts under the programs.
2022 PROXY STATEMENT 54
Our Fiscal 20202022 Executive Compensation Program
For fiscal 2020,2022, the Committee created an executive compensation program with multiple elements:
Fixed Compensation:
• Base Salary • Health and Welfare Benefits • Retirement Benefits | Incentive Compensation:
• Fiscal | |||
• |
| |||
| ||||
The use of a mix of compensation types (salary, benefits, cash-based incentives and equity-based incentives) and a mix of performance periods (single year and multi-year) was intended to promote behavior consistent with our long-term strategic plan and minimize the likelihood of executives having significant motivation to pursue risky or unsustainable results.
In overseeing this compensation program design, the Committee sought to encourage and reward behavior that would promote attainment of our annual and long-term goals and lead to sustainable growth in shareholder value. In particular, the Committee focused on:
Aligning compensation programs, policies and practices to our company’s vision, mission and values;
| • | Aligning compensation programs, policies and practices to our company’s vision, mission and values; |
Being market competitive, but emphasizing variable compensation to differentiate our program from that of peers;
| • | Being market competitive, but emphasizing variable compensation to differentiate our program from that of peers; |
Determining pay mix (fixed and variable compensation) based on executive position;
| • | Determining pay mix (fixed and variable compensation) based on executive position; |
Providing a compensation structure that groups positions based on impact to the company;
| • | Providing a compensation structure that groups positions based on impact to the company; |
Affording opportunities and flexibility in pay positioning to ensure fair and equitable compensation and room for growth; and
| • | Affording opportunities and flexibility in pay positioning to ensure fair and equitable compensation and room for growth; and |
Recognizing and differentiating based on individual, team and company performance.
| • | Recognizing and differentiating based on individual, team, and company performance. |
With respect to each named executive officer, the Committee also considered the following:
Mr. Sean Connolly. | Mr. Connolly has served as our Chief Executive Officer and as a member of the Board since | |
43 CONAGRA BRANDS
Mr. David S. | Mr. Marberger has served as our Executive Vice President and Chief Financial Officer since | |
| ||
| Mr. Thomas M. McGough. | Mr. McGough has served as our Executive Vice President and Co-Chief Operating Officer since | |
55 CONAGRA BRANDS
Mr. Darren | Mr. Serrao has served as our Executive Vice President and Co-Chief Operating Officer since | |
Alexandre | Mr. Eboli has served as our Executive Vice President and Chief Supply Officer since July 2021. Mr. Eboli has principal responsibility for the Company’s end-to-end supply chain, including overseeing the manufacturing, procurement, environment, health and safety, plant quality, logistics, and transportation and warehousing teams. The Committee considered the scope of Mr. Eboli’s responsibilities, the dynamic factors affecting health and safety and the global supply chain, internal pay equity, and external market data in setting his compensation for fiscal 2022. | |
The unique roles, contributions and tenure of our named executive officers had a meaningful impact on their total fiscal 20202022 compensation opportunity. A consistent theme across our named executive officers, however, is that by design, targeted incentive compensation for fiscal 20202022 was a significant percentage of the total compensation opportunity. The Committee’s general policy is to provide the greatest percentage of the incentive opportunity in the form of long-term compensation payable in shares of our common stock. The Committee believes that the emphasis on stock-based compensation is the best method of aligning management interests with those of our shareholders.
2020 PROXY STATEMENT 44
The charts below show the total target compensation opportunity (calculated using base salary rate,earnings for fiscal 2022, targeted fiscal 20202022 Annual Incentive Plan award, and targeted long-term incentive value) for Mr. Connolly and for our other named executive officers as a group.
More detail on each fiscal 20202022 compensation element follows.
2022 PROXY STATEMENT 56
Base Salaries
We pay salaries to our named executive officers to provide them with a base level of fixed income for services rendered. On average, 22% of the total fiscal 20202022 compensation opportunity for each named executive officer, other than the Chief Executive Officer, was provided in the form of base salary. For Mr. Connolly, our Chief Executive Officer, approximately 11% of his total compensation opportunity was provided in the form of base salary. For more information on Mr. Connolly’s base salary, see “Agreements with Named Executive Officers — Agreement with Mr. Connolly” below.
A summary of the salaries of our named executive officers is set forth below.
| Name | Fiscal 2020 Base Salary Rate ($) | Increase from Fiscal 2019 (%) | Percent of Target Total Direct Compensation (%) | Fiscal 2022 Base Salary Rate ($) | Increase from Fiscal 2021 (%) | Percent of Target Total Direct Compensation (%) | ||||||
Mr. Connolly | $1,200,000 | - | 11% | $1,275,000 | 3.2% | 11% | ||||||
Mr. Marberger | $715,200 | 3.8% | 23% | $736,700 | - | 21% | ||||||
Ms. Batcheler | $540,750 | - | 20% | |||||||||
Mr. McGough | $669,500 | - | 22% | $750,000 | - | 21% | ||||||
Mr. Serrao | $610,000 | - | 22% | $610,000 | - | 22% | ||||||
Mr. Eboli | $540,000 | N/A | 27% | |||||||||
In fiscal 2020,2022, the Committee approved a base salary increase for Mr. Marberger, from $689,000 to $715,200,Connolly during annual pay planning in order to align his salary more closely to a level between the market median and seventy-fifth percentile of the market for his role. The base salary rates for the other named executive officers were unchanged from fiscal 2019.
45 CONAGRA BRANDS
2021, except for Mr. Eboli who joined Conagra in July 2021 and thus had no fiscal 2021 base salary (or other compensation) from the Company.
Please see the information included above for a discussion of the other factors the Committee considered when determining the individual salaries of each of the named executive officers.
Incentive Programs – Overview
We use incentive programs to closely align management compensation with company performance. Our incentive programs reward the achievement of our annual operating plan and our long-term strategic plan. For fiscal 2020,2022, opportunities under these programs combined to represent approximately 89% of Mr. Connolly’s compensation opportunity. For each named executive officer other than the Chief Executive Officer, targeted incentive compensation for fiscal 20202022 was approximately 78% of the total compensation opportunity.
We provide details of our incentive programs below. Financial targets disclosed in these discussions are done so in the limited context of our incentive plans; they are not statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Annual Incentive Plan
The fiscal 20202022 Annual Incentive Plan, or FY20FY22 AIP, provided a cash incentive opportunity to approximately 4,5254,592 employees, including our named executive officers. We have regularly provided an annual incentive opportunity to a broad group of employees, to reinforce a sense of ownership across our company and drive and sustain a pay-for-performance culture.
57 CONAGRA BRANDS
At the start of fiscal 2020,2022, the Committee approved fiscal 20202022 operating income and fiscal 20202022 net sales and fiscal 2020 free cash flow as the funding metrics for the FY20FY22 AIP (subject to adjustment, as appropriate, for items impacting comparability of results). The Committee determined that, due to the inflationary environment, a heavier focus on operating income was warranted for fiscal 2022 and therefore increased the weight of the operating income funding metric from 50% in fiscal 2021 to 70% in fiscal 2022. In addition, because the company achieved its deleveraging target during fiscal 2021, the Committee chose to eliminate the free cash flow metric from the AIP in fiscal 2022.
As a result, the Committee selected these threetwo goals, with operating income weighted 50%70% in the plan and net sales weighted 30%, and free cash flow weighted 20%, to reward employees for achieving key elements of the fiscal 20202022 annual operating plan: sales growth,and profit growth and debt reduction. growth.
In fiscal 2019,addition, because the company included earnings before interestbelieves that the achievement of its diversity and taxes (or EBIT) and net sales as the AIP metrics. The Committee moved to operating income and free cash flowinclusion initiatives, in fiscal 2020, in lieu of EBIT, to better acknowledgealignment with the company’s dual focus on increasingstrategy, will support the operating earningscreation of sustainable long-term value for shareholders, the FY22 AIP included D&I as a component of the business and maximizingoverall performance assessment process as part of the business’s ability to generate cash to repay debt.individual performance modifier for senior leaders. Under the fiscal 20202022 AIP, the total payout opportunity for participants continued to be capped at 200% of targeted awards.
2020 PROXY STATEMENT 46
The operating income and net sales and free cash flow goals for the FY20FY22 AIP were as follows:
| ||||||||||||||
| ||||||||||||||
| ||||||||||||||
| Goals (Dollars in Millions) | ||||||||||||
| Metric | Weight | Threshold (25% Payout) | Below Target (95% Payout) | Target (100% Payout) | Above Target (105% Payout) | Maximum (200% Payout) | ||||||
Operating Income | 70% | $1,442.3 | $1,712.8 | $1,802.9 | $1,893.0 | $2,163.5 | ||||||
Net Sales | 30% | $9,996.4 | $10,662.8 | $11,107.1 | $11,551.4 | $12,217.8 | ||||||
Individual Payout Opportunities
In addition to setting the financial goals for the FY20FY22 AIP, the Committee set corresponding target AIP opportunities for each named executive officer, measured as a percentage of his or hertheir base salary for fiscal 2020.2022. The following table shows the ranges of authorized payments (expressed as a percentage of base salary) for the named executive officers uponbased on achievement of the operating income and net sales and free cash flow goals approved for the FY20 AIP.FY22 AIP, as well as each named executive officer’s individual performance modifier. No portion of the incentive was guaranteed.
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| Named Executive Officer | Threshold AIP Award (as % of base salary earnings) | Target AIP Award (as % of base salary earnings) | Maximum AIP Award (as % of base salary earnings) | |||
Mr. Connolly | 39% | 165% | 330% | |||
Mr. Marberger | 25% | 100% | 200% | |||
Mr. McGough | 25% | 100% | 200% | |||
Mr. Serrao | 23% | 90% | 180% | |||
Mr. Eboli | 20% | 80% | 160% | |||
The targets for theall named executive officers other than Mr. Connolly, as percentages of base salary earned, remained unchanged from fiscal 2019. 2021, except for Mr. Eboli who joined Conagra in July 2021 and thus had no fiscal 2021 target. Mr. Connolly’s target, as a percentage of base salary, was increased from 155% to 165% to better align his total targeted compensation opportunity between the market median and the market seventy-fifth percentile for his role. Please see the information above for a discussion of the factors the Committee considered when determining the individual target AIP awards of each of the named executive officers.
2022 PROXY STATEMENT 58
Fiscal 20202022 Results
As discussed above, our results were above target in fiscal 2020. For FY20FY22 AIP purposes, the Committee determined that Conagra achieved fiscal 20202022 adjusted operating income of $1,831.9$1,665.4 million and fiscal 20202022 adjusted net sales of $11,156.7 million, and fiscal 2020 free cash flow of $1,534.0$11,535.9 million. Formulaically, these results provided for a payout equal to 138.2%89.4% of target.
| ||||||
| ||||||
| ||||||
Once the performance metrics review was complete, the Committee considered the manner in which management executed the operating plan during the year to determine if any adjustments were necessarywarranted to the overall payout. The FY20FY22 AIP permitted the Committee to increase or decrease the pool funding level by an amount, up to 15% of target,, based on how the company achieved its business results. ReflectingDuring fiscal 2022, Conagra was negatively impacted by various external factors that were generally outside of management’s control, including higher than expected input cost inflation, higher transportation costs, and elevated supply chain operating costs. These factors adversely impacted Conagra’s FY22 AIP results. Although management took decisive actions to mitigate these impacts, including by investing in our supply chain operations and successfully implementing inflation-driven pricing, the full realization of the benefit of such actions did not occur in time to fully offset higher overall costs in fiscal 2022. Management also effectively managed our Ardent Mills joint venture, the results of which were not reflected in the FY22 AIP results.
After careful consideration of the impact the FY22 AIP payouts might have on Conagra’s ability to retain and reward those key employees necessary to help Conagra meet its financial and business objectives, and in consideration of the many operational and strategic accomplishments from the year in the face of evolving and dynamic challenges, Mr. Connolly recommended, and the Committee agreed, not to exercise any discretionto alterincrease the overall pool funding. The Committee did empower managementFY22 AIP payout funding for all AIP-eligible employees, including the named executive officers, by 10.6 points. As shown in the table below, this discretionary adjustment, which was made pursuant to allocate approximately 3.2 pointsthe original design of the FY22 AIP, increased the FY22 AIP funding percentage for our named executive officers from 89.4% to 100%, subject to individual modifiers for performance in some instances. This was the first time the Committee has exercised positive discretion in AIP payout funding.
| (Dollars in Millions) | ||||||
| Metric (As Adjusted) | FY22 Target | FY22 AIP Results | Funding Level | |||
Operating Income | $1,802.9 | $1,665.4 | 82.7% of Target | |||
Net Sales | $11,107.1 | $11,535.9 | 104.8% of Target | |||
| Initial Payout % | 89.4% of Target | |||||
| Positive Payout Adjustment % | 100% of Target | |||||
4759 CONAGRA BRANDS
funded pool toward greater individual recognition of employees who worked most directly on the company’s COVID-19 response, and to fund the pool at 135% of target for the balance of the AIP eligible population.
Determination of Individual Named Executive Officer Awards
The Committee’s final step was to determine each named executive officer’s individual payout under the FY20FY22 AIP. This process involved an assessment of the individual’s target award, the company performance against the performance goals, and each executive’s individual performance. The Committee consideredperformance, including each executive’s applicable individual performance modifier (which included D&I as a component of the factors set forth above when determining named executive officer payouts under the FY20 AIP, including the application of those factors during fiscal 2020. holistic individual performance assessment).
Mr. Connolly’s input on the individual contribution of these leaders, and his recommendations on program payouts, also assisted the Committee in approving specific AIP payouts. The full Board’s performance evaluation of Mr. Connolly was used in determining his payout. Ultimately, the Committee decided that each named executive officer should be compensated under the FY20FY22 AIP as detailed in the chart below. The Committee believes that the AIP awards paid to the named executive officers for fiscal 20202022 are consistent with the level of accomplishment by the company and each named executive officer during the year.
Named Executive Officer
| Target Opportunity
| Actual AIP Payout
| Actual Payout as
| Target Opportunity
| Actual AIP Payout
| Actual Payout as
| ||||||
Mr. Connolly | $1,869,231 | $2,649,635 | 142% | $2,093,850 | $2,198,543 | 105% | ||||||
Mr. Marberger | $738,677 | $997,214 | 135% | $736,700 | $736,700 | 100% | ||||||
Ms. Batcheler | $561,548 | $795,995 | 142% | |||||||||
Mr. McGough | $695,250 | $938,588 | 135% | $750,000 | $750,000 | 100% | ||||||
Mr. Serrao | $570,115 | $769,656 | 135% | $549,000 | $549,000 | 100% | ||||||
Mr. Eboli | $382,154 | $382,154 | 100% | |||||||||
To incent management to make decisions that have positive long-term impacts, even at the expense of shorter-term results, and to prevent unusual gains and losses from having too great of an impact on plan payouts in any year, the Committee retained discretion in the FY20FY22 AIP to exclude items impacting comparability from company-wide results and adjust actual results for specific items that occurred during the fiscal year. The use of adjustments approved by the Committee and applicable to the fiscal 20202022 operating income and net sales and free cash flow metrics is described below under “Additional Information on Compensation Practices – Use of Adjustments in Incentive Programs.”
Fiscal 20212023 Annual Incentive Plan
At the start of fiscal 2021,2023, the Committee approved operating income and net sales and free cash flow (in each case subject to adjustment as appropriate for items impacting comparability of results) as the funding metrics for the fiscal 2021FY23 Annual Incentive Plan. No changes were made to the funding metrics and weightings used for the fiscal 2020 Annual Incentive Plan.
Long-Term Incentive Plan Overview
The Committee firmly believes in aligning the interests of our senior leaders with those of our shareholders. The significant extent to which equity is included in our named executive officers’ compensation opportunity evidences this belief.
For fiscal 2020,2022, the long-term incentive program was intended to:
provide variable, competitive compensation based on long-term company performance;
| • | provide variable, competitive compensation based on long-term company performance; |
incent and reward leaders who have the greatest ability to drive long-term company success; and
| • | incent and reward leaders who have the greatest ability to drive long-term company success; and |
| • | reward participants for desired results that align with shareholder value creation.
|
The fiscal 20202022 program for the named executive officers included two elements: an award of performance shares that are settled in shares of common stock, and an award of service-based restricted stock units (RSUs).
2022 PROXY STATEMENT 60
The Committee annually establishes a target long-term incentive grant value for each named executive officer using a value-based approach. In fiscal 2022, as in recent years, 75% of this total targeted value was delivered in the form of a performance share grant, and 25% of this total targeted value was delivered in the form of an RSU grant. Targeted values were converted into grant sizes by dividing the dollar value of the targeted opportunity by the average of the closing market price of our common stock on the NYSE for the 10 trading days prior to, the grant date, but not including, the grant date. The aggregate target opportunities for fiscal 20202022 long-term incentive awards for the named executive officers were as follows:
| Named Executive Officer | Target Opportunity | |||
Mr. Connolly | $ | |||
Mr. Marberger | $ | |||
| ||||
Mr. McGough | $ | |||
Mr. Serrao | $1,600,000 | |||
Mr. Eboli | $1,000,000(1) | |||
Each of Mr. Serrao’sConnolly’s, Mr. Marberger’s, and Mr. McGough’s target long-term incentive award increased from $1,200,000$7,750,000 to $8,421,000, from $1,600,000 to $2,000,000, and from $1,600,000 to $2,000,000, respectively, in fiscal 2020.2022. The increase wasincreases were approved during fiscal 2019 (to take effectto better align Mr. Connolly’s total targeted compensation to between the market median and market seventy-fifth percentile, and each of Mr. Marberger’s, and Mr. McGough’s total targeted compensation more closely to the market median for grants beginning in fiscal 2020) to reflect his new role as Co-Chief Operating Officer.each of their roles. Other than Mr. Serrao’sthe increased target opportunity,opportunities for Messrs. Connolly, Marberger, and McGough, no changes were made to the named executive officers’ target long-term incentive opportunities fromfor fiscal 2019.2022, except for Mr. Eboli who joined Conagra in July 2021 and thus had no fiscal 2021 target. Each element of the long-term incentive plan used in fiscal 20202022 is discussed more fully below.
| (1) | Mr. Eboli also has target opportunity of an additional $350,000 related to his sign-on RSU for the beginning of his employment with the company, with one-half of the grant vesting on each of the first and second anniversaries of the grant date. |
Long-Term Incentive Plan – Restricted Stock Units
RSUs generally represent the right to receive a defined number of shares of our common stock after completing a period of service established at the grant date. RSUs encourage long-term commitment to the company.
In general, all RSUs granted in fiscal 20202022 vest in full on the third anniversary of the date of grant, subject to the executive’s continued employment with us. Awards granted in fiscal 20202022 are not entitled to dividend equivalents.
The number of RSUs granted to each named executive officer pursuant to the fiscal 20202022 long-term incentive program is set forth below.
| Named Executive Officer | RSUs Granted During Fiscal | |||
Mr. Connolly | ||||
Mr. Marberger | ||||
| ||||
Mr. McGough | ||||
Mr. Serrao | ||||
Mr. Eboli | 17,347 | |||
The Committee considered the factors set forth above with respect to each named executive officer when determining grant sizes by individual. GrantsAnnual grants to the named executive officers other than Mr. Connolly were made on July 16, 2019.22, 2021. Mr. Connolly’sEboli also received a sign-on grant on August 2, 2021, representing a contingent right to receive 10,214 shares with 50% of those RSUs were grantedvesting on July 17, 2019.August 2, 2022 and the remaining 50% vesting on August 2, 2023. These 10,214 shares are included in the total 17,347 RSUs for Mr. Eboli listed in the above table. The grant date fair value of the RSUs awarded to our named executive officers is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.2022.
4961 CONAGRA BRANDS
Long-Term Incentive Plan – Performance Shares
Performance shares represent an opportunity to earn a defined number of shares of our common stock if we achieve pre-set performance goals over time. In general, the performance shares vest following completion of the third fiscal year following grant and provide the named executive officer participating in the cycle the opportunity to earn a payout, in shares of common stock, from 0% to 200% of their respective targeted award. Dividend equivalents are paid on the portion of performance shares actually earned at our regular dividend rate in additional shares of common stock.
The three-year nature of each performance share grant means that in any year, a named executive officer can have up to three outstanding performance share plan, or PSP, cycles outstanding. In fiscal 2020,2022, for example, each named executive officer participated in our fiscal 20182020 to 20202022 PSP, our fiscal 20192021 to 20212023 PSP, and our fiscal 20202022 to 20222024 PSP.
The targeted number of performance shares granted to our named executive officers in fiscal 2020,2022, together with the performance share grants made under the comparable program in fiscal 20192021 and fiscal 2018,2020, are set forth below.
| Named Executive Officer | Targeted Performance Shares for Fiscal 2020 to 2022 Cycle | Targeted Performance Shares for Fiscal 2019 to 2021 Cycle | Targeted Performance Shares for Fiscal 2018 to 2020 Cycle | Targeted Performance Shares for Fiscal 2022 to 2024 Cycle | Targeted Performance Shares for Fiscal 2021 to 2023 Cycle | Targeted Performance Shares for Fiscal 2020 to 2022 Cycle | ||||||
Mr. Connolly | 201,939 | 156,328 | 151,128 | 180,203 | 160,058 | 201,939 | ||||||
Mr. Marberger | 43,273 | 33,450 | 35,710 | 42,798 | 33,044 | 43,273 | ||||||
Ms. Batcheler | 43,273 | 33,450 | 35,710 | |||||||||
Mr. McGough | 43,273 | 33,450 | 35,710 | 42,798 | 33,044 | 43,273 | ||||||
Mr. Serrao | 43,273 | 25,088 | 26,783 | 34,239 | 33,044 | 43,273 | ||||||
Mr. Eboli | 21,399 | - | - | |||||||||
Goal Setting in the PSP
The Committee’s approach to selecting and setting performance goals for each cycle of the PSP is thorough. Prior to the start of a performance period, the Committee discusses proposed plan design, taking into consideration the company’s strategic plan. Then, shortly after the start of each performance period, the Committee approves the actual metric or metrics for the program and the specific financial hurdles that must be met for awards to be earned.
The Committee’s preferred approach is for the performance goals in each grant to cover the full three-years of the performance period and remain un-revised throughout the cycle. However, the Committee retains the discretion to modify goals or use longer or shorter performance periods if doing so is appropriate in light of relevant company dynamics or macroeconomic conditions. For example, in recent years, the Committee has amended plan targets under the PSP in light of the Pinnacle Foods acquisition and tax reform legislation known as the Tax Cuts and Jobs Act, or TCJA. In addition, dueTCJA, and in July 2021 (due to the significant uncertainty createduncertainties caused by the ongoing COVID-19 pandemic, the Committee made the decision in connection with the implementation ofpandemic), adopted a staged approach to goal setting for the fiscal 2021 portion of the FY21 through 2023FY23 cycle of the performance share plan (approved in July 2020), to adopt a staged approach to goal setting. As will be more fully described in the company’s fiscal 2021 proxy statement, program payouts for the fiscal 2021 to 2023 PSP will ultimately be based on the company’s performance versusby adopting a one-year EPS growth target (fiscal 2021) andrate for the fiscal 2021 period (as described in our 2021 proxy statement, the one-year Adjusted Diluted EPS CAGR). However, the Committee made the decision to return for the FY22 to FY24 cycle to the three-year performance period plan design from prior years, which included a yet-to-be approved two-year target (covering fiscal 2022grant intended to 2023)cover a three-year performance period that would remain unchanged (absent the Committee’s discretion to modify or adjust the applicable goals if necessary (as described above)).
The Committee believes that appropriate goal setting is among the most important aspects of establishing the executive compensation program. As such, the Committee makes goal-setting decisions that it believes best maintain the alignment of the company’s long-term incentive program with the company’s external financial commitments to investors.
The balance of this subsection of the Compensation Discussion and Analysis describes, in more detail, each cycle of our PSP outstanding during fiscal 2020.2022.
20202022 PROXY STATEMENT 5062
FY22 to FY24 Performance Share Awards
Performance shares for the fiscal 2022 to fiscal 2024 cycle of the long-term incentive plan were granted at the start of fiscal 2022. The performance period for this cycle will conclude at the end of fiscal 2024 and the awards will pay out, to the extent earned, in shares of common stock in summer 2024. The specific fiscal 2022 plan targets are as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | |||
Fiscal 2022 to 2024 | 0.9% | 3.2% | 5.4% | |||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity. (2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity. (3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. |
The grant date fair value of all performance shares granted to the named executive officers under the fiscal 2022 to 2024 cycle, based on the probable outcome of the performance conditions for such period, is included for fiscal 2022 in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2022.
FY21 to FY23 Performance Share Awards
Performance shares for the fiscal 2021 to fiscal 2023 cycle of the long-term incentive plan were granted at the start of fiscal 2021. As mentioned above and described in our 2021 proxy statement, the Committee adopted a staged approach to goal setting for the fiscal 2021 through 2023 cycle of the performance share plan by adopting a one-year target for the fiscal 2021 period, and then a two-year target for the fiscal 2022 through fiscal 2023 period, of the FY21 to FY23 awards. The performance measure adopted for the cycle includes a one-year Adjusted Diluted EPS CAGR goal for FY21 (weighted at 33%) approved during fiscal 2021 as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | Weighted | ||||
Fiscal 2021 | 0.4% | 4.3% | 8.3% | 33% | ||||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity. (2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity. (3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. |
At the conclusion of fiscal 2021, the Committee assessed our performance against the one-year goal for the fiscal 2021 tranche described above and certified results overall. As set forth in the table below, our financial performance during fiscal 2021 resulted in a funding level equal to 200% of the fiscal 2021 portion of the FY21 to FY23 performance share awards.
��
| Performance Period | Performance Metric | Results | Payout Earned | Weighted | ||||
Fiscal 2021 Tranche of FY21 to FY 23 awards | EPS CAGR as adjusted | 15.2% | 200% | 33% | ||||
63 CONAGRA BRANDS
The two-year Adjusted Diluted EPS CAGR for FY22-23 (weighted at 67%) was adopted at the beginning of fiscal 2022 . The performance period for this cycle will conclude at the end of fiscal 2023 and the awards will pay out, to the extent earned, in shares of common stock in summer 2023. The specific plan targets are as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | Weighted | ||||
Fiscal 2022 to Fiscal 2023 | -2.5% | 1.1% | 4.6% | 67% | ||||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity.
(2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity.
(3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. | ||||||||
The grant date fair value of the portion of the performance shares granted to the named executive officers under the fiscal 2021 to 2023 cycle based on the probable outcome of the performance conditions for such period, is all included for fiscal 2021 in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2022.
FY20 to FY22 Performance Share Awards
Performance shares for the fiscal 2020 to fiscal 2022 cycle of the long-term incentive plan were granted at the start of fiscal 2020. The performance measure adopted for the cycle is a three-year EPS CAGR. The performance period will conclude at the end of fiscal 2022 and the awards will pay out, to the extent earned, in shares of common stock in summer 2022. The specific plan targets are as follows:
| Fiscal 2020 to 2022 Cycle | ||||||
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | |||
Fiscal 2020 to 2022 | 7.7% | 11.4% | 14.9% | |||
(1)An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity
(2)An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity
(3)An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity | ||||||
The grant date fair value of all performance shares granted to the named executive officers under the fiscal 2020 to 2022 cycle, based on the probable outcome of the performance conditions for such period, is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.
FY19 to FY21 Performance Share Awards
Performance shares for the fiscal 2019 to fiscal 2021 cycle of the long-term incentive plan were granted at the start of fiscal 2019. The plan will conclude at the end of fiscal 2021 and pay out, to the extent earned, in shares of common stock in summer 2021. As discussed in our 2019 proxy statement, the original EPS CAGR goals for this cycle were revised following the Pinnacle acquisition. The revised plan targets are as follows:
| Fiscal 2019 to 2021 Cycle | ||||||
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | |||
Fiscal 2019 to 2021 | 2.5% | 5.8% | 8.9% | |||
(1)An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity
(2)An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity
(3)An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity | ||||||
The grant date fair value of all performance shares granted under the fiscal 2019 to 2021 cycle, based on the probable outcome of the performance conditions for such period, is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2020.
FY18 to FY20 Performance Share Awards
Performance shares for the fiscal 2018 to fiscal 2020 cycle of the long-term incentive plan were granted at the start of fiscal 2018 and the performance period concluded at the end of the fiscal 2020. The performance measure adopted for2022 with the cycle was a three-year EPS CAGR. As discussed in our 2019 proxy statement, the original EPS CAGR goals for this cycle were revised to reflect the impact of the Pinnacle acquisition and the implementation of the TCJA. The revisedspecific plan targets are as follows:
| Fiscal 2018 to 2020 Cycle | ||||||
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | �� Maximum EPS CAGR(3) | |||
Fiscal 2018 to 2020 | 3.5% | 6.8% | 9.9% | |||
(1)EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity
(2)EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity
(3)EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity | ||||||
51 CONAGRA BRANDS
| Performance Period | Threshold EPS CAGR(1) | Target(2) | Maximum EPS CAGR(3) | |||
Fiscal 2020 to 2022 | 7.7% | 11.4% | 14.9% | |||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity.
(2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity.
(3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. | ||||||
At the conclusion of fiscal 2020,2022, the Committee assessed our performance against the fiscal 20182020 to 20202022 EPS CAGR goal and certified results overall. As set forth in the table below, our financial performance over the last three years resulted in a funding level equal to 190.7%0% of the targeted PSP awards.
Performance Period | Adjusted EPS Goal | Performance Metric | Plan Results | Payout Earned | Total Cycle Payout | Performance Metric | Plan Results | Payout Earned | Total Cycle Payout | |||||||||||
FY18-FY20 | Achieved | EPS CAGR, as adjusted | 9.7% | 190.7% | 190.7% | |||||||||||||||
Fiscal 2020 to 2022 | EPS CAGR, as adjusted | 6.2% | 0% | 0% | ||||||||||||||||
For more information about the Committee’s assessment of our performance versus program goals, see “Additional Information on Compensation Practices – Use of Adjustments in Incentive Programs” below. Also see “Additional Information on Compensation Practices – Tax and Accounting Implications of the Committee’s Compensation Decisions” for a discussion of an overarching performance hurdle that had to be achieved for awards under the fiscal 2018 to fiscal 2020 PSP to be earned.
2022 PROXY STATEMENT 64
The table below lists the number of shares of common stock that were issued to the named executive officers following fiscal 20202022 for the fiscal 20182020 to 20202022 cycle of the PSP. It is generally the Committee’s practice to pay performance share awards at a level equal to the funded amount, without applying further discretion. The Committee followed this practice for the fiscal 20182020 to fiscal 20202022 PSP. The noted amounts include dividend equivalents on earned shares, which were paid in additional shares.
| Named Executive Officer | Targeted Performance Shares Granted for Fiscal 2018 to 2020 Cycle | Actual Performance Shares Earned for Fiscal 2018 to 2020 Cycle | Actual as % of Target (without Dividend Equivalents) | Actual as % of Target (with Dividend Equivalents) | Targeted Performance Shares Granted for Fiscal 2020 to 2022 Cycle | Actual Performance Shares Earned for Fiscal 2020 to 2022 Cycle | Actual as % of Target (without Dividend Equivalents) | Actual as % of Target (with Dividend Equivalents) | ||||||||
Mr. Connolly | 151,128 | 312,782 | 190.7% | 207% | 201,939 | 0 | 0% | 0% | ||||||||
Mr. Marberger | 35,710 | 73,907 | 190.7% | 207% | 43,273 | 0 | 0% | 0% | ||||||||
Ms. Batcheler | 35,710 | 73,907 | 190.7% | 207% | ||||||||||||
Mr. McGough | 35,710 | 73,907 | 190.7% | 207% | 43,273 | 0 | 0% | 0% | ||||||||
Mr. Serrao | 26,783 | 55,431 | 190.7% | 207% | 43,273 | 0 | 0% | 0% | ||||||||
Mr. Eboli(1) | - | - | - | - | ||||||||||||
(1) Mr. Eboli did not have a target for and did not receive these performance shares because he did not begin his employment with the Company until July 12, 2021, which was in fiscal 2022. | (1) Mr. Eboli did not have a target for and did not receive these performance shares because he did not begin his employment with the Company until July 12, 2021, which was in fiscal 2022. | |||||||||||||||
Performance-Based Restricted Stock Unit Awards
In fiscal 2019, the Committee approved one-time grants of performance based restricted stock units (PBRSUs) to the named executive officers (not including Mr. Eboli who was not with the Company) and a very limited group of other senior officers of the company. The PBRSU awards arewere designed to strengthen the alignment between management and shareholders and incentivize shareholder value growth. In general, the PBRSU awards willwere to be earned only to the extent management deliversdelivered strong absolute TSRtotal shareholder return (TSR) and strong relative TSR versus the median TSR of the S&P 500 Index over a performance period running from the date of grant (April 15, 2019) until May 27, 2022 (the last trading day of fiscal 2022). The outstandingPBRSU award agreements include non-competition restrictive covenants that generally apply until the earlier of the one-year anniversary of a participant’s termination of employment with us and the one-year anniversary of the vesting date of the PBRSU award.
The PBRSUs granted during fiscal 2019 are included intargets were not met over the Outstanding Equity Awards at Fiscal Year-End Table – Fiscal 2020.performance period and none of the named executive officers earned any PBRSUs.
Committee’s Views on Executive Stock Ownership
The Committee has adopted stock ownership guidelines applicable to approximately 8893 of our most senior employees, including our named executive officers. These guidelines, which are represented as a percentage of salary, increase with level of responsibility within the company. The Committee has adopted these guidelines because it believes that management stock ownership promotes alignment with shareholder interests.
The named executive officers are expected to reach their respective ownership requirement within a reasonable period of time after appointment. Shares personally acquired by the executive through open market purchases or through our employee benefit plans (for
2020 PROXY STATEMENT 52
example, our employee stock purchase plan), as well as outstanding RSU awards, are counted toward the ownership requirement. Unexercised stock options, unearned performance shares, and unearned PBRSUs are not counted. If a named executive officer’s ownership position is below the applicable ownership requirement, the named executive officer is required to hold 75% of the net shares received from equity compensation awards.
The following table reflects the ownership, as of August 3, 2020, of our named executive officers.
Named Executive Officer
| Stock Ownership Guideline (% of Salary)
| Actual Ownership (% of Salary)(1)
| ||
Mr. Connolly | 600 | 2,186 | ||
Mr. Marberger | 400 | 661 | ||
Ms. Batcheler | 400 | 1,434 | ||
Mr. McGough | 400 | 1,294 | ||
Mr. Serrao | 300 | 785 | ||
(1)Based on the closing price of our common stock on the NYSE on August 3, 2020 ($37.56) and the salaries of the named executive officers in effect as of May 31, 2020. | ||||
5365 CONAGRA BRANDS
The following table reflects the ownership, as of July 26, 2022, of our continuing named executive officers.
| Named Executive Officer | Stock Ownership Guideline (% of Salary) | Actual Ownership (% of Salary)(1) | ||
Mr. Connolly | 600 | 2,615 | ||
Mr. Marberger | 400 | 881 | ||
Mr. McGough | 400 | 719 | ||
Mr. Serrao | 300 | 911 | ||
Mr.Eboli (2) | 300 | 140 | ||
(1)Based on the closing price of our common stock on the NYSE on July 26, 2022 ($33.82) and the salaries of the named executive officers in effect as of May 29, 2022.
(2)Due to his hire date of July 12, 2021, Mr. Eboli does not yet meet his ownership requirement. Mr. Eboli is projected to make progress towards his ownership guideline each year he remains in position. | ||||
2022 PROXY STATEMENT 66
Other Fiscal 20202022 Compensation
The additional material elements of our compensation program for the named executive officers during fiscal 20202022 were as follows:
Benefit Programs
We offer a package of core employee benefits to our employees, including our named executive officers. With respect to health and welfare benefits, we offer health, dental, and vision coverage and life and disability insurance. The company and employee participants share in the cost of these programs.
We offer a matching-gifts program through our Conagra Brands Foundation. To maximize community impact, the Conagra Brands Foundation offers matching gift opportunities to all employees, including the named executive officers. Donations made by the Foundation on behalf of a named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2020.2022.
With respect to retirement benefits, we maintain a qualified 401(k) retirement plan (with a company match on employee contributions and a nonelective employer contribution) and the named executive officers are entitled to participate in this plan on the same terms as other employees. Ms. Batcheler and Mr. McGough also participateparticipates in a qualified pension plan that was closed to new participants in 2013 and frozen effective December 31, 2017.
Some of the named executive officers and other employees at various levels of the organization participate in a voluntary deferred compensation plan. The voluntary deferred compensation plan enables us to pay retirement benefits in amounts that exceed the limitations imposed by the Code under our qualified plans. The plan allows the named executive officers, as well as a broader group of employees, to defer receipt of a portion of their base salary and annual cash incentive compensation. A company match is made on deferrals of any compensation above the IRS annual compensation limit ($285,000305,000 for calendar year 2020)2022, and $290,000 for calendar year 2021), and a nonelective contribution is made on compensation above the limit. The program permits executives to save for retirement in a tax-efficient way at minimal administrative cost to the company. Executives who participate in the program are not entitled to above-market (as defined by the SEC) or guaranteed rates of return on their deferred funds.
We include contributions made by the company to the named executive officers’ 401(k) plan and voluntary deferred compensation accounts in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2020.2022. We provide a complete description of these retirement programs under the headings “Pension Benefits – Fiscal 2020”2022 and “Nonqualified Deferred Compensation – Fiscal 2020”2022” below.
Security Policy
The Committee has determined that it is appropriate to cover Mr. Connolly by our security policy. As a result, Mr. Connolly is required to take corporate aircraft for all business and personal air transportation. To offset a portion of the incremental cost to the company of his personal use of corporate aircraft, we entered into an aircraft time share agreement with Mr. Connolly. Under the agreement, Mr. Connolly is responsible for reimbursing us, in cash, certain amounts to help offset a portion of our incremental costs of personal flights, consisting of the cost of fuel and incidentals such as landing and parking fees, airport taxes, and catering costs for such flights. We do not charge for the fixed costs that would be incurred in any event to operate the company aircraft (for example, aircraft purchase costs, maintenance, insurance, and flight crew salaries). Mr. Connolly’s reimbursement obligation to the company begins once the aggregate amount of the certain incremental costcosts detailed above of his personal flights exceeds $150,000 in a fiscal year. The incremental cost to us of providing these benefits in fiscal 2020,2022, if any, is included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2020.2022.
67 2020 PROXY STATEMENTCONAGRA BRANDS 54
A copy of the Conagra Brands, Inc. Aircraft Use Policy is available to any shareholder who requests it from the Corporate Secretary at 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
Agreements with Named Executive Officers
Agreement with Mr. Connolly
We entered into a letter agreement with Mr. Connolly on August 2, 2018, which replaced Mr. Connolly’s prior employment agreement that expired on August 1, 2018. The letter agreement generally describes Mr. Connolly’s duties and responsibilities as CEO, and, provides for a minimum base salary of $1.2 million subject to review and possible increase by the Committee and the Board’s independent directors, as well as a customary vacation allowance. The letter agreement also outlines Mr. Connolly’s participation in our incentive compensation programs. Regarding the annual incentive program, the agreement provides that Mr. Connolly’s target opportunity will be at least 150% of his base salary. With respect to long-term incentives, Mr. Connolly is entitled each year to receive a targeted long-term award opportunity with a value of at least $7.5 million for any routine three-year performance period approved by the Committee, subject to the terms and conditions established by the Committee.
The agreement subjects Mr. Connolly to our stock ownership guidelines. Mr. Connolly also remains bound to certain provisions in his prior employment agreement that survived the expiration of such agreement, including a one-year post-employment non-competition restriction and our standard confidentiality and non-solicitation agreement.
The agreement continues the application of our security policy to Mr. Connolly, as further described above and under “Executive Compensation — Summary Compensation Table – Fiscal 2020”2022” below. In addition, we also agreed to pay Mr. Connolly for professional fees incurred in the negotiation and preparation of the new letter agreement (and related documents).
The letter agreement provides for severance, termination and change of control benefits.
The agreement also entitles Mr. Connolly to participate in benefit plans and programs that are made available to senior executives generally. For information about the terms of Mr. Connolly’s participation in our retirement plans and deferred compensation plans, see “Executive Compensation –— Nonqualified Deferred Compensation – Fiscal 2020”2022” below.
The letter agreement also includes retirement benefits for Mr. Connolly. It provides that, for Mr. Connolly’s equity awards granted on or after July 17, 2018, and for any annual incentive plan in effect in the year of his retirement, (a) any definition of “early retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attains at least age 55 but has not yet attained age 57, and (b) any definition of “normal retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attain at least age 57. In addition, if any RSU or performance share award or agreement with Mr. Connolly under the long-term incentive program for an award outstanding at the time of his termination of employment provides for immediate vesting (either pro-rata or in full, as applicable) in the event of normal retirement or early retirement (as such terms are defined in the RSU or performance share award or agreement), and such normal retirement or early retirement is not within two years of a change of control (as that term is defined in the RSU or performance share award or agreement), then such RSU or performance share award or agreement will be deemed to be amended by the letter agreement so that it provides for continued vesting after the retirement in accordance with the normal vesting schedule for such award (either pro-rata or in full, as applicable).
The letter agreement also provides for severance, termination, and change of control benefits.
Mr. Connolly’s severance benefits under the letter agreement are further described below under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
55 CONAGRA BRANDS
Change of Control Benefits
We have agreements with our named executive officers that are designed to promote stability and continuity of senior management in the event of a change of control. The Committee routinely evaluates participation in this program and its benefit levels to ensure their reasonableness.
2022 PROXY STATEMENT 68
Since fiscal 2012, individuals promoted or hired into positions that, in the Committee’s view, are appropriate for change of control program participation have not been entitled to any excise tax gross-up protection. Although the Committee continues to believe in the importance of maintaining a change of control program, it believes that offering excise tax gross-ups to new participants is inappropriate relative to best executive pay practices.
We provide a complete description of the amounts potentially payable to our named executive officers under these agreements under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
Severance Benefits
We have adopted a broad severance plan potentially applicable to all salaried employees, including the named executive officers. In some circumstances, as part of negotiations during the hiring or recruiting process, we have supplemented this plan with specific severance arrangements. No such arrangements currently exist with our named executive officers other than Mr. Connolly.
Design and Approval of Our Fiscal 20202022 Program
The Committee’s process to design the compensation program for the named executive officers is a robust one. To help ensure that its design objectives are met and program elements are reasonable, the Committee uses a variety of inputs, including the results of our annual “say-on-pay” vote, the advice of the Committee’s independent compensation consultant, company and participant-focused considerations, the input of our Chief Executive Officer, and risk mitigation considerations. We address each of these inputs here.
Annual Say on Pay Vote
In overseeing the executive compensation program for fiscal 2020,2022, the Committee looked to our shareholders. The Committee’s policy is to present a “say-on-pay” vote to our shareholders annually. In September 2019,2021, we received over 92%93% approval in our say-on-pay vote, leading the Committee to the conclusion that material changes in compensation design, solely due to the outcome of the say-on-pay vote, were not warranted for fiscal 2020.2022.
Independent Consultant and Market Data
The Committee also leveraged the advice and counsel of its independent compensation consultant, FW Cook, in setting fiscal 20202022 compensation. The consultant assists the Committee in monitoring policy positions of institutional shareholders and their advisors, emerging market practices in compensation design and philosophy, and policy developments relevant to the Committee’s work. The Committee’s consultant also provides internal and external pay comparison data. The Committee uses this data as a market check on its compensation decisions and does not mandate target ranges for our named executive officers’ salaries, annual incentive opportunities, long-term incentive opportunities, or total direct compensation levels as compared to the peer group. The Committee recognizes that over-reliance on external comparisons can be of concern; therefore, the Committee uses external comparisons as only one point of reference and is mindful of the value and limitations of comparative data.
The Committee’s first step in using external data for fiscal 20202022 was the identification of an appropriate peer group. FW Cook initially prepared a list of potential peer companies (with an emphasis on food and beverage companies) based on consideration of the following criteria:
| • | Operations and Scale: Companies similar in size (based on revenue, market capitalization, and enterprise value) and industry (packaged food and meats and broader brand-based consumer packaged goods companies); |
Operations and Scale: Companies similar in size (based on revenue, market capitalization and enterprise value) and industry (packaged food and meats and broader brand-based consumer packaged goods companies);
| • | Business Characteristics: Public companies listed on major U.S. exchanges and subject to U.S. disclosure rules, and companies with whom we compete for talent; and |
| • | Proxy Advisor Peers: Companies included in peer groups used by shareholder advisory firms (as a reference). |
69 2020 PROXY STATEMENTCONAGRA BRANDS 56
Business Characteristics: Public companies listed on major U.S. exchanges and subjectFollowing discussion, the Committee decided to U.S. disclosure rules, and companies with whom we competemaintain fiscal 2021’s peer group for talent; andfiscal 2022 compensation decisions.
Proxy Advisor Peers: Companies included in peer groups used by shareholder advisory firms (as a reference).
The Committee approved the following peer group of 16 companies for purposes of assessing fiscal 20202022 compensation competitiveness:
| Campbell Soup Company | General Mills, Inc. | |||
| Church & Dwight Co., Inc. | The Hershey Company | |||
| The Clorox Company | Hormel Foods Corporation | |||
| Colgate-Palmolive Company | The J. M. Smucker Company | |||
| Incorporated | ||||
| The Estée Lauder Companies Inc. | Mondelez International, Inc. | |||
| Newell Brands Inc. | ||||
Mattel, Inc. and Pinnacle Foods Inc. were removed from the peer group for fiscal 2020 compensation decisions. The Kraft Heinz Company and McCormick & Company, Incorporated were added to the peer group for fiscal 2020 because both companies satisfied Conagra’s peer selection criteria.
Company and Participant Focused Matters
The Committee also generally considered the following company and participant focused matters in making fiscal 2020 2022compensation decisions:
| Company- Focused Matters | • Company performance in prior years and expectations for the future;
• The anticipated degree of difficulty inherent in the targeted incentive performance goals;
• The level of risk-taking the program would reward;
• The general business environment; and
• Practices and developments in compensation design and governance.
| |||||
| Participant- Focused Matters | • Individual performance history;
• The anticipated degree of difficulty inherent in individual goals;
• Internal pay equity; and
• The potential complexity of each program, preferring programs that are transparent to participants and shareholders and easily administered.
| |||||
57 CONAGRA BRANDS
The Chief Executive Officer’s Views
Mr. Connolly, our Chief Executive Officer and President, played a role in several key areas of the design of our fiscal 20202022 executive compensation program.
Selecting Performance Metrics and Targeted Performance Levels. An important part of designing incentive compensation programs is the selection of plan metrics and performance targets. To help ensure that the Committee’s pay-for-performance goals are achieved, selected metrics must be tied to shareholder value creation. In addition, performance targets must be set at levels that balance investor expectations against achievability, without incenting undue risk taking. The Committee sought Mr. Connolly’s input on these matters for fiscal 2020. Mr. Connolly provided the Committee his views on the appropriate company goals for use in our annual and long-term incentive plans. Mr. Connolly provided input based on his understanding of investor expectations and our operating plans and financial goals. The Committee had sole authority to approve the program metrics and targets but found Mr. Connolly’s input valuable.
| • | Selecting Performance Metrics and Targeted Performance Levels. An important part of designing incentive compensation programs is the selection of plan metrics and performance targets. To help ensure that the Committee’s pay-for-performance goals are achieved, selected metrics must be tied to shareholder value creation. In addition, performance targets must be set at levels that balance investor expectations against achievability, without incenting undue risk taking. The Committee sought Mr. Connolly’s input on these matters for fiscal 2022. Mr. Connolly provided the Committee his views on the appropriate company goals for use in our annual and long- |
Assessing Company Performance.2022 PROXY STATEMENT 70 Financial performance is at the core of our incentive programs. However, the Committee retains the discretion to modify payouts based on the manner in which business results are delivered. At the end of fiscal 2020, Mr. Connolly offered the Committee his views of the quality of our performance against expectations.
| term incentive plans. Mr. Connolly provided input based on his understanding of investor expectations and our operating plans and financial goals. The Committee had sole authority to approve the program metrics and targets but found Mr. Connolly’s input valuable. |
Assessing Individual Performance. With respect to individual performance, which also informed fiscal 2020 compensation decisions, the Committee relied on Mr. Connolly’s regular performance evaluations of the senior leadership team. Mr. Connolly shared information on the named executive officers’ impact on strategic initiatives and organizational goals, as well as their leadership behaviors.
| • | Assessing Company Performance. Financial performance is at the core of our incentive programs. However, the Committee retains the discretion to modify payouts based on the manner in which business results are delivered. At the end of fiscal 2022, Mr. Connolly offered the Committee his views of the quality of our performance against expectations. |
| • | Assessing Individual Performance. With respect to individual performance, which also informed fiscal 2022 compensation decisions, the Committee relied on Mr. Connolly’s regular performance evaluations of the senior leadership team. Mr. Connolly shared information on the named executive officers’ impact on strategic initiatives and organizational goals, as well as their leadership behaviors. |
Apart from this input from Mr. Connolly, no named executive officer played a direct role in his or her own compensation determination for fiscal 2020.2022.
Additional Information on Compensation Practices
Committee’s Practices Regarding the Timing of Equity Grants
We do not backdate stock options or grant equity retroactively. We do not coordinate grants of equity with disclosures of positive or negative information. Most equity is granted in the ordinary course at an annual Committee meeting each July.
The Committee eliminated the granting of stock options from its executive compensation program in fiscal 2018. However, historically, stock options were granted with an exercise price equal to the closing market price of our common stock on the NYSE on the date of grant. If a stock option grant was made other than during the routine July Committee meeting, the company would require that the grant be made on the first trading day of the month on or following the grantee’s date of hire.
Additional Information on the Committee’s Compensation Consultant
The Committee engaged FW Cook directly to assist it in obtaining and reviewing information relevant to its compensation decisions. The independence and performance of FW Cook are of the utmost importance to the Committee. As a result, Committee policy prevents management from directly engaging the consultant without the prior approval of the Committee’s Chair. For fiscal 2020,2022, FW Cook did not provide any additional services to us or our affiliates.In addition, the Committee reviews the types of services provided by the consultant and all fees paid for those services on a regular basis and conducts a formal evaluation of the consultant on an annual basis. The Committee assessed the independence of FW Cook, as required under NYSE listing rules. The Committee has also considered and assessed all relevant factors, including those required by the SEC that could give rise to a potential conflict of interest with respect to FW Cook during fiscal 2020.2022. Based on this review, the Committee did not identify any conflict of interest raised by the work performed by FW Cook.
2020 PROXY STATEMENT 58
Tax and Accounting Implications of the Committee’s Compensation Decisions
U.S. federal income tax law prohibits us from taking a tax deduction for certain compensation paid in excess of $1 million to certain executive officers (and, beginning in 2018, certain former executive officers). Historically, compensation that qualified as “performance-based compensation” under Section 162(m) of the Code could be excluded from this $1 million limit. This exception was repealed for our programs with the TCJA, effective for taxable years beginning after December 31, 2017, unless certain transition relief is available. The Committee’s general intent prior to implementation of the TCJA was to structure our executive compensation programs so that payments could qualify as “performance-based compensation.” However, the Committee may have decided from time to time to grant compensation that would not (or could not) be able to qualify as “performance-based compensation” if appropriate to achieve the objectives of the compensation program.
The fiscal 2018 to fiscal 2020 performance share awards to the named executive officers were subject to, and made in accordance with, a performance-based compensation arrangement that was intended to qualify as tax deductible. To that end, the Committee approved a framework in which (1) maximum awards under this incentive program would be authorized upon attainment of adjusted EPS of $0.10 per year; and (2) negative discretion would be applied by the Committee to decrease authorized awards based upon the program framework described above. For the fiscal 2018 to 2020 cycle of the PSP, the adjusted EPS goal was certified in connection with payouts to the named executive officers.2017.
With the repeal of the “performance-based compensation” provisions of Section 162(m) of the Code, compensation granted by the Committee may, more frequently, be non-deductiblenon-deductible. and, beginning with incentive programs adopted in fiscal 2019, the two-tiered performance hurdle structure described in the immediately foregoing paragraph has been eliminated. The Committee believes that the tax deduction
71 CONAGRA BRANDS
limitation should not be permitted to compromise its ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that in certain cases is not deductible for federal income tax purposes.
Use of Adjustments in Incentive Programs
Our goal is to pay incentives based on the same underlying business trends and results that our investors are using to measure company performance. To incent management to make decisions that have positive long-term impacts, even at the expense of shorter term results, and to prevent one-time gains and losses from having too great of an impact on incentive payouts, the Committee designed its programs to exclude certain items impacting comparability from results in the FY20FY22 AIP and the fiscal 20182020 to 20202022 cycle of the PSP. The metrics for the FY20FY22 AIP were fiscal 20202022 operating income and net sales, and free cash flow.sales. The overarching metric for the fiscal 20182020 to 2020 cycle of the PSP was adjusted EPS. The underlying metric for the fiscal 2018 to 20202022 cycle of the PSP was adjusted diluted EPS CAGR.
In both the FY20FY22 AIP and the fiscal 20182020 to 20202022 cycle of the PSP, the Committee approved adjustments that are generally consistent with the adjustments presented to investors in our discussions of comparable earnings results.
Adjustments included“add-backs” for the following types of unplanned events, which can either negatively impactedor positively impact our performance versus incentive plan targets but arein a manner that is not indicative of underlying business performance:
Restructuring events
| • | Restructuring charges; |
Expenses associated with M&A and integration-related activities
| • | Mergers, acquisitions, or divestitures, including supporting costs; |
Impairments on intangible assets
| • | Material changes in business, operations, corporate or capital structure; |
Lost sales and profits associated with unplanned divestitures
| • | Impairments and other write-offs; |
Certain pension and hedging matters
Adjustments also included the elimination of the impact of the following types of unplanned events, which positively impacted our performance versus incentive plan targets but are not indicative of underlying business performance:
| • | The movement of an operation into discontinued operations after the start of the performance period; |
Gains on divestitures
| • | Foreign exchange or hedge-related gains and losses; |
Benefits to legal accruals
| • | Non-operating/non-cash gains and losses; |
| • | Litigation or claim adjudication, judgments, or settlements – positive and negative; |
59 CONAGRA BRANDS
| • | Adjustments to prior year tax liabilities; and |
| • | The cumulative effects of accounting charges. |
Mitigating Risk in Our Compensation Program
While the primary goal of Conagra’s executive compensation program is to align management and shareholder interests and encourage strong financial performance, the Committee is attuned to the fact that poorly constructed compensation programs can have unintended consequences. As such, the Committee designs Conagra’s program thoughtfully to help mitigate the risk that employees will take unnecessary and excessive risks that threaten the long-term health and viability of our company. With the assistance of Human Resources and Legal department personnel, the Committee undertook a risk review of our fiscal 20202022 compensation programs for all employees. Based on the review, we believe our compensation policies and practices are balanced and aligned with creating shareholder value and do not create risks that are reasonably likely to have a material adverse effect on our company.
20202022 PROXY STATEMENT 6072
What We DO |
| Focus employees on both short- and long-term goals. |
|
| ||||
|
|
|
| |||||
|
| Generally require a “double-trigger” for accelerated vesting to occur in equity awards in connection with a change of control.
| ||||||
| Consider a mix of financial and non-financial goals to prevent over-emphasis on any single metric. |
| Provide for the clawback of amounts paid to any of our most senior officers in certain circumstances. | |||||
| Allow for some subjective evaluation in the determination of incentive payouts, to ensure linkage between payouts and the “quality” of performance.
|
| Use a range of strong processes and controls, including Committee oversight, in our compensation practices.
| |||||
| Employ a greater portion of variable pay (i.e., incentives) at more senior levels of the organization. |
| Engage an independent compensation consultant for the Committee; consultant performs no other work for our company. | |||||
| Require stock ownership for more than 93 of our most senior employees, as of fiscal year end.
|
| Pay incentive compensation only after our financial results have been finalized and certified by the Committee.
| |||||
What We DON’T DO |
| No director or executive officer may pledge or hedge their ownership of company stock.
|
|
| ||||
|
|
| Since fiscal 2012, no change in control agreements have been executed with excise tax “gross-up” protection.
| |||||
| No excessive perquisites are provided to executives. |
| No additional years of credited service are provided to named executive officers in pension programs. | |||||
| No backdating or re-pricing of options may occur without shareholder approval.
|
| No compensation programs that encourage unreasonable risk taking will be implemented.
| |||||
6173 CONAGRA BRANDS
The Human Resources Committee has reviewed and discussed the above section of this Proxy Statement entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Human Resources Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in the company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020.29, 2022.
Conagra Brands, Inc. Human Resources Committee
| Anil Arora | Joie A. Gregor | Richard H. Lenny | ||
| Ruth Ann Marshall, Chair | ||||
Executive Compensation
Summary Compensation Table – Fiscal 20202022
The table below presents compensation information for individuals who served as our Chief Executive Officer and Chief Financial Officer during fiscal 2020 and2022, for each of the other three most highly-compensatedhighly compensated individuals who were serving as executive officers at the end of fiscal 2020.2022. Mr. Eboli was not a named executive officer in fiscal 2020 or fiscal 2021; as such, information about such officer’s compensation for fiscal 2020 and fiscal 2021 is not included.
The amounts in the following Summary Compensation Table for Mr. Connolly are based in part on his letter agreement. For more information about the material terms of the letter agreement with Mr. Connolly and the change of control agreements we have entered into with each of our named executive officers, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above and “Potential Payments Upon Termination or Change of Control” below.
For more information about our named executive officers’ mix of total compensation, see the discussion under “Compensation Discussion and Analysis — Our Fiscal 20202022 Executive Compensation Program” above.
Please note that all share amounts and (if applicable) exercise prices included in the tables in this “Executive Compensation” section for awards granted prior to November 9, 2016 reflect the equitable adjustments to the company’s outstanding equity awards that were made in connection with the spin-off of Lamb Weston. For additional information about such equitable adjustments, please see “Compensation Discussion and Analysis – Special–Special Note on the Treatment of Equity Awards in the Spinoff” in our 2017 proxy statement.
20202022 PROXY STATEMENT 6274
Name and Principal Position
| Fiscal
| Salary
| Bonus
| Stock
| Option
| Non-Equity
| Change in
| All Other
| Total
| Fiscal
| Salary
| Bonus
| Stock
| Non-Equity
| Change in
| All Other
| Total
| |||||||||||||||||||
Sean Connolly CEO and President |
2020
| 1,246,154 | - | 7,630,602 | - | 2,649,635 | - | 356,441 | 11,882,832 | |||||||||||||||||||||||||||
2019
| 1,192,308 | - | 11,173,754 | - | 1,611,404 | - | 415,282 | 14,392,748 | ||||||||||||||||||||||||||||
2018
| 1,142,308 | - | 6,676,835 | - | 2,250,000 | - | 404,128 | 10,473,271 | ||||||||||||||||||||||||||||
Sean Connolly Chief Executive Officer and President |
|
2022
|
| 1,269,000 | - | 7,976,396 | 2,198,543 | - | 503,115 | 11,947,054 | ||||||||||||||||||||||||||
|
2021
|
| 1,230,462 | - | 7,722,276 | 2,357,319 | - | 459,966 | 11,770,023 | |||||||||||||||||||||||||||
|
2020
|
| 1,246,154 | - | 7,630,602 | 2,649,635 | - | 356,441 | 11,882,832 | |||||||||||||||||||||||||||
David Marberger Executive Vice President and Chief Financial Officer |
2020
| 738,677 | - | 1,587,822 | - | 997,214 | - | 123,791 | 3,447,504 |
|
2022
|
| 736,700 | - | 1,894,382 | 736,700 | - | 153,874 | 3,521,656 | |||||||||||||||||
2019
| 683,000 | - | 2,201,192 | - | 615,383 | - | 132,486 | 3,632,061 |
|
2021
|
| 733,392 | - | 1,594,274 | 906,473 | - | 159,998 | 3,394,137 | ||||||||||||||||||
2018
| 639,231 | - | 1,582,062 | - | 715,107 | - | 91,029 | 3,027,429 |
|
2020
|
| 738,677 | - | 1,587,822 | 997,214 | - | 123,791 | 3,447,504 | ||||||||||||||||||
Colleen Batcheler Executive Vice President and General Counsel |
2020
| 561,548 | - | 1,587,822 | - | 795,995 | 88,823 | 95,431 | 3,129,619 | |||||||||||||||||||||||||||
2019
| 540,750 | - | 2,201,192 | - | 487,216 | 28,863 | 107,178 | 3,365,199 | ||||||||||||||||||||||||||||
2018
| 540,750 | - | 1,582,062 | - | 672,152 | 10,449 | 109,850 | 2,915,263 | ||||||||||||||||||||||||||||
Tom McGough Executive Vice President and Co-Chief Operating Officer |
2020
| 695,250 | - | 1,587,822 | - | 938,588 | 76,391 | 108,005 | 3,406,056 | |||||||||||||||||||||||||||
2019
| 669,500 | - | 2,201,192 | - | 603,220 | 28,693 | 134,058 | 3,636,663 | ||||||||||||||||||||||||||||
2018
| 669,500 | - | 1,582,062 | - | 832,189 | 15,987 | 137,007 | 3,236,745 | ||||||||||||||||||||||||||||
Thomas McGough Executive Vice President and Co-Chief Operating Officer |
|
2022
|
| 750,000 | - | 1,894,382 | 750,000 | 0 | 145,478 | 3,539,860 | ||||||||||||||||||||||||||
|
2021
|
| 714,385 | - | 1,594,274 | 882,980 | 4,923 | 129,543 | 3,326,105 | |||||||||||||||||||||||||||
|
2020
|
| 695,250 | - | 1,587,822 | 938,588 | 76,391 | 108,005 | 3,406,056 | |||||||||||||||||||||||||||
Darren Serrao Executive Vice President and Co-Chief Operating Officer |
2020
| 633,462 | - | 1,587,822 | - | 769,656 | - | 95,684 | 3,086,624 |
|
2022
|
| 610,000 | - | 1,515,532 | 549,000 | - | 113,859 | 2,788,391 | |||||||||||||||||
2019
| 575,062 | - | 1,805,401 | - | 466,317 | - | 109,880 | 2,956,660 |
|
2021
|
| 610,000 | - | 1,594,274 | 678,564 | - | 122,854 | 3,005,692 | ||||||||||||||||||
| 2018 | 496,797 | - | 1,186,587 | - | 581,029 | - | 84,580 | 2,348,993 |
|
2020
|
| 633,462 | - | 1,587,822 | 769,656 | - | 95,684 | 3,086,624 | ||||||||||||||||||
Alexandre Eboli Executive Vice President and Chief Supply Chain Officer |
|
2022
|
| 477,693 | 380,000 | 1,262,702 | 382,154 | - | 105,575 | 2,608,124 | ||||||||||||||||||||||||||
| 1. | Reflects bonus paid as part of Mr. Eboli’s sign-on package related to beginning his employment with the Company. |
| 2. | Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the stock awards granted during the reported fiscal years. For each of fiscal 2022, fiscal 2021, and fiscal 2020, the amount reported includes the full grant date fair value for all of the performance years of the performance shares awarded |
For fiscal |
The measurement date for pension value for fiscal |
75 CONAGRA BRANDS
The components of fiscal |
Perquisites and Personal Benefits(a) | (Column 3) Company Contribution to $(c)
|
Perquisites and Personal Benefits(a) | (Column 4) Tax $ | (Column 5) Company $(d)
| ||||||||||||
| Named Executive Officer | (Column 1) Personal Use of Aircraft $ | (Column 2) Matching Gifts $ | (Column 1) Personal Use of $ | (Column 2) Matching Gifts $ | (Column 3) Relocation $ | |||||||||||
Mr. Connolly
|
106,492
|
(b)
|
242,449
|
179,962
|
(b)
|
-
|
-
| 315,653
| ||||||||
Mr. Marberger
|
-
|
(b)
|
116,291 |
-
|
(b)
|
-
|
-
| 146,374
| ||||||||
Ms. Batcheler
|
-
|
(b)
|
90,431
| |||||||||||||
Mr. McGough
|
-
|
-
|
108,005
|
-
|
-
|
-
|
-
| 145,478
| ||||||||
Mr. Serrao
|
-
| (b)
|
95,184
|
-
| -
|
-
|
-
| 113,859
| ||||||||
Mr. Eboli
|
-
|
-
|
45,036
|
(b)(c)
| 41,746
| |||||||||||
| (a) | All amounts shown are valued at the incremental cost to us of providing the benefit. For Column 1, also includes the incremental cost of repositioning flights associated with personal use by the named executive officer. With respect to Mr. Connolly’s use of company aircraft (Column 1), |
63 CONAGRA BRANDS
| Mr. Connolly is a party to an aircraft time share agreement with us. Under this agreement, Mr. Connolly reimburses us in cash for a portion of our incremental costs of personal flights once |
| (b) | For Columns |
| (c) | Reflects tax assistance payments related to Mr. Eboli in connection with relocation benefits received in fiscal 2022. |
| (d) | Reflects the qualified |
Named Executive Officer
| Company
| Company
| ||
Mr. Connolly | 23,891 | 291,762 | ||
Mr. Marberger | 27,450 | 118,924 | ||
Mr. McGough | 27,450 | 118,028 | ||
Mr. Serrao | 26,100 | 87,759 | ||
Mr. Eboli | 41,746 | - | ||
Grants of Plan-Based Awards – Fiscal 20202022
The following table presents information about grants of plan-based awards (equity and non-equity) made during fiscal 20202022 to the named executive officers. All equity-based grants were made under the shareholder approved Conagra Brands, Inc. 2014 Stock Plan, as amended, which we refer to as the 2014 Stock Plan.
Estimated Possible Payouts
| Estimated Future Payouts Under
| All Other
| Grant Date
| |||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant Date
|
Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
| |||||||||||||||||||||||||||||||||||||||||||||
Mr. Connolly |
-
| -
|
1,869,231
|
3,738,462
|
-
|
-
|
-
|
-
|
-
| |||||||||||||||||||||||||||||||||||||||||||
7/17/2019
| -
|
-
| -
|
-
|
201,939
|
403,878
|
-
|
5,848,153
| ||||||||||||||||||||||||||||||||||||||||||||
7/17/2019
| -
| -
| -
| -
| -
| -
| 67,313
| 1,782,448
| ||||||||||||||||||||||||||||||||||||||||||||
Mr. Marberger | - | - | 738,677 | 1,477,354 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 43,273 | 86,546 | - | 1,217,702 | ||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 14,424 | 370,120 | ||||||||||||||||||||||||||||||||||||||||||||
Ms. Batcheler | - | - | 561,548 | 1,123,096 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 43,273 | 86,546 | - | 1,217,702 | ||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 14,424 | 370,120 | ||||||||||||||||||||||||||||||||||||||||||||
Mr. McGough | - | - | 695,250 | 1,390,500 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 43,273 | 86,546 | - | 1,217,702 | ||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 14,424 | 370,120 | ||||||||||||||||||||||||||||||||||||||||||||
Mr. Serrao | - | - | 570,115 | 1,140,231 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 43,273 | 86,546 | - | 1,217,702 | ||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 14,424 | 370,120 | ||||||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive
| Estimated Future Payouts Under Equity Incentive Plan Awards(2)
| All Other
| Grant Date
| |||||||||||||||||
Name
| Grant Date
|
Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
| |||||||||||||
Mr. Connolly | -
| -
| 2,093,850
| 4,187,700
|
| -
| -
| -
| -
| -
| ||||||||||
7/22/2021 | - | - | - |
| - | 180,203 | 360,406 | - | 6,150,328 | |||||||||||
| 7/22/2021
| -
| -
| -
|
| -
| -
| -
| 60,068
| 1,826,067
| |||||||||||
Mr. Marberger | - | - | 736,700 | 1,473,400 |
| - | - | - | - | - | ||||||||||
7/22/2021 | - | - | - |
| - | 42,798 | 85,596 | - | 1,460,696 | |||||||||||
7/22/2021 | - | - | - |
| - | - | - | 14,266 | 433,686 | |||||||||||
Mr. McGough | - | - | 750,000 | 1,500,000 |
| - | - | - | - | - | ||||||||||
7/22/2021 | - | - | - |
| - | 42,798 | 85,596 | - | 1,460,696 | |||||||||||
7/22/2021 | - | - | - |
| - | - | - | 14,266 | 433,686 | |||||||||||
Mr. Serrao | - | - | 549,000 | 1,098,000 |
| - | - | - | - | - | ||||||||||
7/22/2021 | - | - | - |
| - | 34,239 | 68,478 | - | 1,168,577 | |||||||||||
7/22/2021 | - | - | - |
| - | - | - | 11,413 | 346,955 | |||||||||||
Mr. Eboli | - | - | 382,154 | 764,308 |
| - | - | - | - | - | ||||||||||
7/22/2021 | - | - | - |
| - | 21,399 | 42,798 | - | 730,348 | |||||||||||
7/22/2021 | - | - | - |
| - | - | - | 7,133 | 216,843 | |||||||||||
8/2/2021 | - | - | - |
| - | - | - | 10,214 | 315,510 | |||||||||||
| 1. | Amounts reflect grants made under the |
| 2. | Amounts reflect the performance |
| 3. | The grant date fair value of performance shares granted under our long-term incentive program for |
77 2020 PROXY STATEMENTCONAGRA BRANDS 64
Outstanding Equity Awards at Fiscal Year-End – Fiscal 20202022
The following table lists all stock options, performance shares RSU and PBRSURSUs awards outstanding as of May 31, 202029, 2022 for the named executive officers.
Option Awards
|
Stock Awards
|
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant Date
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity (#)
| Equity ($)(2)
| Grant
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity
| Equity
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Connolly | 4/1/2015 | 806,150 | - | 27.44 | 3/31/2025 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/28/2015 | 283,111 | - | 31.06 | 8/27/2025 | - | - | - | - | 4/1/2015 | 806,150 | - | 27.44 | 3/31/2025 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/11/2016 | 273,309 | - | 35.81 | 7/10/2026 | - | - | - | - | 8/28/2015 | 283,111 | - | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/20/2017 | - | - | - | - | 50,376 | 1,752,581 | - | - | 7/11/2016 | 273,309 | - | 35.81 | 7/10/2026 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/18/2018 | - | - | - | - | 52,109 | 1,812,872 | - | - | 7/17/2019 | - | - | - | - | 67,313 | 2,231,426 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2019 | - | - | - | - | 67,313 | 2,341,819 | - | - | 7/23/2020 | - | - | - | - | 53,353 | 1,768,652 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/18/2018 | - | - | - | - | - | - | 164,638(3) | 5,727,756 | 7/22/2021 | - | - | - | - | 60,068 | 1,991,254 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/15/2019 | - | - | - | - | - | - | 95,190(4) | 3,311,660 | 7/23/2020 | - | - | - | - | - | - | 338,850(3) | 11,232,878 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2019 | - | - | - | - | - | - | 413,072(3) | 14,370,775 | 7/22/2021 | - | - | - | - | - | - | 50,260(3) | 1,666,119 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Marberger | 9/1/2016 | 69,248 | - | 34.26 | 8/31/2026 | - | - | - | - | 9/1/2016 | 69,248 | - | 34.26 | 8/31/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/19/2017 | - | - | - | - | 11,903 | 414,105 | - | - | 7/16/2019 | - | - | - | - | 14,424 | 478,156 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 387,909 | - | - | 7/23/2020 | - | - | - | - | 11,015 | 365,147 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 501,811 | - | - | 7/22/2021 | - | - | - | - | 14,266 | 472,918 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | - | - | 35,228(3) | 1,225,582 | 7/23/2020 | - | - | - | - | - | - | 69,956(3) | 2,319,041 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,231(4) | 529,886 | 7/22/2021 | - | - | - | - | - | - | 11,937(3) | 395,712 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 88,512(3) | 3,079,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Batcheler | 7/15/2013 | 187,607 | - | 27.46 | 7/14/2023 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/28/2015 | 72,480 | - | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/11/2016 | 69,965 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/19/2017 | - | - | - | - | 11,903 | 414,105 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 387,909 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 501,811 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | - | - | 35,228(3) | 1,225,582 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,231(4) | 529,886 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 88,512(3) | 3,079,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. McGough | 7/15/2013 | 21,405 | - | 27.46 | 7/14/2023 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/14/2014 | 135,951 | - | 23.00 | 7/13/2024 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/28/2015 | 72,480 | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/11/2016 | 69,965 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 478,156 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/23/2020 | - | - | - | - | 11,015 | 365,147 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/22/2021 | - | - | - | - | 14,266 | 472,918 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/23/2020 | - | - | - | - | - | - | 69,956(3) | 2,319,041 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/22/2021 | - | - | - | - | - | - | 11,937(3) | 395,712 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
65 CONAGRA BRANDS2022 PROXY STATEMENT 78
Option Awards
|
Stock Awards
|
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity (#)
| Equity ($)(2)
| Grant
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity
| Equity Rights that
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. McGough | 7/16/2012 | 80,615 | - | 18.42 | 7/15/2022 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/15/2013 | 187,607 | - | 27.46 | 7/14/2023 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/14/2014 | 205,951 | - | 23.00 | 7/13/2024 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/28/2015 | 72,480 | - | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/11/2016 | 69,965 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/19/2017 | - | - | - | - | 11,903 | 414,105 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 387,909 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 501,811 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | - | - | 35,228(3) | 1,225,582 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,231(4) | 529,886 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 88,512(3) | 3,079,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Serrao | 8/28/2015 | 54,358 | - | 31.06 | 8/27/2025 | - | - | - | - | 8/28/2015 | 54,358 | - | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/11/2016 | 52,472 | - | 35.81 | 7/10/2026 | - | - | - | - | 7/11/2016 | 52,472 | - | 35.81 | 7/10/2026 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/19/2017 | - | - | - | - | 8,928 | 310,605 | - | - | 7/16/2019 | - | - | - | - | 14,424 | 478,156 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | 8,363 | 290,949 | - | - | 7/23/2020 | - | - | - | - | 11,015 | 365,147 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 501,811 | - | - | 7/22/2021 | - | - | - | - | 11,413 | 378,341 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/17/2018 | - | - | - | - | - | - | 26,422(3) | 919,221 | 7/23/2020 | - | - | - | - | - | - | 69,956(3) | 2,319,041 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,231(4) | 529,886 | 7/22/2021 | - | - | - | - | - | - | 9,550(3) | 316,583 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/16/2019 | - | - | - | - | - | - | 88,512(3) | 3,079,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Eboli | 7/22/2021 | - | - | - | - | 7,133 | 236,459 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/2/2021 | - | - | - | - | 10,214 | 338,594 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/22/2021 | - | - | - | - | - | - | 5,969(3) | 197,872 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. | Service-based RSUs generally vest in full on the third anniversary of the grant date, except for Mr. Eboli’s August 2, 2021 grant which vests 50% on the first anniversary of the grant date and 50% on the second anniversary of the grant date. |
| 2. | The market value of unvested or unearned RSUs and unearned shares |
| 3. | Reflects, on separate lines, as of May |
|
79 2020 PROXY STATEMENTCONAGRA BRANDS 66
Option Exercises and Stock Vested – Fiscal 20202022
The following table summarizes the RSUs vested and the option awards exercised during fiscal 20202022 for each of the named executive officers as well as theofficers. The performance shares that were not earned by and paid out to the named executive officers for the fiscal 20182020 to 20202022 cycle of the PSP.
| Option Awards | Stock Awards | |||||||||||||||||||
Name
| Number of Shares
| Value Realized on
| Number of Shares
| Value Realized on
| ||||||||||||||||
Mr. Connolly | - | - | 358,333 | 12,702,691 | ||||||||||||||||
Mr. Marberger | - | - | 85,448 | 3,033,038 | ||||||||||||||||
Ms. Batcheler | - | - | 85,567 | 3,026,152 | ||||||||||||||||
Mr. McGough | - | - | 85,567 | 3,026,152 | ||||||||||||||||
Mr. Serrao | - | - | 64,176 | 2,277,337 | ||||||||||||||||
|
| Option Awards | Stock Awards | |||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on ($) | ||||
Mr. Connolly | - | - | 52,109 | 1,816,520 | ||||
Mr. Marberger | - | - | 11,150 | 388,689 | ||||
Mr. McGough | 116,202 | 964,775 | 11,150 | 388,689 | ||||
Mr. Serrao | - | - | 8,363 | 291,534 | ||||
Mr. Eboli | - | - | - | - | ||||
Pension Benefits – Fiscal 20202022
Conagra Brands has historicallypreviously maintained a non-contributory defined benefit pension plan for eligible employees, which we refer to as the Qualified Pension. The Qualified Pension was closed to new participants who joined the company on or after August 1, 2013. As a result, Messrs. Connolly, Marberger, Serrao, and SerraoEboli are not eligible to participate. Of the named executive officers, only Ms. Batcheler and Mr. McGough participate.currently participates in this plan.
In the Qualified Pension, the pension benefit formula for the named executive officer participants is determined by adding two components:
A multiple – 0.9% — of Average Monthly Earnings (up to the integration level) multiplied by years of credited service.
A multiple – 1.3% — of Average Monthly Earnings (over the integration level) multiplied by years of credited service.
“Average Monthly Earnings” is the monthly average of the executive’s annual compensation from the company, up to the IRS limit, for the highest five consecutive years of the final ten years of his or her service. Only salary and annual incentive payments (reported in the “Non-Equity Incentive Plan Compensation” column of the summary compensation table year to year) are considered for the named executive officers in computing Average Monthly Earnings. The integration level is calculated by the IRS by averaging the last 35 years of Social Security taxable wages, up to and including the year in which the executive’s employment ends.
2022 PROXY STATEMENT 80
Participants are vested in the pension benefit once they have five years of service with the company; each of Ms. Batcheler and Mr. McGough areis vested. Pension benefits become payable at age 65 for normal retirement, or at age 55 with 10 years of service for early retirement. There is no difference in the benefit formula upon an early retirement, and there is no payment election option that would impact the amount of annual benefits any of the named executive officers would receive. The Qualified Pension was frozen effective December 31, 2017. Credited service and Average Monthly Earnings were frozen as of such date.
67 CONAGRA BRANDS
Name
| Plan Name(1)
| Number of Years
|
Present Value of
| Plan Name(1)
| Number of Years
|
Present Value of
| ||||||||||||||||||||
Mr. Connolly(4) | Qualified Pension | - | - | Qualified Pension | - | - | ||||||||||||||||||||
Mr. Marberger(4) | Qualified Pension | - | - | Qualified Pension | - | - | ||||||||||||||||||||
Ms. Batcheler | Qualified Pension | 13.5 | 342,448 | |||||||||||||||||||||||
Mr. McGough | Qualified Pension | 12.9 | 397,474 | Qualified Pension | 10.9 | 325,987 | ||||||||||||||||||||
Mr. Serrao(4) | Qualified Pension | - | - | Qualified Pension | - | - | ||||||||||||||||||||
Mr. Eboli(4) | Qualified Pension | - | - | |||||||||||||||||||||||
| 1. | Qualified Pension refers to the Conagra Brands, Inc. Pension Plan. |
| 2. | The number of years of credited service set forth above is calculated as of May |
| 3. | The valuation methodology and all material assumptions applied in quantifying the present value of the accumulated benefit are presented in |
| 4. | Messrs. Connolly, Marberger, Serrao and |
Nonqualified Deferred Compensation – Fiscal 20202022
The table following this summary shows the nonqualified deferred compensation activity for each named executive officer during fiscal 2020.2022. The amounts shown include amounts deferred under the Conagra Brands Retirement Income Savings Plan, or Qualified CRISP, which is our qualified 401(k) plan, and the Conagra Brands, Inc. Voluntary Deferred Compensation Plan, as amended and restated, or Voluntary Deferred Comp Plan.
Under our Qualified CRISP, which is a broad-based plan for employees, the company will match 100% of the first 6% of salary and bonus the employee contributes to the plan and make an additional contribution of 3% of salary and annual incentive. Participants are provided a wide-arraywide array of investment alternatives for their account balances.
Our Voluntary Deferred Comp Plan allows certain employees to defer receipt of between 6% to 50% of their salary, up to 90% of their annual incentive payment, or up to 90% of their salary plus annual incentive payment in excess of the IRS limit ($285,000305,000 for calendar year 2020)2022, and $290,000 for calendar year 2021). The investment alternatives for deferred amounts mirror those available under our Qualified CRISP. An election to participate in the plan must be timely filed with the company in accordance with IRS requirements.
Our Voluntary Deferred Comp Plan also provides nonqualified matching contribution benefits. The plan provides for company matching contributions and company non-elective contributions for eligible participants associated with amounts of eligible compensation above IRS limits. The matching contribution is a dollar for dollar match, limited to 6% of eligible compensation earned by the participant and paid by the company in excess of the IRS limit. The non-elective contribution is equal to 3% of an eligible participant’s eligible compensation in excess of the IRS limit. Matching contributions and non-elective contributions are credited on or about December 31st of each year.
81 CONAGRA BRANDS
The Voluntary Deferred Comp Plan also provides that, unless the company determines otherwise with respect to a participant, the interest of each participant in his or her matching contributions and non-elective contributions will be immediately 100% vested.
With respect to distributions from the Voluntary Deferred Comp Plan, in general, amounts will be distributed in cash in a lump sum in January following the individual’s separation from service. Participants may also elect to receive their balances at certain other times, including in the January of the calendar year specified by the participant or 18 months
2020 PROXY STATEMENT 68
following the occurrence of a change of control. Elections regarding the time and form of payment are intended to comply with Section 409A of the Code, and certain payments to executives meeting the definition of a “specified employee” under Section 409A will be delayed for six months after the date of the separation from service. Executives may make hardship withdrawals from the Voluntary Deferred Comp Plan under certain circumstances, but no hardship withdrawals were requested by executives during fiscal 2020.2022.
Name
| Plan(1)
| Executive
| Registrant
| Aggregate
| Aggregate
| Aggregate
| Plan(1)
| Executive
| Registrant
| Aggregate
| Aggregate
| Aggregate
| ||||||||||||||||
Mr. Connolly | Voluntary Def Comp Plan | 216,648 | 222,472 | 108,377 | - | 2,419,558 | Voluntary Def Comp Plan | 189,753 | 291,762 | (133,751) | - | 3,675,882 | ||||||||||||||||
Mr. Marberger | Voluntary Def Comp Plan | 86,154 | 91,091 | 28,254 | - | 1,170,623 | Voluntary Def Comp Plan | 70,104 | 118,924 | 36,781 | - | 1,620,861 | ||||||||||||||||
Ms. Batcheler | Voluntary Def Comp Plan | 63,405 | 65,735 | 20,027 | (113,194) | 338,344 | ||||||||||||||||||||||
Mr. McGough | Voluntary Def Comp Plan | 246,143 | 87,245 | 93,304 | (13,231) | 1,743,272 | Voluntary Def Comp Plan | 204,385 | 118,028 | (296,716) | (18,333) | 2,695,746 | ||||||||||||||||
Mr. Serrao | Voluntary Def Comp Plan | 65,979 | 69,984 | 18,731 | - | 533,157 | Voluntary Def Comp Plan | 52,140 | 87,759 | (33,346) | - | 904,962 | ||||||||||||||||
Mr. Eboli | Voluntary Def Comp Plan | 22,929 | - | - | - | 22,929 | ||||||||||||||||||||||
| 1. | Voluntary Def Comp Plan refers to the Conagra Brands, Inc. Voluntary Deferred Compensation Plan, as amended. |
| 2. | The amounts reported are included in the “Salary” column of the Summary Compensation Table – Fiscal |
| 3. | The amounts reported are included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal |
| 4. | Our Voluntary Def Comp Plan does not offer above market earnings (as defined by SEC rules). As a result, none of these earnings are included in the Summary Compensation Table – Fiscal |
| 5. | The following amounts from this column were reported in Summary Compensation Tables for prior fiscal years: Mr. Connolly, |
69 CONAGRA BRANDS2022 PROXY STATEMENT 82
Termination or Change of Control
Our named executive officers’ employment may be terminated under several possible scenarios. In some of these scenarios, our plans, agreements, and arrangements would provide severance benefits in varying amounts to the executive. Further, our plans, agreements, and arrangements would provide for certain benefits (or for the acceleration of certain benefits) upon a change of control. Severance and other benefits that are payable upon a termination of employment or upon a change of control are described below. In the event of an actual triggering event under any of the plans, agreements, and arrangements discussed in this section, all benefits would be paid to the executive in accordance with, and at times permitted by, Section 409A of the Code.
Plan Summaries
Severance Pay Plan
We maintain a severance pay plan that provides severance guidelines for all salaried employees. Any benefits payable under the program are at the sole and absolute discretion of Conagra Brands; for any particular employee, we may elect to provide severance as suggested by the plan or to provide benefits equal to, greater than or less than those provided in the guidelines. Ms. Batcheler and Messrs. Marberger, McGough, Serrao, and SerraoEboli are potentially covered by the plan.plan, As described further below, Mr. Connolly is party to a letter agreement with us that, among other things, addresses his severance benefits. For information regarding the letter agreement with Mr. Connolly, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above.
Under the severance pay plan, the severance guideline for individuals above a certain pay grade, including that of our named executive officers, is 52 weeks of salary continuation, plus one additional week of salary continuation for each year of continuous service prior to separation. The guidelines also provide that upon notice that the former employee has obtained new employment, we will provide him or her with a lump sum payment equal to 50% of the severance pay remaining; the other 50% would be forfeited. In addition, the guidelines provide for the provision during this period of the same type and level of health plan coverage that was in effect immediately prior to the named executive officer’s termination of employment, up to a maximum of 18 months.
If a named executive officer is entitled to receive a severance payment under a change of control agreement (described below), we are not required to make payments to him or her under the severance pay plan.
Agreement with Mr. Connolly
We are party to a letter agreement with Mr. Connolly that addresses matters such as his salary, participation in our annual and long-term incentive plans, and participation in health and welfare benefit plans and other benefit programs and arrangements. The letter agreement also addresses certain of Mr. Connolly’s severance benefits. For information regarding the letter agreement with Mr. Connolly, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above.
A summary of Mr. Connolly’s severance benefits is provided below. Generally, any payments made under the letter agreement upon disability or as a result of a termination without cause or for good reason (other than certain benefits required by law) would be conditioned on Mr. Connolly first signing a release agreement in a form approved by us.
83 CONAGRA BRANDS
We have excludedincluded retirement as a hypothetical scenario in the table below because Mr. Connolly would not have beenis eligible for early retirement at any time during fiscal 2020.
2020 PROXY STATEMENT 70
Salary, AIP, Stock Options, and Health and Welfare Benefits | ||||||||||
Involuntary with |
Involuntary Voluntary with | Voluntary Termination without | Death or Disability | Retirement(1) | ||||||
Salary | • Paid through month of termination | • Paid through month of termination • Also paid a lump sum equal to
| • Paid through month of termination | • Paid through month of event | • Paid through month of termination | |||||
Annual | • Not eligible for payment | • Paid no less than a prorated award for year of termination based on actual results, plus a lump sum equal to
| • Not eligible for payment | • Paid no less than a prorated award for the year of event based on actual results | • Paid a prorated award for the year of retirement based on actual results | |||||
Health and Welfare | • Paid in accordance with plan provisions | • Company will pay monthly COBRA premium for up to 24 months after termination of employment
• Other benefits paid in accordance with plan provisions
| • Paid in accordance with plan provisions | • Paid in accordance with plan provisions | • Paid in accordance with plan provisions | |||||
|
| |||||||||
Stock Options | • Options terminate
• Unexercised options | • Sign-on options remain exercisable until the later of July 31, 2021 and as otherwise provided under the award agreement
• Other vested options remain exercisable for 90 days (or until earlier expiration date)
• Unvested options are forfeited
| • Vested options, including vested sign-on options, remain exercisable for 90 days (or until earlier expiration date)
• Unvested options are forfeited | • Death: Options fully vest and remain exercisable for 3 years after event (or until earlier expiration date)
• Disability: Options vest on a prorated basis | ||||||
| • Vested options remain exercisable for 3 years after retirement (or until earlier expiration date) | |||||||||
71 CONAGRA BRANDS2022 PROXY STATEMENT 84
PSP Awards and RSUs: Retirement (In all other scenarios, these awards are paid in accordance with plan provisions described below) | ||||||||||
PSP Awards and RSU Awards | • For awards granted on or after July 17, 2018 that provide for full vesting (Normal Retirement) or pro-rata vesting (Early Retirement) upon termination due to Retirement, awards will continue to vest in accordance with the normal vesting schedule applicable to such award, as long as the Retirement does not occur within 2 years of a Change of Control (in which case the Change of Control provisions apply) | |||||||||
| (1) | “Retirement” means “Early Retirement” (which is a termination of employment upon or after attaining age 55, but prior to attaining age 57) or “Normal Retirement” (which is a termination of employment upon or after attaining age 57). |
Upon any of the hypothetical termination scenarios described above, Mr. Connolly would be paid his balance under our Voluntary Deferred Comp Plan based on his advance elections.
We currently maintain a separate change of control program, as discussed below. Mr. Connolly currently participates in our change of control program.
Annual Incentive Plan (the “AIP”)
The following terms of the AIP govern the impact of specific separation events not covered by an individual agreement:
Involuntary termination due to position elimination: If a participant’s position is involuntarily eliminated such that the employee is eligible for severance, he or she would be eligible for a prorated AIP award based on the number of days the individual was eligible to participate in the plan and actual performance.
| • | Involuntary termination due to position elimination: If a participant’s position is involuntarily eliminated such that the employee is eligible for severance, he or she is eligible for a prorated AIP award based on the number of days the individual was eligible to participate in the plan and actual performance. |
Termination due to retirement: If a participant retires during a fiscal year after reaching age 65, after reaching age 55 with at least 10 years of service, or after reaching age 60 with at least 5 years of service, the participant will be eligible for a prorated AIP award based on the number of days the individual was eligible to participate in the plan and actual performance. Pursuant to the terms of his letter agreement, Mr. Connolly would be eligible for this retirement treatment upon reaching age 57.
| • | Termination due to retirement: If a participant retires during a fiscal year after reaching age 65, after reaching age 55 with at least 10 years of service, or after reaching age 60 with at least 5 years of service, the participant is eligible for a prorated AIP award based on the number of days the individual was eligible to participate in the plan and actual performance. Pursuant to the terms of his letter agreement, Mr. Connolly is eligible for this retirement treatment upon reaching age 57. |
Termination due to death: Any AIP payment for which a participant would have been eligible would be prorated based on the number of days the individual was eligible to participate in the plan to the date of the participant’s death, based on actual performance.
| • | Termination due to death: Any AIP payment for which a participant would have been eligible would be prorated based on the number of days the individual was eligible to participate in the plan to the date of the participant’s death, based on actual performance. |
Except as might otherwise be required by law, in the absence of one of the foregoing events (or a specific agreement with us), a participant would forfeitforfeits his or her AIP award if he or she failedfails to be an active employee at the end of the fiscal year.
Any prorated award made to a former participant is based on actual performance forpaid after the end of the fiscal year and is payable after the end of such fiscal year when payments are made to other participants.
The change of control agreements, described below, govern the payment of annual incentive awards in the event of a change of control.
Long-Term Incentive Plan – Performance Shares and PBRSUs
The following terms of the PSP and PBRSUs govern the impact of specific separation events:
Termination other than as described below:
| • | Involuntary termination: If a participant experiences an involuntary termination of employment that results in severance or supplemental unemployment payments from us, the participant’s awards will vest based on actual performance for the full performance period, and be paid on a prorated basis, based on the days of service completed during the performance period. |
Termination due to disability: If a participant experiences a termination due to disability, the participant will receive a pro rata share of the award that would have been earned for the full performance period at the “target” level. The proration calculation will be based on the days served as of the participant’s termination date. |
| • | Termination due to retirement: If a participant terminates his or her employment via normal retirement or early retirement (as each term is defined in the award or an individual agreement with the participant), the participant’s |
85 CONAGRA BRANDS
| awards will vest based on actual performance for the full performance period (but, in the case of early retirement, the award will be prorated based on days of service during the performance period). |
| • | Termination due to death: The award will vest in full at the target level. |
| • | Change of Control: In the event of a change of control (as defined in the PSP), the earned portion of a participant’s award will be determined as of the change of control, using a share valuation methodology further described in the award and based on the greater of target performance and actual performance through the end of our fiscal period that ends immediately prior to the change of control (the “PSP Change of Control Value”). |
|
| • | Termination other than as described above: |
The participant forfeits all performance shares granted that had not been paid at the date of termination, whether or not the shares are earned as of such date. The Committee has the discretion to pay out some or all of the forfeited performance shares if (i) they would have been earned based on performance and (ii) the Committee deems such a payout appropriate and in our best interests. Such performance shares will be distributed to the participant at the same time they are distributed to other participants who remain employed. |
|
Involuntary termination: If a participant experiences an involuntary termination of employment that results in severance or supplemental unemployment payments from us, such participant’s awards will vest based on actual performance for the full performance period, prorated based on days of service completed during the performance period.
Termination due to disability: On termination due to disability, the participant will receive a pro rata share of the award that would have been earned for the full performance period at the “target” level, prorated based upon days of service as of the participant’s termination date.
Termination due to retirement: On termination due to normal retirement or early retirement (as each term is defined in the award or an individual agreement with the participant), such participant’s awards will vest based on actual performance for the full performance period (but, in the case of early retirement, the award will be prorated based on days of service during the performance period).
2020 PROXY STATEMENT 72
Termination due to death: The award will vest in full at the target level.
Change of Control: In the event of a change of control (as defined in the PSP or PBRSU, as applicable), the earned portion of a participant’s award will be determined as of the change of control, using a share valuation methodology further described in the award and based on the greater of target performance and actual performance through either:
|
|
If no replacement award meeting the requirements set forth in the PSP is provided following a change of control, a participant will vest in a cash payment equal to the PSP Change of Control Value. If a qualifying replacement award is provided, it will generally take the form of a time-based, stock-settled award with a value equal to the PSP Change of Control Value and will vest, subject to continued employment, at the end of the performance period applicable to the original performance share award. Following a change of control, a replacement award will also vest in full if the participant dies or, within two years of the change of control, terminates employment due to normal or early retirement, is terminated without cause (as defined in the PSP) or resigns for good reason (as defined in the PSP), or is terminated due to disability.
The PBRSU Change of Control Value will generally be paid to the participant if the participant terminates employment on the date of the change of control, continues employment through the end of the performance period, or dies prior to the end of the performance period. The PBRSU Change of Control Value will also be paid to the participant if, within two years after the change of control, the participant experiences a termination of employment without cause or for good reason (as each such term is defined in the applicable award agreement), terminates employment due to retirement, or experiences a termination of employment due to disability.
The PBRSU award agreements include non-competition restrictive covenants that generally apply until the earlier of the one-year anniversary of a participant’s termination of employment with us and the one-year anniversary of the vesting date of the PBRSU award.
Long-Term Incentive Plan – RSUs
The following terms generally govern the impact of a separation from us on outstanding RSUs:
Termination other than as described below: The participant forfeits all RSUs unvested at the date of termination.
| • | Involuntary termination: RSUs will vest pro rata based on days of service completed during the vesting period if a participant is terminated due to a divestiture or an involuntary termination that results in severance or supplemental unemployment payments from us. |
Involuntary termination: RSUs granted prior to fiscal 2019 under the 2014 Stock Plan will vest pro rata based on days of service completed during the vesting period if a participant experiences a termination due to job elimination, divestiture or reduction in force at least one year after the date of grant (or, for RSUs granted in fiscal 2018, at any time prior to vesting). RSUs granted in fiscal 2019 or later will vest pro rata based on days of service completed during the vesting period if a participant is terminated due to a divestiture or an involuntary termination that results in severance or supplemental unemployment payments from us.
| • | Termination due to disability or early retirement: On termination due to disability or early retirement (as defined in the award agreement), all unvested RSUs vest pro rata based on days of service completed during the vesting period. For participants other than Mr. Connolly, RSUs are accelerated. For Mr. Connolly’s awards, the pro rata vesting would occur generally on the normal vesting schedule for the award. |
Termination due to disability or early retirement: On termination due to disability or early retirement (as defined in the award agreement), all unvested RSUs granted under the 2014 Stock Plan will vest pro rata (for Mr. Connolly’s awards granted in fiscal 2019 or later, generally on the normal vesting schedule) based on days of service completed during the vesting period.
| • | Termination due to normal retirement: On termination due to normal retirement (as defined in the award agreement), all unvested RSUs fully vest. For participants other than Mr. Connolly, RSUs are accelerated. For Mr. Connolly’s awards, the pro rata vesting would occur generally on the normal vesting schedule for the award. |
Termination due to normal retirement: On termination due to normal retirement (as defined in the award agreement), all unvested RSUs fully vest (for Mr. Connolly’s awards granted in fiscal 2019 or later, generally on the normal vesting schedule).
| • | Termination due to death: All unvested RSUs vest in full. |
Termination due to death: All unvested RSUs vest in full.
| • | Change of Control: Each of the agreements evidencing outstanding awards of RSUs provide for double-trigger vesting, requiring both a change of control event and a qualifying termination of employment (or a failure of the surviving company to provide a replacement award) to trigger vesting. |
| • | Termination other than as described above: The participant forfeits all RSUs unvested at the date of termination. |
Change of Control: Each of the agreements evidencing outstanding awards of RSUs provide for double-trigger vesting, requiring both a change of control event and a qualifying termination of employment (or a failure of the surviving company to provide a replacement award) to trigger vesting.
73 CONAGRA BRANDS
Retirement Benefits
Each of our Qualified Pension and Voluntary Deferred Comp Plan contains provisions relating to the termination of the participant’s employment. These payments are described more fully in the disclosure provided in connection with the “Pension Benefits –— Fiscal 2020”2022” and “Nonqualified Deferred Compensation –— Fiscal 2020”2022” sections of this Proxy Statement.
Change of Control Program
The change of control program for senior executives is designed to encourage management to continue performing its responsibilities in the event of a pending or potential change of control. During fiscal 2020,2022, this program covered each of the named executive officers.
2022 PROXY STATEMENT 86
Generally, a change of control under these agreements occurs if one of the following events occurs:
| • | Individuals who constitute the Board, which, for these purposes, we refer to as the Incumbent Board, cease for any reason to constitute at least a majority of the Board. Anyone who becomes a director and whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board is considered a member of the Incumbent Board. |
| • | Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were our shareholders immediately prior to the transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged, or consolidated company. |
| • | A liquidation or dissolution of Conagra Brands or the sale of all or substantially all of our assets. |
The change of the Board. Anyone who becomes a director and whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board is considered a member of the Incumbent Board.
Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were our shareholders immediately prior to the transaction do not, immediately thereafter, own more than fifty percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company.
A liquidation or dissolution of Conagra Brands or the sale of all or substantially all of our assets.
Thecontrol agreements provide that upon a change of control, we may (at the sole and absolute discretion of the Board or Committee) pay each named executive officer all or a prorated portion of the executive’s short and/or long-term incentive for the year in which the change of control occurs.
The terms of our stock plan and award agreements govern the treatment of equity awards upon a change of control.
With respect to severance, the change of control agreements are double-trigger arrangements, requiring both a change of control event and a qualifying termination of employment to trigger benefits. A qualifying termination event occurs if, within three years after a change of control, (1) the executive’s employment is involuntarily terminated without “cause” or (2) the executive terminates his or her employment for “good reason.”
Executives entitled to severance benefits under a change of control agreement forfeit any severance compensation and benefits under our severance pay plan guidelines and receive the following (subject to execution of a release of claims in favor of us):
a lump sum cash payment equal to a multiple of the executive’s base salary and annual bonus (calculated using the executive’s highest annual bonus for the three fiscal years preceding the change of control or the executive’s target bonus percentage as of the date the change of control agreement is executed, whichever is greater). The multiples are three for Mr. Connolly and Ms. Batcheler and two for Messrs. Marberger, McGough, and Serrao.
| • | a lump sum cash payment equal to a multiple of the executive’s base salary and annual bonus (calculated using the executive’s highest annual bonus for the three fiscal years preceding the change of control or the executive’s target bonus percentage as of the date the change of control agreement is executed, whichever is greater). The multiples are three for Mr. Connolly and two for Messrs. Marberger, McGough, Serrao, and Eboli. |
continuation for three years (for agreements in place prior to July 2011) or two years (for agreements in place after July 2011) of medical, dental, disability, basic and supplemental life insurance to the extent such benefits remain in effect for other executives, with premiums paid by the executive at the rate required of other executive employees (or, for medical and dental benefits, the COBRA rate). Conagra Brands must pay the executive a single lump sum payment equal to an amount to offset taxes (for agreements in place prior to July 2011) plus the executive’s estimated cost to participate in the medical and dental plans.
| • | continuation for three years (for agreements in place prior to July 2011) or two years (for agreements in place after July 2011) of medical, dental, disability, basic and supplemental life insurance to the extent such benefits remain in effect for other executives, with premiums paid by the executive at the rate required of other executive employees (or, for medical and dental benefits, the COBRA rate). Conagra Brands must pay the executive a single lump sum payment equal to an amount to offset taxes (for agreements in place prior to July 2011) plus the executive’s estimated cost to participate in the medical and dental plans. |
a supplemental benefit under our Voluntary Deferred Comp Plan equal to three times (for agreements in place prior to July 2011) or one time (for agreements in place after July 2011) the maximum company contribution that the executive could have received under the Qualified CRISP and Voluntary Deferred Comp Plan in the year in which the change of control occurs.
| • | a supplemental benefit under our Voluntary Deferred Comp Plan equal to three times (for agreements in place prior to July 2011) or one time (for agreements in place after July 2011) the maximum company contribution that the executive could have received under the Qualified CRISP and Voluntary Deferred Comp Plan in the year in which the change of control occurs. |
| • | outplacement assistance not exceeding $30,000.
|
Generally, a termination for “cause” under the agreement requires (as further described in the change of control agreements) (1) the willful and continued failure by the executive to substantially perform his or her duties, (2) the willful engaging by the executive in conduct that is demonstrably and materially injurious to us or (3) the executive’s conviction of a felony or misdemeanor that impairs his or her ability substantially to perform duties for us.
A right of the executive to terminate with “good reason” following a change of control is generally triggered by (1) any failure of Conagra Brands to comply with and satisfy the terms of the change of control agreement, (2) a significant involuntary reduction of the authority, duties, or responsibilities held by the executive immediately prior to the change of control, (3) any involuntary removal of the executive from an officer position held by the executive immediately prior to the change of control, except in connection with promotions, (4) any involuntary reduction in the aggregate compensation level of the executive, (5) requiring the executive to become based at a new location, or (6) requiring the executive to undertake substantially greater amounts of business travel.
87 CONAGRA BRANDS
Certain payments to a “specified employee” within the meaning of Section 409A of the Code will be delayed for six months after the date of the separation from service.
For agreements in place prior to July 2011, the agreements also entitle each executive to an additional payment, if necessary, to make the executive whole as a result of any excise and related taxes imposed by the Code on any change of control benefits received. If the safe harbor amount at which the excise tax is imposed is not exceeded by more than 10%, the benefits will instead be reduced to avoid the excise tax. Following a review of market practices in July 2011, the Committee adopted a policy that any future change of control benefits should be structured without any excise tax gross-up protection. Mr. Connolly’s, Mr. McGough’s, Mr. Marberger’s, Mr. Serrao’s, and Mr. Serrao’sEboli’s agreements do not contain an excise tax gross-up. Although the Committee continues to believe in the importance of maintaining a change of control program, it believes that offering excise tax gross-ups in the future is inappropriate relative to best executive pay practices.
Each change of control agreement terminates, in the absence of a change of control, when the executive’s employment as our full-time employee is terminated or the executive enters into a written separation agreement with us. In addition, we may unilaterally terminate each agreement prior to a change of control following six months prior written notice to the executive.
Summary of Possible Benefits
In the disclosure below, the first table summarizes estimated incremental amounts payable upon termination under various hypothetical scenarios. A second table summarizes estimated incremental amounts payable upon a hypothetical change of control and upon termination following a change of control. We have not included amounts payable regardless of the occurrence of the relevant triggering event. For example, we excluded accumulated balances in retirement plans when a terminating event would do nothing more than create a right to a payment of the balance. We also excluded death benefits where the executive would pay the premium.
The data in the tables assumes the following:following for all named executive officers:
| • | each triggering event occurred on May 27, 2022 (the last business day of fiscal 2022), and the per share price of our common stock was $33.15(the closing price of our stock on the NYSE on May 27, 2022); |
| • | with respect to salary continuation, if an executive did not have a right to salary continuation under a stand-alone agreement with us, the severance pay plan guidelines applied; |
| • | with respect to the AIP, awards were earned at target levels, and where the HR Committee had discretionary authority to award a payout, except in the cases of involuntary termination with cause and voluntary termination without good reason, it exercised that authority (including in the change of control scenario); |
| • | with respect to the AIP and equity awards, in the case of an involuntary termination not for cause without a change of control, the termination was due to a position elimination or another termination event on the last business day of fiscal 2022 that would have resulted in severance compensation; |
| • | with respect to performance shares, awards were earned at target levels (these amounts also include a cash value of dividend equivalents on the number of shares assumed to have been earned); |
| • | with respect to equity awards in the change of control scenario, a replacement award was provided; |
| • | with respect to performance shares in the change of control scenario, the HR Committee exercised any applicable discretionary authority to award a pro rata payout and did so at target levels; and |
each triggering event occurred on May 29, 2020 (the last business day of fiscal 2020), and the per share price of our common stock was $34.79 (the closing price of our stock on the NYSE on May 29, 2020);2022 PROXY STATEMENT 88
| • | in the disability scenarios, the disabling event lasted one year into the future. |
Involuntary w/ Cause or ($)
| Involuntary w/o Cause or ($)
| Death ($)
| Disability ($)
| Retirement ($)
| ||||||||||||||||
Mr. Connolly | ||||||||||||||||||||
Lump Sum Severance |
| - |
|
| 6,757,500 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 2,103,750 |
|
| 2,103,750 |
|
| 2,103,750 |
|
| 2,103,750 |
| |||||
Performance Shares |
| - |
|
| 13,540,598 |
|
| 19,238,668 |
|
| 13,540,598 |
|
| 13,540,598 |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 3,786,990 |
|
| 5,991,332 |
|
| 3,786,990 |
|
| 3,786,990 |
| |||||
Benefits Continuation |
| - |
|
| 47,623 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 712,500 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
|
| 26,243,961 |
|
| 28,333,750 |
|
| 20,143,838 |
|
| 19,431,338 |
| |||||
Mr. Marberger | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 807,537 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 736,700 |
|
| 736,700 |
|
| 736,700 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 2,922,761 |
|
| 4,222,202 |
|
| 2,922,761 |
|
| - |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 816,054 |
|
| 1,316,221 |
|
| 816,054 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 20,012 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 443,350 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
|
| 5,310,564 |
|
| 7,275,123 |
|
| 4,918,865 |
|
| - |
| |||||
Mr. McGough | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 966,346 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 750,000 |
|
| 750,000 |
|
| 750,000 |
|
| 750,000 |
| |||||
Performance Shares |
| - |
|
| 2,922,761 |
|
| 4,222,202 |
|
| 2,922,761 |
|
| 2,922,761 |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 816,054 |
|
| 1,316,221 |
|
| 816,054 |
|
| 816,054 |
| |||||
Benefits Continuation |
| - |
|
| 20,012 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 450,000 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
|
| 5,482,673 |
|
| 7,288,423 |
|
| 4,938,815 |
|
| 4,488,815 |
| |||||
Mr. Serrao | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 680,385 |
|
| - |
|
| - |
| - | |||||||
Annual Incentive Plan |
| - |
|
| 549,000 |
|
| 549,000 |
|
| 549,000 |
| - | |||||||
Performance Shares |
| - |
|
| 2,816,301 |
|
| 3,927,465 |
|
| 2,816,301 |
| - | |||||||
Accelerated Restricted Stock Units |
| - |
| 789,235 | 1,221,644 | 789,235 | - | |||||||||||||
Benefits Continuation |
| - |
|
| 20,012 |
|
| - |
|
| - |
| - | |||||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 380,000 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
| - |
| - |
|
| - |
| |||||||
Total |
| - |
|
| 4,862,433 |
|
| 6,698,109 |
|
| 4,534,536 |
|
| - |
| |||||
with respect to salary continuation, if an executive did not have a right to salary continuation under a stand-alone agreement with us, the severance pay plan guidelines applied;
with respect to the AIP, awards were earned at target levels, and where the HR Committee had discretionary authority to award a payout, except in the cases of involuntary termination with cause and voluntary termination without good reason, it exercised that authority (including in the change of control scenario);
with respect to the AIP and equity awards, in the case of an involuntary termination not for cause without a change of control, the termination was due to a position elimination or another termination event that would have resulted in severance compensation on the last business day of fiscal 2020;
with respect to performance shares and PBRSUs, awards were earned at target levels (these amounts also include a cash value of dividend equivalents on the number of shares assumed to have been earned);
7589 CONAGRA BRANDS
with respect to equity awards other than PBRSUs in the change of control scenario, a replacement award was provided;
with respect to performance shares in the change of control scenario, the HR Committee exercised any applicable discretionary authority to award a pro rata payout and did so at target levels; and
in the disability scenarios, the disabling event lasted one year into the future.
Involuntary w/ Cause or $
| Involuntary w/o Cause or $
| Death $
| Disability $
| Retirement $
| ||||||||||||||||
Mr. Connolly | ||||||||||||||||||||
Lump Sum Severance |
| - |
|
| 6,000,000 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 1,800,000 |
|
| 1,800,000 |
|
| 1,800,000 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 12,224,822 |
|
| 19,203,709 |
|
| 12,224,822 |
|
| - |
| |||||
PBRSUs |
| - |
|
| 1,266,773 |
|
| 3,498,935 |
|
| 1,266,773 |
|
| - |
| |||||
Accelerated Stock Options |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 3,483,975 |
|
| 5,907,272 |
|
| 3,483,975 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 45,406 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 675,000 |
|
| - |
| |||||
Outplacement |
| - |
|
| 5,200 |
|
| - |
|
| - |
|
| - |
| |||||
Total
|
| -
|
|
| 24,826,176
|
|
| 31,409,916
|
|
| 19,450,570
|
|
| -
|
| |||||
Mr. Marberger | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 728,750 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 689,000 |
|
| 689,000 |
|
| 689,000 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 2,743,914 |
|
| 4,238,807 |
|
| 2,743,914 |
|
| - |
| |||||
PBRSUs |
| - |
|
| 202,687 |
|
| 559,841 |
|
| 202,687 |
|
| - |
| |||||
Accelerated Stock Options |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 784,201 |
|
| 1,303,825 |
|
| 784,201 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 19,039 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 432,600 |
|
| - |
| |||||
Outplacement |
| - |
|
| 5,200 |
|
| - |
|
| - |
|
| - |
| |||||
Total
|
| -
|
|
| 5,172,791
|
|
| 7,791,473
|
|
| 4,852,402
|
|
| -
|
| |||||
Ms. Batcheler | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 675,938 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 540,750 |
|
| 540,750 |
|
| 540,750 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 2,743,914 |
|
| 4,238,807 |
|
| 2,743,914 |
|
| - |
| |||||
PBRSUs |
| - |
|
| 202,687 |
|
| 559,841 |
|
| 202,687 |
|
| - |
| |||||
Accelerated Stock Options |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
Accelerated Restricted Stock Units |
| - |
|
| 784,201 |
|
| 1,303,825 |
|
| 784,201 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 22,501 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
| - |
|
| - |
|
| 345,375 |
|
| - |
| ||||||
Outplacement |
| - |
|
| 5,200 |
|
| - |
|
| - |
|
| - |
| |||||
Total
|
| -
|
|
| 4,975,191
|
|
| 7,643,223
|
|
| 4,616,927
|
|
| -
|
| |||||
2020 PROXY STATEMENT 76
Involuntary w/ Cause or $
| Involuntary w/o Cause or $
| Death $
| Disability $
| Retirement $
| Involuntary w/Cause or ($)
| Involuntary w/o Cause or
| Death ($)
| Disability
| Retirement
| |||||||||||||||||||||||
Mr. McGough | ||||||||||||||||||||||||||||||||
Mr. Eboli | ||||||||||||||||||||||||||||||||
Salary Continuation |
| - |
| 836,875 |
| - |
|
| - |
| - |
| - |
| 540,000 | - | - | - | ||||||||||||||
Annual Incentive Plan |
| - |
| 669,500 | 669,500 | 669,500 | 669,500 |
| - |
| 432,000 | 432,000 | 432,000 | - | ||||||||||||||||||
Performance Shares |
| - |
| 2,743,914 | 4,238,807 | 2,743,914 | 2,743,914 |
| - |
| 266,150 | 736,895 | 266,150 | - | ||||||||||||||||||
PBRSUs |
| - |
| 202,687 | 559,841 | 202,687 | 202,687 | |||||||||||||||||||||||||
Accelerated Stock Options |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||||||||||||||
Accelerated Restricted Stock Units |
| - |
| 784,201 | 1,303,825 | 784,201 |
| 784,201 |
|
| - |
| 206,259 | 575,053 | 206,259 | - | ||||||||||||||||
Benefits Continuation |
| - |
| 22,501 |
| - |
|
| - |
|
| - |
|
| - |
| 20,012 | - | - | - | ||||||||||||
Death Benefits |
| - |
|
| - |
| 1,000,000 |
| - |
|
| - |
|
| - |
| - | 1,000,000 | - | - | ||||||||||||
Disability Benefits |
| - |
|
| - |
|
| - |
| 409,750 |
| - |
|
| - |
| - | - | 345,000 | - | ||||||||||||
Outplacement |
| - |
| 5,200 |
| - |
|
| - |
|
| - |
|
| - |
| 7,500 | - | - | - | ||||||||||||
Total
|
| -
|
|
| 5,264,878
|
|
| 7,771,973
|
|
| 4,810,052
|
|
| 4,400,302
|
|
| - |
| 1,471,921 | 2,743,948 | 1,249,409 | - | ||||||||||
Mr. Serrao | - | |||||||||||||||||||||||||||||||
Salary Continuation | - | 656,923 | - | - | - | |||||||||||||||||||||||||||
Annual Incentive Plan | - | 549,000 | 549,000 | 549,000 | - | |||||||||||||||||||||||||||
Performance Shares | - | 2,195,401 | 3,585,826 | 2,195,401 | - | |||||||||||||||||||||||||||
PBRSUs | - | 202,687 | 559,841 | 202,687 | - | |||||||||||||||||||||||||||
Accelerated Stock Options | - | - | - | - | - | |||||||||||||||||||||||||||
Accelerated Restricted Stock Units | - | 624,794 | 1,103,365 | 624,794 | - | |||||||||||||||||||||||||||
Benefits Continuation | - | 19,386 | - | - | - | |||||||||||||||||||||||||||
Death Benefits | - | - | 1,000,000 | - | - | |||||||||||||||||||||||||||
Disability Benefits | - | - | - | 380,000 | - | |||||||||||||||||||||||||||
Outplacement | - | 5,200 | - | - | - | |||||||||||||||||||||||||||
Total | - | 4,253,391 | 6,789,032 | 3,951,882 | - | |||||||||||||||||||||||||||
In the table that follows, if, following a change of control, any of Ms. Batcheler or Messrs. Marberger, McGough, Serrao, or SerraoEboli was terminated for “Cause” or voluntarily terminated employment without “Good Reason,” the individual would not receive any benefits incremental to those shown in the “No Termination” column. Mr. Connolly would be entitled to salary continuation through the end of the month of the event.
| No Termination ($) | Change of Control and: Involuntary ($) | |||||||
| No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/ Good Reason ($) | |||||||
Mr. Connolly | ||||||||
Lump Sum Salary | - | 3,600,000 | - | 3,825,000 | ||||
Annual Incentive Plan | 1,800,000 | 6,944,850 | 2,103,750 | 7,948,905 | ||||
Performance Shares | - | 19,203,709 | - | 19,979,608 | ||||
PBRSUs | - | 3,498,942 | ||||||
Accelerated Stock Options | - | - | ||||||
Accelerated Restricted Stock Units | - | 5,907,272 | - | 5,991,332 | ||||
Qualified and Non-Qualified Benefit | - | 350,621 | - | 312,079 | ||||
Benefits Continuation | - | 44,868 | - | 47,623 | ||||
Death/Disability Benefit | - | 6,258 | - | 6,041 | ||||
Outplacement | - | 30,000 | - | 30,000 | ||||
Total | 1,800,000 | 39,586,521 | 2,103,750 | 38,140,588 | ||||
Mr. Marberger | ||||||||
Lump Sum Salary | - | 1,473,400 | ||||||
Annual Incentive Plan | 736,700 | 1,994,428 | ||||||
Performance Shares | - | 4,391,059 | ||||||
Accelerated Restricted Stock Units | - | 1,316,221 | ||||||
Qualified and Non-Qualified Benefit | - | 132,606 | ||||||
Benefits Continuation | - | 47,623 | ||||||
Death/Disability Benefit | - | 6,041 | ||||||
Outplacement | - | 30,000 | ||||||
Total | 736,700 | 9,391,378 | ||||||
2022 PROXY STATEMENT 90
| No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/ Good Reason ($) | |||
Mr. McGough | ||||
Lump Sum Salary | - | 1,500,000 | ||
Annual Incentive Plan | 750,000 | 1,877,175 | ||
Performance Shares | - | 4,391,059 | ||
Accelerated Restricted Stock Units | - | 1,316,221 | ||
Qualified and Non-Qualified Benefit | - | 135,000 | ||
Benefits Continuation | - | 47,623 | ||
Death/Disability Benefit | - | 6,041 | ||
Outplacement | - | 30,000 | ||
Total | 750,000 | 9,303,119 | ||
Mr. Serrao | ||||
Lump Sum Salary | - | 1,220,000 | ||
Annual Incentive Plan | 549,000 | 1,539,312 | ||
Performance Shares | - | 4,072,015 | ||
Accelerated Restricted Stock Units | - | 1,221,644 | ||
Qualified and Non-Qualified Benefit | - | 104,310 | ||
Benefits Continuation | - | 47,623 | ||
Death/Disability Benefit | - | 6,041 | ||
Outplacement | - | 30,000 | ||
Total | 549,000 | 8,240,945 | ||
Mr. Eboli | ||||
Lump Sum Salary | - | 1,080,000 | ||
Annual Incentive Plan | 432,000 | 864,000 | ||
Performance Shares | - | 797,666 | ||
Accelerated Restricted Stock Units | - | 575,053 | ||
Qualified and Non-Qualified Benefit | - | 77,386 | ||
Benefits Continuation | - | 43,786 | ||
Death/Disability Benefit | - | 6,041 | ||
Outplacement | - | 30,000 | ||
Total | 432,000 | 3,473,932 | ||
7791 CONAGRA BRANDS
| No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/ Good Reason ($) | |||
Mr. Marberger | ||||
Lump Sum Salary | - | 1,378,000 | ||
Annual Incentive Plan | 689,000 | 1,430,215 | ||
Performance Shares | - | 4,238,807 | ||
PBRSUs | - | 559,835 | ||
Accelerated Stock Options | - | - | ||
Accelerated Restricted Stock Units | - | 1,303,825 | ||
Qualified and Non-Qualified Benefit | - | 156,230 | ||
Benefits Continuation | - | 44,868 | ||
Death/Disability Benefit | - | 6,258 | ||
Outplacement | - | 30,000 | ||
Total | 689,000 | 9,148,039 | ||
Ms. Batcheler | ||||
Lump Sum Salary | - | 1,622,250 | ||
Annual Incentive Plan | 540,750 | 2,247,380 | ||
Performance Shares | - | 4,238,807 | ||
PBRSUs | - | 559,835 | ||
Accelerated Stock Options | - | - | ||
Accelerated Restricted Stock Units | - | 1,303,825 | ||
Qualified and Non-Qualified Benefit | - | 366,537 | ||
Benefits Continuation | - | 67,303 | ||
Death/Disability Benefit | - | 9,388 | ||
Outplacement | - | 30,000 | ||
Total | 540,750 | 10,445,325 | ||
Mr. McGough | ||||
Lump Sum Salary | - | 1,339,000 | ||
Annual Incentive Plan | 669,500 | 1,757,349 | ||
Performance Shares | - | 4,238,807 | ||
PBRSUs | - | 559,835 | ||
Accelerated Stock Options | - | - | ||
Accelerated Restricted Stock Units | - | 1,303,825 | ||
Qualified and Non-Qualified Benefit | - | 147,045 | ||
Benefits Continuation | - | 44,868 | ||
Death/Disability Benefit | - | 6,258 | ||
Outplacement | - | 30,000 | ||
Total | 669,500 | 9,426,988 | ||
2020 PROXY STATEMENT 78
| No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/ Good Reason ($) | |||
Mr. Serrao | ||||
Lump Sum Salary | - | 1,220,000 | ||
Annual Incentive Plan | 549,000 | 1,162,058 | ||
Performance Shares | - | 3,585,826 | ||
PBRSUs | - | 559,835 | ||
Accelerated Stock Options | - | - | ||
Accelerated Restricted Stock Units | - | 1,103,365 | ||
Qualified and Non-Qualified Benefit | - | 126,281 | ||
Benefits Continuation | - | 44,868 | ||
Death/Disability Benefit | - | 6,258 | ||
Outplacement | - | 30,000 | ||
Total
| 549,000
| 7,838,492
| ||
79 CONAGRA BRANDS
For fiscal 2020,2022, the ratio of the annual total compensation of Mr. Connolly, our CEO (referred to as CEO Compensation), to the median of the annual total compensation of all of our employees and those of our consolidated subsidiariessubsidiary employees other than Mr. Connolly (referred to as Median Annual Compensation), was 287 206 to 1. For purposes of this pay ratio disclosure, CEO Compensation was determined to be $11,882,832,$11,947,054, which represents the total compensation reported for Mr. Connolly under the “Summary Compensation Table – Fiscal 2020.2022.” Median Annual Compensation for the identified median employee was determined to be $41,468.$57,855.
Median Employee Methodology
WeSolely for the purpose of this disclosure, we identified the median employeeour “median employee” by examining our total employee population as of March 9, 20202021 (the Determination Date). We included all full-time, part-time, seasonal, and temporary employees of Conagra and our consolidated subsidiaries. We excluded independent contractors and “leased” workers. Our analysis identified 17,65519,169 individuals.individuals as of the Determination Date.
The median employee at Conagra is employed in a manufacturing facility in the United States and has a job function of Operator.Team Coordinator.
Additional information on the employee population at Conagra includes the following (as of the March 9, 20202021 Determination Date):
Number of employees: 17,655 individuals
| • | 89.5% employed in the United States; 10.5% in international locations |
| • | 96.4% employed full time, 0.2% employed part time, 3.4% employed seasonally/temporarily |
90.3% employed
| • | 83.7% based in manufacturing facilities |
We believe that there has been no change in the United States; 9.7%our employee population or employee compensation arrangements during fiscal 2022 that resulted in international locationsa significant year-over-year change to our CEO Pay Ratio disclosure.
98.1% employed full time, 0.2% employed part time, 1.7% employed seasonally/temporarily
82.4% based in manufacturing facilities
Median Annual Compensation Methodology
To determine Median Annual Compensation, we generally reviewed compensation for the period beginning on March 10, 20199, 2020 and ending on March 9, 2020. However, for 401 of our employees (including our employees in Mexico), we measured compensation for the full months of March 2019 through February 2020, due to different payroll schedules applicable to these employees.2021. As permitted by applicable SEC rules, we excluded from the compensation measurement under the “de minimis” exemption the compensation of 558551 individuals (all of the individuals in each of China (3 individuals), India (549(540 individuals), Panama (4(5 individuals), and the Philippines (2(3 individuals)) as of the Determination Date).
We measured Median Annual Compensation by totaling, for each employee other than Mr. Connolly, base earnings (salary, hourly wages, and overtime, as applicable) and annual cash incentives paid during the measurement period. We did not use any statistical sampling or cost-of-living adjustments for purposes of this pay ratio disclosure. A portion of our employee workforce (full-time and part-time) worked for less than the full fiscal year (due to start dates, disability status, or similar factors). In determining the Median Annual Compensation, we generally annualized the total compensation for such individuals other than seasonal employees (but avoided creating full-time equivalencies) based on reasonable assumptions and estimates relating to our employee compensation program.
Due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this pay ratio disclosure is a reasonable estimate.
20202022 PROXY STATEMENT 8092
Information on Stock Ownership
Voting Securities of Directors, Officers, and Greater Than 5% Owners
The table below shows the shares of Conagra Brands common stock beneficially owned as of August 3, 2020July 26, 2022 by (1) beneficial owners of more than 5% of our outstanding common stock, (2) our current directors, (3) our named executive officers, and (4) all current directors and executive officers as a group.
As discussed elsewhere in this Proxy Statement, our directors and executive officers are committed to owning stock in Conagra Brands. Both groups have stock ownership requirements that preclude them from selling any Conagra Brands common stock in the market (other than to cover the cost of theany stock option exercise price and, in the case of executive officers, minimum statutory tax withholding) until they have enough shares to meet and maintain their stock ownership guidelines pre- and post-sale.
To better show the financial stake of our directors in the company, we have included a “Share Units” column in the table. The column, which is not required under SEC rules, shows share units earned by the non-employee directors and deferred through the Conagra Brands, Inc. Directors’ Deferred Compensation Plan. Although these share units will ultimately be settled in shares of common stock, they currently have no voting rights and will not be settled within 60 days of August 3, 2020.July 26, 2022. None of our executive officers has any deferred share units.
Name
| Number of
| Right to
| Percent of Class(3)
| Share Units
| ||||||||||
The Vanguard Group(4) |
| 53,951,894 |
|
| - |
| 11.25% |
| N/A |
| ||||
Capital World Investors(5) |
| 48,259,802 |
|
| - |
| 10.1% |
| N/A |
| ||||
BlackRock, Inc.(6) |
| 34,415,738 |
|
| - |
| 7.2% |
| N/A |
| ||||
Anil Arora |
| 30,794 |
|
| 2,369 |
| * |
| 6,107 |
| ||||
Tony Brown |
| 31,356 |
|
| 2,369 |
| * |
| - |
| ||||
Manny Chirico |
| 10,788 |
|
| 2,369 |
| * |
| 6,050 |
| ||||
Sean M. Connolly |
| 794,650 |
|
| 1,658,682 |
| * |
| N/A |
| ||||
George Dowdie |
| 5,980 |
|
| 2,995 |
| * |
| - |
| ||||
Joie A. Gregor |
| 70,478 |
|
| 2,369 |
| * |
| 18,404 |
| ||||
Fran Horowitz |
| 8,847 |
|
| 6,597 |
| * |
| - |
| ||||
Rajive Johri |
| 90,607 |
|
| 2,369 |
| * |
| 81,599 |
| ||||
Richard H. Lenny |
| 141,826 |
|
| 6,102 |
| * |
| 24,764 |
| ||||
Melissa Lora |
| 22,740 |
|
| 2,369 |
| * |
| 18,002 |
| ||||
Ruth Ann Marshall |
| 141,175 |
|
| 2,369 |
| * |
| 132,987 |
| ||||
Craig P. Omtvedt |
| 94,083 |
|
| 2,369 |
| * |
| - |
| ||||
Denise A. Paulonis(7) |
| - |
|
| - |
| * |
| - |
| ||||
David S. Marberger |
| 137,349 |
|
| 69,248 |
| * |
| N/A |
| ||||
Thomas M. McGough(8) |
| 328,265 |
|
| 313,339 |
| * |
| N/A |
| ||||
Darren C. Serrao |
| 120,012 |
|
| 106,830 |
| * |
| N/A |
| ||||
Alexandre O. Eboli |
| - |
|
| 5,107 |
| * |
| N/A |
| ||||
All Directors and Current Executive Officers as a Group (20 people) | 2,189,317 | 2,341,758 | * | 287,914 | ||||||||||
8193 CONAGRA BRANDS
Name | Number of Shares of Common Stock Owned(1) | Right to Acquire Shares of Common Stock(2) | Percent of Class(3) | Share Units | ||||
The Vanguard Group(4) | 56,189,829 | - | 11.5% | N/A | ||||
Capital World Investors(5) | 52,144,735 | - | 10.7% | N/A | ||||
BlackRock, Inc.(6) | 42,215,593 | - | 8.6% | N/A | ||||
T. Rowe Price Associates, Inc.(7) | 36,965,270 | - | 7.6% | N/A | ||||
The Macquarie Parties (as defined below)(8) | 33,851,971 | - | 7.0% | N/A | ||||
Anil Arora | 13,790 | 2,226 | * | 6,791 | ||||
Thomas K. Brown | 28,501 | 2,226 | * | - | ||||
Stephen G. Butler | 142,729(9) | 2,226 | * | 87,187 | ||||
Sean M. Connolly | 525,569 | 1,431,606 | * | N/A | ||||
Joie A. Gregor | 58,589 | 2,226 | * | 12,977 | ||||
Rajive Johri | 71,927 | 2,226 | * | 67,657 | ||||
Richard H. Lenny | 83,365 | 6,309 | * | 23,172 | ||||
Melissa Lora | 8,147 | 2,226 | * | 8,147 | ||||
Ruth Ann Marshall | 111,553 | 2,226 | * | 109,026 | ||||
Craig P. Omtvedt | 80,228 | 2,226 | * | - | ||||
Scott Ostfeld(10) | 10,858,404 | 2,226 | * | - | ||||
David S. Marberger | 89,301 | 69,248 | * | N/A | ||||
Colleen Batcheler | 169,874 | 142,445 | * | N/A | ||||
Thomas M. McGough | 193,664(9) | 550,780 | * | N/A | ||||
Darren C. Serrao | 93,667 | 106,830 | * | N/A | ||||
All Directors and Current Executive Officers as a Group (18 people) |
12,721,278 |
2,591,998 |
* |
314,957 | ||||
| * | Represents less than 1% of common stock outstanding. |
| 1. | For executive officers and directors, reflects shares that have been acquired through one or more of the following: (a) open market purchases, (b) vesting or exercise of share-based awards, and (c) crediting to defined contribution plan accounts. |
| 2. | Reflects shares that the individual has the right to acquire within 60 days of |
| 3. | Based on |
| 4. | Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February |
| 5. | Based on a Schedule 13G/A filed by Capital World Investors with the SEC on |
| 6. | Based on a Schedule 13G/A filed by BlackRock, Inc. |
| 7. |
|
| 8. |
|
2020 PROXY STATEMENT 82
|
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that our directors, executive officers, and persons who own more than 10% of a registered class of our equity securities file with the SEC reports of ownership and changes in beneficial ownership of our common stock. The company files certain Section 16(a) reports on behalf of the directors and executive officers, and directors, executive officers, and greater than 10% owners are required to furnish us with copies of all Section 16(a) forms that are filed on their behalf. Based solely on a review of copies of these reports furnished to us or written representations that no other reports were required, we believe that during fiscal 2022, all required reports were filed on behalf of our directors and executive officers on a timely basis, other than the filing of one Form 4 reporting one transaction for Alexandre O. Eboli relating to a grant of RSUs was filed one day late on August 5, 2021 due to an administrative error. |
83 CONAGRA BRANDS2022 PROXY STATEMENT 94
Our AnnualAdditional Information About the Meeting of Shareholders
Virtual Meeting Format
We have decided to hold the 2020 Annual Meeting virtually via live webcast due to the uncertainty relating to the COVID-19 pandemic.again this year. There will not be a physical location for the 2020 Annual Meeting and you will not be able to attend in person. In addition to supporting the health and well-being of our shareholders, Board members, employees, and their families, we believe that hosting a virtual annual meeting will enableAnnual Meeting enables shareholders to attend and participate fully and equally, improveimproves meeting efficiency and our ability to effectively communicate and engage with our shareholders, regardless of their size,holdings, resources, or physical location, and provideprovides for cost savings to the company and our shareholders.savings.
We have designed the virtual 2020 Annual Meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. Shareholders will be able to attend and participate online and submit questions during the 20202022 Annual Meeting by visiting www.virtualshareholdermeeting.com/CAG2020CAG2022.
To attend and participate in the 20202022 Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. The 2020 Annual Meeting will begin promptly at 11:0011 a.m. CDT. We encourage you to access the 20202022 Annual Meeting prior to the start time. Online access will begin at 10:4511 a.m. CDT.
The virtual 2020 Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Shareholders should ensure that they have a strong internet connection if they intend to attend and/or participate in the 20202022 Annual Meeting. Attendees should allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the 20202022 Annual Meeting.
If you encounter any difficulties accessing the virtual 2020 Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting login page for assistance. Technical support will be available beginning at 10:4511 a.m. CDT on September 23, 202021, 2022 through the conclusion of the 20202022 Annual Meeting.
Voting
Shareholders of record as of the close of business on August 3, 20201, 2022, the record date, are entitled to attend, participate in, and to vote at the 20202022 Annual Meeting and at any postponements or adjournments of the 20202022 Annual Meeting. On August 3, 2020,1, 2022, there were 488,480,114480,627,959 voting shares of common stock, par value $5.00 per share, of Conagra Brands, issued and outstanding. Each share of common stock is entitled to one vote for each director to be elected and one vote for each of the other matters to be voted on.
Your vote is very important. Even if you plan to attend and participate in the 20202022 Annual Meeting, please promptly vote your shares in advance.
Voting Before the 20202022 Annual Meeting
If you hold shares of common stock of Conagra Brands in your own name (known as ownership “of record”) on the books of our transfer agent, you are a registered shareholder. If a broker, bank, or other nominee holds your shares (also
95 CONAGRA BRANDS
known as ownership in “street name”), you are a beneficial owner. Registered shareholders (including those who hold shares in the Conagra Brands Employee Stock Purchase Plan, or ESPP) and beneficial owners may vote their shares in advance of the 20202022 Annual Meeting using one of the following methods:
| • | By Mail: If you received paper copies of our proxy materials, by completing, signing, dating and returning (in the postage-paid envelope provided) the enclosed proxy card or voting instruction form; |
2020 PROXY STATEMENT 84
| • | By Internet: Go to www.proxyvote.com and follow the instructions – you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form; or |
| • | By Telephone: Call (800) 690-6903 (registered shareholders and ESPP participants) or (800) 454-8683 (beneficial owners) |
Internet and telephone voting isare available through 11:59 p.m. Eastern Time on Tuesday, September 22,202018, 2022 for registered shareholders, and beneficial owners, and through 11:59 p.m. Eastern Time on Sunday, September 20, 2020 for shares held in the ESPP.
If you hold shares in the ESPP, your proxy card serves as voting instructions for the shares credited to your plan account and such shares must be voted prior to the 2020 Annual Meeting. The trustee for the ESPP must receive your voting instructions by 11:59 p.m. Eastern Time on Sunday, September 20, 2020.18, 2022. If the plan trustee does not receive your instructions by that time, the trustee will vote the shares held by the ESPP in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received.
Revoking a Proxy
You can revoke your proxy at any time before your shares are voted if you (1) are the owner of “record” of your shares and submit a written revocation to our Corporate Secretary at or before the 20202022 Annual Meeting (mail to: Conagra Brands, Inc., Attn: Corporate Secretary, 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654), (2) submit a timely later-dated proxy (or voting instruction form if you hold shares through a broker, bank, or nominee), or (3) provide timely subsequent internet or telephone voting instructions. You may also attend and participate in the 2020 Annual Meeting andinstructions, or (4) vote online during the 20202022 Annual Meeting, which will replace any previous votes.Meeting.
Voting During the 20202022 Annual Meeting
Registered shareholders (other than those who hold shares in the ESPP) and beneficial owners may also vote online during the 20202022 Annual Meeting. You will need the 16-digit control number included on your Notice of Internet Availability of Proxyproxy Materials, proxy card, or voting instruction form to log in to the virtual meeting platform at www.virtualshareholdermeeting.com/CAG2020CAG2022. Voting electronically online during the 20202022 Annual Meeting will replace any previous votes.
Participants in the ESPP may attend and participate in the 20202022 Annual Meeting but will not be able to vote shares held in the ESPP electronically online during the 20202022 Annual Meeting. ESPP participants must vote in advance of the 20202022 Annual Meeting using one of the methods described above.
Presenting Questions During the Virtual Meeting
Shareholders may submit questions during the 20202022 Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CAG2020CAG2022, typing your question into the “Ask a Question” field, and clicking “Submit.”
Questions pertinent to the 20202022 Annual Meeting that comply with the meeting Rules of Conduct will be answered during the 20202022 Annual Meeting, subject to time constraints. Questions regarding personal matters, including, but not limited to, those related to employment or product issues, are not pertinent to 20202022 Annual Meeting matters and therefore will not be answered.answered only at the discretion of the meeting’s Chair. Any such questions pertinent to 2022 Annual Meeting matters that cannot be answered during the 2020 Annual Meeting due to time constraints will be posted and answered on our Investor Relations website, www.conagrabrands.com/investor-relations,, as soon as practical after the 20202022 Annual Meeting.
2022 PROXY STATEMENT 96
Additional information regarding the ability of shareholders to ask questions during the 20202022 Annual Meeting and related Rules of Conduct will be available at www.virtualshareholdermeeting.com/CAG2020CAG2022.
85 CONAGRA BRANDS
Vote Requirements
Quorum: Shares Necessary to Conduct the Business of the Meeting
To conduct the business of the 20202022 Annual Meeting, a majority of the shares of common stock outstanding and entitled to vote on the record date must be present in person or by proxy at the 20202022 Annual Meeting.
The inspector of elections intends to treat properly executed proxies marked “abstain” as “present” for purposes of determining whether a quorum has been achieved. The inspector will also treat proxies held in “street name” by brokers where the broker indicates that it does not have authority to vote on one or more of the proposals coming before the meeting (“broker non-votes”) as “present” for purposes of determining whether a quorum has been achieved.
Vote Required to Approve Voting Items
If a quorum is present:
We will hold an election of directors. Each outstanding share of common stock of Conagra Brands is entitled to cast one vote for each director seat. In an uncontested election, a director will be elected if he or she receives the affirmative vote of a majority of the votes cast in the election. An incumbent director nominee who does not receive the affirmative vote of a majority of the votes cast in the election is required promptly to tender his or her resignation to the Board, and the resignation will be accepted or rejected by the Board as more fully described in the “How We Govern” section of this Proxy Statement. Abstentions and broker non-votes are not treated as votes cast and, therefore, will not affect the outcome of the election of directors.
We will vote to ratify the appointment of KPMG LLP as our independent auditor for fiscal 2021.year 2023. The appointment of KPMG LLP as our independent auditor for fiscal 2021year 2023 will be ratified if approved by a majority of the votes cast. Abstentions are not treated as votes cast and therefore will not affect the outcome of the vote. Because the ratification of the appointment of KPMG LLP as our independent auditor is considered a “routine” matter, there will be no broker non-votes with respect to this matter.
We will vote, on an advisory basis, to approve our named executive officer compensation. The advisory resolution to approve our named executive officer compensation, as described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, will be considered adopted if approved by a majority of the votes cast. Abstentions and broker non-votes are not treated as votes cast and, therefore, will not affect the outcome of the votes on this matter.
We will vote to approve an amendment to our Certificate of Incorporation to allow shareholders to act by written consent. The amendment to our Certificate of Incorporation to allow shareholders to act by written consent will be adopted if approved by the affirmative vote of a majority of the company’s outstanding shares entitled to vote. Accordingly, abstentions and broker non-votes will have the same effect as votes “AGAINST” the proposal.
We will vote on a shareholder proposal requesting that the Board amend the Company’s governing documents regarding the offices of the Board Chair and CEO. If properly presented, the shareholder proposal requesting that the Board amend the Company’s governing documents regarding the offices of the Board Chair and CEO must receive the affirmative vote of a majority of the votes cast to be approved. Abstentions and broker non-votes are not treated as votes cast and, therefore, will not affect the outcome of the votes on this matter.
The shares represented by valid proxies received by internet, by telephone, or by mail and not properly revoked will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted: “FOR” the election of each of the nominees for director named in this Proxy Statement; “FOR” the
97 CONAGRA BRANDS
ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2021; and2023; “FOR” the resolution to approve our named executive officer compensation.compensation; “FOR” the Board resolution to amend our Certificate of Incorporation to allow shareholders to act by written consent; and “AGAINST” the shareholder proposal requesting that the Board amend the Company’s governing documents regarding the offices of the Board Chair and CEO. If any matter not described above is properly presented at the meeting,2022 Annual Meeting, the proxy gives authority to the persons named on the proxy card to vote as recommended by the Board on such other matters.
Proxy Solicitation
Proxies will be solicited by Conagra Brands on behalfWe have engaged Innisfree M&A Incorporated as our proxy solicitor for the 2022 Annual Meeting at an estimated cost of the Board by mail, telephone, other electronic means or in person.approximately $20,000 plus disbursements. Our directors, officers, and other employees may also solicit proxies in the ordinary course of their employment. Conagra Brands will bear the cost of the solicitation, including the cost of reimbursing brokerage houses and other custodians for their expenses in sending proxy materials to you.
2020 PROXY STATEMENT 86
Multiple Shareholders Sharing an Address
Pursuant to SEC rules, only one copy of the Notice of Internet Availability of Proxy Materials, Annual Report, and Proxy Statement is being delivered to shareholders residing at the same address, unless the shareholders have notified us of their desire to receive multiple copies. We believe these rules benefit everyone by eliminating duplicate mailings that shareholders living at the same address receive, and by reducing our printing and mailing costs. Shareholders living at the same address will continue to receive individual proxy cards for each registered account. We will promptly deliver, upon oral or written request, a separate copy of the Notice of Internet Availability of Proxy Materials, Annual Report, and Proxy Statement to any shareholder residing at an address to which only one copy was mailed. If you receive a single set of proxy materials but prefer to receive separate copies for each registered account in your household for the 20202022 Annual Meeting or for future meetings, please contact our agent, Broadridge, by telephone at (866) 540-7095 or in writing at Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Broadridge will remove you from the householding program within 30 days after it receives your request, at which point you will begin receiving an individual copy of the proxy materials for each registered account. You can also contact Broadridge at the telephone number or address above if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future.
Our 20212023 Annual Meeting of Shareholders
Shareholder Proposals to be Included in our 20212023 Proxy Statement
To be considered for inclusion in next year’s Proxy Statement, shareholder proposals submitted in accordance with SEC Rule 14a-8 must be received at our principal executive offices no later than the close of business on April 15, 2021.12, 2023.
If an eligible shareholder, or a group of up to 20 eligible shareholders, desires to have a candidate for election as a director included in the proxy materials (a proxy access nominee) for the 20212023 Annual Meeting, such nomination shall conform to the applicable requirements set forth in our by-lawsBylaws and any applicable SEC regulations concerning the submission and content of proxy access nominations, and must be submitted not earlier than March 16, 202113, 2023 and not later than the close of business on April 15, 2021.12, 2023. Such requirements include, without limitation, providing information about the proposed director nominee and the nominating shareholder that is required to be included in a proxy statement under SEC and NYSE rules, any statement by the nominating shareholder about the proposed director nominee to be included in the proxy statement, and any other information that Conagra Brands or the Board requests and determines to include in the proxy statement relating to the proposed director nominee.
Address any proposals to the Corporate Secretary, Conagra Brands, Inc., 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
2022 PROXY STATEMENT 98
Other Shareholder Proposals to be Presented at our 20212023 Annual Meeting
Our by-lawsBylaws provide that any shareholder proposal, including the nomination of directors, that is sought to be presented directly at the 20212023 Annual Meeting but not submitted for inclusion in the Proxy Statement for the 20212023 Annual Meeting must be received in writing at our principal executive offices no earlier than May 26, 2021,24, 2023, nor later than June 25, 2021.23, 2023. If the date of the 20212023 Annual Meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the 2020 meeting,2022 Annual Meeting, then the notice must be received not earlier than the 120th day prior to the 20212023 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 20212023 Annual Meeting or the tenth day following the first public announcement of the 20212023 Annual Meeting date. Our by-lawsBylaws also specify the information that must accompany the notice.
Address proposals to the Corporate Secretary, Conagra Brands, Inc., 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
The proxy card for the 20212023 Annual Meeting will give us discretionary authority with respect to all shareholder proposals properly brought before the 20212023 Annual Meeting that are not included in the Proxy Statement for the 20212023 Annual Meeting.
Universal Proxy Rules for Director Nominations
In addition to satisfying the foregoing requirements under the Bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than Conagra’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended, which notice must be postmarked or transmitted electronically to Conagra at its principal executive offices no later than 60 calendar days prior to the anniversary date of the 2022 Annual Meeting (for the 2023 Annual Meeting, no later than July 24, 2023). However, if the date of the 2023 Annual Meeting is changed by more than 30 calendar days from such anniversary date, then notice must be provided by the later of 60 calendar days prior to the date of the 2023 Annual Meeting or the 10th calendar day following the day on which public announcement of the date of the 2023 Annual Meeting is first made by Conagra.
8799 CONAGRA BRANDS
Reconciliation of GAAP and Non-GAAP Information
This Proxy Statement contains certain non-GAAP financial measures, including organic net sales, adjusted diluted earnings per share from continuing operations, net leverage ratio and adjusted operating margin. Management considers GAAP financial measures as well as non-GAAP financial measures in its evaluation of the company’s financial statements and believes these non-GAAP measures provide useful supplemental information to assess the company’s operating performance and financial position. These measures should be viewed in addition to, and not in lieu of, the company’s diluted earnings per share, operating performance, and financial measures as calculated in accordance with GAAP. Please see our Annual Report on Form 10-K for the fiscal year ended May 31, 202029, 2022 for a reporting of our financial results in accordance with GAAP.
Certain of these non-GAAP measures such as net leverage ratio, are forward-looking. Historically, the Company has excluded the impact of certain items impacting comparability, such as, but not limited to, restructuring expenses, the impact of the extinguishment of debt, the impact of foreign exchange, the impact of acquisitions and divestitures, hedging gains and losses, impairment charges, the impact of legacy legal contingencies, and the impact of unusual tax items, from the non-GAAP financial measures it presents. Reconciliations of these forward-looking non-GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significantsignificance of the unavailable information, which could be material to future results.
A-1 CONAGRA BRANDS
The following information is provided to reconcile the non-GAAP financial measures disclosed in this Proxy Statement to their most directly comparable GAAP measures.
Conagra Brands, Inc.
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
(in millions)
FY20
| Operating profit1 | Diluted EPS from income attributable to Conagra Brands, Inc common stockholders | ||
Reported | $1,447.1 | $1.72 | ||
% of Net Sales | 13.1% | |||
Restructuring plans | 138.9 | 0.22 | ||
Acquisitions and divestitures | 5.3 | 0.01 | ||
Corporate hedging derivative losses | 5.5 | 0.01 | ||
Pension settlement and valuation adjustment | - | 0.07 | ||
Gain on Ardent JV asset sale | - | (0.01) | ||
Impairment of businesses held for sale | 59.0 | 0.11 | ||
Contract settlement gain | (11.9) | (0.02) | ||
Intangible impairment charges | 165.5 | 0.26 | ||
Legal matters | 3.5 | 0.01 | ||
Environmental matters | 6.6 | 0.01 | ||
Loss on divestiture of businesses | 1.7 | - | ||
Unusual tax items | - | (0.10) | ||
Rounding | - | (0.01) | ||
Adjusted | $1,821.2 | $2.28 | ||
% of Net Sales | 16.5% | |||
| FY22 | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Total Conagra Brands | |||||
Net Sales | $4,697.4 | $4,859.3 | $970.8 | $1,008.4 | $11,535.9 | |||||
Impact of foreign exchange | - | - | (16.2) | - | (16.2) | |||||
Organic Net Sales | $4,697.4 | $4,859.3 | $954.6 | $1,008.4 | $11,519.7 | |||||
Year-over-year change - Net Sales | 1.6% | 1.8% | 3.4% | 19.1% | 3.1% | |||||
Impact of foreign exchange (pp) | - | - | (1.7) | - | (0.1) | |||||
Net sales from divested businesses (pp) | 0.9 | 0.9 | 0.2 | 0.3 | 0.8 | |||||
Organic Net Sales | 2.5% | 2.7% | 1.9% | 19.4% | 3.8% | |||||
Volume (Organic) | (4.4)% | (5.3)% | (5.2)% | 10.7% | (3.8)% | |||||
Price/Mix | 6.9% | 8.0% | 7.1% | 8.7% | 7.6% | |||||
2022 PROXY STATEMENT A-1
| FY21 | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Total Conagra Brands | |||||
Net Sales | $4,624.7 | $4,774.6 | $938.6 | $846.8 | $11,184.7 | |||||
Net sales from divested businesses | (38.3) | (40.8) | (1.6) | (2.1) | (82.8) | |||||
Organic Net Sales | $4,586.4 | $4,733.8 | $937.0 | $844.7 | $11,101.9 | |||||
| FY22 | Operating profit 1 | Diluted EPS from income attributable to Conagra Brands, Inc common stockholders | ||
Reported | $1,346.0 | $1.84 | ||
% of Net Sales | 11.7% | |||
Restructuring plans | 49.0 | 0.08 | ||
Acquisitions and divestitures | 2.4 | - | ||
Corporate hedging derivative losses (gains) | (4.4) | (0.01) | ||
Brand impairment charges | 209.0 | 0.33 | ||
Consulting fees on tax matters | 2.8 | - | ||
Proceeds received from the sale of a legacy investment | (3.3) | (0.01) | ||
Legal matters | (19.6) | (0.03) | ||
Environmental matters | (6.5) | (0.01) | ||
Fire related costs | 11.3 | 0.02 | ||
Impairment of businesses held for sale | 70.1 | 0.13 | ||
Unusual tax items | - | 0.02 | ||
Adjusted | $1,656.8 | $2.36 | ||
% of Net Sales | 14.4% | |||
| 1 | Operating profit is derived from taking Income from continuing operations before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement non-service |
2020 PROXY STATEMENT A-2
Conagra Brands, Inc.
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
(in millions)
| ||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| ||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
A-3A-2 CONAGRA BRANDS
Conagra Brands, Inc.Appendix B
Reconciliation of Non-GAAPESG Quick Summary Financial Measures to Reported Financial Measures
(in millions)
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
voting in contested elections | |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
| All | |||
| None | |||
Annual Board Self-Evaluation Process | Yes | |||
Executive Sessions of Independent Directors | Yes, at each regularly- scheduled Board meeting | |||
| Board Governance | ||
Year-Round Shareholder Engagement | Yes | |
Robust Stock Ownership Guidelines | Yes, for our Board and more than 90 senior employees | |
Code of Conduct for Directors and Employees | Yes | |
Director Onboarding and Continuing Education | Yes | |
Related Party Transactions with Directors | None | |
Political Contributions | Publicly disclosed | |
Independent Auditor | KPMG LLP | |
| Yes | |||
| No | |||
Cumulative Voting | No | |||
Vote Standard for Charter/Bylaw Amendment | Majority standard | |||
Shareholder Right to Call Special Meeting | No | |||
Shareholder Right to Act by Written Consent | Pending shareholder approval | |||
Board Authorized to Issue Blank-Check Preferred Stock | Yes | |||
Poison Pill | No | |||
Proxy Access Bylaw | Yes | |||
Exclusive Forum Bylaw | Yes | |||
2022 PROXY STATEMENT B-1
| Compensation Practices | ||
Employ Significant Portion of Variable Pay (i.e., Incentives) for Most Senior Employees | Yes | |
Frequency of Say-on-Pay Advisory Vote | Annual | |
Employment Agreements with Executive Officers Other Than CEO | No | |
Excessive Perquisites to Executives | No | |
Financial and Non-Financial Goals in Executive Compensation | Yes | |
Independent Compensation Consultant | Frederic W. Cook & Co, Inc. | |
Clawback Policy | Yes | |
Incentive Plans Encourage Excessive Risk-Taking | No | |
Double-Trigger Change of Control Provisions | Yes | |
Backdating or Repricing of Stock Options Without Shareholder Approval | No | |
Shares Pledged or Hedged by Directors or Executives | No | |
CEO Pay Ratio | 206:1 | |
| Environmental Practices | ||
Board Oversight of ESG Practices and Strategies | Yes | |
Climate Change Goals | Yes 2030 targets validated by | |
| Environmental Practices | ||
Sustainable Agriculture Program | Decade of Ag Vision and Birds Eye | |
| Supplier Excellence Program | |
Sustainable Packaging Target | Publicly disclosed | |
Sustainability Accounting Standards Board (SASB) Disclosure | Publicly disclosed | |
Water Risk Management Program | Yes | |
Zero Waste Approach | Yes | |
Animal Welfare Policies | Publicly disclosed | |
| Social Engagement | ||
Supplier Code of Conduct | Yes | |
Statement of Human Rights | Yes | |
Diversity and Inclusion Initiatives |
• 100% score on Human Rights Campaign’s Corporate Equality Index • Supplier Diversity Program • D&I Leadership Council • Inclusive Leadership Program | |
|
| |
|
| |
|
|
|
B-2 CONAGRA BRANDS
Annex A – Proposed Charter Amendment
ARTICLE XIII
ANNUAL AND SPECIAL MEETINGS OF STOCKHOLDERS
The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by deleting existing Article XIII thereof in its entirety and by substituting in lieu thereof the following new Article XIII:
All actions required or permitted to be taken by stockholders at an annual or special meeting of stockholders of the Corporation may be taken without a meeting by the written consent of the holders of capital stock of the Corporation entitled to vote; provided that no such action may be taken except in accordance with the provisions of this Article, the By-Laws and applicable law.
A. RecordDate. The record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be as fixed by the Board of Directors or as otherwise established under this Article. Any stockholder seeking to have stockholders authorize or take corporate action by written consent without a meeting shall, prior to soliciting any written consents in respect of such action, request that a record date be set for such purpose, by written request addressed to the Secretary, delivered to or mailed and received at the principal executive offices of the Corporation and signed by holders of record at the time such request is delivered representing in the aggregate at least 25% of the outstanding voting stock of the Corporation (the “Requisite Percentage”). The written request must contain the information set forth in Section B of this Article. Following the delivery of the request, the Board of Directors shall, by the later of (i) 10 business days after delivery of a valid request to set a record date and (ii) 5 business days after delivery of any information required by the Corporation to determine the validity of the request for a record date, determine the validity of the request and whether the request relates to an action that may be taken by written consent and, if appropriate, adopt a resolution fixing the record date for such purpose. The record date for such purpose shall be no more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors and shall not precede the date such resolution is adopted. If a request complying with this Section A has been delivered to the Secretary, but no record date has been fixed by the Board of Directors by the date required by the second preceding sentence, the record date shall be the first date on which a signed written consent relating to the action taken or proposed to be taken by written consent is delivered to the Corporation in the manner described in Section F of this Article; provided that, if prior action by the Board of Directors is required under the provisions of Delaware law, the record date shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
B. RequestRequirements. Any request required by Section A of this Article (i) must be addressed to the Secretary and delivered to or mailed and received at the principal executive offices of the Corporation by the holders of record of at least the Requisite Percentage, who shall not revoke such request and who shall continue to own in the aggregate not less than the Requisite Percentage through the date of delivery of written consents signed by a sufficient number of stockholders to authorize or take such action; (ii) must contain an agreement to solicit consents in accordance with Section D of this Article, (iii) must describe the action proposed to be taken by written consent of stockholders, (iv) must contain (1) such information and representations, to the extent applicable, then required by Article II, Section 10 or Article II, Section 11 and any other applicable sections of the By-Laws as though such stockholder was intending to make a nomination or to submit business before a meeting of stockholders and (2) the text of the proposed action to be taken (including the text of any resolutions to be adopted by written consent), and (v) must include documentary evidence that the requesting stockholder(s) own in the aggregate not less than the Requisite Percentage. The Corporation may require the stockholder(s) submitting such request to furnish such other information as may be requested by the Corporation to determine the validity of the record date request and to determine whether the request relates to an action that may be taken by written consent under this Article. Any requesting stockholder may revoke his, her or its request at any time by written revocation addressed to the Secretary and delivered to or mailed and received at the principal executive offices of the Corporation. Any disposition by a requesting stockholder of any shares of voting stock of the Corporation after the date of the request shall be deemed a revocation of the request with respect to such shares, and each requesting stockholder shall
20202022 PROXY STATEMENT A-4
certify to the Secretary on the day prior to the record date set for the action by written consent as to whether any such disposition has occurred. If the unrevoked requests represent in the aggregate less than the Requisite Percentage, the Board of Directors, in its discretion, may cancel the action by written consent.
C. Actions Which May Not Be Taken by Written Consent. Stockholders are not entitled to act by written consent if (i) the record date request does not comply with this Article; (ii) the action relates to an item of business that is not a proper subject for stockholder action under applicable law; (iii) the request for a record date for such action is received by the Corporation during the period commencing 90 days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the date of the next annual meeting; (iv) an identical or substantially similar item of business, including the nomination, election or removal of directors (as determined by the Board of Directors in its reasonable determination, which determination shall be conclusive and binding on the Corporation and its stockholders (a “Similar Item”)), was presented at a meeting of stockholders held within 90 days before the record date request is received by the Secretary; (v) a Similar Item is included in the Corporation’s notice as an item of business to be brought before an annual or special meeting of stockholders that has been called but not yet held or that is called to be held within 60 days after the record date request is received by the Secretary; or (vi) such record date request was made in a manner that violated Regulation 14A under the Securities Exchange Act of 1934 or other applicable law. For purposes of this Section C, the nomination, election or removal of directors shall be deemed to be a Similar Item with respect to all actions involving the nomination, election or removal of directors, changing the size of the Board of Directors or filling vacancies and/or newly created directorships resulting from any increase in the authorized number of directors.
D. Manner of Consent Solicitation. Holders of shares of voting stock of the Corporation may take action by written consent only if consents are solicited by the stockholder or stockholders seeking to take action by written consent from all holders of voting stock of the Corporation entitled to vote on the matter and in accordance with Regulation 14A under the Securities Exchange Act of 1934 without reliance upon the exemption contained in Rule 14a-2(b)(2) of the Securities Exchange Act of 1934 and other applicable law.
E. Date of Consent. Every consent purporting to take or authorize the taking of corporate action must bear the date of signature of each stockholder who signs the consent, and no consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by Section F of this Article and not later than 120 days after the record date, consents signed by a sufficient number of stockholders to take such action are so delivered to the Corporation in the manner required by Section F of this Article.
F. Delivery of Consents. No consents may be dated or delivered to the Corporation or its registered office in the State of Delaware until 45 days after the record date. Consents must be delivered to the Corporation pursuant to, and in compliance with, applicable law, including Section 228(d)(1) and (d)(2) of the Delaware General Corporation Law. In the event of the delivery to the Corporation of consents, the Secretary shall provide for the safe-keeping of such consents and any related revocations and may designate one or more persons, who shall not be members of the Board of Directors, to serve as inspectors (“Inspectors”) with respect such consents. The Secretary or the Inspectors shall promptly conduct a ministerial review of the sufficiency of all consents and any related revocations and of the validity of the action to be taken by written consent as the Secretary deems necessary or appropriate, including, without limitation, whether the stockholders of a number of shares having the requisite voting power to authorize or take the action specified in consents have given consent. If after such investigation the Secretary or the Inspectors shall determine that the action purported to have been taken is duly authorized by the consents, that fact shall be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders and the consents shall be filed in such records. In conducting the investigation required by this section, the Secretary or the Inspectors may, at the expense of the Corporation, retain legal counsel and any other necessary or appropriate professional advisors as such person or persons may deem necessary or appropriate and, to the fullest extent permitted by law, shall be fully protected in relying in good faith upon the opinion of such counsel or advisors.
G. Effectiveness of Consent. Notwithstanding anything in this Amended and Restated Certificate of Incorporation to the contrary, no action may be taken by the stockholders by written consent except in accordance with this Article. If the Board of Directors determines that any request to fix a record date or to take stockholder action by written consent was not properly made in accordance with, or relates to an action that may not be effected by written
CONAGRA BRANDS
consent pursuant to, this Article or the stockholder or stockholders seeking to take such action do not otherwise comply with this Article, then the Board of Directors shall not be required to fix a record date and any such purported action by written consent shall be null and void to the fullest extent permitted by applicable law. No action by written consent without a meeting shall be effective until such date as the Secretary or the Inspectors certify to the Corporation that the consents delivered to the Corporation in accordance with Section F of this Article represent at least the minimum number of votes that would be necessary to take the corporate action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Delaware law and this Amended and Restated Certificate of Incorporation.
H. Challenge to Validity of Consent. Nothing contained in this Article shall in any way be construed to suggest or imply that the Board of Directors of the Corporation or any stockholder shall not be entitled to contest the validity of any consent or related revocations, whether before or after such certification by the Secretary or the Inspectors, as the case may be, or to prosecute or defend any litigation with respect thereto.
I. Board-Solicited Stockholder Action by Written Consent. Notwithstanding anything to the contrary set forth above, (i) none of the foregoing provisions of this Article shall apply to any solicitation of stockholder action by written consent by or at the direction of the Board of Directors and (ii) the Board of Directors shall be entitled to solicit stockholder action by written consent in accordance with applicable law.
2022 PROXY STATEMENT
OUR BRANDS |
| |
ACT II® |
| |
Alexia® |
| |
Andy Capp’s® |
| |
Angie’s BOOMCHICKAPOP® |
| |
Armour Star® |
| |
|
| |
Banquet |
| |
|
| |
|
| |
| Marie Callender’s® | |
| Mrs. Butterworth’s® | |
| Mrs. Paul’s® | |
| Nalley® | |
| Odom’s Tennessee Pride® | |
| Open Pit® | |
| Orville Redenbacher’s® | |
Brooks® | P.F. Chang’s Home Menu™® | |
Celeste® Pizza for One™ |
| |
Chef Boyardee® |
| |
Crunch ‘n Munch® |
| |
C&W® | Poppycock® | |
DAVID® |
| |
Dennison’s® |
| |
Duke’s® |
| |
Duncan Hines® |
| |
Duncan Hines® |
| |
|
| |
|
| |
| Sandwich Bros. | |
| Slim Jim® | |
EVOL® | Smart Balance® | |
Fiddle Faddle® | Snack Pack® | |
Fleischmann’s® | Swiss Miss® | |
Frontera® |
| |
| Van Camp’s® | |
| Van De Kamps® | |
Gulden’s® | Vlasic® | |
|
| |
| Wish-Bone® | |
| Wolf® | |
| ||
  |
| Our Notice of Annual Meeting, Proxy Statement, and Annual Report for the fiscal year ended http://www.conagrabrands.com/investor-relations/financial-reports/
|
222 Merchandise Mart Plaza Suite 1300 Chicago, Illinois 60654 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.comor scan the QR Barcode above
1. Read the accompanying Proxy Statement and this proxy card. 2. Go to the Website www.proxyvote.com. 3. Follow the instructions.
During The Meeting - Go to www.virtualshareholdermeeting.com/
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903 | |
1. Read the accompanying Proxy Statement and this proxy card. | ||
2. Call toll free at 1-800-690-6903. | ||
3. Follow the recorded instructions. | ||
| VOTE BY MAIL | ||
1. Read the accompanying Proxy Statement and this proxy card. | ||
2. Complete, sign, and date your proxy card. | ||
3. Return your proxy card in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
If you vote by Phone or Internet, please do not mail this Proxy Card. | ||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| KEEP THIS PORTION FOR YOUR RECORDS | |
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||
DETACH AND RETURN THIS PORTION ONLY
| ||||||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||
CONAGRA BRANDS, INC.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR each of the following nominees for director: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
1. |
Election of Directors |
For |
Against |
Abstain | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1a. | Anil Arora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1b. | Thomas K. Brown | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
| 1c. | ☐ | ☐ | ☐ | 2. | Ratification of the appointment of KPMG LLP as our independent auditor for fiscal | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||
| 1d. | Sean M. Connolly | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
| 1e. | ☐ | ☐ | ☐ | 3. | Advisory approval of our named executive officer compensation | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||
| 1f. | Fran Horowitz | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
| 1g. | Richard H. Lenny | ☐ | ☐ | ☐ | 4. | A Board resolution to amend the Certificate of Incorporation to allow shareholders to act by written consent | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
| 1h. | Melissa Lora | ☐ | ☐ | ☐ | The Board of Directors recommends a vote AGAINST the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
| 1i. | Ruth Ann Marshall | ☐ | ☐ | ☐ | 5. | A shareholder proposal regarding the office of the Chair and the office of the Chief Executive Officer | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||
| 1j. | Denise A. Paulonis | ☐ | ☐ | ☐ | NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this proxy card. | |||||||||||||||||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||||
Conagra Brands, Inc. 20202022 Annual Meeting of Shareholders
Wednesday, September 23, 202021, 2022
11:00 a.m. CDT
www.virtualshareholdermeeting.com/CAG2020CAG2022
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D21232-P42642D89646-P77172
PROXY - CONAGRA BRANDS, INC.
Please vote and sign on reverse side.
This Proxy is Solicited by the Board of Directors for the
September 23, 202021, 2022 Annual Meeting of Shareholders.
The undersigned appoints each of Sean M. Connolly and Richard H. Lenny as proxies, with full power of substitution, to vote all shares of common stock of Conagra Brands, Inc. that the undersigned would be entitled to vote at the Annual Meeting of Shareholders and any adjournments or postponements thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS PROXY. IF YOU SIGN AND RETURN YOUR PROXY BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE PROXIES WILL VOTE THE SHARES FOR EACH NOMINEE LISTED IN ITEM 1, FOR ITEMS 2, 3, AND 3,4, AND AGAINST ITEM 5, AND AS RECOMMENDED BY THE BOARD OF DIRECTORS IN CONNECTION WITH SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF SHAREHOLDERS.
If you wish to vote by mailing this proxy card, please mark the boxes accordingly, indicate the date, sign your name exactly as it appears on this card, and return it in the enclosed envelope. When signing as attorney, executor, administrator, trustee, guardian, or officer of a corporation, please give your full title as such. Information on telephonic and Internet voting is on the reverse side of this proxy card.
You may also vote via telephone or the Internet. Please see the reverse side of this card for information about telephonic or Internet voting. Your telephone or Internet votevoting instruction authorizes the named proxies to vote these shares in the same manner as if you marked, signed, and returned yourthis proxy card. Telephone andWhether you vote by mail, telephone, or via the Internet, voting are available untilyour vote must be returned by 11:59 p.m. (ET) on September 22, 2020.20, 2022.
Continued and to be signed on reverse side
222 Merchandise Mart Plaza Suite 1300 Chicago, Illinois 60654 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.comor scan the QR Barcode above
1. Read the accompanying Proxy Statement and this voting instruction card. 2. Go to the Website www.proxyvote.com. 3. Follow the instructions.
During The Meeting - Go to www.virtualshareholdermeeting.com/
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903 | |
1. Read the accompanying Proxy Statement and this voting instruction card. | ||
2. Call toll free at 1-800-690-6903. | ||
3. Follow the recorded instructions. | ||
| VOTE BY MAIL | ||
1. Read the accompanying Proxy Statement and this voting instruction card. | ||
2. Complete, sign, and date your voting instruction card. | ||
3. Return your voting instruction card in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
If you vote by Phone or Internet, please do not mail this Voting Instruction Card. | ||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| KEEP THIS PORTION FOR YOUR RECORDS | |
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||
DETACH AND RETURN THIS PORTION ONLY
| ||||||
| THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||
CONAGRA BRANDS, INC.
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR each of the following nominees for director: | ||||||||||||||||||||||||||||||||||||||||||||||||||
1. |
Election of Directors | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
| 1a. | Anil Arora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||
| 1b. | Thomas K. Brown | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||
| 1c. | ☐ | ☐ | ☐ | 2. | Ratification of the appointment of KPMG LLP as our independent auditor for fiscal | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||
| 1d. | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||||||||
| 1e. | ☐ | ☐ | ☐ | 3. | Advisory approval of our named executive officer compensation | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||
| 1f. | Fran Horowitz | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||
| 1g. | Richard H. Lenny | ☐ | ☐ | ☐ | 4. | A Board resolution to amend the Certificate of Incorporation to allow shareholders to act by written consent | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||
| 1h. | Melissa Lora | ☐ | ☐ | ☐ | The Board of Directors recommends a vote AGAINST the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||
| 1i. | Ruth Ann Marshall | ☐ | ☐ | ☐ | 5. | A shareholder proposal regarding the office of the Chair and the office of the Chief Executive Officer | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||
| 1j. | Denise A. Paulonis | ☐ | ☐ | ☐ | NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this voting instruction card. | |||||||||||||||||||||||||||||||||||||||||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||||
Conagra Brands, Inc. 20202022 Annual Meeting of Shareholders
Wednesday, September 23, 202021, 2022
11:00 a.m. CDT
www.virtualshareholdermeeting.com/CAG2020CAG2022
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D21234-P42642D89816-P77172
VOTING INSTRUCTION CARD - CONAGRA BRANDS, INC.
Please vote and sign on reverse side.
This Voting Instruction Card is Solicited by the Board of Directors for the
September 23, 202021, 2022 Annual Meeting of Shareholders.
As a participant in the Conagra Brands Employee Stock Purchase Plan (the “ESPP”), I hereby direct Computershare, as Trustee, to vote all shares of common stock I hold in this plan account in accordance with the instructions set forth on the reverse side.
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS CARD. IF YOU SIGN AND RETURN YOUR INSTRUCTION CARD BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE TRUSTEE WILL VOTE THE SHARES FOR EACH NOMINEE LISTED IN ITEM 1, AND FOR ITEMS 2, 3, AND 3.4, AND AGAINST ITEM 5.
If you wish to vote using this voting instruction card, please mark the boxes accordingly, sign your name exactly as it appears on this card, indicate the date, and return this card in the enclosed envelope. If you are a current or former employee ofConagra Brands, Inc. and have an interest in the ESPP, your proportionate interest as of August 3, 20201, 2022 is shown on this voting instruction card and the instructions you provide will determine how the Trustee will vote. If you do not vote, the Trustee will vote the shares in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received, unless contrary to applicable law.
You may also vote via telephone or the Internet. Please see the reverse side of this card for information about telephonic or Internet voting. Your telephone or Internet voting instruction authorizes Computershare to vote these shares in the same manner as if you marked, signed, and returned this voting instruction card. Whether you vote by mail, telephone, or via the Internet, your vote must be returned by 11:59 p.m. (ET) on September 22, 2020.18, 2022.
Continued and to be signed on reverse side
The Board unanimously recommends a vote FOR each of the director nominees. 
