☐ | 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 |
☒ | No fee required |
☐ | Fee paid previously with preliminary materials |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and0-11 |
April 29, 2022
DEAR FELLOW STOCKHOLDER,
This past year was a pivotal one for Keurig Dr Pepper (KDP), as we completed our three-year merger integration period and introduced our new strategic plan designed to deliver strong value creation through both organic and inorganic growth strategies.
Looking back over the past three years, KDP met or exceeded all commitments made at the time of the merger in 2018. And our strength since merger extends well beyond our financial commitments. We delivered high-quality in-market performance—including broad-based market share growth across our portfolio and meaningful expansion of new households using the Keurig® system.
We also continued to make progress on our Corporate Responsibility agenda and are increasingly recognized as a leader in Environmental, Social and Governance initiatives. We remain on track to achieve our goals and have further strengthened our focus in both existing and new areas, which will be detailed in our annual Corporate Responsibility Report available this summer.
Our progress is notable in a stable macro environment, but it is even more noteworthy in the context of the volatility experienced since merger—a period marked by pandemic, inflation, supply chain disruption, labor challenges and social unrest. I offer my deep appreciation to all 27,000 KDP team members for their commitment, resilience and focus in delivering our goals, despite the challenges.
Shifting our perspective to the future, KDP’s long-term outlook targets attractive organic growth, plus the opportunity for meaningful inorganic value creation. As we embark on this journey, maintaining consistency of KDP leadership and strategic direction is paramount. To that end, we recently announced a thoughtful leadership succession plan in which KDP Chief Financial Officer & President of International Ozan Dokmecioglu, with whom I have partnered for the past six years, will become our new CEO, while I will remain Executive Chairman for the next two years. I would like to thank our Board of Directors for their continued commitment to good governance practices, as demonstrated by the robust CEO succession process that will enable a seamless leadership transition.
I strongly believe that the best days for KDP still lie ahead. We recognize that the macro environment will continue to be challenging for some time yet remain confident that our team will continue to successfully manage the business through whatever the future may bring.
We are pleased to invite you to attend our annual meeting of stockholders, which will take place online on June 9, 2022, at 10:00 a.m., Eastern Time. You may attend, vote, and submit questions during the meeting via the Internet at www.virtualshareholdermeeting.com/KDP2022. Details regarding how to attend the meeting online and the business to be conducted at the annual meeting are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the virtual annual meeting, we hope you will vote as soon as possible.
Sincerely,
Robert J. Gamgort
Chairman and Chief Executive Officer
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
DEAR FELLOW STOCKHOLDERS, 2023 was a year of tremendous progress at KDP. We want to thank our team of 28,000 employees for bringing their passion and dedication to driving our results every day. We also want to thank you, our stockholders, for your support of KDP. We have much to be proud of in 2023: • Our operational and financial momentum continued. Strong consolidated sales and earnings growth was supported by marketing and capability investments that drove broad-based market share gains, productivity savings, and operating leverage. • We furthered our track record of dynamic and disciplined capital allocation. We entered strategic partnerships in the fast-growing sports hydration and ready-to-drink coffee categories, raised our dividend for the third consecutive year, and opportunistically increased our share repurchase activity in recognition of KDP’s significant future value creation potential. • We continued our efforts to make a positive impact with every drink and to embed conscious and responsible practices into the foundation of our business. Our particular focus areas remain the environment, our supply chain, the health and well-being of our consumers, and our people and our communities. We are excited to share our progress across each of these dimensions in our upcoming annual Corporate Responsibility Report. • We also refreshed our executive leadership ranks, leveraging the strong internal bench we have cultivated since the creation of KDP, as well as our ability to recruit top talent from outside the organization. Our leadership team is experienced and energized, ready to usher in the next chapter of growth and value creation at KDP. Following the Board’s deliberate and robust succession planning process, we worked together to ensure a seamless CEO transition. This is a pivotal moment for KDP. As we enter this next stage, we are proud to report that the KDP organization is galvanized around an evolved and compelling strategy designed to capitalize on our advantaged industry position. Our recent investor day, held in March and archived for replay on our website, detailed these elements for our stockholders. As we look forward to our Annual Meeting of Stockholders, we are pleased to share our proxy statement with you. Within its pages, you will find enhanced disclosure, including the director skills matrix. You will also recognize an ongoing and high-quality process of director refreshment underway, as Peter Harf and Larry Young retire after many years of valuable service, and as the Board proposes that Joachim Creus, the recently appointed Chief Executive Officer of JAB, our largest stockholder, be elected to join. Now that the CEO transition is complete, we will also both serve on the Board of Directors, with Bob continuing as Executive Chairman and Tim joining effective today. We continue to prioritize a Board with a diversity of backgrounds and experiences among our directors and believe KDP will benefit from the unique perspectives of our refreshed director slate. We are pleased to invite you to attend our Annual Meeting of Stockholders, which will take place online on June 10, 2024, at 11:00 a.m., Eastern Time. You may attend, vote, and submit questions during the meeting via the Internet at www.virtualshareholdermeeting.com/KDP2024. Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the virtual annual meeting, we hope you will vote as soon as possible. Thank you for your continued support. Sincerely, |
next stage, we are proud to report that the KDP organization is galvanized around an evolved and compelling strategy designed to capitalize on our advantaged industry position.” Robert Gamgort Executive Chairman Timothy Cofer Chief Executive Officer | |||
Robert Gamgort Executive Chairman | Timothy Cofer Chief Executive Officer | |||
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
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Date and Time
| Location Virtual Annual Meeting www.virtualshareholdermeeting.com/
| Record Date April |
Notice is hereby given that the virtual annual meeting of stockholders (the “Annual Meeting”) of Keurig Dr Pepper Inc., a Delaware corporation (“KDP”), will be held on June 9, 2022,10, 2024, at 10:11:00 a.m. ET. You can attend the Annual Meeting online, vote your shares electronically and submit questions online during the meeting by visiting www.virtualshareholdermeeting.com/KDP2022KDP2024 and entering the control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. If your shares are held in the name of a bank, broker or other nominee and you have any questions about your control number, please contact the bank, broker or other nominee that holds your shares.
Items Of Business:
1.
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To elect the 11
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To approve, on an advisory
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3.
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To ratify the appointment of Deloitte & Touche LLP as KDP’s independent registered public accounting firm for fiscal year
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4.
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To
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Stockholders will also transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Who May Vote:Stockholders of KDP common stock at the close of business on April 14, 2022 15, 2024. A list of stockholders will be accessible prior to the Annual Meeting upon request from the Corporate Secretary and during the Annual Meeting by visiting the meeting website referenced above.
Distribution Date:A Notice of Internet Availability of Proxy Materials or the Proxy Statement is first being sentmade available to stockholders on or about April 29, 2022 26, 2024.
How You May Vote:(i) VIA THE INTERNET, (ii) BY TELEPHONE, or (iii) BY MAIL.
If your shares are held in the name of a bank, broker or other nominee, follow the instructions you receive from your bank, broker or other nominee on how to vote your shares.
Your vote is very important. To ensure your representation at the Annual Meeting, please complete and return the enclosed proxy card or submit your vote through the Internet or by telephone. Whether or not you plan to attend the meeting, we urge you to vote.
Anthony Shoemaker
Chief Legal Officer & Secretary
WHETHER OR NOT YOU PLAN TO VIRTUALLY ATTEND THE ANNUAL MEETING, YOU MAY VOTE AND SUBMIT YOUR PROXY ELECTRONICALLY, BY TELEPHONE OR,
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 9, 2022:10, 2024:
The Company’s Proxy Statement for the Annual Meeting and the Annual Report on Form 10-K for the year ended December 31, 20212023 are available at www.proxyvote.com by entering the control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.
PROXY SUMMARY | 1 | ||||||
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PROPOSAL 1 – ELECTION OF DIRECTORS | 6 | ||||||
CORPORATE GOVERNANCE PRACTICES | |||||||
EXECUTIVE OFFICERS | |||||||
PROPOSAL 2 – ADVISORY RESOLUTION TO APPROVE KDP’S EXECUTIVE COMPENSATION | |||||||
COMPENSATION DISCUSSION AND ANALYSIS | |||||||
Keurig Dr Pepper Inc. |
Proxy Summary
This summary highlights certain information in this Proxy Statement. Stockholders are encouraged to read the entire Proxy Statement and 20212023 Annual Report carefully before voting.
20222024 Annual Meeting Information
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Date and Time
| Location Virtual Annual Meeting www.virtualshareholdermeeting.com/
| Record Date April |
Meeting Agenda and Voting Recommendations
Proposal | Board’s Voting Recommendation | Page Reference | ||||||||
Company Proposals | ||||||||||
1. Election of | FOR (each nominee) | 6 | ||||||||
2. Advisory Resolution to Approve KDP’s Executive Compensation | FOR | 26 | ||||||||
3. Ratification of Deloitte & Touche LLP’s Appointment as the Company’s Independent Auditor for | FOR | 53 | ||||||||
Stockholder Proposal | ||||||||||
4. Stockholder proposal requesting additional reporting on plastic packaging, if properly presented | AGAINST | 57 |
Keurig Dr Pepper – A Modern Beverage Company
Keurig Dr Pepper Inc. (“KDP,” “we,” “us,” “our” or the “Company”) is a leading beverage company in North America, with a portfolio of more than 125 owned, licensed and partner brands and distribution capabilities to provide a beverage for every need, anytime, anywhere. With annual revenue approaching $13of approximately $15 billion, and approximately 27,000 employees. KDP holdswe hold leadership positions in beverage categories including soft drinks, specialty coffee, and tea, water, juice and juice drinks and mixers, and marketshave the #1 single serve coffee brewing system in the U.S. and Canada. The Company’s portfolio of more than 125 owned, licensedOur innovative partnership model builds emerging growth platforms in categories such as premium coffee, energy, sports hydration and partnerready-to-drink coffee. Our brands is designed to satisfy virtually any consumer need, any time, and includesinclude Keurig®, Dr Pepper®, Canada Dry®, Mott’s®, A&W®, Snapple®, Peñafiel®, 7UP®, Green Mountain Coffee Roasters®, Canada DryClamato®, Snapple®, Bai®, Mott’s®, CORECore Hydration® and The Original Donut Shop®. ThroughDriven by a purpose to Drink Well. Do Good, our powerful28,000 employees aim to enhance the experience of every beverage occasion and to make a positive impact for people, communities and our planet.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 1 |
Proxy Summary
Company Highlights
KDP is a scaled and disruptive Challenger in the attractive North American beverages industry.
Since our formation in 2018, KDP’s all-weather business model has been tested by a historically dynamic macroeconomic environment. Despite these challenges, the Company delivered strong and resilient performance, including net sales growth of 6% and Adjusted diluted EPS growth of 11% on a compound annual basis, as well as approximately $11 billion in cumulative free cash flow generation.* The Company also underwent a simultaneous transition from a closely held company with a public float of 13% at formation to a widely held company today with a public float of 79%.
Our performance in 2023 highlights KDP’s ongoing operational and financial momentum. We achieved strong consolidated sales and distribution network, KDP can deliverearnings growth, reflecting market share gains in categories representing approximately 85% of our U.S. Refreshment Beverages portfolio, the expansion of our Keurig brewing system to approximately 40 million U.S. households and broad-based in-market success across our International markets. We also continued to demonstrate dynamic and disciplined capital allocation, expanding our portfolio within the quickly growing ready-to-drink coffee and sports hydration categories, raising our dividend and increasing our share repurchase activity.
Our ambitious growth agenda continues and, in early 2024, we previewed a multi-year innovation pipeline for a completely reimagined single-serve coffee system using plastic- and aluminum-free pods. These consumables, called K-Rounds, will feature expertly roasted coffee beans that are ground, pressed and wrapped in a protective plant-based coating. K-Rounds plastic-free pods will work in the new Keurig Alta brewer, which will begin beta testing as early as fall 2024.
In 2023, our Board of hotDirectors initiated a thoughtful succession process that balances continuity and cold beveragesnew perspectives across the Company’s most senior leaders. Notably, in November 2023, Timothy Cofer joined the Company as our Chief Operating Officer, with a planned transition to nearly every pointChief Executive Officer in the second quarter of purchase for consumers. The Company2024. During his time as Chief Operating Officer, Mr. Cofer worked closely with the executive leadership team, including Robert Gamgort, to help drive KDP’s strategic growth agenda, lead each of the Company’s business segments and oversee operations. As a culmination of our robust succession plan, Mr. Cofer ascended to the role of Chief Executive Officer on April 26, 2024, at which time he was also appointed to the Board, with Mr. Gamgort continuing to serve as the Executive Chairman of KDP.
Additionally, in January 2023, KDP welcomed Karin Rotem-Wildeman as our Chief Research & Development Officer, and in November 2023, we elevated Andrew Archambault to the role of President, U.S. Refreshment Beverages; Patrick Minogue to the role of President, U.S. Coffee; and Monique Oxender to the role of Chief Corporate Affairs Officer. Also in November 2023, Sudhanshu Priyadarshi’s role as Chief Financial Officer was expanded to include the position of President, International. With these new appointments, a talented and energized leadership team is committedin place to sourcing, producinglead KDP in its next chapter of growth.
2 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Proxy Summary
Looking ahead, KDP has an evolved strategy to guide our 28,000 employees and distributingfurther our beverages responsibly throughtrack record of outstanding value creation. We are driven by our Challenger culture, our purpose to Drink Well. Do Good. corporate responsibility platform, including efforts around circular packaging, efficient natural resource use and supply chain sustainability.our vision of a beverage for every need, anytime, anywhere.
* |
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Keurig Dr Pepper Inc. |
Proxy Summary
KDP is a Modern Beverage Company with a portfolio of iconic and new brands, distributed through a flexible and scalable route-to-market network and advanced by a leading approach to data and technology.
Company Highlights
Milestone Achievements in 2021
In 2021, KDP completed milestone achievements on its three-year journey to becoming a Modern Beverage Company. When Keurig Green Mountain, Inc. (“KGM”) and Dr Pepper Snapple Group, Inc. (“DPS”) merged in 2018 (the “Merger”), they formed a new challenger in the beverage industry. Under the guidance of the Board of Directors (the “Board”), KDP set ambitious three-year financial and operational targets to cement the Company’s position as a leader in the marketplace.
By the end of last year, the Company had proven its merger thesis and met or exceeded all of its key commitments. In particular, the Company delivered net sales growth of nearly 5% and Adjusted EPS growth of over 15% on a compound annual basis since the merger while significantly delevering. At the same time, the Company advanced a corporate responsibility agenda that included diversity and inclusion, positive hydration, and regenerative agriculture. These achievements were made in the face of unprecedented obstacles beginning in 2020 in the form of a global pandemic and supply chain challenges.
Succession Plan for 2022 and Beyond
In 2022, KDP’s Board is looking ahead to the next phase of the Company’s development. In April, the Company announced a CEO transition plan that leverages the successful partnership between Robert Gamgort, Executive Chairman and CEO, and Ozan Dokmecioglu, CFO and President of International, to ensure continuity of the Company’s leadership and strategic direction.
Effective July 29, 2022, Mr. Dokmecioglu will become KDP’s next CEO and Mr. Gamgort will begin his two-year commitment to serve as Executive Chairman. Mr. Gamgort and Mr. Dokmecioglu have worked closely together since they both joined KGM in 2016, and their continued collaboration will help drive KDP’s growth as the Company focuses on deploying its exceptional discretionary cash flow to create stockholder value. Mr. Dokmecioglu will join KDP’s Board at the same time he becomes CEO. For more information on Mr. Gamgort’s role as Executive Chairman, see the section entitled “Executive Chairman” on page 11.
As part of the transition, Mr. Gamgort and KDP have entered into an agreement for his role as Executive Chairman, in which Mr. Gamgort has committed to remaining a significant investor in KDP, maintaining at least half of his KDP shareholdings during his tenure as Executive Chairman. In addition, the agreement provides that Mr. Gamgort will serve on no more than one other public company board of directors in addition to KDP. For more information on the new compensation arrangements with Mr. Gamgort and Mr. Dokmecioglu, see the section entitled “2022 Succession Plan” on page 29.
Proxy Summary
20222024 Director Nominees
nominees are independent | 4 of 11 nominees are women
| 5 different nationalities |
average tenure |
Name | Principal Occupation | Years of Service | Independent | No. of Current Public Company Boards (including KDP) | Committees & Roles | Principal Occupation | Years of Service | Independent | No. of Current Public Company Boards (including KDP) | Committees & Roles | ||||||||||
Timothy Cofer | ||||||||||||||||||||
Timothy Cofer | Chief Executive Officer of KDP | <1 |
| 1 |
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Robert Gamgort | ||||||||||||||||||||
Robert Gamgort | Chairman and Chief Executive Officer of KDP | 4 |
| 1 |
| Executive Chairman of KDP | 6 |
| 1 |
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Michael Call | Senior Vice President, Corporate Controller and Chief Accounting Officer of Mondelēz | <1 | ✓ | 1 | Audit RemCo | |||||||||||||||
Oray Boston | ||||||||||||||||||||
Oray Boston | Worldwide President of Trauma, Extremities, Craniomaxillofacial, Sports and Animal Health at DePuy Synthes | 1 | ✓ | 1 | RemCo | |||||||||||||||
Joachim Creus | ||||||||||||||||||||
Joachim Creus | Managing Partner and Chief Executive Officer of JAB | 0 |
| 3 |
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Olivier Goudet | Managing Partner and Chief Executive Officer of JAB | 4 |
| 4 |
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Peter Harf | Managing Partner and Chairman of JAB | 4 |
| 3 |
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Olivier Goudet | Senior Investment Advisor of JAB | 6 |
| 4 |
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Juliette Hickman | Former Investment Analyst of Capital World Investors | 1 | ✓ | 2 | Audit | |||||||||||||||
Juliette Hickman | Former Investment Analyst, Capital Group Companies | 3 | ✓ | 2 | Audit | |||||||||||||||
Paul S. Michaels | Former Global President of Mars, Inc. | 4 | ✓ | 2 | Lead Director RemCo (Chair) | |||||||||||||||
Paul Michaels | ||||||||||||||||||||
Paul Michaels | Former Global President of Mars, Inc. | 6 | ✓ | 2 | Lead Director RemCo (Chair) | |||||||||||||||
Pamela Patsley | ||||||||||||||||||||
Pamela Patsley | Former Executive Chairman and Chief Executive Officer of MoneyGram International, Inc. | 14 | ✓ | 4 | Audit | Former Executive Chairman and Chief Executive Officer of MoneyGram International, Inc. | 16 | ✓ | 4 | Audit | ||||||||||
Lubomira Rochet | Partner of JAB | 1 |
| 3 |
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Lubomira Rochet | Partner of JAB | 3 |
| 4 |
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Debra Sandler | ||||||||||||||||||||
Debra Sandler | Founder & CEO of Mavis Foods, LLC | 1 | ✓ | 4 | RemCo | Founder and CEO of Mavis Foods, LLC | 3 | ✓ | 4 | RemCo | ||||||||||
Robert Singer | Former Chief Executive Officer of Barilla Holding S.p.A. | 4 | ✓ | 2 | Audit (Chair) | |||||||||||||||
Larry D. Young | Former President and Chief Executive Officer of Dr Pepper Snapple Group | 15 | ✓ | 1 |
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Robert Singer | Former Chief Executive Officer of Barilla Holding S.p.A. | 6 | ✓ | 2 | Audit (Chair) |
Corporate Governance Highlights
Board Diversity and Independence
| Board Practices
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Oversight of Risk, Ethics and
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Proxy Summary
Key Executive Compensation Practices
Strong pay for performance philosophy designed to link pay delivery to the Company’s financial and market performance |
Significant levels of direct investment and long-term stock ownership required for all executives to closely align the interests of executives with those of our stockholders |
Lengthy vesting periods for all equity awards |
Independent compensation consultant reporting to the Remuneration and Nominating Committee (the “RemCo”) |
4 |
| Keurig Dr Pepper Inc. |
Proxy Summary
Incentives do not encourage excessive risk taking |
Clawback |
No excise tax gross-ups for changes of control |
§ | Double-trigger vesting upon a change of control |
Hedging is prohibited |
Minimal perquisites |
KDP’s Corporate Responsibility Commitments
Our corporate responsibility commitments aim to
This summer, we will release our
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 5 |
Proposal 1 — Election of Directors
PROPOSAL 1 – ELECTIONOF DIRECTORS
Our Board recommends that you vote “FOR” the election of |
The Board has nominated the 11 candidates named in this proposal for election as directors at the Annual Meeting. All nominees are currently serving as KDP directors. directors, other than Joachim Creus. Mr. Creus was recommended to the Company by JAB and has been nominated by the Board for election by the Company’s stockholders at the Annual Meeting. Timothy Cofer was appointed to the Board in April 2024 in connection with his promotion to Chief Executive Officer of KDP and has also been nominated for election by the Company’s stockholders at the Annual Meeting. Peter Harf and Larry Young have not been renominated and will no longer serve on the Board upon election of the director nominees at the Annual Meeting, and the size of the Board will be fixed at 11 directors immediately upon election of directors at the Annual Meeting.
Directors are elected annually and serve until their term expires at the 20232025 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified. Each nominee has agreed to be named in this Proxy Statement and to serve if elected. For each director nominee to be approved,elected, assuming a quorum is present, votes cast “FOR” each nominee must exceed votes cast “AGAINST” such nominee. A failure to vote, a broker non-vote or an abstention will not be counted as having been voted onvotes cast either “FOR” or “AGAINST” the election of the applicable nominee, and therefore will have no effect on the vote, assuming a quorum is present.vote.
Our Board currently consists of 12 directors, including one director who is designated by Mondelēz, which owns approximately 5% of our common stock, pursuant to the terms of the Investor Rights Agreement (the “IRA”), dated as of July 9, 2018, by and among KDP, Maple Holdings B.V. and Mondelēz. Michael Call has been nominated as the designated nominee of Mondelēz under the IRA. Justine Tan has not been renominated and will no longer serve on the Board following the Annual Meeting.
The Board is responsible for nominating the Company’s director candidates, with assistance in identifying and recommending nominees from the RemCo. The RemCo uses a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the RemCo through management, current Board members, stockholders or other sources. Mr. Call was recommended by Mondelēz in accordance with the IRA, as described above.
Members of the RemCo, the Lead Independent Director of the Board (the “Lead Director”) and other members of the Board interview potential director candidates as part of the selection process when evaluating new director candidates. The RemCo reviews the background of all potential nominees and determines whether they individually possess the personal and professional attributes necessary to be a director. Any feedback obtained through the Board’s annual self-evaluation process with respect to the ability of individual directors to contribute to the Board is also considered in connection with the nomination process. The RemCo will also consider director nominations by a stockholder made pursuant to the procedures set forth in our Amended and Restated By-Laws (the “By-Laws”) relating to stockholder nominations.
In addition, the Company’s Corporate Governance Principles provide that directors are expected to limit the number of other boards on which they serve so as not to interfere with their service as a director of the Company and ordinarily may not serve on the board of more than three other public companies (or one other public company in the case of a director currently serving as chief executive of a public company). Each of our directors is currently in compliance with these expectations. Directors are required to advise the chair of the RemCo in advance of accepting an invitation to serve on another corporate board of directors. Directors also must inform the RemCo and offer to resign from the Board if his or her principal occupation or business association changes substantially.
Board Composition, Qualifications and Diversity
The Board is committed to the ongoing review of Board composition and regularly discusses the skills and characteristics required of KDP directors in the context of the current makeup of the Board, the operating requirements of the Company and the long-term interests of stockholders. The RemCo also reviews the collective experience of the Board and makes recommendations to the Board regarding the appropriate mix of skillsets, qualifications and attributes of the Board as a whole.
The Board seeks candidates with diverse personal backgrounds and experiences and who are committed to active participation, sharing fresh perspectives and providing constructive feedback to management. Our Board prioritizes candidates with proven executive leadership capabilities; consumer product industry expertise; strategic planning experience; financial and accounting skills; and corporate governance, regulatory and risk management experience. With respect to diversity, the Board may consider such factors as diversity in viewpoint, professional experience, education, international experience, skills and other individual
Proposal 1 — Election of Directors
qualifications and attributes that contribute to board diversity, including characteristics such as age, gender, race and national origin. Specific attributesorigin, and assesses its effectiveness in this regard as part of our 2022 director nominees are summarized below:the annual evaluation process.
6 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Proposal 1 — Election of Directors
The following matrix and charts highlight the specific skills, attributes and experience of our director nominees, and the absence of a designation does not mean a director nominee does not possess that particular skill or qualification. Each director nominee also contributes other important skills, knowledge, experience, viewpoints, and perspectives to our Board that are not reflected in the matrix and charts below:
Director Skills Matrix
Skills and Experience | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Leadership | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||
Strategic and M&A | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||
Finance & Accounting | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||
Sustainability/Corp. Resp. | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||
Brand Marketing | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||
Digital, Innov. & Tech. | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||
Public Co. Board | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● |
Age
| Tenure | |||||||||
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In accordance with Nasdaq’s board diversity listing standards, below we are disclosing aggregated statistical information about our Board’s self-identified characteristics, as voluntarily confirmed to us by each of our directors.
Board Diversity Matrix (as of April 26, 2024) | ||||||||||
Total Number of Directors | 11 | |||||||||
Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | ||||||
Directors | 4 | 7 | 0 | 0 | ||||||
Part II: Demographic Background |
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African American or Black | 1 | 1 | 0 | 0 | ||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||
Asian | 0 | 0 | 0 | 0 | ||||||
Hispanic or Latinx | 1 | 0 | 0 | 0 | ||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||
White | 3 | 5 | 0 | 0 | ||||||
Two or More Races or Ethnicities | 1 | 0 | 0 | 0 | ||||||
LGBTQ+ |
| 0 |
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Did Not Disclose Demographic Background |
| 1 |
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 7 |
Proposal 1 — Election of Directors
Director Independence
The below Board Diversity Matrix provides additional information regarding certain attributesmajority of the current KDP directors. Followingmembers of the 2022 Annual Meeting, the below responses will change when Justine Tan no longer serves as a KDP director.
Board Diversity Matrix (as of April 29, 2022) | ||||||||
Total Number of Directors | 12 | |||||||
Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | ||||
Directors | 5 | 7 | 0 | 0 | ||||
Part II: Demographic Background |
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African American or Black | 0 | 0 | 0 | 0 | ||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||
Asian | 1 | 0 | 0 | 0 | ||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||
White | 3 | 7 | 0 | 0 | ||||
Two or More Races or Ethnicities | 1 | 0 | 0 | 0 | ||||
LGBTQ+ | 0 | |||||||
Did Not Disclose Demographic Background | 0 |
Board are independent under Nasdaq’s listing standards. In order to determine that a director is independent under Nasdaq’s listing rules, the Board must affirmatively determine, after reviewing all relevant information, that a director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Based on these standards, the Board has determined that the following directors are independent: Michael Call,Oray Boston, Juliette Hickman, Paul S. Michaels, Pamela Patsley, Debra Sandler, Robert Singer and Larry Young. The Board also previously determined that Michael Call, a former directors Genevieve Hovde and Nelson Urdaneta were independent.
Robert Gamgort does not qualifydirector, was independent during the period he served as independent due to his position as our CEO. Due to their roles with JAB, our largest stockholder, Olivier Goudet, Peter Harf and Lubomira Rochet are not currently determined to be independent, nor is Justine Tan,director. In determining that Mr. Young, who is serving as a director until the 20222024 Annual Meeting. In determining that Larry YoungMeeting, qualifies as independent, the Board considered that Mr. Younghe has not been employed by the Company in any capacity since his service as DPSthe CEO of Dr Pepper Snapple Group, Inc. (“DPS”) ended over threenearly six years ago at the time of the Merger2018 merger between DPS and Keurig Green Mountain, Inc. (the “DPS Merger”) and that Mr. Young does not have any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Timothy Cofer and Robert Gamgort do not qualify as independent due to their positions as our CEO and Executive Chairman, respectively. Due to their roles with JAB, our largest stockholder, Joachim Creus, Olivier Goudet and Lubomira Rochet are not currently determined to be independent. The Board has also considered Mr. Call’s affiliation with Mondelēz but determined that this relationship didPeter Harf, who is serving as a director until the 2024 Annual Meeting, does not preclude a finding of independence. Therefore, the majority of the members of the Board arequalify as independent under Nasdaq’s listing standards.due to his role with JAB.
Director Nominees
Director since 2024 Chief Executive Officer of KDP 55 years of age No committee memberships Key skills Executive Leadership Consumer Products Strategic and M&A Brand Marketing Digital, Innov. & Tech. Public Company Board | Timothy Cofer Biographical Information: Timothy “Tim” Cofer has served as Chief Executive Officer of KDP and a member of the Board since April 26, 2024. He previously served as KDP’s Chief Operating Officer from November 2023 to April 26, 2024. Mr. Cofer is a seasoned consumer packaged goods executive, with more than 30 years of multinational experience in driving growth, leading transformations and executing significant mergers and acquisitions. His career is highlighted by a track record of creating value and building high-performing teams. Prior to joining KDP, from October 2019 to September 2023, Mr. Cofer was the Chief Executive Officer and a member of the board of directors of Central Garden & Pet Company (Nasdaq: CENT) (Nasdaq: CENTA), a portfolio of brands in the lawn, garden and pet supplies industries, where he oversaw a multi-year period of double-digit revenue and profit growth and a series of strategic acquisitions. Previously, he spent more than 25 years with Mondelēz International, a manufacturer of snack food products, and its predecessor company, Kraft Foods, with responsibility across a wide range of product categories, including coffee, chocolate and packaged food. In Mr. Cofer’s last position as EVP and Chief Growth Officer of Mondelēz International from 2016 to 2019, he was a critical architect behind the company’s successful growth strategy. He previously led several global regions, including as President of Asia Pacific, Middle East & Africa of Mondelēz International and President of Kraft Foods Europe. In his U.S.-focused roles of President of Kraft Pizza Company and President of Oscar Mayer Foods, he oversaw manufacturing and distribution operations, including a nationwide direct store delivery network. He also led the global integration of Kraft and Cadbury, delivering on the merger’s strategic and financial objectives while nurturing a combined high-performing culture. Mr. Cofer holds an MBA from the University of Minnesota and a BA in Economics and Political Science from St. Olaf College. Qualifications: Mr. Cofer has extensive experience as an executive in the consumer packaged goods industry, with a track record of driving growth, leading transformations and executing significant mergers and acquisitions. He has leadership experience in general management, manufacturing and distribution and strategic transactions, among other areas. Other Current Public Company Directorships: None |
8 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Proposal 1 — Election of Directors
Director since 2018 Executive Chairman of KDP 61 years of age No committee memberships Key skills Executive Leadership Consumer Products Strategic and M&A Sustainability/Corp. Resp. Brand Marketing Public Company Board | ||
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Biographical Information: Robert “Bob” Gamgort His 35-plus year career in consumer products Mr. Gamgort Mr. Gamgort holds an MBA in marketing and finance from the Kellogg Graduate School of Management at Northwestern
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Qualifications: Mr. Gamgort has extensive senior-level executive experience in the consumer products industry and substantial marketing and general management experience. Mr. Gamgort has significant experience overseeing transformational mergers and integrations.
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 9 |
Proposal 1 — Election of Directors
Director since 2022 Independent 57 years of age Remuneration & Nomination Committee (Member) Key skills Executive Leadership Consumer Products Strategic and M&A Sustainability/Corp. Resp. Brand Marketing Digital, Innov. & Tech. | Oray Boston Biographical Information: Oray B. Boston Jr. is the Worldwide President of TECA + Sports (Trauma, Extremities, Craniomaxillofacial, Sports and Animal Health) for DePuy Synthes, the Orthopaedics Company of Johnson & Johnson, a role he has held since August 2021, and joined KDP’s Board in November 2022. With a focus on driving commercial growth and enhancing customer relationships globally, Mr. Boston leads the TECA + Sports platform, strengthening the leadership position in Trauma, enhancing their position in Extremities, elevating their life-changing offerings in Craniomaxillofacial, and bolstering the critical efforts of their Animal Health business. His previous positions at Johnson & Johnson, a pharmaceutical and medical technologies corporation, include Ethicon President of Global Biosurgery (May 2018 to September 2021), Office of Technology Vice President of Commercialization, Ethicon Vice President of Franchise Operations, Biosurgery Vice President of Sales & Marketing, and OTC Vice President of Sales Strategy. Mr. Boston holds a Bachelor of Science in Industrial Engineering from the University of Southwest Louisiana and a master’s degree from the University of Pennsylvania. He is a member of the CEO Council for Growth of Philadelphia. Qualifications: Mr. Boston has expertise in brand and marketing innovation, as well as sales and customer management with key consumer-packaged goods retailers, developed through over 30 years of experience in operations, sales, marketing and other roles at global companies. In addition, Mr. Boston has experience with P&L management. Other Current Public Company Directorships: | |
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Director nominee Managing Partner and Chief Executive Officer of JAB 47 years of age No committee memberships Key skills Executive Leadership Consumer Products Strategic and M&A Finance & Accounting Sustainability/Corp. Resp. Public Company Board | Joachim Creus Biographical Information: Joachim Creus is a Managing Partner and the Chief Executive Officer and Vice Chairman of JAB Holding Company, Mr. Creus has held a number of executive officer roles at several JAB holding entities. He served as a Managing Partner of JAB from October 2021 to January 2024 and as a Senior Partner of JAB from April 2019 to October 2021. He is currently a member of the board of directors of Coty Inc., JDE Peet’s N.V. and several JAB controlled companies. Previously, Mr. Creus held various legal- and tax-related positions at Siemens, Rödl & Partner and Tiberghien Lawyers. Mr. Creus holds several degrees from KU Leuven and an LL.M. in international tax law from Vienna University of Economics and Business. Qualifications: Mr. Creus has nearly two decades of experience in managing complex transactions and legal and tax matters in law firm, corporate and fund environments, including deal structuring, financing, contract negotiation and antitrust matters. His extensive work experience in Europe, Asia and North America contributes to his perspective on business, tax and law. Other Current Public Company Directorships: Coty Inc., JDE Peet’s N.V. |
10 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Proposal 1 — Election of Directors
Director since Senior Investment Advisor 59 years of age No committee memberships Key skills Executive Leadership Consumer Products Strategic and M&A Finance & Accounting Public Company Board | Olivier Goudet Biographical Information: Olivier Goudet is a Senior Investment Advisor at JAB Holding Company and was previously its Managing Partner and Chief Executive Officer from 2012 to November 2023. He has been on KDP’s Board since the formation of the Company in July 2018. With extensive financial expertise and senior executive experience, Mr. Goudet has a strong track record of leading strategic acquisitions, driving revenue growth and leading governance as a director of several public companies. He serves as Chairman of the Board of JDE Peet’s N.V., Mr. Goudet holds a degree in Engineering from l’Ecole Centrale de Paris and graduated from the ESSEC Business School in Paris with a major in Finance.
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Qualifications: Mr. Goudet has extensive financial expertise and senior executive experience, as well as significant governance and oversight experience attained through his tenure as a director of several public companies. Mr. Goudet has a strong track record leading strategic acquisitions and integrations and driving revenue growth, along with significant global experience in the consumer-packaged goods and coffee industries.
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Proposal 1 — Election of Directors
| Other Current Public Company Directorships: | |
| Coty Inc., JDE Peet’s N.V. | |
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Director since 2021
50 years of age Audit and Finance Committee (Member) Key skills Strategic and M&A Finance & Accounting Sustainability/Corp. Resp. Public Company Board | ||
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Biographical Information: Juliette Hickman served as an investment analyst at the Capital Group Companies, an investment management company, from 1998 to 2020, with exposure to a broad range of industries on a global basis and specific expertise and focus on the global beverage industry. She joined KDP’s Board in January 2021. Throughout her career, Ms. Hickman has Ms. Hickman holds a
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Qualifications: Ms. Hickman has extensive experience in the beverage industry, and her exposure to a broad range of industries on a global basis from the perspective of an analyst allows her to provide unique
Other Current Public Company Directorships: Waldencast plc |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 11 |
Proposal 1 — Election of Directors
Director since 2018 Lead Independent Director 72 years of age Remuneration & Nomination Committee (Chair) Key skills Executive Leadership Consumer Products Strategic and M&A Sustainability/Corp. Resp. Brand Marketing Public Company Board | ||
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Paul Michaels His extensive career highlights include launching, building and growing some of today’s most well-known global brands. Mr. Michaels Mr. Michaels is on the Board of Directors of Krispy Kreme, Inc. and is a former member of Coty Inc.’s Board. He holds a
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Qualifications: Mr. Michaels has expertise and creativity in launching, building and supporting global brands in the consumer products industry. Mr. Michaels has a focus on operational efficiency and effectiveness developed through his extensive executive experience with complex multinational consumer product organizations such as Mars and Johnson & Johnson.
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Proposal 1 — Election of Directors
| Other Current Public Company Directorships: Krispy Kreme, Inc. | |
Director since 2018 Independent 67 years of age Audit and Finance Committee (Member) Key skills Executive Leadership Strategic and M&A Finance & Accounting Brand Marketing Digital, Innov. & Tech. Public Company Board | Pamela Patsley Biographical Information: Pamela “Pam” Patsley served as the Executive Chairman of MoneyGram International, Inc., | |
Ms. Patsley She serves on the
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Qualifications: Ms. Patsley has extensive management experience at multiple multinational companies and a deep understanding of audit, financial control and technology matters. Ms. Patsley has extensive public company board and corporate governance experience.
Other Current Public Company Directorships: Hilton Grand Vacations, Inc., Texas Instruments Incorporated, Payoneer Global Inc. |
12 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Proposal 1 — Election of Directors
Director since 2021 Partner of JAB 46 years of age No committee memberships Key skills Executive Leadership Consumer Products Brand Marketing Digital, Innov. & Tech. Public Company Board | ||
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Biographical Information: Lubomira Rochet has Over the course of her career, she has Ms. Rochet is a director of Coty Inc.; Societe Generale, a leading European She holds a degree from Ecole Normale Supérieure in Paris, Sciences Po Paris, and the College of Europe in Bruges (Belgium).
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Qualifications: Ms. Rochet has deep expertise in digital marketing, ecommerce, direct-to-consumer selling and the use of data, technology and innovative business models. Ms. Rochet brings to the Board a recognized digital transformation track record, significant knowledge of the consumer goods industry and unique perspectives on driving growth through digital leadership and consumer engagement.
Other Current Public Company Directorships: Societe Generale, Coty Inc. |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 13 |
Proposal 1 — Election of Directors
Director since 2021 Independent 64 years of age Remuneration & Nomination Committee (Member) Key skills Executive Leadership Consumer Products Finance & Accounting Sustainability/Corp. Resp. Brand Marketing Public Company Board | ||
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Biographical Information: Debra Sandler is the Founder and CEO of Mavis Foods, LLC, a Ms. Sandler Ms. Sandler serves on the Board of Archer-Daniels-Midland Company, Dollar General Corporation and Gannett Co., Inc. She is also a member of the Board of Advisors for Pharmavite, LLC, a wholly owned subsidiary of Otsuka Pharmaceuticals, and a trustee for Hofstra University. Ms. Sandler is a regular speaker on topics such as diversity and inclusion, multicultural business development and health and wellbeing in the consumer packaged goods industry.
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She holds a bachelor’s degree from Hofstra University and a master’s degree in Marketing from New York University. Qualifications: Ms. Sandler has an extensive understanding of consumer behavior and the evolving retail environment, including valuable e-commerce and strategic planning experience. Ms. Sandler has a proven record of creating, building, enhancing, and leading well-known consumer brands as a result of the leadership positions she has held with Mars, Johnson & Johnson and PepsiCo.
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Proposal 1 — Election of Directors
| Other Current Public Company Directorships: Archer-Daniels-Midland Company, Dollar General Corporation, Gannett Co., Inc. | |
Director since 2018 Independent 72 years of age Audit and Finance Committee (Chair) Key skills Executive Leadership Consumer Products Strategic and M&A Finance & Accounting Public Company Board | ||
Biographical Information: Robert “Bob” Singer Mr. Singer’s career includes executive experience in operations and finance as well as numerous Board of Director roles for various public companies. Previous positions include President and Chief Operating Officer of Abercrombie and Fitch Co. Mr. Singer Mr. Singer holds a
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Qualifications: Mr. Singer has extensive operating, financial and executive experience as a former chief executive officer. Mr. Singer has financial acumen developed through his extensive executive experience and significant public company board experience (including audit chair experience).
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Keurig Dr Pepper Inc. |
Corporate Governance Practices
CORPORATE GOVERNANCE PRACTICES
KDP is committed to strong corporate governance policies and practices, which are embodied in our Corporate Governance Principles, available at investors.keurigdrpepper.com/corporate-governance-guidelines.www.keurigdrpepper.com. The RemCo reviews the Corporate Governance Principles annually to ensure they reflect evolving best practices and regulatory requirements, including Nasdaq listing standards. The governance practices highlighted below are reflected in the Corporate Governance Principles, our By-Laws and our committee charters, as appropriate.
The Board is responsible for broad corporate policy and overall performance of the Company through oversight of management and stewardship of the Company. Among other duties, the Board selects and advises the Company’s officers, assigns to them responsibility for management of the Company’s business, and monitors their performance.
The Board recognizes that its leadership structure – particularly the combination or separation of the CEO and Chairman roles – is driven by the needs of the Company, and that different leadership structures are appropriate for different circumstances. As a result, the Company does not currently have a policy requiring either the combination or separation of leadership roles. Instead, the Board periodically evaluates its leadership structure and maintains flexibility to determine which arrangement is best suited for the conditions facing the Company at that time.
Executive Chairman
As discussed on page 2, on July 29, 2022,April 26, 2024, Mr. Gamgort will transitiontransitioned his CEO duties to Mr. Cofer and begin a two-year commitment to servebegan serving exclusively as the Company’s Executive Chairman. Mr. Gamgort hashad served as both Chairman of the Board and CEO since 2019.2019, other than a brief period of service as solely Executive Chairman in 2022. By serving in both positions, Mr. Gamgort has beenwas able to draw on his extensive experience leading both public and private companies to focus the Board’s discussions and guide review of the Company’s strategy, which has resultedresulting in efficient decision-making and effective governance during a timefor the Company. With Mr. Cofer transitioning to CEO, the separation of transition following the Merger.CEO and Executive Chairman roles will permit Mr. Cofer to focus on managing and operating the Company, while Mr. Gamgort directs his attention to certain strategic issues determined by the Board.
In his new role serving exclusively as Executive Chairman, Mr. Gamgort will have responsibilities in four distinctthe following areas, as outlined below.unless otherwise determined by the Board:
| § | advising the CEO;
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§ | acting as a liaison between the Board and management;
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◾ Assist the RemCo and the Lead Director in evaluation of Board performance
◾ Chair annual meetings of stockholders
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Lead Independent Director
In February 2021, the Board created a Lead Director position to bring additional knowledge, oversight and accountability to the Company’s leadership structure. The Company’s Corporate Governance PoliciesPrinciples provide for an independent and active Lead Director who is designated by the independent directors with clearly defined leadership authority and responsibilities. As set forth in the Corporate Governance Principles, the Lead Director’s responsibilities include:
presiding at any meetings of the Board at which the Executive Chairman is not present; |
chairing executive sessions of the non-employee or independent directors; |
serving as a liaison between the independent directors and the Executive Chairman and otherwise facilitating communications among members of the Board; |
providing input to the Executive Chairman on meeting agendas, schedules and other information sent to the Board; |
being available for consultation with investors, regulators or other significant stakeholders; and |
assisting the RemCo with evaluating Board and management performance. |
Less formally, the Lead Director acts as a “sounding board” and advisor to the Executive Chairman, and CEO, and he seeks to facilitate healthy discussion among other directors both inside and outside of the boardroom. Recently, the Lead Director also led the Company’s succession planning efforts.
Keurig Dr Pepper Inc. |
Corporate Governance Practices
The Board appointed Paul Michaels served as Lead Director in February 20212023 and was reappointed him to the positionrole in 2022.2024. The independent directors believe that Mr. Michaels bringsis well suited to serve as Lead Director due to his more than 30 years of consumer products industry experience, including at major companies such as Mars, Johnson & Johnson, and Procter & Gamble. He has a track record of industry accomplishments and executive leadership, and he is deeply engaged in the Company’s mission asvision of a Modern Beverage Company. beverage for every need, anytime, anywhere. As a result of this, he is well positioned to carry out the responsibilities of the Lead Director and provide constructive, independent and informed guidance and oversight to management.
Our Board met eightseven times during 2021.2023. Each current director attended at least 75% of the total number of meetings of the Board and committees on which such director served that were held during 20212023 while the director was a member. Directors are also expected to attend annual meetings of stockholders, and allten of our eleven directors who were on the Board at the time attended the 20212023 Annual Meeting of Stockholders.
In addition to Board and committee meetings, our directors also discharge their duties through, among other things, less formal group communications, including discussions, briefings and educational sessions with the Chairman and CEO, members of senior management and others as appropriate regarding relevant matters.
The Board’s standing committees, their membership and the number of meetings held in 20212023 are set forth below. Charters for each of our standing committees are available at our corporate governance webpage at investors.keurigdrpepper.com/corporate-governance-guidelines.www.keurigdrpepper.com.
All members of the RemCo and the Audit and Finance Committee (the “Audit Committee”) satisfy the standards of independence applicable to members of such committees, including Nasdaq listing standards. |
All members of the Audit Committee meet the financial literacy requirements under Nasdaq listing standards and independence requirements under Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has also determined that all of the members of the Audit Committee are “audit committee financial experts” within the meaning of the U.S. Securities and Exchange Commission (“SEC”) rules and have financial sophistication in accordance with Nasdaq listing standards. No Audit Committee member received any payments in |
The Board has determined that all members of the RemCo meet the heightened independence standards under the Nasdaq listing standards and are “non-employee” directors as defined under Rule 16b-3 under the Exchange |
REMUNERATION AND NOMINATION COMMITTEE | ||
Current Members
Paul
Debra Sandler
| Primary Responsibilities
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16 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Corporate Governance Practices
AUDIT AND FINANCE COMMITTEE | ||
Current Members
Robert Singer (Chair)
Juliette Hickman Pamela Patsley
8 Meetings Held in | Primary Responsibilities
§ See also “Report of the Audit Committee.” |
Corporate Governance Practices
The Board’s Oversight Responsibilities
The Company’s corporate governance practices and policies ensure substantial independent oversight of management. For instance:
The Board has a majority of independent and non-employee directors. |
The Board’s standing committees are composed solely of independent directors. The RemCo and Audit Committee are each composed solely of independent directors. The committees provide independent oversight of management. |
The Board’s non-employee directors and independent directors meet regularly in executive session. The non-employee directors meet regularly in executive session without management present and, consistent with Nasdaq listing rules, the independent directors also meet regularly in executive session. These sessions are chaired by the Lead Director. |
Board Oversight of Risk
The Board views the oversight of the Company’s strategy and operations as one of its key responsibilities and understands that risk is inherent in accomplishing the Company’s objectives. Oversight of the Company’s risk management is therefore an important function of the Board. The Board and management consider factors such as a risk’s likelihood, potential impact and time horizon. To evaluate risk and administer its oversight function, the Board relies on the breadth and depth of experience of its directors, delegating responsibility to its standing committees as appropriate. To the extent necessary, the Board also discusses risks during its executive sessions. Management plays a key role in risk management and regularly provides updates to the Board. The Board is also informed on the recommendations of external advisors, including law firms, financial firms, auditors, compensation consultants and other experts.
The Board of Directors
The Board as a whole primarily oversees matters related to strategic and operational risk. The Board’s standing committees report to the full Board regarding their respective considerations and actions. The Board’s role in the Company’s risk oversight process includes reviewing and discussing with members of management areas of material risk to the Company, including strategic, operational, financial and legal risks.
The Board as a whole primarily oversees matters related to strategicAudit and operational risk. Finance Committee
The Audit Committee oversees matters of financial, legal and compliance risk. In administering this oversight, the Audit Committee regularly receives reports from the Controller, Treasurer, General Counsel, head of Internal Audit and others, and it interacts directly with the Company’s independent auditors. The Audit Committee has been delegated responsibility for oversight of data privacy and cybersecurity risk including cybersecurity risk. and receives regular updates from the Company’s Chief Information Officer and its Chief Information Security Officer.
The Remuneration and Nomination Committee
The RemCo addresses risks related to compensation and other talent-related matters, as well as risks associated with Board independence and governance. Committees reportIt receives regular reports from the Chief Human Resources Officer and its independent compensation consultant, Frederic W. Cook & Co. (“FW Cook”).
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 17 |
Corporate Governance Practices
Management
Management plays a central role in the Company’s risk management and regularly provides updates to the Board on a variety of relevant matters, including strategy and operations, cybersecurity, data privacy, sustainability, human capital management, supply chain, legal matters and other key topics. The Company’s processes, disclosure controls and procedures and internal controls are designed to facilitate the identification and management of risks and to cause key risks to be escalated to the Board. In some cases, management implements its risk management function through internal committees. The Company’s full Disclosure Review Committee meets at least quarterly and is comprised of several members of senior management, including our Controller, General Counsel, the financial heads for our business units, the heads of Internal Audit and Financial Planning & Analysis and others. The Disclosure Review Committee discusses key issues within the Company that may implicate public reporting, which are elevated to the Board regarding their respective considerationsas appropriate. Similarly, the Company’s Sustainability Governance Committee, which is comprised of select Executive Leadership Team members and actions.other key leaders, monitors and responds to ESG-related risk and periodically reports to the Board through the Chief Corporate Affairs Officer.
Board Oversight of Corporate Responsibility and ESG Matters
The Board oversees KDP’s corporate responsibility strategy and goals and sets the tone for the Company’s commitment to act responsibly and be a force for positive impact. In early 2022, the Board updated theOur Corporate Governance Principles to formally reflect theour longstanding commitment to addressing ESG matters directly with the full Board. TheIn this regard, the Board added as a core responsibility the oversight ofoversees the Company’s environmental sustainability and social responsibility strategies and commitments, including for climate, water, circular economy, health and wellbeing, sustainability practices within our supply chain, sustainability, human rights, and diversity and inclusion. The RemCo assists the Board with oversight of human capital management strategies and corporate governance matters.
The full Board approves long-term goals and commitments under our focus areas of Environment, Supply Chain, Health & Wellbeing and People & Communities. KDP executive leaders help guide and develop these corporate responsibility programs; the KDP Executive Leadership Team ensures alignment of our corporate responsibility approach and strategies with our long-term business objectives, provides advisory support on programs and provide regularmonitors progress. The Chief Corporate Affairs Officer provides periodic updates on progress to the Board on progress against our goals. Focus areas for the Board in 2021 included sustainable supply chain, health and well-being, diversity and inclusion initiatives and corporate governance. The RemCo assists the Board with oversight of human capital management strategies and corporate governance matters.Board.
We are committed to transparency and information sharing in corporate responsibility, and otherincluding related ESG topics that impact our Company, and plan to release our fourthsixth annual Corporate Responsibility Report in the summer of 2022.2024. Our Corporate Responsibility Reports and policies, including our ethics and compliance policies, can be found at keurigdrpepper.com/en/our-company/corporate-responsibility.www.keurigdrpepper.com. The information on, or accessible through, our website is not incorporated by reference into, and is not a part of, this Proxy Statement.
Board and Committee Evaluations
The Board, as well as each standing committee, conducts an annual self-evaluation to assess its performance. All directors participate in the formal evaluation process, responding to written questions designed to elicit information to be used in improving Board and committee effectiveness. Director feedback is solicited from the formal self-evaluation process and is shared on an anonymous basis with the entire Board and committee and, where appropriate, addressed with management. In response to feedback from the evaluation process, our Board and committees work with management to take concrete steps to improve our policies processes, and procedures to further Board and committee effectiveness.
We are dedicated to earning the trust of our customers and investors, and our actions are guided by the principles of integrity, trustworthiness, dependability and respect. The Board has adopted a Code of Conduct that applies to all employees, officers and directors.directors are expected to adhere to. All employees and all Board members are required to participate in annual Code of Conduct training and certifications.
Corporate Governance Practices
certifications, and a material violation of the Code of Conduct is cause for termination. Our Code of Conduct is posted on our website at keurigdrpepper.com/en/our-company/ethics-and-compliance.www.keurigdrpepper.com within “Our Policies” found under “Who We Are” on our homepage. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K or applicable stock exchange rules regarding any amendment to, or waiver from, a provision of the Code of Conduct for our directors and executive officers (including senior financial officers, including the chief executive officer, eitherofficers) by posting such information on our website at keurigdrpepper.com/en/our-company/ethics-and-compliance or by filing a Current Report on Form 8-K with the SEC.www.keurigdrpepper.com.
18 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Corporate Governance Practices
Certain Relationships and Related Party Transactions
Related Person Transactions Policy
We have adopted a written Related Person Transactions Policy, which applies to any transaction or proposed transaction in which KDP is a participant, the amount involved exceeds $120,000, and a related person under the policy has a direct or indirect material interest. In general, related persons are directors, executive officers, their immediate family members, and stockholders beneficially owning more than 5% of our outstanding stock or more than 10% of Acorn Holdings B.V. (an investment entity affiliated with JAB), includingand their immediate family members. Pursuant to this policy, management determines whether a transaction requires review by the disinterested directors of the Board or Audit Committee. Based on its consideration of all of the relevant facts and circumstances, the disinterested members of the Board or Audit Committee, as applicable, decide whether or not to approve such transactions and approve only those transactions that are deemed to be in the best interests of KDP and its stockholders. Our Related Person Transactions Policy also includes certain exceptions for transactions that are considered pre-approved by under the Board.terms of the policy.
Certain Related Person Transactions
Existing Commercial Arrangements with JAB Related Persons
KDP has previously negotiated and disclosed a number of arm’s length commercial arrangements with Peet’s Coffee & Tea, Inc. (“Peet’s”), Caribou Coffee Company, Inc. (“Caribou”), Panera Bread Company (“Panera”), Einstein Bros Bagels (“Einstein Bros”), and Krispy Kreme, Doughnuts Inc. (“Krispy Kreme”). KDP’s largest stockholder, JAB, has controlling or significant investments in Peet’s, Krispy Kreme and Panera Brands, which includes Caribou Panera,and Einstein Bros and Krispy Kreme.Bros.
KDP purchases certain raw materials from Peet’s and manufactures coffee and tea portion packs under Peet’s brands for sale by KDP and Peet’s in the U.S. and Canada. KDP exclusively manufactures, distributes and sells Peet’s ready-to-drink beverage products in the U.S. and Canada. Peet’s is also an authorized distributor of KDP products. KDP licenses the Caribou Panera and Krispy Kreme trademarks for use in the manufacturing of portion packs for the Keurig brewing system. KDP also sells various syrups and packaged beverages to Caribou, Panera, Einstein Bros and Krispy Kreme for resale to retail customers.
Related Person Transactions in 2024
On March 5, 2024, KDP repurchased 35 million shares from JAB, our largest stockholder, (the “Repurchase”) in connection with JAB’s underwritten secondary offering of 100 million shares of KDP’s common stock. KDP repurchased the shares at a per share of $28.90, the price paid by the underwriters, for a total price of $1,011,500,000. In accordance with our Related Person Transactions Policy, the Repurchase was approved by a majority of the disinterested directors on the Board.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC and Nasdaq and to furnish us with copies of the reports.SEC. Based on our review of such reports and written representations from our directors and officers, except as previously reported, we believe that all such filing requirements were met from January 1, 20212023 through the record date, with the exception of one Form 3 relating to former director Nelson Urdaneta’s election as a director, filed late on September 16, 2021, and(1) for Karin Rotem-Wildeman, one Form 4 relating to a vesting for Mauricio Leyva,one transaction, filed late on April 8, 2022, in each caseAugust 4, 2023 due to administrative error.error and (2) for Roger Johnson, one timely filed Form 3 that inadvertently reported the incorrect number of shares of common stock beneficially owned.
Where to Find More Information
To learn more aboutYou can access our corporate governance practices and our otherdocuments, including the policies you can access the governance documents listed below, at investors.keurigdrpepper.com/corporate-governance-guidelines and other policies at keurigdrpepper.com/en/our-company/ethics-and-compliance.www.keurigdrpepper.com. We will also provide copies of any of these documents to stockholders upon written request to the Corporate Secretary.
By-Laws |
Corporate Governance Principles |
Board Committee Charters |
KDP Code of Conduct |
Political Contributions Policy |
Supplier Code of Conduct |
§ | Environmental Policy |
Water Policy |
Climate Policy |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 19 |
Corporate Governance Practices
Stockholder Outreach and Communications with the Board
As part of our effort to better understand our stockholders’ perspectives, we regularly engage with our stockholders, seeking their input and views on various matters. We discuss a variety of topics with our stockholders, including the Company’s business strategy, financial performance, executive compensation and environmental, social and governance matters. The Board values our stockholders’ perspectives, and the feedback we receive continues to inform our policies and practices.
Any interested party may communicate with the Board, the Executive Chairman, the Lead Director or the independent directors on a Board-related issue by sending an email to ir@kdrp.com or corporatesecretary@kdrp.com or sending a written communication to: Corporate Secretary, Keurig Dr Pepper Inc., 6425 Hall of Fame Lane, Frisco, TX 75034. Communications related to the responsibilities of the Board will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication.
Our non-employee director compensation program is guided by three goals: compensation should fairly pay directors for work required in a company of our size and scope; compensation should align directors’ interests with the long-term interests of stockholders; and the structure of the compensation should be easy for stockholders to understand. The Board believes that a director’s total compensation should include a significant equity component because it believes that this more closely aligns the long-term interests of directors with those of stockholders and provides a continuing incentive for directors to foster the Company’s success. In furtherance of these goals, our non-employee directors are bound by an equity ownership requirement of at least five times the annual cash retainer for a director.
Directors’ compensation is determined by the Board, and the RemCo makes recommendations to the Board based on periodic benchmarking assessments and advice received from Frederic W.FW Cook, & Co., its independent compensation consultant. In 2020, the Board approved an annual cash retainer for the newly-appointed Lead Director of $40,000 per year and approved an increase of $10,000While director compensation was unchanged from fiscal 2022 to the cash retainer granted to the chair of the Audit Committee, each effective beginningfiscal 2023, in fiscal 2021. In 2021,2023, the Board approved an increase of $5,000$10,000 to the annual equity award granted to all directors and an increase of $5,000 to the annual cash retainer for all directors, effective beginning in fiscal 2022,2024, in each case to maintain alignment with market practices for a company of our size and scope.
Summary of 2023 Compensation Elements
Annual Compensation Elements | Amount | |||
Board Retainer | $ | 105,000 | ||
Audit & Finance Committee Chair Retainer | 40,000 | |||
Remuneration & Nominating Committee Chair Retainer | 30,000 | |||
Lead Director Retainer | 40,000 | |||
Annual Equity Award | 165,000 |
In determining the number of shares that will be issued in connection with an annual equity award to directors, the Company divides the dollar amount of an award approved by the Board by the closing price per share of KDP common stock on the date of grant of the award. Annual equity awards to directors vest in full on the fifth anniversary of the grant date. If a director’s service with the Company terminates for any reason, the award will vest in full on the termination date, except that awards granted within one year of the termination date will vest on a pro rata basis. In determining the number of shares that will be issued in connection with an annual equity award to directors, the Company divides the dollar amount of an award approved by the Board by the closing price per share of KDP common stock on the date of grant of the award.
Summary of 2021 Compensation Elements
Annual Compensation Elements | Amount | |||
Board Retainer | $ | 100,000 | ||
Audit & Finance Committee Chair Retainer | $ | 40,000 | ||
Remuneration & Nominating Committee Chair Retainer | $ | 30,000 | ||
Lead Director Retainer | $ | 40,000 | ||
Annual Equity Award | $ | 160,000 |
20 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Corporate Governance Practices
Non-Employee Director Compensation for Fiscal 20212023
The following table contains information with respect to the annual compensation of our non-employee directors earned during 20212023 with respect to their Board service:
Name | Fees Earned Or Paid In Cash ($) (1) | Stock Awards ($)(2)(3) | Option Awards | Non-equity Incentive Plan Compensation | Change In Pension Value And Nonqualified Deferred Compensation Earnings | All Other Compensation | Total ($) | |||||||||||||||||||||
Michael Call(4) | — | — | — | — | — | — | — | |||||||||||||||||||||
Olivier Goudet | 100,000 | 140,997 | — | — | — | — | 240,997 | |||||||||||||||||||||
Peter Harf | 107,500 | 140,997 | — | — | — | — | 248,497 | |||||||||||||||||||||
Juliette Hickman(5) | 100,000 | 140,997 | — | — | — | — | 240,997 | |||||||||||||||||||||
Genevieve Hovde(6) | 100,000 | 140,997 | — | — | — | — | 240,997 | |||||||||||||||||||||
Paul S. Michaels | 159,167 | 140,997 | — | — | — | — | 300,164 | |||||||||||||||||||||
Pamela Patsley | 100,000 | 140,997 | — | — | — | — | 240,997 | |||||||||||||||||||||
Gerhard Pleuhs(7) | 50,000 | 140,997 | — | — | — | — | 190,997 | |||||||||||||||||||||
Lubomira Rochet(8) | 75,000 | 71,635 | — | — | — | — | 146,635 | |||||||||||||||||||||
Debra Sandler(9) | 83,333 | 71,635 | — | — | — | — | 154,968 | |||||||||||||||||||||
Robert Singer | 140,000 | 140,997 | — | — | — | — | 280,997 | |||||||||||||||||||||
Justine Tan | 100,000 | 140,997 | — | — | — | — | 240,997 | |||||||||||||||||||||
Nelson Urdaneta(10) | 58,333 | 71,635 | 129,968 | |||||||||||||||||||||||||
Dirk Van de Put(11) | 50,000 | 140,997 | 190,997 | |||||||||||||||||||||||||
Larry D. Young | 100,000 | 140,997 | — | — | — | — | 240,997 |
Name | Fees Earned Or Paid In Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) | |||||||||
Oray Boston | $ | 96,250 | $ | 147,676 | $ | 243,926 | ||||||
Michael Call(4) | 52,500 | 147,676 | 200,176 | |||||||||
Olivier Goudet | 105,000 | 147,676 | 252,676 | |||||||||
Peter Harf | 105,000 | 147,676 | 252,676 | |||||||||
Juliette Hickman | 105,000 | 147,676 | 252,676 | |||||||||
Paul Michaels | 175,000 | 147,676 | 322,676 | |||||||||
Pamela Patsley | 105,000 | 147,676 | 252,676 | |||||||||
Lubomira Rochet | 105,000 | 147,676 | 252,676 | |||||||||
Debra Sandler | 105,000 | 147,676 | 252,676 | |||||||||
Robert Singer | 145,000 | 147,676 | 292,676 | |||||||||
Larry Young | 105,000 | 147,676 | 252,676 |
(1) | The amounts reported in this column reflect cash retainers paid in |
(2) | The amounts reported in this column reflect the grant date fair value associated with restricted stock units (“RSUs”) granted to each director and are computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718, Stock Compensation (“ASC 718”). In accordance with ASC 718, the amounts reported in this column are lower than the face value of the awards when approved because the RSUs do not accrue or otherwise participate in the Company’s dividends prior to vesting. Even though the RSUs may be forfeited, the amounts reported do not reflect this contingency. |
(3) | The following table shows the aggregate number of outstanding RSUs for each non-employee director as of December 31, |
Name | KDP RSUs | ||||||
Oray Boston | 4,826 | ||||||
Michael Call | — | ||||||
Olivier Goudet | |||||||
Peter Harf | |||||||
Juliette Hickman | |||||||
Paul | |||||||
Pamela Patsley | |||||||
Lubomira Rochet | |||||||
Debra Sandler | |||||||
Robert Singer | |||||||
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Larry | |||||||
27,429 |
(4) | Mr. Call |
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Corporate Governance Practices
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Keurig Dr Pepper Inc. |
Executive Officers
Our executive officers are as follows:
Executive Officers | Age | Position | ||||||||
Andrew Archambault | 50 | President, U.S. Refreshment Beverages | ||||||||
Timothy Cofer | 55 | Chief Executive Officer | ||||||||
Mary Beth DeNooyer | Chief Human Resources Officer | |||||||||
| Executive Chairman | |||||||||
Roger Johnson | 45 | Chief Supply Chain Officer | ||||||||
Patrick Minogue | 49 | President, U.S. Coffee | ||||||||
Monique Oxender | 48 | Chief Corporate Affairs Officer | ||||||||
Sudhanshu Priyadarshi | 47 | Chief Financial Officer and President, International | ||||||||
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Anthony Shoemaker | Chief Legal Officer, General Counsel and Secretary | |||||||||
Justin Whitmore | Chief Strategy Officer |
For more information about Mr.Messrs. Cofer and Gamgort, see “Proposal 1 – Election of Directors.” Biographical information about our other executive officers is set forth below:
Andrew Archambault | President, U.S. Refreshment Beverages | |||
Andrew Archambault has served as our President, U.S. Refreshment Beverages since November 2023. He leads all aspects of the business unit including marketing, fountain food service, concentrate sales, and our nationwide direct store delivery (DSD) network. Prior to this appointment, Mr. Archambault served as President, Commercial & Beverage Concentrates beginning in August 2022, where he led full-portfolio business planning, national account management and sales execution and all enterprise commercial functions as well as fountain food service and cola-affiliated bottlers and distributors. He was previously our Chief Customer Officer from January 2021 to August 2022 and our Senior Vice President of National Retail Sales from October 2018 to January 2021. Prior to that, he was Senior Vice President for U.S. Commercial Strategy at Keurig Green Mountain. Before joining Keurig Green Mountain, Mr. Archambault served as Chief Commercial and Customer Officer for The Nature’s Bounty, Co. and as Vice President and Managing Director for Bacardi USA. His career also includes 17 years at The Coca-Cola Company, where he held a variety of sales and corporate roles. Mr. Archambault is an Executive Board and Committee member of the American Beverage Association (ABA) and a member of the Board of Directors of Tractor Beverage Company. He earned undergraduate degrees in Business Management and Political Science from Gettysburg College and an MBA from Georgia State University. |
Mary Beth DeNooyer | Chief Human Resources Officer | |||
With nearly 30 years of career experience in food and beverage companies, Ms. DeNooyer has extensive experience in designing and implementing HR processes and programs to support publicly traded companies. Prior to joining She spent more than a decade with Pepsi Bottling Group, holding progressive HR leadership roles, and started her career with General Mills. She holds
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22 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Officers
| Chief | |||
Roger Johnson was named Chief Supply Chain Officer of KDP in October 2022. He is responsible for the Company’s end-to-end supply chain, including manufacturing, procurement, logistics, warehousing, transportation and quality, environment, health and safety. Mr. Johnson joined KDP in 2016 and has held several leadership positions across the supply chain and R&D organizations, including Chief Product Officer for the Keurig brand from September 2021 to October 2022 and Senior Vice President, Global Product Organization and GM Asia from April 2020 to September 2021. In those roles, he established KDP’s global operations center in Singapore, diversified the organization’s brewer manufacturing network across Asia and designed highly successful brewer innovation strategies. With more than 20 years of experience in consumer durables, electronics, food and beverage and automotive industries, Mr. Johnson has held leadership roles in product development, engineering and supply chain for organizations including BISSELL Homecare, Whirlpool Corporation and Ford Motor Company. He holds a bachelor’s and master’s degree in engineering from Purdue University and an MBA from the University of Michigan. |
| President, U.S. Coffee | |||
Patrick Minogue has served as our He was previously Senior Vice President and GM of Coffee Operations for KDP from June 2023 to November 2023, Senior Vice President, Digital and Keurig System Strategy from January 2023 to June 2023 and Senior Vice President, Keurig Experience from November 2020 to December 2022, among other roles. Since joining the Company in 2015, Mr. Minogue has leveraged his background in technology and marketing, and his more than fifteen years of beverage industry experience, to enhance KDP’s consumer-facing capabilities. He has played a key role in the innovation and growth of the Keurig system, including the successful launch of connected brewers, the strategy and products that are capturing iced and specialty coffee occasions, and the ongoing growth of KDP’s leading e-commerce platforms, including Keurig.com. Prior to He holds
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She was previously KDP’s Senior Vice President Ms. She holds an MBA
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 23 |
Executive Officers
Sudhanshu Priyadarshi | Chief Financial Officer and President, International | |||
Sudhanshu Priyadarshi has served as our Chief Financial Officer since November 2022, with his role expanding to include President, International in November 2023. He leads the Finance, Information Technology organizations and is responsible for KDP’s International Business Segment. A seasoned global finance, strategy and operations executive, Mr. Priyadarshi has more than 25 years of leadership experience in the food and beverage, retail, pharmaceutical and logistics industries. Before KDP, from April 2020 to November 2022, Mr. Priyadarshi was CFO of Vista Outdoor Inc. (NYSE: VSTO), a leading global designer, manufacturer and marketer of outdoor sports and recreation consumer products. Previously, from 2018 to 2019, Mr. Priyadarshi served as CFO of Flexport, a worldwide provider of logistics solutions, where he led all financial operations, Global Real Estate and Insurance P&L. He also held leadership positions at Walmart as Vice President of Finance for the growing U.S. e-commerce and Vice President of Finance and Strategy for the $100 billion General Merchandise and Softline division. Before Walmart, he worked at Cipla as the Global COO and Global Head of Corporate Strategy and Development. He held progressive roles in his 14 years at PepsiCo, including CFO of Global R&D and PepsiCo Global Nutrition Platforms. Mr. Priyadarshi serves on the Board of Directors of Wabash (NYSE: WNC), a world-class manufacturer of advanced engineered solutions and services for the transportation, logistics and distribution industries. He holds a bachelor’s degree in Physics from Tilka Manjhi Bhagalpur University in India and an MBA in Finance from the University of Technology, Sydney. |
Karin Rotem-Wildeman | Chief Research & Development Officer | |||
Karin Rotem-Wildeman serves as our Chief Research & Development Officer, leading product development, packaging innovation, flavor technology and associated R&D capabilities. Ms. Rotem-Wildeman joined KDP in January 2023 with over 25 years of leadership experience in product innovation and commercialization for leading global food and beverage companies, including PepsiCo, Nestle and GODIVA Chocolatier, where she was the Global Head of Research and Development from September 2019 to January 2021. Additionally, from January 2021 to December 2022, she was Chief Scientific Officer at the LIVEKINDLY Collective, a plant-based startup with a portfolio of established brands and innovative new products. Ms. Rotem-Wildeman spent 18 years with PepsiCo in global R&D leadership roles across beverages and food, last serving as Senior Vice President, Beverage Regional R&D. During her tenure, she led innovation into emerging white spaces as well as renovation in core categories and oversaw work in process development, strategy, portfolio management and venture capital investment. Ms. Rotem-Wildeman holds a Doctorate in Chemical Engineering from the University of Massachusetts Amherst and a bachelor’s degree in Chemical Engineering from Lehigh University. She currently serves on the department advisory boards of both academic institutions. |
Anthony Shoemaker | Chief Legal Officer, General Counsel and Secretary | |||
Prior to this appointment, he had been with the Company as Before KDP, Mr. Shoemaker served as Vice President, Assistant General Counsel and Corporate Secretary at Tenet Healthcare, Mr. Shoemaker
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24 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Officers
Justin Whitmore | Chief Strategy Officer | |||
Before joining KDP, from 2017 to 2021, Mr. Whitmore Mr. Whitmore Mr. Whitmore He earned his bachelor’s degree in
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Keurig Dr Pepper Inc. |
Proposal 2 –— Advisory Resolution to Approve KDP’s Executive Compensation
PROPOSAL 2 – ADVISORY RESOLUTIONTO APPROVE KDP’S EXECUTIVE COMPENSATION
As required by Section 14A of the Exchange Act, the Company is asking stockholders to approve an advisory resolution onto approve the Company’s executive compensation as reported in this Proxy Statement. As described in the Compensation Discussion and Analysis section of this Proxy Statement, the Company’s executive compensation programs are designed to attract and retain talent through the alignment of pay and financial interests of our executives with stockholder value creation. We will continue to design and implement our compensation programs and policies in line with this philosophy to promote superior performance results and generate greater value for our stockholders.
Beginning in 2011, a “say on pay” advisory vote to approve executive compensation has been required for all U.S. public companies under Section 14A of the Exchange Act. Therefore, inIn accordance with the Exchange Act, and as a matter of good corporate governance, the Company is asking stockholders to approve the following non-binding advisory resolution at the 20222024 Annual Meeting:
“RESOLVED, that the stockholders of Keurig Dr Pepper Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis, compensation tables and the related narrative discussion in the Proxy Statement for the Company’s 20222024 Annual Meeting of Stockholders.”
Because your vote on this proposal is advisory, it will not be binding on the Board. However, the RemCo and the Board will consider the outcome of the vote when making future compensation decisions. The Board currently holds this “say on pay” advisory vote on an annual basis and expects the next such vote after the 2024 Annual Meeting will be held at the Company’s 2025 Annual Meeting of Stockholders.
The Board unanimously recommends that KDP’s stockholders vote “FOR” the approval of the Advisory Resolution to Approve KDP’s Executive Compensation |
Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
COMPENSATION DISCUSSIONAND ANALYSIS
The Compensation Discussion and Analysis that follows describes our executive compensation philosophy and programs, as well as the RemCo’s compensation-setting process and the 20212023 compensation of our named executive officers (“NEOs”).
Our NEOs for fiscal 20212023 are:
Robert Gamgort Executive Chairman, effective Chief Executive Officer for 2023 | ||||||||||
Sudhanshu Priyadarshi Chief Financial Officer and | Timothy Cofer Chief Executive Officer, effective April 26, 2024 Chief Operating Officer for 2023 |
Karin Rotem-Wildeman Chief Research & Development Officer | Andrew Archambault President, U.S. Refreshment Beverages |
Mr. Milikin joinedGamgort served as the Chief Executive Officer of the Company through April 26, 2024, at which time he transitioned to a role as the Company’s Executive Chairman and Mr. Cofer was appointed aspromoted from Chief Supply ChainOperating Officer to Chief Executive Officer. Mr. Priyadarshi’s role of Chief Financial Officer was expanded to also include the position of President, International, effective September 7, 2021, as successorNovember 6, 2023. Mr. Archambault was promoted from President, Commercial & Beverage Concentrates, to Mr. Cortes, whose employment with the Company ended on September 24, 2021 after a short transition period. Mr. Whitmore joined the Company and was appointed as Chief Strategy Officer,President, U.S. Refreshment Beverages, effective March 1, 2021.November 6, 2023.
Table of Contents
Overview | |||||||
Roles and Responsibilities with Regard to Compensation | |||||||
Peer Group, Market Data and Benchmarking |
2024 Succession Plan | 35 | ||||||
Other Matters | |||||||
20212023 Performance Highlights
During 2021,2023, KDP achieved exceptionalthe following financial and operational performance, including:highlights:
Net Sales $14.8B
as compared to |
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40M U.S. households |
Grew market share in
of the U.S. Refreshment Beverages segment | Expanded presence in ready-to-drink coffee and sports hydration categories | ||||||||||||
TheseKDP’s history of strong results, coupledrevenue growth continued in 2023, with 5.4% reported net sales growth for the full year. During 2023, we also expanded our portfolio into quickly growing ready-to-drink coffee and sports hydration categories through strategic partnerships. Early in 2024, we introduced a multi-year innovation agenda for our Keurig coffee brewing system, featuring a completely reimagined coffee system using plastic- and aluminum-free pods, which will begin beta testing as early as fall 2024. Additionally, we continued to enhance our positive impact on a variety of stakeholders through continued progress towards our ambitious corporate responsibility commitments.
KDP is driven by a talented team that is empowered by our Challenger culture and anchored in our values: Team First, Deliver Big, Think Bold and Be Fearless and Fair. KDP’s team is a key driver of its success, and the Company’s remarkable performance since 2018, meant that KDP had delivered on its bold three-year targets set at the time of the Merger. To fulfill the Company’s commitments, KDP has transformed from a new challenger in the beverage industry to a Modern Beverage Company.
While the Company has evolved, the compensation philosophy driving the performance of itsfor senior leaders has remained constant. Since the Merger,is designed to spur their performance. KDP’s Board has long required senior executives to acquire and hold a significant amount of Company shares over long time horizons, including through the Elite Investment Program. These compensation practices distinguish KDP from most of its peers, and the Board believes they are a key component of the Company’s success. KDP’s Board seeks senior executives who are more than managers and truly act as co-owners of the enterprise alongside its stockholders.
Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
Following the Merger in July 2018…
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Our Compensation Philosophy & Practices
The primary objectives of our executive compensation program are to:
Attract and retain highly qualified and experienced executives |
Motivate executives to achieve KDP’s strategic goals and adhere to our values |
Encourage, reinforce and reward long-term delivery of stockholder value |
Align executives’ interests with stockholders’ interests by requiring the purchase and retention of significant levels of KDP stock |
Elements of KDP’s Compensation Program
NEO compensation consists of base salary, annual cash incentive awards under our Short-Term Incentive Plan (“STIP”), annual equity awards under our Long-Term Incentive Plan (“LTIP”), and our unique Elite Investment Program (“Elite”).Program.
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Base Salary | Fixed cash paid regularly during the year
See page | To attract and retain highly qualified executives by offering salaries that are competitive with market opportunities and that reflect each executive’s position, role, responsibility and experience | ||
Short-Term Incentive Plan | Variable performance-based cash payment based on achievement of annual performance goals, paid during the first quarter of the subsequent year
See page | To motivate and reward executives for meeting challenging, objective performance goals across three categories: growth, profit and cash | ||
Annual LTIP Awards | Time-based restricted stock units (“RSUs”) that vest over five years
See page | To reward performance over the longer term by encouraging focus on the long-term value of | ||
Elite Investment Program | Required purchases of significant levels of KDP common stock coupled with a one-for-one matching award of RSUs (“Matching RSUs”) that generally cliff vest in five years
See page | To directly align the interests of executives with stockholders by requiring significant personal investment in the Company over an extended period of time |
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Compensation Discussion and Analysis
Competitive Pay Tied Closely to Long-Term Performance
To retain the right talent needed to lead our Modern Beverage Company,Challenger culture, and to align the interests of our NEOs with our stockholders, a significant portion of executive compensation is tied to Company performance in the form of annual cash incentives and equity awards as well as required participation in our Elite Investment Program. The Elite Investment Program provides an opportunity for executives to realize substantial value when they invest their own funds alongside our stockholders and incentivizes commitment to the long-term performance of the Company.
The RemCo generally reviews and targets the 50th50th percentile market pay level when assessing target annual cash compensation, the 75th75th percentile when assessing equity compensation, and between the 50th50th and 75th75th percentile when assessing total target compensation. We benchmark our compensation against a peer group of companies with whomwhich we compete for key talent (the “Compensation Peer Group”), which isas described more fully below. We also provide certain limited benefits and perquisites that are in line with general market practice and typically represent an insignificant elementa non-material aspect of compensation for our NEOs.
28 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
Compensation Policies and Governance Practices
Our compensation governance policies further align our executives’ interests with those of our stockholders and are designed to manage risk and follow best practices:
Significant stock ownership required. KDP’s Board strongly believes that significant long-term stock ownership by our executives is an important factor in aligning executive and stockholder interests to successfully deliver stockholder value over the long term, significant long-term stock ownership by our NEOs is nonnegotiable.term. All NEOs and other senior executives are subject to a stock ownership requirement and must also participate in the Elite Investment Program, which requires substantial investment in our Company and maintaining that entire investment for at least five years until the underlying equity incentiveassociated Matching RSUs fully vests. Our CEO, for example, is subject to a $25 million stock ownership requirement under Elite. Messrs.vest. Mr. Gamgort, Dokmecioglu, LeyvaMr. Priyadarshi, Mr. Cofer, Ms. Rotem-Wildeman and WhitmoreMr. Archambault have each made substantial personal investments in KDP stock during their tenures and as of the record date collectively own common stock valued at approximately $260$150 million. Mr. Milikin, who was hired in 2021, will have until September 14, 2022 to make his first investments in KDP stock under Elite. Mr. Cortes, who left KDP during 2021, participated in the Elite Investment Program until his termination of employment.
No tax gross-ups. Any personal income taxes due as a result of compensation and/or perquisites, other than reimbursement for taxes incurred with respect to certain relocation or housing expenses, are the responsibility of the NEOs. We do not provide tax gross-ups on any change-in-control benefits.
Incentives do not encourage excessive risk taking. In order to assess the risk inherent in the design of our compensation program, the RemCo periodically reviews our plans and programs and has determined that our compensation program is not designed to encourage excessive risk taking. For example, we continue to utilize multiple performance measures under the annual STIP to reduce the risk of over-concentration on a single business or financial metric, while our equity awards generally have five-year vesting periods tied to continued employment with the Company, which discourages excessive risk taking intended to optimize short-term and non-sustainable performance.
Clawback policies and provisions inapplicable to our incentive compensation programs. OurIn September 2023, we adopted a Rule 10D-1 Clawback Policy, which is intended to comply with the requirements of Nasdaq Listing Standard 5608 implementing Rule 10D-1 under the Exchange Act. In the event the Company is required to prepare an accounting restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws, the Company will, subject to limited exceptions, recover, on a reasonably prompt basis, the excess incentive-based compensation received by any covered executive, including the NEOs, during the prior three fiscal years that exceeds the amount that the executive otherwise would have received had the incentive-based compensation been determined based on the restated financial statements. In addition to the Rule 10D-1 Clawback Policy, the Company maintains a Senior Leadership Clawback Policy applicable to our executive leadership, which allows for recoupment of short-term and long-term incentive compensation (including time-based equity awards) from certain executives, including gains from equity compensation and the Elite Investment Program, is subject to recoupment, or clawback, in certain circumstances. In addition to any clawbacks required by law, regulation or applicable listing standards, the clawback policy allows KDP to recoup paymentsNEOs, in the event of a financial restatement from any executive covering the compensation that was paid to such executive in excess of restated values for the three-year period preceding any accounting period which is restated.misconduct.
Double-trigger equity award vesting upon a change of control. All activeoutstanding unvested equity compensation plans and programsawards that provide for additional or accelerated payment or fully accelerated vesting in connection with a change in the control of the Company, including the annual LTIP awards and the Matching RSUs issued pursuant to the Elite Investment Program, require a “double-trigger,“double trigger,” which means that accelerated vesting of equity will only occur upon a qualifying termination of employment in connection with a change of control (and not solely as a result of the completion of a change in control transaction).
No hedging. Under our insider trading policy, all employees and members of the Board are prohibited from engaging in any speculative transactions in KDP securities, including engaging in short sales, transactions involving put options, call options or other derivative securities, or any other forms of hedging transactions, such as collars or forward sale contracts.
No backdating or repricing of equity awards, including stock options. While stock options are not currently part of our compensation mix, repricing of stock options and issuing stock options at below-market exercise prices are strictly prohibited by our equity incentive plan, and any options we would grant must have an exercise price at least equal to the fair market value of our stock on the date of grant.
Limited tax gross-ups. Any personal income taxes due as a result of compensation and/or perquisites, other than reimbursement for taxes incurred with respect to certain relocation-related expenses or expatriate assignments, are the responsibility of the NEOs. We do not provide tax gross-ups on any change-in-control benefits.
Minimal perquisites. NEO perquisites are evaluated annually by the RemCo for reasonableness and determined to be reasonable and do nottypically represent a significant portionnon-material aspect of any NEO’s total compensation.
Compensation Discussion and Analysis
Roles and Responsibilities with Regard to Compensation
Role of the Executive Chairman, CEO, RemCo and Board
Our RemCo annually evaluates and approves compensation for our NEOs and full executive leadership team, including equity awards, bonus payouts and any changes in compensation packages. The RemCo’s determinations regarding the compensation of our executive officers take into account a variety of factors, including recommendations by our Executive Chairman and CEO (except regarding himself)themselves) and other factors the RemCo believes are appropriate. Changes in overall target compensation levels are typically only approved in the event of significant changes in responsibility or market positioning.
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Compensation Discussion and Analysis
Role of Compensation Consultant
Since 2020, theThe RemCo has engaged Frederic W.FW Cook & Co. (“FW Cook”) to provide information regarding the Compensation Peer Group and compensation benchmarking data for NEOs and executive-level positions, as well as information about market practices for equityincentive compensation, plan governance and plan governance.executive compensation-related regulatory developments. Each year, the RemCo assesses the independence of the compensation consultant, and for 2021,2023, the RemCo concluded that FW Cook is independent, and no conflict of interest exists that would preventwith regard to FW Cook’s engagement.
Although members of senior management consult with FW Cook, from providing this information to the RemCo.
FW Cook reports directly to the RemCo, with input from certain members of senior management.RemCo. All decisions with respect to the amount and form of NEO compensation under our executive compensation programs are made solely by the RemCo and the Board, and may reflect factors and considerations other than the information provided by FW Cook.
Role of Stockholders
As part of its annual processes, the RemCo considers the results of the stockholder advisory vote on our executive compensation from prior years. Our stockholders have expressed strong support offor our executive compensation programs to date, with 98.3%approximately 82% of votes cast in 20212023 supporting the advisory vote and at least 99.7%94% approving in each of 20192022 and 2020. While the2021. The Board believes that our executive compensation programs have beenare successful in aligning management and stockholder interests and has not made changes to our compensation program in response to the results of the most recent vote. The RemCo values feedback from our stockholders and will continue to design and implement our compensation programs and policies in line with thisour philosophy to promote superior performance results and generate greater value for our stockholders.
Peer Group, Market Data and Benchmarking
In establishing compensation for our NEOs, the RemCo considers the compensation practices of the Compensation Peer Group and the pay levels for similar roles among the Compensation Peer Group companies. In assessing pay levels for the NEOs, theThe RemCo considers a total compensation range between the 50th and 75th percentile as reasonable for this purpose given the aggressive KDP business plan goals under the STIP and the high levels of “at-risk” pay for all KDP senior executives.
The RemCo periodically reviews the make-up of the Compensation Peer Group.Group with input from FW Cook. The Compensation Peer Group includes companies that compete directly with us for executive talent and compete with us in the marketplace for business and investment opportunities.
The 20212023 Compensation Peer Group remained the same as 20202022 and was comprised of the following companies:
Anheuser-Busch InBev SA/NV | The Kraft Heinz Company | |
Campbell Soup Company | McCormick & Company, Incorporated | |
| Mondelēz International, Inc. | |
The Coca-Cola Company | ||
Danone | PepsiCo, Inc. | |
Diageo plc | The Procter & Gamble Company | |
The Hershey Company | Reckitt Benckiser Group plc | |
Kellanova (f/k/a Kellogg | Unilever PLC |
Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
20212023 Compensation Decisions
The specific compensation elements and decisions applicable to our NEOs’ 20212023 compensation are described in detail below.
Base Salary
Base salaries provide executives with a secure, fixed base of cash compensation in recognition of role, individual responsibilities, experience and job performance. Salary levels are reviewed annually by the RemCo, and any salary increases are approved after a comparative analysis of base salaries for similar positions among the Compensation Peer Group. When determining base salaries and salary increases, the RemCo considers external market conditions in addition to total direct compensation targets and personal performance. In fiscal year 2021, none of the NEOs received a base salary increase. Each NEO’s annual base salary during 2021as of December 31, 2023 follows:
NEO | Base Salary | |||
Robert Gamgort | $ | 1,500,000 | ||
Ozan Dokmecioglu | $ | 850,000 | ||
Mauricio Leyva | $ | 850,000 | ||
Tony Milikin | $ | 750,000 | ||
Fernando Cortes | $ | 600,000 | ||
Justin Whitmore | $ | 575,000 |
NEO | Base Salary | |||
Robert Gamgort | $ | 1,500,000 | ||
Sudhanshu Priyadarshi | 850,000 | |||
Timothy Cofer | 1,150,000 | |||
Karin Rotem-Wildeman | 425,000 | |||
Andrew Archambault | 750,000 | (1) |
(1) | Mr. Archambault’s salary was increased from $600,000 to $750,000, effective November 6, 2023, upon his promotion to President, U.S. Refreshment Beverages. |
In February 2024, Mr. Priyadarshi’s and Ms. Rotem-Wildeman’s base salaries were increased to $900,000 and $475,000, respectively. In connection with the Company’s succession plan, Mr. Gamgort’s base salary was reduced to $1,000,000 upon his transition to Executive Chairman, and Mr. Cofer’s base salary was increased to $1,250,000 upon his transition to Chief Executive Officer.
Short-Term Incentive Plan
The STIP is a key component of KDP’s annual compensation program and is designed to link performance-based, at-risk annual cash incentives to the achievement of predetermined financial performance goals that correspond directly with the Company’s annual businessoperating plan and external earnings guidance. The RemCo believes that aligning bonus payouts directly with these key quantifiable performance targets encourages and rewards the achievement of financial metrics thatdesigned to contribute to the RemCo believes correspond to stock price performance.Company’s long-term success.
STIP Structure
For 2021,our 2023 STIP, to align incentives to achieve results for the overall enterprise, we established onea single set of enterprise performance goals for our NEOs, while also adding a new business unit-specific component for employees who were fully dedicated to a business unit. This change was intended to more directly align business unit performance with employee compensation and drive stronger accountability among employees. For those employees dedicated to a specific business unit, business unit performance was weighted at 25% of the STIP award, and enterprise performance was weighted at 75% of the STIP award. For employees who were not dedicated to a specific business unit, 100% of the STIP award was based on enterprise performance. The RemCo determined that the STIP award for our full executive leadership team, including all 7,000 STIP participants to emphasize teamwork in light of economic uncertainty and continuing challenges broughtNEOs, should be based 100% on byenterprise performance given their role leading the COVID-19 pandemic. Company.
The STIP has a single payout scale for all job levels with a minimum payout of 0% and a maximum payout of 250%200% of the target STIP award for all bonus-eligible employees, in line with our pay-for-performance philosophy. We believe that having one set of goals to measure against supports our Company core value of “Team First” and has contributed significantly to the Company’s strong performance in 2021.
Target STIP awards for each NEO are set as a percentage of suchthat NEO’s base salary, withsalary. For 2023, Mr. Gamgort’s 2021 target was set at 150% of base salary, Mr. Cofer’s at 125% of base salary, Messrs. Priyadarshi’s and the other NEOsArchambault’s at 80%. Payouts are of base salary and Ms. Rotem-Wildeman’s at 70% of base salary. The STIP payout is based on the Company’s achievement on three categories of quantifiable metrics that are aligned with our annual business plan:
Growth, measured by total Net Sales |
Profit, measured by Adjusted Operating Income |
Cash, measured by |
TheseFor 2023, the RemCo chose to measure the Cash metric by Free Cash Flow rather than by Net Working Capital as a percent of Net Sales, as used in previous years, because Free Cash Flow aligns with the Company’s externally reported performance and is a more holistic representation of the Company’s cash generation.
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Compensation Discussion and Analysis
The three performance metrics are designed to be quantifiable and visible by employees throughout the year to enable employees to track performance. They also encourage focus on achieving the Company’s annual operating plan.
In the first quarter of 2021,2023, the RemCo determined performance targets for each metric at the levels reflected in the table below, with the “Good” (Target)target level for the Profit and Cash metricseach metric set to correspond with the Company’s annual operating plan approved by the Board,Board. When the RemCo determines the actual performance and payouts, it considers the “Good” (Target) levelqualitative and quantitative circumstances behind the outcomes. From time to time the RemCo may exclude certain items from results to ensure that the calculated payout appropriately reflects the compensatory purpose of the STIP award and does not provide windfalls or penalties for factors beyond executives’ control. To determine the total payout multiplier for the GrowthSTIP, the calculated payout percentage for each of the three metrics is multiplied by the weight for each respective metric set to correspond withand then added together.
The table below reflects the high endtargets and results of our external guidance range.the STIP for 2023 for the executive leadership team, including all NEOs, as determined by the RemCo in early 2024.
Metric (in millions, except %s) | Threshold | Target | Maximum | Actual Results | Calculated Payout | Weight | ||||||||||||||||||
Growth – Net Sales(1) | $ | 13,789 | $ | 14,669 | $ | 15,549 | $ | 14,643 | 99 | % | 30 | % | ||||||||||||
Profit – Adjusted Operating Income(2)(3) | 3,494 | 3,717 | 3,940 | 3,613 | 81 | % | 60 | % | ||||||||||||||||
Cash – Free Cash Flow(2) | 2,256 | 2,400 | 2,544 | 913 | — | % | 10 | % | ||||||||||||||||
Total Payout Multiplier |
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(1) |
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Compensation Discussion and Analysis
KDP 2021 STIP Performance Targets | ||||||||||||||||||||||||
Metric (in millions, except %s) | Unacceptable (Threshold) | Marginal | Acceptable | Good (Target) | Very Good | Excellent (Maximum) | ||||||||||||||||||
Growth – Net Sales(1) | $ | 11,850 | $ | 11,927 | $ | 12,005 | $ | 12,082 | $ | 12,315 | $ | 12,547 | ||||||||||||
Profit – Adjusted OI(2) | $ | 3,392 | $ | 3,424 | $ | 3,456 | $ | 3,488 | $ | 3,576 | $ | 3,654 | ||||||||||||
Cash – Net Working Capital | (15.9%) | (16.4%) | (16.9%) | (18.1%) | (19.4%) | (20.6%) |
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(2) | Please refer to Appendix A to this Proxy Statement for a description and reconciliation of these non-GAAP compensation performance measures relative to the reported GAAP financial measures. |
(3) | In determining the |
Achievement levels on each metric correspond to a payout multiple set by the RemCo, as reflected in the table below.2023 STIP Payouts
KDP 2021 STIP Payout Multiples | ||||||||||||||||||||||||
Metric | Unacceptable | Marginal | Acceptable | Good | Very Good | Excellent | ||||||||||||||||||
Growth – Net Sales | 70 | % | 80 | % | 90 | % | 100 | % | 125 | % | 145 | % | ||||||||||||
Profit – Adjusted OI | 0 | % | 33 | % | 80 | % | 100 | % | 125 | % | 145 | % | ||||||||||||
Cash – Net Working Capital | 70 | % | 80 | % | 90 | % | 100 | % | 115 | % | 119 | % |
The payout multiple achieved for each of the three metrics (interpolating linearly between each award level, as appropriate) are then multiplied together to determine the total payout multiplier for the STIP, as shown below. Importantly, if the Company performs at or below the “Unacceptable” (Threshold) level for the Profit metric, the entire bonus payout will be zero.
2021 Performance Results and Payouts
For 2021, for each metric, the Company achieved the results reflected in the table below. These results correspond to the target levels achieved and the payout multiples shown in the table below:
Metric (in millions, except %s) | Actual Results | Target Level Achieved | Corresponding Payout Multiple | |||||||
Growth – Net Sales(1) | $ | 12,683 | Excellent | 145 | % | |||||
Profit – Adjusted OI(2) | $ | 3,421 | Marginal – Acceptable | 58 | % | |||||
Cash – Net Working Capital | (17.9%) | Acceptable – Good | 98 | % |
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The Growth payout multiple, the Profit payout multiple and the Cash payout multiple above were all multiplied together to determine the total payout multiplier for 2021 STIP awards. This resulted in a total payout multiplier of 82% for 2021, as reflected below:
Growth Payout | × |
Profit Payout Multiple | × |
Cash Payout Multiple | = |
Total Payout Multiplier | ||||||
145% | × | 58% | × | 98% | = | 82% |
20212023 STIP awards were calculated and paid in the first quarter of 20222024 upon certification by the RemCo of the achievement levels discussed above. The table below shows target payout levels and actual STIP awards earned by each NEO for 2021.2023.
NEO | Target 2021 STIP Payouts | Actual 2021 STIP Payout | ||||||
Robert Gamgort | $ | 2,250,000 | $ | 1,845,000 | ||||
Ozan Dokmecioglu | $ | 680,000 | $ | 557,600 | ||||
Mauricio Leyva | $ | 680,000 | $ | 557,600 | ||||
Tony Milikin | $ | 190,685 | (1) | $ | 156,362 | (1) | ||
Fernando Cortes | $ | 351,123 | (1) | $ | 287,921 | (1) | ||
Justin Whitmore | $ | 385,644 | (1) | $ | 316,228 | (1) |
(1) Reflects proration for the portion of 2021 during which he was employed by the Company.
NEO | Target 2023 STIP Payouts | Actual 2023 STIP Payout | ||||||
Robert Gamgort | $ | 2,250,000 | $ | 1,755,000 | ||||
Sudhanshu Priyadarshi | 680,000 | 530,400 | ||||||
Timothy Cofer(1) | 220,548 | 172,027 | ||||||
Karin Rotem-Wildeman(1) | 290,979 | 226,964 | ||||||
Andrew Archambault(2) | 498,411 | 388,761 |
(1) | ||||
Reflects proration for the portion of 2023 during which the NEO was employed by the Company. |
Compensation Discussion and Analysis
(2) | Reflects proration for base salary change in connection with Mr. Archambault’s promotion to President, U.S. Refreshment Beverages in November 2023. |
Long-Term Incentive Compensation
Long-term stock ownership of the executive team is the cornerstone of KDP’s compensation philosophy. The Board encourages long-term ownership through (i) annual grants of Restricted Stock UnitsRSUs under our LTIP, (ii) an obligatory and substantial personal investment in KDP shares under our Elite Investment Program and (iii) a stock ownershipholding requirement. Our equity compensation programs encourage retention of and long-term focus by our NEOs by giving them a direct ownership stake in our future growth and financial success.
Annual RSU Awards
We closely align the interests of our NEOs with those of our stockholders through a compensation program whichthat pays a significant portion of total compensation in the form of at-risk equity. The compensation program for our NEOs features long-term equity-basedequity- based compensation under the LTIP generally awarded in the form of RSUs.
32 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
The structure of KDP’s annual equity awards focuses our executives on increasing stockholder value over a sustained period of time.period. Annual awards under the LTIP and Matching RSUs under our Elite Investment Program have generally been subject to five-year vesting periods tied to continued employment with the Company and other vesting conditions.
We typically only grant LTIP awards on two days each year—one grant date in March and one grant date in September. Annual LTIP awards are made in March, and in September we issue “half grants” to those executives who joinedjoin the Company or, in some cases, are promoted, after the March grant date but before the September grant date. Prior toBefore 2020, annual RSUs had been structured to vest in full on the fifth anniversary of the grant date. In 2020, the RemCo modified the vesting schedule for awards to NEOs and other similarly situated executives to better align with market norms of our public peers, while still maintaining a lengthy vesting period. Annual RSUs granted in or after 2020 vest 60% on the third anniversary of the date of grant, with 20% vesting on each of the fourth and fifth anniversaries.
In determining the number of shares that will be issued in connection withRSUs subject to an award, under the LTIP, the Company divides the dollar amount of an award approved by the RemCo by the closing price per share of KDP common stock on the date of grant for the award. The table below reflects the values of the annual LTIP awards to NEOs in 2021,2023, as approved by the RemCo. Given his start date, Mr. Cofer did not receive a standard annual RSU award in 2023 and began participating in the annual RSU program in 2024.
NEO | Annual LTIP Award | |||
Robert Gamgort | $ | 4,700,000 | ||
Ozan Dokmecioglu | $ | 2,200,000 | ||
Mauricio Leyva | $ | 2,200,000 | ||
Tony Milikin | $ | 750,000 | (1) | |
Fernando Cortes | $ | 1,500,000 | (2) | |
Justin Whitmore | $ | 1,200,000 |
NEO | 2023 Annual LTIP Award | |||
Robert Gamgort | $ | 4,700,000 | ||
Sudhanshu Priyadarshi | 2,200,000 | |||
Karin Rotem-Wildeman | 700,000 | |||
Andrew Archambault | 1,200,000 |
In connection with his promotion to President, U.S. Refreshment Beverages in November 2023, the RemCo approved an additional $2,000,000 equity award to Mr. Archambault, as described further under “Letter Agreement with and Equity Award to Mr. Archambault.”
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Elite Investment Program
In addition to annual equity awards, to reinforce significant long-term stock ownership by our NEOs, all Senior Vice Presidents and above (including all NEOs) at the Company are required to participate in our Elite Investment Program.Program (“Elite”) at the time of initial hiring or promotion. This program distinguishes KDP from most of its peers and ensures senior executives have a meaningful, long-term investment at stake in the Company’s performance. Under Elite at the time of initial hiring or promotion, the executive makes a substantial personal commitment to a specific level of investment in KDP common stock (the “Commitment Amount”) (within a minimum and maximum range set by the Company) in KDP common stock (the “Commitment Amount”) according to their job level and business scope.
The opportunity to participate in Elite is typically a one-time opportunity upon achieving eligibility. For each share of KDP common stock purchased (each, an “Elite Share”) up to the threshold Commitment Amount, the executive receives one Matching RSU that vests on the fifth anniversary of grant, subject to the executive’s ongoing employment with the Company and the continuous ownership of the full Commitment Amount. Each executive generally has approximately a one-year period (the “Investment Period”) to purchase Elite Shares to meet his or her Commitment Amount.
Taken together, toTo receive the benefit of the Matching RSUs, an executive participating in Elite must acquire enough Elite Sharesshares to meet at least the minimum Commitment Amount in the first year of eligibilityInvestment Period and then continue to hold them for the remainder of the five-year vesting period. All Matching RSUs will be immediately forfeited if the executive fails to meet or maintain the chosenminimum Commitment Amount or if the executive’s service with the Company is terminated before the vesting date except in the event of death, disability, change in control or retirement at age 60 with at least five years of service.
Compensation Discussion and Analysis
service, or with respect to Matching RSUs granted in 2023 or later, certain involuntary terminations.
When benchmarking the annual value of long-term incentive awards as part of our executives’ compensation, the RemCo takes into account twenty percent (20%) of the grant value of any outstanding Matching RSUs awarded to an executive under Elite.Elite in light of the fact that such awards vest after a five-year period of service.
Messrs.Mr. Gamgort Dokmecioglu, Leyva and Whitmore previously fulfilled their respectivehis Commitment AmountsAmount of $25 million in stock holdings upon becoming eligible to participate in Elite.
Upon joining the Company in November 2023, Mr. Cofer became eligible to participate in the Elite Investment Program. In view of Mr. Cofer’s expected transition to Chief Executive Officer in the second quarter of 2024, the RemCo determined that Mr. Cofer’s Commitment Amount would be $12,500,000, an amount commensurate with the Company’s stock ownership requirements for a Chief Executive Officer, and which Commitment Amount he has fulfilled. As a result, the Company granted Mr. Cofer $12,500,000 of Matching RSUs in November 2023. Mr. Cofer did not receive any separate, additional award under the Elite Investment Program in connection with his promotion to Chief Supply Chain OfficerExecutive Officer.
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Compensation Discussion and Analysis
Mr. Priyadarshi previously fulfilled his Commitment Amount for his existing investment in 2018, Mr. Cortes electedElite. Then, in February 2024, in light of the expansion of his role to invest the minimum Commitment Amount. In 2021,include President, International, the RemCo offeredrequired Mr. CortesPriyadarshi to make an opportunity to invest further to reachadditional investment through the maximum Commitment Amount.Elite program. Accordingly, in May 2021, the RemCo approved a March 2024 grant of $2,000,000$3,000,000 of Matching RSUs to Mr. Cortes. These Matching RSUs were forfeited upon Mr. Cortes’s departure in September 2021.Priyadarshi. He will have until March 2025 to acquire sufficient shares to fulfill his new Commitment Amount.
Upon joining the Company in March 2021, Mr. WhitmoreJanuary 2023, Ms. Rotem-Wildeman became eligible to participate in the Elite Investment Program, pursuant to which heshe elected to invest $3,000,000 in KDP common stock. As a result, the Company granted Mr. WhitmoreMs. Rotem-Wildeman $3,000,000 of Matching RSUs in March 2021,May 2023, to match hisher Commitment Amount. Ms. Rotem-Wildeman has since fulfilled her Commitment Amount.
Upon joiningMr. Archambault previously fulfilled his Commitment Amount for his existing investment in Elite. Then, in November 2022, in connection with his promotion to President, Commercial & Beverage Concentrates, the Company in September 2021, Mr. Milikin became eligibleRemCo offered him an opportunity to participate in themake an additional Elite Investment Program, pursuant to which he elected to invest $5,000,000 in KDP common stock. Asinvestment and approved a result, the Company granted Mr. Milikin $5,000,000grant of $2,000,000 of Matching RSUs to Mr. Archambault. The terms of the award require that Mr. Archambault satisfy the Commitment Amount by no later than the final vesting date of the award and retain at least 50% of after-tax shares upon any equity vesting during the vesting term of his Matching RSUs, as discussed further in September 2021,“Letter Agreement with and Equity Award to match his Commitment Amount. Mr. Milikin will have until September 14, 2022 to purchase sufficient shares to fulfill his Commitment Amount.Archambault” below.
2020 Performance-Based Awards to Mr. Gamgort
In December 2020, the RemCo added performance vesting conditions to 75% of Mr. Gamgort’s “Reinvestment” RSUs that were granted in September 2020 to create strong incentives over a targeted three-year period. In particular,The remaining 25% of Mr. Gamgort’s Reinvestment RSUs were time-based; they vested one-third on each of January 15, 2022, January 15, 2023 and January 15, 2024. The Reinvestment RSUs all settle on the first anniversary of the applicable corresponding vesting date.
With respect to Mr. Gamgort’s performance-based Reinvestment RSUs, the RemCo established the following performance conditions with respect to 75% of Mr. Gamgort’s Reinvestment RSUs:conditions:
KDP’s relative Total Shareholder Return (TSR) is compared to the S&P 500 over one, two and three-year periods corresponding to each of the 2021, 2022 and 2023 fiscal years, with one-third of the performance-based RSUs available to vest after each measurement period. |
For each of the three measurement periods, if the Company’s TSR is below the 50th percentile, payout for that tranche of units will be 0%. |
The full target amount of RSUs awarded can vest only if TSR achieves the 80th percentile or better in each of the three measurement periods, with no potential for a payout above 100% of target. |
One third of Mr. Gamgort’s performance-based Reinvestment RSUs were eligible to vest on January 15, 2022, but the performance conditions were not met. As a result, those RSUs were canceled and forfeited.
A second third of Mr. Gamgort’s performance-based Reinvestment RSUs were eligible to vest on January 15, 2023. The Company’s TSR was in the 65th percentile of the S&P 500, resulting in a payout percentage of 50% of this tranche of performance-based Reinvestment RSUs. Half of the RSUs vested and later settled on January 15, 2024, in accordance with the terms of the award agreement. The other half were canceled and forfeited.
The final third of Mr. Gamgort’s performance-based Reinvestment RSUs were eligible to vest on January 15, 2024, but the performance conditions were not met. As a result, those RSUs were canceled and forfeited.
Stock Ownership Requirement
In May 2021, toTo further align the interests of our NEOs with those of our stockholders, the RemCo has established stock ownership requirements for all Vice Presidents and above, including all NEOs (for purposes of this section, “executives”) at the Company. The stock ownership requirement is separate and apart from the Elite Investment Program, but the minimum stock ownership requirement for each executive generally matches that executive’s minimum level of investment in Elite, with the exception of the Chief Executive Officer and the Chief Financial Officer, whose minimum stock ownership requirements are lower than their minimum levels of investment in Elite. The table below shows the minimum stock ownership requirement for the NEOs as an estimated multiple of the NEO’s base salary.
Job Level | Minimum Stock Ownership Requirement, as an Estimated Multiple of Salary | |
Executive Chairman | 15x | |
Chief Executive Officer | 10x | |
Chief Financial Officer | 6x | |
Executive Leadership Team | 3 – |
34 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Compensation Discussion and Analysis
The Company expects that NEOs will meet their minimum stock ownership requirements within one year of their first grant of Matching RSUs under Elite.Elite or, for recently promoted executives, one year from the date of their most recent Elite investment. Shares that an executive beneficially owns count toward the executive’s minimum stock ownership requirement, but unvested equity awards are excluded. Until the stock ownership requirement is met, executives must maintainretain 50% of after-tax shares upon any equity vesting. If an executive does not meet the stock ownership requirement within the allotted time period, his or her future LTIP awards may be forfeited, subject to the RemCo’s discretion. Messrs.
Mr. Gamgort, Dokmecioglu, LeyvaMr. Priyadarshi, Mr. Cofer and WhitmoreMs. Rotem-Wildeman have fulfilled their respective stock ownership requirements. The RemCo and Mr. Milikin, who joinedArchambault have agreed that he will retain 50% of after-tax shares upon any equity vesting until he has met his ownership requirement.
Letter Agreement with Mr. Cofer
In connection with his hiring and appointment as the Company’s Chief Operating Officer, the Company entered into a letter agreement with Mr. Cofer on September 18, 2023. The terms of the letter agreement are provided below, in September 2021, will have until September 14, 2022 to meet his stock ownership requirement.the section entitled, “2024 Succession Plan – Mr. Cortes had fulfilled his stock ownership requirement prior to his separation from the Company.Cofer’s Letter Agreement.”
Compensation Discussion and Analysis
InducementNew Hire Awards to Mr. WhitmoreMs. Rotem-Wildeman
At the time heshe was hired in March 2021,January 2023, Ms. Rotem-Wildeman received a one-time cash sign-on bonus of $250,000 as an inducement to join the Company and in recognition of forgone incentive compensation from her prior employer. The Company also agreed to cover certain relocation expenses for Ms. Rotem-Wildeman. Both the sign-on bonus and the relocation expenses are subject to repayment in full in the event that Ms. Rotem-Wildeman resigns within one year of her start date for any reason other than for Good Reason as defined under the Keurig Dr Pepper Inc. Executive Severance Plan.
Letter Agreement with and Equity Award to Mr. Whitmore receivedArchambault
At the time of Mr. Archambault’s promotion to President, U.S. Refreshment Beverages in November 2023, the Company entered into a letter agreement with Mr. Archambault with terms effective November 6, 2023. The letter agreement provides that Mr. Archambault will receive an annual salary of $750,000, a target annual bonus equal to 80% of his base salary (with his 2023 bonus pro-rated based on time, salary and bonus target in each position), an annual LTIP award value of $1,500,000 (awarded in March 2024), and a one-time sign-on RSU award with a grant date value of $2,000,000 granted on November 20, 2023, resulting in a grant of RSUs with a value of $2,500,000, vesting over five years with62,933 shares (the “Promotion RSU Award”). The Promotion RSU Award vests 25% vesting on each of the second, third, fourth and fifth anniversaries of the grant.grant date, contingent upon Mr. Whitmore also became eligible to participate inArchambault (1) retaining at least 50% of after-tax shares received upon any equity vesting during the Elite Investment Program, pursuant to which he elected to invest $3,000,000. As a result,five-year term of the Company granted Mr. Whitmore $3,000,000 of Matching RSUs in March 2021, which will vest onaward and (2) accumulating and holding 62,933 shares by no later than the fifth anniversary of the grant date. This award is intended to recognize his enrollmentexpanded scope of responsibilities and further incentivize Mr. Archambault to deliver increased value to stockholders in the Elite program.his new role.
Additionally,Letter Agreement with Mr. Whitmore received a one-time cash sign-on bonus of $2,000,000Gamgort
In April 2022, in recognition of unvested short- and long-term incentives from his prior employer. In the event thatconnection with Mr. Whitmore resigns from KDP priorGamgort’s previous transition to the second anniversaryrole of his date of hire, 100% of this sign-on bonus is repayable to KDP.
Inducement Awards to Mr. Milikin
At the time he was hired in September 2021, Mr. Milikin received a one-time sign-on grant of RSUs with a value of $5,000,000 intended to replace certain equity incentives which were forfeited by Mr. Milikin upon leaving his prior employer. This award vests over five years with 60% vesting on the third anniversary of the grant, and 20% vesting on each of the fourth and fifth anniversaries. Mr. Milikin also became eligible to participate in the Elite Investment Program, pursuant to which he elected to invest $5,000,000. As a result, the Company granted Mr. Milikin $5,000,000 of Matching RSUs in September 2021, which will vest on the fifth anniversary of his enrollment in the Elite program, subject to Mr. Milikin’s purchase of sufficient shares to fulfill his Commitment Amount. Mr. Milikin will have until September 14, 2022 to purchase sufficient shares.
As discussed on page 2, in April 2022 KDP announced its succession plan pursuant to which the Board has appointed Mr. Dokmecioglu as the Company’s next CEO and Mr. Gamgort has committed to serve as Executive Chairman, for two years. All changes will be effective July 29, 2022 (the “Transition Date”), at which time Mr. Dokmecioglu will also join the Board.
Mr. Dokmecioglu’s Compensation Arrangements
In connection with his appointment as Chief Executive Officer and effective on the Transition Date, Mr. Dokmecioglu will receive an annual base salary of $1,250,000 and will be eligible to receive an annual bonus at a target level of 150% of his base salary. He will be granted two long-term incentive awards: (i) in September 2022, an award of RSUs with a grant date value of $900,000, which will vest 60% on the third anniversary of the date of grant and 20% on each of the fourth and fifth anniversaries of the date of grant, and (ii) on or around the Transition Date, an award of RSUs with a grant date value of $14,000,000, which RSUs will vest in one-third installments on each of the third, fourth and fifth anniversaries of the date of grant, subject to his continued employment, maintenance of shareholdings at an amount equal to the award, and other vesting conditions.
Mr. Gamgort’s Compensation Arrangements
In connection with his transition, the Company entered into a letter agreement with Mr. Gamgort (the “Letter Agreement”) with an employmenta term commencing on the Transition DateJuly 29, 2022 and ending on July 26, 2024 (the “Term”). Pursuant to the Letter Agreement,The letter agreement provides that Mr. Gamgort will receive an annual base salary of $1,000,000 and will be eligible to receive an annual bonus at a target level of 100% of his base salary. Mr. Gamgort will also be granted a long-term incentive award on or around the Transition Date with a grant date value of $5,000,000 in the form of RSUs that will fully vest at the end of the Term, subject to his continued employment and other vesting conditions.
Mr. Gamgort commits in the Letter Agreement that he will continue to hold, and not sell, at least 50% of the number of shares of the Company’s common stock that he holdsheld as of April 5, 2022 through the end of the Term. In addition, consistent with Mr. Gamgort’s previous employment agreement, dated July 2, 2018, the letter agreement provides that Mr. Gamgort’s previously granted equity awards will be subject to pro-rata vesting (1) upon his retirement on or after attaining age 60 or (2) upon any termination of employment by Mr. Gamgort further commitsor by the Company without cause.
2024 Succession Plan
As discussed on page 2, in September 2023, KDP announced its succession plan pursuant to which the Board appointed Mr. Cofer to the position of Chief Operating Officer, effective November 6, 2023, with the expectation that duringin the Term, he will (i) not engage in any other business, profession or occupation for compensation or whichsecond quarter of 2024, Mr. Cofer would conflict or interfere with his dutiessucceed Mr. Gamgort as Chief Executive Officer of the Company and Mr. Gamgort would return to the role of Executive Chairman exclusively. Mr. Gamgort and Mr. Cofer assumed their roles as Executive Chairman and (ii) serveChief Executive Officer, respectively, on no more than one other public company board of directors in additionApril 26, 2024.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 35 |
Compensation Discussion and Analysis
Mr. Cofer’s Letter Agreement
The Company entered into a letter agreement with Mr. Cofer on September 18, 2023. Pursuant to the Company.letter agreement, as Chief Operating Officer, Mr. Cofer received an annual base salary of $1,150,000 with a STIP target at 125% of his base salary. He was eligible to participate in the LTIP with an annual award target value of $3,500,000 (commencing in 2024) and was required to participate in Elite by investing $12,500,000 in shares of the Company, an amount commensurate with the Company’s stock ownership requirements for a Chief Executive Officer in light of his expected transition to that role.
The letter agreement also provides that upon Mr. Cofer’s promotion to Chief Executive Officer, his annual base salary will be $1,250,000, with a STIP target at 150% of his base salary. As Chief Executive Officer, his annual award target value under the LTIP will be $4,000,000.
Pursuant to the letter agreement, Mr. Cofer was granted the following in recognition of forgone incentive compensation from his prior employer: (1) a one-time sign-on grant of RSUs with a grant date value of $7,000,000, which vest 30% on the 18-month anniversary of the grant date, 40% on the 30-month anniversary of the grant date and 30% on the 42-month anniversary of the grant date and (2) a one-time cash sign-on bonus of $8,000,000, which, in the event of his voluntary resignation or termination for cause within one year of his start date, will be repayable to the Company 100%, or between the first and second year after his start date, will be repayable to the Company 50%.
The letter agreement further provides that Mr. Cofer and his family will be expected to relocate to the Company’s Frisco, Texas headquarters by the summer of 2024. The Company will provide relocation assistance in connection with such move, subject to repayment in full in the event he is terminated for cause or voluntarily resigns within one year of his start date and 50% repayment in the event of such a termination between the first and second anniversaries of his start date. Pending his permanent relocation, the Company agreed to provide Mr. Cofer with temporary living, preliminary relocation and certain commuting expenses.
Mr. Gamgort’s Compensation Arrangements
In connection with Mr. Gamgort’s transition to the role of Executive Chairman effective April 26, 2024, the RemCo approved an annual base salary of $1,000,000, with a STIP target at 100% of his base salary. As Executive Chairman, Mr. Gamgort will be eligible to participate in the LTIP with an annual award target value of $2,500,000.
Other Matters
General Benefits and Perquisites
Our NEOs participate in the same benefit plans generally available to our employees. These benefit plans include health, dental and vision insurance, life insurance and disability coverage. NEOs receive the same coverage as the rest of our employees.
Compensation Discussion and Analysis
While we may provide NEOs with reasonable perquisites on an individual basis, including relocation and expatriate assignment benefits, such perquisites generally do not make up a significant part of any NEO’s total compensation. All perquisites with an aggregate value of at least $10,000 received by an NEO are detailed in the footnotes to the Summary Compensation Table.
Retirement and Pension Benefits
NEOs are eligible to participate in the Company’s qualified 401(k) plan, which includes a company match of 100% on the first 6% of employee contributions within certain statutory limitations under the Code.Internal Revenue Code of 1986, as amended (the “Code”). All of our NEOs except Mr. Cofer participated in the 401(k) program in 2023. We do not maintain or make contributions to a defined benefit plan or any non-qualified deferred compensation retirement plans for any of our NEOs.
Potential Payments upon Termination of Employment
The employment agreements for Messrs. Gamgort and Dokmecioglu, and ourOur compensation plans provide for certain payments and incremental benefits if aan NEO’s employment is terminated under certain limited circumstances. There are no tax gross-ups provided in connection with these payments or incremental benefits. These payments and incremental benefits are discussed under “Post-Termination Compensation” beginning on page 35.41.
Change in Control
All activeoutstanding unvested equity compensation plans and programsawards that provide for additional or accelerated payment or fully accelerated vesting in connection with a change in the control of the Company, including annual LTIP awards, the Matching RSUs, and all other equity awards, require a “double-trigger,” which means that accelerated vesting of equity will only occur upon a termination of employment in connection with a change of control (and not solely as a result of the completion of a change in control transaction). The equity awards vest in full upon a qualifying termination in connection with a change of control.
Tax and Accounting Implications
36 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Section 162(m) of the Code, generally limits, for U.S. corporate income tax purposes, the annual tax deductibility of compensation paid to certain current and former executive officers to $1 million. Although the Company believes that tax deductibility of executive compensation is an important consideration, the RemCo in its judgement may, nevertheless, authorize compensation payments that are not fully tax deductible, and/or modify compensation programs and practices without regard for tax deductibility when it believes that such compensation is appropriate.
Report of the Remuneration and Nomination Committee
REPORTOFTHE REMUNERATIONAND NOMINATION COMMITTEE
In fulfilling its responsibilities, the Remuneration and Nomination Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement.
In reliance on the review and discussions referred to above, the Remuneration and Nomination Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 20212023 (through incorporation by reference to this Proxy Statement).
The Remuneration and Nomination Committee
Paul S. Michaels, Chair
Michael Call
The Remuneration and Nomination Committee | ||||
Paul Michaels, Chair Oray Boston Debra Sandler |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 37 |
Executive Compensation Discussion and Analysis Tables
EXECUTIVE COMPENSATION TABLES
The executive compensation disclosure contained in this section reflects compensation information for 2021 for our 2023 NEOs.
Summary Compensation Table
The following table sets forth information regarding the compensation earned by our NEOs in fiscal years 2023, 2022 and 2021. Messrs. Priyadarshi and Archambault were not NEOs in 2021, 2020 and 2019.Mr. Cofer and Ms. Rotem-Wildeman were not NEOs in 2022 or 2021. In accordance with the SEC disclosure requirements, their compensation disclosure is provided only for the year or years in which they were NEOs.
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation(4) | Total | |||||||||||||||||||||||||||
Robert Gamgort | 2021 | $ | 1,528,846 | — | $ | 4,297,860 | — | $ | 1,845,000 | — | $ | 100,815 | $ | 7,772,521 | ||||||||||||||||||||||
2020 | $ | 1,557,692 | — | $ | 18,334,997 | — | $ | 2,407,500 | — | $ | 210,347 | $ | 22,510,536 | |||||||||||||||||||||||
2019 | $ | 1,500,000 | — | $ | 5,500,015 | $ | 2,047,500 | — | $ | 157,406 | $ | 9,204,921 | ||||||||||||||||||||||||
Ozan Dokmecioglu | 2021 | $ | 866,346 | — | $ | 2,011,772 | — | $ | 557,600 | — | $ | 17,354 | $ | 3,453,072 | ||||||||||||||||||||||
2020 | $ | 882,692 | — | $ | 13,200,021 | — | $ | 727,600 | — | $ | 18,265 | $ | 14,828,578 | |||||||||||||||||||||||
2019 | $ | 848,077 | — | $ | 2,600,024 | — | $ | 618,800 | — | $ | 42,321 | $ | 4,109,222 | |||||||||||||||||||||||
Mauricio Leyva | 2021 | $ | 866,346 | — | $ | 2,011,772 | — | $ | 557,600 | — | $ | 17,100 | $ | 3,452,818 | ||||||||||||||||||||||
2020 | $ | 676,731 | $ | 5,500,000 | (6) | $ | 22,200,017 | — | $ | 586,454 | — | $ | 22,137 | $ | 28,985,339 | |||||||||||||||||||||
Tony Milikin | 2021 | $ | 242,308 | — | $ | 9,789,313 | — | $ | 156,362 | — | $ | 5,192 | $ | 10,193,175 | ||||||||||||||||||||||
Fernando Cortes | 2021 | $ | 438,462 | — | $ | 3,170,803 | — | $ | 287,921 | — | $ | 3,953,554 | $ | 7,850,740 | ||||||||||||||||||||||
2020 | $ | 538,462 | — | $ | 1,200,009 | — | $ | 442,267 | — | $ | 29,940 | $ | 2,210,678 | |||||||||||||||||||||||
2019 | $ | 500,000 | — | $ | 1,500,011 | — | $ | 364,000 | — | $ | 79,895 | $ | 2,443,906 | |||||||||||||||||||||||
Justin Whitmore | 2021 | $ | 486,538 | $ | 2,000,000 | (8) | $ | 6,032,544 | — | $ | 316,228 | — | $ | 11,279 | $ | 8,846,589 |
Name and Principal Position | Year | Salary ($) | Bonus ($)(5) | Stock Awards ($)(6) | Non-Equity Incentive Plan Compensation ($)(7) | All Other Compensation ($)(8) | Total ($) | |||||||||||||||||||||
Robert Gamgort | 2023 | 1,500,000 | — | 4,335,741 | 1,755,000 | 29,354 | 7,620,095 | |||||||||||||||||||||
2022 | 1,357,692 | — | 9,182,281 | 1,780,205 | 166,314 | 12,486,492 | ||||||||||||||||||||||
2021 | 1,528,846 | — | 4,297,860 | 1,845,000 | 100,815 | 7,772,521 | ||||||||||||||||||||||
Sudhanshu Priyadarshi | 2023 | 850,000 | — | 2,029,504 | 530,400 | 17,654 | 3,427,558 | |||||||||||||||||||||
2022 | 114,423 | 3,850,000 | 7,447,994 | 84,059 | — | 11,496,476 | ||||||||||||||||||||||
Timothy Cofer | 2023 | 176,923 | 8,000,000 | 17,463,228 | 172,027 | 104,523 | 25,916,701 | |||||||||||||||||||||
Karin Rotem-Wildeman | 2023 | 416,827 | 250,000 | 3,304,729 | 226,964 | 355,268 | 4,553,788 | |||||||||||||||||||||
Andrew Archambault | 2023 | 623,077 | — | 2,933,307 | 388,761 | 108,477 | 4,053,622 | |||||||||||||||||||||
2022 | 545,087 | — | 2,639,731 | 382,090 | 34,794 | 3,601,702 |
(1) |
|
(2) | Mr. Cofer joined the Company as its Chief Operating Officer on November 6, 2023 and was promoted to Chief Executive Officer on April 26, 2024. |
(3) | Ms. Rotem-Wildeman joined the Company as its Chief Research & Development Officer effective January 9, 2023. |
(4) | Mr. Archambault served as President, Commercial & Beverage Concentrates until November 6, 2023, when he was promoted to President, U.S. Refreshment Beverages. |
(5) | For each of Mr. Cofer and Ms. Rotem-Wildeman, reflects a cash sign-on bonus paid in 2023 intended as an inducement to join the Company and to compensate the executives for certain foregone incentive compensation from their respective prior employers. Such sign-on bonuses are subject to repayment (i) in the case of Mr. Cofer, in full in the event he is terminated for cause or voluntarily resigns within one year of his start date and 50% repayment in the event of such a termination between the first and second anniversaries of his start date and (ii) in the case of Ms. Rotem-Wildeman, in full in the event that she resigns within one year of her start date other than for Good Reason as defined under the Keurig Dr Pepper Inc. Executive Severance Plan. |
(6) | The amounts reported in the Stock Awards column reflect the grant date fair value |
The amounts |
|
Name | Corporate Aircraft(a) | Relocation / Housing(b) | Company Contributions(c) | Separation- Related Compensation(d) | ||||||||||||
Robert Gamgort | $ | 32,293 | $ | 51,422 | $ | 17,100 | — | |||||||||
Ozan Dokmecioglu | $ | 254 | — | $ | 17,100 | — | ||||||||||
Mauricio Leyva | — | — | $ | 17,100 | — | |||||||||||
Tony Milikin | — | — | $ | 5,192 | — | |||||||||||
Fernando Cortes | — | — | $ | 17,400 | $ | 3,936,154 | ||||||||||
Justin Whitmore | — | — | $ | 11,279 | — |
38 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Compensation Tables
Name | Corporate Aircraft(a) | Relocation / Housing | Company Contributions(b) | |||||||||
Robert Gamgort | $ | 12,023 | $ | — | $ | 17,331 | ||||||
Sudhanshu Priyadarshi | — | — | 17,654 | |||||||||
Timothy Cofer | 17,861 | 86,662 | (c) | — | ||||||||
Karin Rotem-Wildeman | — | 338,595 | (d) | 16,673 | ||||||||
Andrew Archambault | — | 88,677 | (e) | 19,800 |
(a) |
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Compensation Discussion and Analysis
|
|
(c) |
|
(d) | Reflects Company-paid relocation expenses, including moving costs and certain fees incurred in connection with Ms. Rotem-Wildeman’s sale of her prior residence. The amount shown also includes a |
(e) |
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Grants of Plan-Based Awards
The following table sets forth information regarding equity plan awards and non-equity incentive plan awards by us to our NEOs in fiscal year 2021.2023. For a discussion of the material terms of these awards, see “Compensation Discussion and Analysis” beginning on page 21.27.
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | |||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||
Robert Gamgort | — | 2,250,000 | 5,625,000 | |||||||||||||||||||||||||||||||||
3/3/2021 | (4) | 153,495 | 4,297,860 | |||||||||||||||||||||||||||||||||
Ozan Dokmecioglu | — | 680,000 | 1,700,000 | |||||||||||||||||||||||||||||||||
3/3/2021 | (4) | 71,849 | 2,011,772 | |||||||||||||||||||||||||||||||||
Mauricio Leyva | — | 680,000 | 1,700,000 | |||||||||||||||||||||||||||||||||
3/3/2021 | (4) | 71,849 | 2,011,772 | |||||||||||||||||||||||||||||||||
Tony Milikin | — | 190,685 | 476,712 | |||||||||||||||||||||||||||||||||
9/14/2021 | (5) | 21,417 | 693,054 | |||||||||||||||||||||||||||||||||
9/14/2021 | (6) | 142,776 | 4,476,028 | |||||||||||||||||||||||||||||||||
9/14/2021 | (7) | 142,776 | 4,620,231 | |||||||||||||||||||||||||||||||||
Fernando Cortes | — | 351,123 | 877,808 | |||||||||||||||||||||||||||||||||
3/3/2021 | (4) | 48,988 | 1,371,664 | |||||||||||||||||||||||||||||||||
5/26/2021 | (8) | 54,735 | 1,799,139 | |||||||||||||||||||||||||||||||||
Justin Whitmore | — | 385,644 | 964,110 | |||||||||||||||||||||||||||||||||
3/3/2021 | (4) | 39,191 | 1,097,348 | |||||||||||||||||||||||||||||||||
3/3/2021 | (9) | 97,976 | 2,643,392 | |||||||||||||||||||||||||||||||||
3/3/2021 | (10) | 81,646 | 2,291,803 |
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | ||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||
Robert Gamgort | — | 2,250,000 | 4,500,000 | |||||||||||||||||||||
3/1/2023 | (4) | 137,468 | 4,335,741 | |||||||||||||||||||||
Sudhanshu Priyadarshi | — | 680,000 | 1,360,000 | |||||||||||||||||||||
3/1/2023 | (4) | 64,347 | 2,029,504 | |||||||||||||||||||||
Timothy Cofer | — | 220,548 | 441,096 | |||||||||||||||||||||
11/20/2023 | (5) | 393,330 | 10,989,640 | |||||||||||||||||||||
11/20/2023 | (6) | 220,265 | 6,473,588 | |||||||||||||||||||||
Karin Rotem-Wildeman | — | 290,979 | 581,958 | |||||||||||||||||||||
3/1/2023 | (4) | 20,474 | 645,750 | |||||||||||||||||||||
5/23/2023 | (7) | 93,692 | 2,658,979 | |||||||||||||||||||||
Andrew Archambault | — | 498,411 | 996,822 | |||||||||||||||||||||
3/1/2023 | (4) | 35,098 | 1,106,991 | |||||||||||||||||||||
11/20/2023 | (8) | 62,933 | 1,826,316 |
(1) | The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column represent the potential payouts of annual cash incentive awards granted to our NEOs |
(2) | Represents the number of shares subject to time-vesting RSU awards made in |
(3) | The amounts reported in the Grant Date Fair Value of Stock |
(4) | Annual RSU awards that vest as follows: 60% on March |
(5) |
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 39 |
Executive Compensation Discussion and Analysis Tables
Sign-on RSU award that vests as follows: |
Elite Matching |
|
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Outstanding Equity Awards
The following table sets forth information regarding exercisable and unexercisable stock options and vested and unvested equityRSU awards held by each NEO as of December 31, 2021. All such awards relate to shares2023. No NEOs held any outstanding stock options as of our common stock.December 31, 2023.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#): Exercisable | Number of Securities Underlying Unexercised Options: Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price ($/ share) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | ||||||||||||||||||||||||
Robert Gamgort | 7/2/2018 | (2) | 248,808 | 9,171,063 | ||||||||||||||||||||||||||||
7/2/2018 | (2) | 248,808 | 9,171,063 | |||||||||||||||||||||||||||||
3/4/2019 | (2) | 211,133 | 7,782,362 | |||||||||||||||||||||||||||||
3/12/2020 | (3) | 204,437 | 7,535,548 | |||||||||||||||||||||||||||||
12/7/2020 | (4) | 217,014 | 7,999,136 | |||||||||||||||||||||||||||||
12/7/2020 | (5) | 651,042 | 23,997,408 | |||||||||||||||||||||||||||||
3/3/2021 | (3) | 153,495 | 5,657,826 | |||||||||||||||||||||||||||||
Ozan Dokmecioglu | 8/24/2018 | (6) | 111,159 | 4,097,321 | ||||||||||||||||||||||||||||
3/4/2019 | (2) | 99,809 | 3,678,960 | |||||||||||||||||||||||||||||
3/12/2020 | (3) | 95,694 | 3,527,281 | |||||||||||||||||||||||||||||
9/15/2020 | (7) | 381,945 | 14,078,493 | |||||||||||||||||||||||||||||
3/3/2021 | (3) | 71,849 | 2,648,354 | |||||||||||||||||||||||||||||
Mauricio Leyva | 3/12/2020 | (3) | 95,694 | 3,527,281 | ||||||||||||||||||||||||||||
3/12/2020 | (2) | 217,486 | 8,016,534 | |||||||||||||||||||||||||||||
3/12/2020 | (8) | 652,458 | 24,049,602 | |||||||||||||||||||||||||||||
3/3/2021 | (3) | 71,849 | 2,648,354 | |||||||||||||||||||||||||||||
Tony Milikin | 9/14/2021 | (3) | 21,417 | 789,431 | ||||||||||||||||||||||||||||
9/14/2021 | (2) | 142,776 | 5,262,723 | |||||||||||||||||||||||||||||
9/14/2021 | (3) | 142,776 | 5,262,723 | |||||||||||||||||||||||||||||
Fernando Cortes(9) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Justin Whitmore | 3/3/2021 | (3) | 39,191 | 1,444,580 | ||||||||||||||||||||||||||||
3/3/2021 | (2) | 97,976 | 3,611,395 | |||||||||||||||||||||||||||||
3/3/2021 | (7) | 81,646 | 3,009,472 |
| Stock Awards | |||||||||||
Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | |||||||||
Robert Gamgort | 3/4/2019 | (2) | 211,133 | 7,034,952 | ||||||||
3/12/2020 | (3) | 81,775 | 2,724,743 | |||||||||
12/7/2020 | (4) | 73,785 | 2,458,516 | |||||||||
3/3/2021 | (5) | 153,495 | 5,114,453 | |||||||||
3/2/2022 | (5) | 121,731 | 4,056,077 | |||||||||
7/29/2022 | (6) | 129,066 | 4,300,479 | |||||||||
3/1/2023 | (5) | 137,468 | 4,580,434 | |||||||||
Sudhanshu Priyadarshi | 11/22/2022 | (7) | 25,828 | 860,589 | ||||||||
11/22/2022 | (2) | 130,447 | 4,346,494 | |||||||||
3/1/2023 | (5) | 64,347 | 2,144,042 | |||||||||
Timothy Cofer | 11/20/2023 | (8) | 220,265 | 7,339,230 | ||||||||
11/20/2023 | (2) | 393,330 | 13,105,756 | |||||||||
Karin Rotem-Wildeman | 3/1/2023 | (5) | 20,474 | 682,194 | ||||||||
5/23/2023 | (2) | 93,692 | 3,121,817 | |||||||||
Andrew Archambault | 3/4/2019 | (2) | 19,194 | 639,544 | ||||||||
3/12/2020 | (3) | 7,395 | 246,401 | |||||||||
3/3/2021 | (5) | 13,880 | 462,482 | |||||||||
3/3/2021 | (9) | 12,247 | 408,070 | |||||||||
3/2/2022 | (5) | 11,008 | 366,787 | |||||||||
9/13/2022 | (5) | 10,282 | 342,596 | |||||||||
11/22/2022 | (2) | 54,266 | 1,808,143 | |||||||||
3/1/2023 | (5) | 35,098 | 1,169,465 | |||||||||
11/20/2023 | (10) | 62,933 | 2,096,928 |
(1) | Market value is determined by multiplying the total number of shares or |
(2) | Represents RSUs that vest on the fifth anniversary of the grant date. |
(3) | Represents RSUs that vest one-half on each of the fourth and fifth anniversaries of the grant date. |
(4) | Represents RSUs that vested on January 15, 2024. |
(5) | Represents RSUs that vest 60% on the third anniversary of the grant date, 20% on the fourth anniversary of the grant date and 20% of the fifth anniversary of the grant date. |
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Compensation Discussion and Analysis
(6) | Represents RSUs that vest on |
(7) | Represents RSUs that vest |
(8) | Represents RSUs that vest 30% on May 20, 2025, 40% on |
(9) | Represents RSUs that vest one-third on each of the |
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40 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Compensation Tables
Stock Awards Vested
The following table sets forth information regarding stock awards made toRSUs held by our NEOs that have vested during fiscal year 2021.
Name | Type of Grant (Option/ SAR/ Stock Award) | Date of Exercise or Vest | No. of Shares Acquired on Exercise or Vesting (#) | Exercise Price ($) | Market Price ($) (exercise date) | Value Realized on Exercise or Vesting ($) | ||||||||||||||||||
Robert Gamgort | Stock Award | 3/15/2021 | 3,470,393 | — | 33.58 | 116,535,797 | ||||||||||||||||||
Ozan Dokmecioglu | Stock Award | 3/15/2021 | 1,561,678 | — | 33.58 | 52,441,147 | ||||||||||||||||||
Mauricio Leyva | — | — | — | — | — | — | ||||||||||||||||||
Tony Milikin | — | — | — | — | — | — | ||||||||||||||||||
Fernando Cortes | — | — | — | — | — | — | ||||||||||||||||||
Justin Whitmore | — | — | — | — | — | — |
Non-Qualified Deferred Compensation
Prior to the Merger, certain employees of DPS (“legacy DPS employees”) were eligible to participate in deferred compensation benefits programs, of which Mr. Cortes, as a named executive officer of DPS, was eligible. Messrs. Gamgort, Dokmecioglu, Leyva, Milikin and Whitmore were eligible to participate in a 401(k) plan only.
Qualified 401(k) Plan
In 2021 all2023. None of our NEOs were eligible for, and participated in, a 401(k) program which provided a 100% company match on the first 6% of employee contributions within certain statutory limitations under the Code.
The Supplemental Savings Plan (the “SSP”)
The SSP is a non-qualified deferred compensation plan sponsored by the Company for our employees, and is a non-tax qualified defined contribution plan. Prior to the Merger, the SSP was for legacy DPS employees who were actively enrolled in the legacy DPS 401(k) plan and whose deferrals under the STIP were limited by Code compensation limitations. Employees were eligible to elect to defer up to 75% of their base salary over the Code compensation limit to the SSP, and were matched 100% of the first 4% of base salary, on a per paycheck basis, that was contributed by these employees. Employees participating in the SSP are always fully vested in the amount they and the Company contribute to the plan. Participants self-direct the investment of their account balances among various mutual funds. This portion of the SSP was terminated as December 31, 2019.
Also as part of the SSP, we previously offered an enhanced defined contribution component (the “Non-qualified EDC”) on a non-tax qualified basis to the SSP plan account. The Non-qualified EDC provided a contribution equal to 3% of eligible compensation over statutory pay limits to individual accounts annually. The Non-qualified EDC contributions are 100% vested after three years of service with the Companyheld or prior affiliates. This portion of the SSP was also terminated.
The SSP also offers our employees the opportunity to defer up to 100% of their annual bonus. Participants will make yearly elections on payoutexercised any options of bonus deferrals under the plan. Vesting is immediate and the participant has multiple distribution options available during each annual enrollment period. Participants self-direct the investment of their account balances among various mutual funds.
The SSP is unfunded with respect to the Company’s obligation to pay any balances in the SSP. A participant’s rights to receive any payment from the SSP shall be no greater than the rights of an unsecured general creditor of the Company.
In 2021, there were no executives contributing to the SSP. Mr. Cortes had participated in prior years and information regarding the non-qualified deferred compensation under the SSP for Mr. Cortes in fiscal year 2021 is reflected in the table below:2023.
Name | Executive Contributions In Last Fiscal Year | Registrant Contributions In Last Fiscal Year | Aggregate Earnings In Last Fiscal Year | Aggregate Withdrawals/ Distributions | Aggregate Balance At Last Fiscal Year End | ||||||||||||||||||||||||
Fernando Cortes | — | — | $ | (5,701 | ) | — | $ | 311,935 | |||||||||||||||||||||
Name | |||||||||||||||||||||||||||||
Name | |||||||||||||||||||||||||||||
Name | |||||||||||||||||||||||||||||
Name | Name | Stock Awards | |||||||||||||||||||||||||||
No. of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||||||||||||||
Robert Gamgort | |||||||||||||||||||||||||||||
Robert Gamgort | |||||||||||||||||||||||||||||
Robert Gamgort | |||||||||||||||||||||||||||||
Robert Gamgort | 107,422 | (1) | 3,838,188 | ||||||||||||||||||||||||||
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| 71,615 | (1) | 2,558,804 | ||||||||||||||||||||||||||
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| 122,662 | 4,201,174 | |||||||||||||||||||||||||||
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| 248,808 | 7,829,988 | |||||||||||||||||||||||||||
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| 248,808 | 7,829,988 | |||||||||||||||||||||||||||
Sudhanshu Priyadarshi | |||||||||||||||||||||||||||||
Sudhanshu Priyadarshi | |||||||||||||||||||||||||||||
Sudhanshu Priyadarshi | |||||||||||||||||||||||||||||
Sudhanshu Priyadarshi | 52,440 | 1,699,580 | |||||||||||||||||||||||||||
Timothy Cofer | |||||||||||||||||||||||||||||
Timothy Cofer | |||||||||||||||||||||||||||||
Timothy Cofer | |||||||||||||||||||||||||||||
Timothy Cofer | — | — | |||||||||||||||||||||||||||
Karin Rotem-Wildeman | |||||||||||||||||||||||||||||
Karin Rotem-Wildeman | |||||||||||||||||||||||||||||
Karin Rotem-Wildeman | |||||||||||||||||||||||||||||
Karin Rotem-Wildeman | — | — | |||||||||||||||||||||||||||
Andrew Archambault | |||||||||||||||||||||||||||||
Andrew Archambault | |||||||||||||||||||||||||||||
Andrew Archambault | |||||||||||||||||||||||||||||
Andrew Archambault | 4,083 | 141,068 | |||||||||||||||||||||||||||
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| 11,092 | 379,901 | |||||||||||||||||||||||||||
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| 21,377 | 745,416 | |||||||||||||||||||||||||||
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| 40,000 | 1,325,200 |
(1) | ||||
Represents RSUs that vested on January 15, 2023, but which settled on January 15, 2024 pursuant to the terms of the Keurig Dr Pepper Inc. Omnibus Stock Incentive Plan of 2019 and Mr. Gamgort’s relevant award agreement, which provides that shares related to vested RSUs will be subject to deferred settlement and delivered on the first anniversary of the applicable vesting date (or, if that falls on a day when Nasdaq is not open for trading, the next following trading day). |
Non-Qualified Deferred Compensation Discussion and Analysis
The following table sets forth information regarding non-qualified deferred compensation held by our NEOs in 2023, which solely consists of certain deferred RSUs held by Mr. Gamgort.
Name | Value of Deferred Equity: Executive Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate Withdrawals/Distributions | Value of Deferred Equity: Aggregate Balance at Last FYE | ||||
Robert Gamgort | $6,396,992(1) | $2,127,289 | $2,558,768(2) | $5,965,513(3) |
(1) | Reflects value, as of the vesting date, of RSUs that vested on January 15, 2023 but for which settlement was deferred until January 15, 2024 pursuant to the terms of the Keurig Dr Pepper Inc. Omnibus Stock Incentive Plan of 2019 and Mr. Gamgort’s relevant award agreement. |
(2) | Reflects value, as of the settlement date, of RSUs that vested on January 15, 2022 but for which settlement was deferred until January 17, 2023 pursuant to the terms of the Keurig Dr Pepper Inc. Omnibus Stock Incentive Plan of 2019 and Mr. Gamgort’s relevant award agreement, which provides that shares related to vested RSUs will be delivered on the first anniversary of the applicable vesting date, or, if that falls on a day when Nasdaq is not open for trading, the next following trading day. |
(3) | Reflects value, as of December 29, 2023, the last trading day of fiscal year 2023, of such deferred RSUs. |
Post-Termination Compensation
Employment Agreements with
Keurig Dr Pepper Inc. Executive Severance Plan
The Company maintains the Keurig Dr Pepper Inc. Executive Severance Plan (the “Severance Plan”), which provides severance benefits for the Company’s Executive Chairman, Chief Executive Officer, Executive Leadership Team (including Mr. GamgortPriyadarshi, Ms. Rotem-Wildeman and Mr. Dokmecioglu
Mr. GamgortArchambault and, Mr. Dokmecioglu each have an employment agreement with the Company. Mr. Gamgort’s agreement provides for an initial term that ended on May 2, 2021, with the term automatically extending for successive one-year periods unless either the Company or Mr. Gamgort gives notice to the other party not later than three months prior to any such automatic extension that it or he does not want the term to be so extended. Mr. Dokmecioglu’s agreement may be terminated with 90 days’ prior notice by either party. Each agreement includes non-competition and non-solicitation provisions, which provide that the executive will not, for ahis period of two years after termination of employment, (i) become engaged with companies that are in competition with us, including, but not limited to, a predetermined list of companies or (ii) solicit or attempt to entice away any of our employees or customers. The employment agreements forservice as Chief Operating Officer, Mr. GamgortCofer), Senior Vice Presidents and Mr. Dokmecioglu will be mutually terminated effective July 29, 2022 in connection with the Company’s CEO succession plan.Vice Presidents.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 41 |
Executive Compensation Tables
Termination without “Cause” or Termination for “Good Reason” Other Than in Connection with a Change ofin Control
The executive employment agreements of Mr. Gamgort and Mr. Dokmecioglu each provide that severance payments occur and salary and benefits continue if termination of employment occurs without “cause” or ifUnder the executive resigns for “good reason.”
InSeverance Plan, in the event (1) the Company terminates Mr. Gamgort’s employment “without cause”the Executive Chairman or hethe Chief Executive Officer without Cause or (2) the Executive Chairman or the Chief Executive Officer resigns for “good reason,” during the employment term,Good Reason, he is entitled to receive:
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In the event (1) the Company terminates Mr. Dokmecioglu’s employment “without cause”an Executive Leadership Team member without Cause or (2) an Executive Leadership Team member declines an offer for a position that is not a Comparable Position, he resigns for “good reason”, heor she is entitled to receive:
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The above benefits are subject to (1) the participant’s execution (and non-revocation) of a general release of claims in a form provided by the Company within the time period specified therein and (2) the participant’s continued compliance in all material respects with the participant’s Employee Confidentiality and Non-Competition Agreement and any other confidentiality obligations or restrictive covenants applicable to the participant.
Termination Following a Change ofin Control
InDuring the period that is six months prior to or two years following a Change in Control, in the event (1) the Company terminates Mr. Gamgort’s employment “without cause”the Executive Chairman or hethe Chief Executive Officer without Cause or (2) the Executive Chairman or the Chief Executive Officer resigns for “good reason” within 24 months following a Change of Control,Good Reason, he is entitled to receive:receive a lump sum amount equal to three times the sum of his base pay plus target bonus.
During the period that is six months prior to or two years following a Change in Control, in the event (1) the Company terminates an Executive Leadership Team member without Cause or (2) an Executive Leadership Team member resigns for Good Reason, he or she is entitled to receive a lump sum amount equal to 2.25 times the sum of his or her base pay plus target bonus.
The above benefits are subject to (1) the participant’s execution (and non-revocation) of a general release of claims in a form provided by the Company within the time period specified therein and (2) the participant’s continued compliance in all material respects with the participant’s Employee Confidentiality and Non-Competition Agreement and any other confidentiality obligations or restrictive covenants applicable to the participant.
Definitions
Under the Severance Plan, “Cause” is defined as a participant’s:
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Compensation Discussion and Analysis
In the event the Company terminates Mr. Dokmecioglu’s employment “without cause” or he resigns for “good reason” within 12 months following a Change of Control, he is entitled to receive:
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Under the executive employment agreements “cause” is defined as termination of the executive’s employment for his:
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willful neglect, refusal or repeated willful failure to perform any |
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material |
Prior to a Change of Control (defined below), “good reason”“Good Reason” means:
a material diminution in the |
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a material |
a |
Following a ChangeGood Reason does not apply unless all of Control, “good reason” also means, in additionthe following conditions are satisfied: (1) the condition giving rise to the events described above,participant’s termination of employment must have arisen without the failureparticipant’s consent; (2) the participant must provide notice to the
42 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Compensation Tables
Company of such condition within 30 days of the date that the participant first becomes aware of the condition; (3) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company; and (4) the date of the participant’s termination of employment must occur within 30 days after the date the Company’s cure period expires.
A “Comparable Position” means a position with the Company or its direct or indirect subsidiary that offers the participant generally comparable base pay and incentive compensation, provided that either (1) it is located no more than 50 miles from the participant’s former primary work location, or (2) for a participant working in a highly dense metropolitan area, it does not cause a significant detrimental impact to continue the executive’s participation in the STIP, LTIP and Elite (or any similar plan or successor to any such plan) on a basis that is commensurate with his position.participant’s commute.
A “Change ofin Control” is defined in each of Mr. Gamgort’s and Mr. Dokmecioglu’s agreementsthe Severance Plan to mean:
any “person” or “group” other than the Company or JAB, or any affiliate of the Company or JAB, is or becomes the “beneficial |
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a plan or agreement |
STIP Payment Upon Termination
Involuntary Termination
If the Company terminates an executive’s employment in connection with a reorganization, the closing of a facility, or a reduction in force or otherwise terminates the executive’s employment without Cause, the executive is eligible to receive an award payout based on his or her target bonus and the actual achievement of the performance goals for the year, prorated to date the executive ceases to perform services for the Company and payable at the same time awards are paid to other active STIP participants. For purposes of the STIP, “Cause” is defined in the STIP as termination due to unsatisfactory work performance or inability to perform the essential functions of the job, failure to comply with company policy, absenteeism, mutually agreed separation for performance or conduct issues, failed drug screen, invalid employment documentation, misconduct or malfeasance, the commission of a dishonest act or common law fraud, or for any other reason as determined by the Company or described as “for Cause” in an agreement between the STIP participant and the Company.
Death
In the event of an executive’s termination due to death, the executive’s estate will be eligible to receive the executive’s target bonus under the STIP, prorated to the time of death and payable within 60 days of death.
Retirement or Disability
In the event of an executive’s termination due to disability or retirement (defined as attaining the age of 60 and completing 5 years of service), the executive is eligible to receive an award payout based on his or her target bonus and the actual achievement of the performance goals for the year, prorated to the date of retirement or disability and payable at the same time awards are paid to other active STIP participants.
Equity Treatment Upon Other Termination Scenarios
Double-Trigger Equity Vesting Upon a Change ofin Control
In the event of a Change of Control, all outstanding RSUs, and Matching RSUs, including those held by our NEOs, have double-triggerdouble- trigger protection which means that no accelerated vesting of outstanding RSUs will occur unless both (1) a Change ofin Control occurs, and (2) the executiveexecutive’s employment is terminated within 24 months (or, in the case of Mr. Dokmecioglu, within 12 months) of such Change in Control by the Company other than for Cause or by the executive for Good Reason. For purposes of Control.the RSUs, “Good Reason” generally means:
a material reduction in the executive’s base salary, other than as part of an overall expense reduction program that is generally applicable to all similarly situated employees; |
§ | a material adverse reduction in the executive’s duties and responsibilities such that the executive is required to serve in a position that is at least two salary grades lower than the position in which the executive had been serving prior to such reduction, or any other such similar reduction in duties and responsibilities; or |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 43 |
Executive Compensation Discussion and Analysis Tables
§ | the relocation of the executive’s principal workplace without the executive’s consent to a location more than 50 miles distant from the location at which the executive had previously been principally providing services. |
Death or Disability
In the event of an executive’s termination due to death or disability, all outstanding RSUs and Matching RSUs become fully vested and payable.
Involuntary Termination
For RSUs granted in March 2023 or later, in the event of an executive’s Qualifying Termination, outstanding RSUs vest on a pro rata basis. A “Qualifying Termination” means, (1) with respect to the Executive Chairman or Chief Executive Officer, a termination of employment by the Company without Cause or by the Executive Chairman or Chief Executive Officer for Good Reason and (2) with respect to an Executive Leadership Team member, by the Company without Cause or by the Executive Leadership Team member’s declining an offer for a position that is not a Comparable Position. “Cause,” “Good Reason” and “Comparable Position” are each defined as in the Severance Plan.
Retirement
In the event of an executive’s retirement (generally defined as attaining the age of 60 and completing 5 years of service), outstanding RSUs and Matching RSUs vest on a pro rata basis, except thatbasis. As an exception, any unvested “Reinvestment RSUs” that were granted to Messrs.Mr. Gamgort and Dokmecioglu in September 2020 and amended in December of 2020 will be canceled and forfeited.
Severance Pay Plan for Executives
Messrs. Leyva, Milikin, and Whitmore are eligible for our Severance Pay Plan for Executives. In the event Messrs. Leyva’s, Milikin’s or Whitmore’s employment is involuntarily terminated, each of these NEOs is entitled to receive severance benefits under our Severance Pay Plan for executive employees (“Severance Pay Plan for Executives”), which benefits include:
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Messrs. Leyva, Milikin and Whitmore would not be eligible for severance under the Severance Pay Plan if the NEO were terminated: (i) for cause, (ii) because of inadequate or unsatisfactory performance, (iii) as the result of misconduct (including mismanagement of a position of employment by action or inaction, neglect that jeopardizes the life or property of another, intentional wrongdoing or malfeasance, intentional violation of a law, or violation of a policy or rule adopted to ensure the orderly work and the safety of employees), (iv) for gross neglect in job performance, or (v) because the NEO’s position is eliminated and the NEO refuses to accept another position with generally comparable base salary and incentive compensation and that is located no more than 50 miles from the former office, or it does not cause a significant detrimental impact to the executives that commute. (These items are hereinafter referred to as “Disqualifying Conditions.”)
In exchange for accepting their long-term incentive awards, Messrs. Leyva, Milikin and Whitmore have each agreed to a non-compete agreement, which provides each will not, for a period of two years after termination of employment, (i) become engaged with companies that are in competition with us, including, but not limited to, a predetermined list of companies or (ii) solicit or attempt to entice away any of our employees or customers.
Separation and ReleaseLetter Agreement with Mr. CortesGamgort
Mr. Cortes’s employmentGamgort entered into a letter agreement with the Company was terminated effective September 24, 2021. In accordance with the terms of the Severance Pay Plan for Executives, for which he was eligible, Mr. Cortes received benefits consistent with an involuntary termination (as described above). In addition, in recognition of his contributions to the Company and leadership of supply chain integration since the Merger, the RemCo approved a $3,500,000 Leadership Integration Bonus to Mr. Cortes. Mr. Cortes’s unvested equity awards were canceled and forfeited upon his separation from the Company. The following table reflects the payments provided to Mr. Corteson April 5, 2022 in connection with his separation frominitial assumption of the Company.Executive Chairman role. Consistent with Mr. Gamgort’s previous employment agreement with the Company, the letter agreement provides that equity awards previously granted to Mr. Gamgort will be subject to pro-rata vesting (1) upon his retirement on or after attaining age 60 or (2) upon any termination of employment by Mr. Gamgort or by the Company without Cause (as defined in the Severance Plan). The letter agreement also provides that a $5,000,000 RSU award that Mr. Gamgort received in 2022 connection with his employment as Executive Chairman will be subject to pro-rata vesting if the Company terminates his employment without Cause before July 26, 2024. Under the letter agreement, a termination of Mr. Gamgort’s employment will be governed by the Severance Plan.
Fernando Cortes
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Compensation Discussion and Analysis
Tables of Potential Payments and Assumptions
The following tables outline the potential payments to Messrs.Mr. Gamgort, Dokmecioglu, Leyva, Milikin, CortesMr. Priyadarshi, Mr. Cofer, Ms. Rotem-Wildeman and WhitmoreMr. Archambault upon the occurrence of various termination events, including “termination(1) termination without cause”Cause or, “for good reason”as applicable, for Good Reason or “terminationdeclining an offer for a position that is not a Comparable Position, (2) termination due to death, (3) termination due to disability or disability” or “retirement,”(4) retirement. The following tables also reflect potential payments related to change of control and subsequent qualified termination within a specified window for each NEO other than Mr. Cortes, whose separation-related compensation is set forth above.such NEO.
The following assumptions apply with respect to the tables below and any termination of employment:
the tables include estimates of amounts that would have been paid to NEOs in the event their employment |
the tables assume that the price of a share of our common stock is |
each NEO is entitled to receive amounts earned during the term of his employment regardless of the manner of termination. These amounts include accrued base salary, accrued vacation time, any vested but deferred RSUs and other employee benefits to which the NEO was entitled on the date of termination, and are not shown in the tables below; and |
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44 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Executive Compensation Tables
Robert Gamgort
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Severance Payments | — | — | — | 7,500,000 | 11,250,000 | |||||||||||||||||||||||||||||||||||
Lump Sum 2021 Bonus Payment | — | 1,845,000 | 1,845,000 | 1,845,000 | 1,845,000 | |||||||||||||||||||||||||||||||||||
Medical, Dental and Vision Benefits Continuation | — | — | — | 58,069 | 58,069 | |||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | $ | — | $ | — | $ | — | $ | 7,500,000 | $ | 11,250,000 | ||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | 1,755,000 | 2,250,000 | 1,755,000 | 1,755,000 | 1,755,000 | |||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 6,300 | — | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | — | 71,314,406 | 71,314,406 | — | 71,314,406 | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | 16,692,687 | 37,645,169 | 37,645,169 | 16,692,687 | 37,645,169 | |||||||||||||||||||||||||||||||||||
TOTAL | — | 73,159,406 | 73,159,406 | 9,403,069 | 84,467,475 | |||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 18,447,687 | $ | 39,895,169 | $ | 39,400,169 | $ | 25,953,987 | $ | 50,650,169 |
Ozan DokmeciogluSudhanshu Priyadarshi
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Declining a Non-Comparable Position | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Severance Payments | — | — | — | 3,060,000 | 4,590,000 | |||||||||||||||||||||||||||||||||||
Lump Sum 2021 Bonus Payment | — | 557,600 | 557,600 | 557,600 | 557,600 | |||||||||||||||||||||||||||||||||||
Medical, Dental and Vision Benefits Continuation | — | — | — | 58,069 | 58,069 | |||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | $ | — | $ | — | $ | — | $ | 2,295,000 | $ | 3,442,500 | ||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | — | 680,000 | 530,400 | 530,400 | 530,400 | |||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 6,300 | — | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | — | 28,030,408 | 28,030,408 | — | 28,030,408 | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | — | 7,351,125 | 7,351,125 | 321,638 | 7,351,125 | |||||||||||||||||||||||||||||||||||
TOTAL | — | 28,588,008 | 28,588,008 | 3,675,669 | 33,236,077 | |||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | — | $ | 8,031,125 | $ | 7,881,525 | $ | 3,153,338 | $ | 11,324,025 |
Timothy Cofer
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Declining a Non-Comparable Position | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||
Severance Payments | $ | — | $ | — | $ | — | $ | 3,881,250 | $ | 5,821,875 | ||||||||||
Lump Sum 2023 STIP Payment | — | 220,548 | 172,027 | 172,027 | 172,027 | |||||||||||||||
Outplacement Services | — | — | — | 6,300 | — | |||||||||||||||
Accelerated Equity Payments | — | 20,444,985 | 20,444,985 | 393,209 | 20,444,985 | |||||||||||||||
TOTAL | $ | — | $ | 20,665,533 | $ | 20,617,013 | $ | 4,452,787 | $ | 26,438,888 |
Karin Rotem-Wildeman
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Declining a Non-Comparable Position | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||
Severance Payments | $ | — | $ | — | $ | — | $ | 1,083,750 | $ | 1,625,625 | ||||||||||
Lump Sum 2023 STIP Payment | — | 290,979 | 226,964 | 226,964 | 226,964 | |||||||||||||||
Outplacement Services | — | — | — | 6,300 | — | |||||||||||||||
Accelerated Equity Payments | — | 3,804,011 | 3,804,011 | 466,580 | 3,804,011 | |||||||||||||||
TOTAL | $ | — | $ | 4,094,990 | $ | 4,030,975 | $ | 1,783,594 | $ | 5,656,600 |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 45 |
Executive Compensation Discussion and Analysis Tables
Mauricio LeyvaAndrew Archambault
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | ||||||||||||||||||||||||||||||||||||||||
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Declining a Non-Comparable Position | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||||||||||||||||||||||
Severance Payments | — | — | — | 2,295,000 | 2,295,000 | |||||||||||||||||||||||||||||||||||
Lump Sum 2021 Bonus Payment | — | 680,000 | 557,600 | 557,600 | 557,600 | |||||||||||||||||||||||||||||||||||
Medical, Dental and Vision Benefits Continuation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | ||||||||||||||||||||||||||||||||||||||||
Severance Payments | $ | — | $ | — | $ | — | $ | 1,872,617 | $ | 2,808,925 | ||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | ||||||||||||||||||||||||||||||||||||||||
Lump Sum 2023 STIP Payment | — | 498,411 | 388,761 | 388,761 | 388,761 | |||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 7,000 | 7,000 | |||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | ||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 6,300 | — | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | — | 38,241,771 | 38,241,771 | — | 38,241,771 | |||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | ||||||||||||||||||||||||||||||||||||||||
Accelerated Equity Payments | — | 7,540,416 | 7,540,416 | 210,382 | 7,540,416 | |||||||||||||||||||||||||||||||||||
TOTAL | — | 38,921,771 | 38,799,371 | 2,859,600 | 41,101,371 | |||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | — | $ | 8,038,827 | $ | 7,929,177 | $ | 2,478,060 | $ | 10,738,101 |
Tony Milikin
46 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
CEO Pay Ratio
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||
Severance Payments | — | — | — | 2,025,000 | 2,025,000 | |||||||||||||||
Lump Sum 2021 Bonus Payment | — | 190,685 | 156,362 | 156,362 | 156,362 | |||||||||||||||
Medical, Dental and Vision Benefits Continuation | — | — | — | — | — | |||||||||||||||
Outplacement Services | — | — | — | 7,000 | 7,000 | |||||||||||||||
Accelerated Equity Payments | — | 11,314,877 | 11,314,877 | — | 11,314,877 | |||||||||||||||
TOTAL | — | 11,505,562 | 11,471,239 | 2,188,362 | 13,503,239 |
Justin Whitmore
Compensation Element | Retirement | Death | Disability | Termination Without Cause or For Good Reason | Termination Without Cause or For Good Reason Following CIC | |||||||||||||||
Severance Payments | — | — | — | 1,552,500 | 1,552,500 | |||||||||||||||
Lump Sum 2021 Bonus Payment | — | 385,644 | 316,228 | 316,228 | 316,228 | |||||||||||||||
Medical, Dental and Vision Benefits Continuation | — | — | — | — | — | |||||||||||||||
Outplacement Services | — | — | — | 7,000 | 7,000 | |||||||||||||||
Accelerated Equity Payments | — | 8,065,447 | 8,065,447 | — | 8,065,447 | |||||||||||||||
TOTAL | — | 8,451,091 | 8,381,675 | 1,875,728 | 9,941,175 |
PAY RATIO
As required by Section 953(b) of the Dodd-Frank Act, we are providing disclosure regarding the ratio of the annual total compensation of our CEO, Mr. Gamgort, to that of our median employee.
As a multi-national organization,For 2023, we have employees operating in several countries. Our objective is to provide competitive compensation commensurate with an employee’s position and geographic location, while also linking compensation to Company and individual performance.
To provide context for this disclosure, it is important to understandused the scope of our operations. Approximately sixteen percent of our employees are located in Mexico where the cost of living is significantly below the United States. The compensation elements and pay levels of our employees can vary dramatically from country to country based on market trends, cost of living, and cost of labor. These factors, along with fluctuations in currency exchange rates, impact thesame median employee compensation and the resulting ratio.
Compensation Discussion and Analysis
Forthat was identified in 2021 we identified our median employee by using total taxable wages (Form W-2 Box 1 or equivalent), our consistently applied compensation measure, for all individuals who were employed by us on December 31, 2021, excluding our CEO and employees who were on leave of absence for all of 2021. As permitted by the SEC, under the de minimis exception, we excluded 213 of our employees located outside the United States, who representrepresented less than 5% of our total employee population of 27,276 as of December 31, 2021, as follows: China (78), Hong Kong (8), Ireland (63), Malaysia (1), Singapore (44) and Switzerland (19). All employees in North America were included in our pay ratio calculation. We selected total taxable wages as our consistently applied compensation measure because this metric is applicable to and comparable across our entire employee population. To identify the compensation of our median employee, we determined the total compensation paid for each of our employees without applying any cost-of-living adjustments. For an employee paid in a currency other than U.S. dollars, we converted annual compensation into U.S. dollars using December 2021 exchange rates. Once we identified the median employee,
For 2023, we calculated the median employee’s compensation using the same methodology used to calculate the total annual compensation of our CEO. Based on this data and process, we determined that our median employee was a full-time employee who receives salary plus commission with annual total compensation in 20212023 of $55,207.$59,669.
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 20212023 Summary Compensation Table, $7,772,521.$7,620,095. Therefore, the ratio of our CEO’s annual total compensation to the Median Employee’s annual total compensation in 20212023 was 141128 to 1.
The pay ratio as described above involves a degree of imprecision due to the use of estimates and assumptions, but is a reasonable estimate that we calculated in a manner consistent with Item 402(u) of Regulation S-K.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 47 |
Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Summary Compensation Table Total for PEO (Robert Gamgort) (1) | Compensation Actually Paid to PEO (Robert Gamgort) (2) | Summary Compensation Table Total for PEO (Ozan Dokmecioglu) (1) | Compensation Actually Paid to PEO (Ozan Dokmecioglu) (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (4) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (6) | Net Income (7) | Adjusted Operating Income (8) | ||||||||||||||||||||||||||||||||||||||||
2023 | $ | 7,620,095 | $ | 8,755,242 | $ | — | $ | — | $ | 9,487,917 | $ | 9,599,096 | $ | 126 | $ | 114 | $ | 2,181 | $ | 3,657 | ||||||||||||||||||||||||||||||
2022 | 12,486,492 | 12,970,246 | 16,663,492 | (22,473,209 | ) | 5,088,351 | 2,821,000 | 131 | 118 | 1,436 | 3,538 | |||||||||||||||||||||||||||||||||||||||
2021 | 7,772,521 | 17,501,205 | — | — | 6,759,279 | 7,522,595 | 133 | 119 | 2,146 | 3,421 | ||||||||||||||||||||||||||||||||||||||||
2020 | 22,510,536 | 40,340,240 | — | — | 14,615,711 | 19,446,817 | 113 | 103 | 1,325 | 3,191 |
(1) | The dollar amounts reported in the Summary Compensation Table Total for PEO (Principal Executive Officer) columns are the amounts reported for Robert Gamgort (the Company’s Chief Executive Officer for 2020, 2021, portions of 2022, and 2023) and Ozan Dokmecioglu (the Company’s Chief Executive Officer for a portion of 2022) for each of the corresponding years in the Total column in our Summary Compensation Table. See “Executive Compensation Tables – Summary Compensation Table”. |
(2) | The dollar amounts reported in the Compensation Actually Paid to PEO columns represent the amount of “compensation actually paid” to Messrs. Gamgort and Dokmecioglu, as applicable, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually realized or received by such PEOs. In accordance with these rules, these amounts reflect the Total compensation as set forth in the Summary Compensation Table for each year, adjusted as shown below for 2023. Refer to our Proxy Statement for the 2023 Annual Meeting information on the calculations applicable for prior years. Equity values are calculated consistent with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
Compensation Actually Paid to Robert Gamgort | 2023 | ||||
Summary Compensation Table Total | $ | 7,620,095 | |||
Less, value of Stock Awards reported in Summary Compensation Table | (4,335,741 | ) | |||
Plus, year-end fair value of outstanding and unvested equity awards granted in the year | 4,269,603 | ||||
Plus, fair value as of vesting date of equity awards granted and vested in the year | — | ||||
Plus (less), year-over-year change in fair value from prior year end of outstanding and unvested equity awards granted in prior years | 3,088,824 | ||||
Plus (less), change in fair value from prior year end to vesting date of equity awards granted in prior years that vested in the year | (1,887,539 | ) | |||
Less, prior year-end fair value for any equity awards forfeited in the year | — | ||||
Compensation Actually Paid to Robert Gamgort | $ | 8,755,242 |
(3) | The dollar amounts reported in the Average Summary Compensation Table Total for Non-PEO NEOs column represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Gamgort for each year shown and Mr. Dokmecioglu for 2022) in the Total column of the Summary Compensation Table in each applicable year. The NEOs included for these purposes in each applicable year are as follows: (i) for 2023, Sudhanshu Priyadarshi, Timothy Cofer, Karin Rotem-Wildeman and Andrew Archambault; (ii) for 2022, Sudhanshu Priyadarshi, Mauricio Leyva, Andrew Archambault, Roger Johnson, George Lagoudakis and Tony Milikin; (iii) for 2021, Ozan Dokmecioglu, Mauricio Leyva, Tony Milikin, Fernando Cortes and Justin Whitmore; and (iv) for 2020, Ozan Dokmecioglu, Mauricio Leyva, Derek Hopkins and Fernando Cortes. |
(4) | The dollar amounts reported in the Average Compensation Actually Paid to Non-PEO NEOs column represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Gamgort for each year shown and Mr. Dokmecioglu for 2022), as computed in accordance with Item 402(v) of RegulationS-K. In accordance with these rules, these amounts reflect Total Compensation as set forth in the Summary Compensation Table for each year, adjusted as shown below for 2023. Refer to our Proxy Statement for the 2023 Annual Meeting information on the calculations applicable for prior years. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. |
48 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Average Compensation Actually Paid to Non-PEO NEOs | 2023 | ||||
Average Summary Compensation Table Total | $ | 9,487,917 | |||
Less, average value of Stock Awards reported in Summary Compensation Table | (6,432,692 | ) | |||
Plus, average year-end fair value of outstanding and unvested equity awards granted in the year | 6,729,522 | ||||
Plus, average fair value as of vesting date of equity awards granted and vested in the year | — | ||||
Plus (less), average year-over-year change in fair value from prior year end of outstanding and unvested equity awards granted in prior years | (124,668 | ) | |||
Plus (less), average change in fair value from prior year end to vesting date of equity awards granted in prior years that vested in the year | (60,983 | ) | |||
Less, prior year-end fair value for any equity awards forfeited in the year | — | ||||
Average Compensation Actually Paid to Non-PEO NEOs | $ | 9,599,096 |
(5) | Total Shareholder Return (TSR) assumes an initial $100 investment in KDP stock beginning on December 31, 2019. TSR is cumulative, with the value determined at the end of each applicable fiscal year shown, calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019. |
(6) | Peer Group Total Shareholder Return represents the weighted peer group TSR, which is weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the Company’s Compensation Peer Group discussed in “Compensation Discussion and Analysis” above: Anheuser-Busch InBev SA/NV, Campbell Soup Company, Chocoladefabriken Lindt & Sprungli AG, The Coca-Cola Company, Danone, Diageo plc, The Hershey Company, Kellanova (f/k/a Kellogg Company), The Kraft Heinz Company, McCormick & Company, Incorporated, Mondelēz International, Inc., Nestle S.A., PepsiCo, Inc., The Procter & Gamble Company, Reckitt Benckiser Group plc and Unilever PLC. |
(7) | The dollar amounts reported represent the amount of net income, in millions, reflected in the Company’s audited financial statements for the applicable year. |
(8) | The dollar amounts reported represent the amount of Adjusted operating income, in millions. Please refer to Appendix A to this Proxy Statement for a description and reconciliation of this non-GAAP compensation performance measure relative to the reported GAAP financial measure. |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 49 |
50 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
§ | Adjusted operating income (Company-selected measure) |
§ | Net sales growth |
§ | Adjusted operating income growth |
§ | Adjusted diluted EPS growth |
§ | Free cash flow conversion |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 51 |
Securities Authorized for Issuance Under Equity Compensation Plans
SECURITIES AUTHORIZEDFOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes certain information related to our equity award plans as of December 31, 2021.2023:
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($)(1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Initial Column) (#) | |||||||||||||||||||||
Plan Category | ||||||||||||||||||||||||
Plan Category | ||||||||||||||||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($)(1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Initial Column) (#) | |||||||||||||||||||||
Equity Compensation Plans approved by security holders | 7,886,027 | $ | 12.09 | 25,144,959 | (2) | |||||||||||||||||||
Equity Compensation Plans approved by security holders | ||||||||||||||||||||||||
Equity Compensation Plans approved by security holders | ||||||||||||||||||||||||
Equity Compensation Plans approved by security holders | 9,095,704 | 15.23 | 23,723,736 | (2) | ||||||||||||||||||||
Equity Compensation Plans not approved by security holders(3) | 22,768,573 | — | 2,768,595 | |||||||||||||||||||||
Equity Compensation Plans not approved by security holders(3) | ||||||||||||||||||||||||
Equity Compensation Plans not approved by security holders(3) | ||||||||||||||||||||||||
Equity Compensation Plans not approved by security holders(3) | 25,175,092 | — | 362,076 | |||||||||||||||||||||
Total | 30,654,600 | $ | 12.09 | 27,913,554 | ||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | 34,270,796 | 15.23 | 24,085,812 |
(1) | As of December 31, |
(2) | Represents |
(3) | In connection with the DPS Merger, the Company assumed the Keurig Green Mountain, Inc. Long-Term Incentive Plan and the Keurig Green Mountain, Inc. Executive Ownership Plan, in each case effective August 11, 2016, and the RSUs outstanding thereunder and the authorized but unissued share pool with respect thereto (the “Keurig Award Pool”). The Company may grant awards to |
Keurig Dr Pepper Inc. |
Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm
PROPOSAL 3 — RATIFICATIONOFTHE APPOINTMENTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee, which consists entirely of independent directors, is directly responsible for the appointment, compensation, retention, and oversight of the work of KDP’s independent registered public accounting firm. The Audit Committee is recommending ratification of its appointment of Deloitte & Touche LLP (“Deloitte”) as independent registered public accounting firm for fiscal year 2022.2024. Deloitte has served as the independent registered public accounting firm of KDP since 2006 (including service for KDP’s predecessor DPS). The Audit Committee and the Board believe that the continued retention of Deloitte to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders.
Although stockholder ratification of the Audit Committee’s appointment of Deloitte as the Company’s independent registered public accounting firm is not required by the Company’s By-Laws or otherwise, the Board is submitting the appointment of Deloitte to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider the appointment for fiscal year 2022.2024. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during fiscal year 20222024 if it is determined that such a change would be in the best interests of KDP and its stockholders.
A representative of Deloitte is expected to be present at the Annual Meeting, will have an opportunity to make a statement, if desired, and will be available to respond to appropriate questions.
The Board unanimously recommends that KDP’s stockholders vote “FOR” the ratification of Deloitte & Touche LLP’s appointment as the Company’s independent registered public accounting firm |
Independent Registered Public Accounting Firm’s Fees
Fees for professional services provided by our independent registered public accounting firm in each of the last two fiscal years, in each of the following categories, were as follows:
(in thousands) | 2021 | 2020 | ||||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||||
Audit Fees(1) | $ | 5,578 | $ | 5,837 | ||||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | ||||||||||||||||
Audit Fees(1) | $ | 5,714 | $ | 5,957 | ||||||||||||
Audit-Related Fees | — | — | ||||||||||||||
Audit-Related Fees | ||||||||||||||||
Audit-Related Fees | ||||||||||||||||
Audit-Related Fees | — | — | ||||||||||||||
Tax Fees(2) | 2,203 | 1,560 | ||||||||||||||
All Other Fees | 2 | 2 | ||||||||||||||
Tax Fees(2) | ||||||||||||||||
Tax Fees(2) | ||||||||||||||||
Tax Fees(2) | 1,080 | 1,709 | ||||||||||||||
All Other Fees(3) | ||||||||||||||||
All Other Fees(3) | ||||||||||||||||
All Other Fees(3) | ||||||||||||||||
All Other Fees(3) | 5 | 5 | ||||||||||||||
|
| |||||||||||||||
Total Fees | $ | 7,783 | $ | 7,399 | ||||||||||||
|
| |||||||||||||||
Total Fees | ||||||||||||||||
Total Fees | ||||||||||||||||
Total Fees | $ | 6,799 | $ | 7,671 |
(1) | These amounts represent fees and out-of-pocket expenses of Deloitte for the audit of our annual consolidated financial statements, the review of financial statements included in our quarterly Form 10-Q reports, the audit of internal controls over financial reporting, services rendered in connection with acquisitions and debt offerings and the services that an independent auditor would customarily provide in connection with statutory requirements, regulatory filings, and similar engagements for the fiscal year, such as comfort letters, consents and assistance with review of documents filed with the SEC. Audit Fees also include advice about accounting matters that arose in connection with or as a result of the audit or the review of periodic consolidated financial statements and statutory audits that non-U.S. jurisdictions require. For purposes of this schedule, fees billed from non-U.S. jurisdictions in the currencies of such jurisdictions have been converted to U.S. dollars as of the date of the approval of such fees. |
(2) | These amounts represent fees of Deloitte for professional services primarily related to tax compliance, as well as tax planning and advice, in |
(3) | These amounts represent fees for subscriptions to the Deloitte Accounting Research Tool. |
Under the Audit Committee charter, the Audit Committee has established pre-approval policies and procedures under which all audit and non-audit services performed by the Company’s independent registered public accounting firm must be approved in advance by the Audit Committee in order to assure that the provision of such services does not impair the independence of the independent registered public accounting firm. The policy also provides that the Audit Committee may delegate pre-approval authority to the Chair of the Audit Committee, provided that the Chair reports any such pre-approval decisions to the full Audit Committee at its next meeting. The Audit Committee approved all audit and non-audit services provided in 20212023 and 20202022 in
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 53 |
Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm
accordance with the Audit Committee’s policy and procedures. Additional information may be found in the Audit Committee Report that follows and Audit Committee charter available on the Company’s website at investors.keurigdrpepper.com/corporate-governance-guidelines.www.keurigdrpepper.com.
Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm
The Audit and Finance Committee (the “Audit Committee”) is composed of Mr. Singer (Chair), Mr. Call, Ms. Hickman and Ms. Patsley. All of the Audit Committee members are “independent,” as defined in the Nasdaq listing standards and the applicable rules of the Securities Exchange Act of 1934, as amended. Each of Mr. Singer, Mr. Call, Ms. Hickman and Ms. Patsley meet the definition of “audit committee financial expert,” as defined in SEC Regulation S-K.
The Audit Committee Charter sets forth the duties and responsibilities of the Audit Committee. The Audit Committee is primarily responsible for the oversight of the integrity of KDP’s financial reporting process and systems of internal controls (including the integrity of KDP’s financial statements and related disclosures), KDP’s compliance with legal and regulatory requirements, the independence, qualifications and performance of KDP’s independent auditors, KDP’s internal audit activities and KDP’s policies and practices with respect to risk assessment and risk management.
Management has primary responsibility for the preparation of the financial statements, the completeness and accuracy of financial reporting, the overall system of internal control over financial reporting and the performance of the internal audit function. The Audit Committee has reviewed and discussed with management KDP’s audited financial statements and management’s evaluation and assessment of the effectiveness of internal control over financial reporting.
The Audit Committee engaged Deloitte as our independent registered public accounting firm for fiscal year 2021,2023, to be responsible for planning and conducting the audit of the financial statements and expressing an opinion on the fairness of the financial statements and their conformity with U.S. GAAP and for auditing of KDP’s internal control over financial reporting and expressing an opinion on its effectiveness.
The Audit Committee has also reviewed and discussed with Deloitte, with and without management present, the financial statement audit, its evaluation of effectiveness of internal control over financial reporting, the overall quality of financial reporting and disclosure, the quality (and not just the acceptability) of the accounting principles utilized, the reasonableness of significant accounting judgments and estimates, the critical audit matters identified in Deloitte’s audit, and other matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board Accounting Standards (“PCAOB”) and the SEC. The Audit Committee has also discussed with KDP’s internal auditors and Deloitte the overall scope and plans for their respective audits. The Audit Committee has reviewed and received from Deloitte the written disclosures and the letter required by the applicable PCAOB requirements regarding Deloitte’s communications with the Audit Committee concerning independence and discussed with Deloitte the firm’s independence from KDP and management.
Based on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20212023 filed with the SEC on February 24, 2022.22, 2024.
Submitted by the Audit and Finance Committee of the Board: | ||||
Robert Singer (Chair) | ||||
Juliette Hickman | ||||
Pamela Patsley |
Keurig Dr Pepper Inc. |
Ownership of Our Equity Securities
OWNERSHIPOF OUR EQUITY SECURITIES
The following table sets forth, as of April 14, 2022,15, 2024, the record date for the Annual Meeting, certain information with respect to the shares of our common stock beneficially owned (including the number of shares they had the right to acquire within 60 days of that date) by (i) stockholders known to us to own more than 5% of the outstanding shares of our common stock, (ii) each of our directors, nominees and Named Executive Officersnamed executive officers and (iii) all of our executive officers and directors as a group. Unless otherwise noted below, the address of each beneficial owner listed in the table below is Keurig Dr Pepper Inc., 53 South Avenue, Burlington, MA 01803, and each beneficial owner has sole voting power and investment power with respect to securities shown in the table.
Name | Amount Of Beneficial Ownership Of Common Stock | Percent Of Class | ||||||||||
BENEFICIAL OWNERS OF MORE THAN 5% OF OUR COMMON STOCK | ||||||||||||
JAB BevCo B.V. (1) | 472,909,049 | 33.3 | % | |||||||||
Mondelēz International Holdings LLC (2) | 75,541,407 | 5.3 | % | |||||||||
DIRECTORS AND NOMINEES | ||||||||||||
Michael Call | — | — | ||||||||||
Olivier Goudet (3) | 2,772,256 | * | ||||||||||
Peter Harf (4) | 2,869,055 | * | ||||||||||
Juliette Hickman | — | — | ||||||||||
Paul S. Michaels (5) | 193 | * | ||||||||||
Pamela Patsley | 20,032 | * | ||||||||||
Lubomira Rochet | — | — | ||||||||||
Debra Sandler | — | — | ||||||||||
Robert Singer (6) | 65,500 | * | ||||||||||
Justine Tan | — | — | ||||||||||
Larry D. Young | 767,220 | * | ||||||||||
NAMED EXECUTIVE OFFICERS | ||||||||||||
Fernando Cortes (7) | 130,541 | * | ||||||||||
Ozan Dokmecioglu (8) | 1,930,687 | * | ||||||||||
Robert Gamgort | 4,528,186 | * | ||||||||||
Mauricio Leyva | 291,846 | * | ||||||||||
Tony Milikin | — | |||||||||||
Justin Whitmore | 97,976 | |||||||||||
All Executive Officers and Directors as a Group (21 persons) | 14,008,812 | 1.0 | % |
Name | Amount Of Beneficial Ownership Stock | Percent Of Class | ||||||
BENEFICIAL OWNERS OF MORE THAN 5% OF OUR COMMON STOCK |
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JAB BevCo B.V.(1) | 283,443,879 | 20.9 | % | |||||
Capital World Investors(2) | 108,292,164 | 8.0 | % | |||||
The Vanguard Group(3) | 83,014,973 | 6.1 | % | |||||
BlackRock, Inc.(4) | 80,687,237 | 6.0 | % | |||||
DIRECTORS AND NOMINEES |
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Oray Boston | — | — | ||||||
Joachim Creus | 142,236 | * | ||||||
Olivier Goudet(5) | 3,706,401 | * | ||||||
Peter Harf(6) | 3,802,205 | * | ||||||
Juliette Hickman | — | — | ||||||
Paul Michaels(7) | 12,967 | * | ||||||
Pamela Patsley | 32,806 | * | ||||||
Lubomira Rochet | — | — | ||||||
Debra Sandler | — | — | ||||||
Robert Singer(8) | 48,142 | * | ||||||
Larry Young | 625,260 | * | ||||||
NAMED EXECUTIVE OFFICERS |
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Robert Gamgort(9) | 4,204,785 | * | ||||||
Sudhanshu Priyadarshi | 218,566 | * | ||||||
Timothy Cofer | 400,393 | * | ||||||
Karin Rotem-Wildeman(10) | 93,694 | * | ||||||
Andrew Archambault | 20,565 | * | ||||||
ALL EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP (21 PERSONS) | 13,817,742 | 1.0 | % |
* | Less than 1% of outstanding shares of common stock. |
(1) | Based on information provided to KDP by the stockholder (which was formerly known as Maple Holdings B.V.), such stockholder has indicated that it beneficially owns |
Ownership of Our Equity Securities
(2) | Based on a Schedule |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 55 |
Ownership Of Our Equity Securities
(3) |
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(4) | Based on a Schedule 13G filed by |
(5) | 3,694,622 shares are held by Platin Holdings S.à r.l. |
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114 shares are |
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Keurig Dr Pepper Inc. |
Other Matters Proposal 4 — Stockholder Proposal Requesting Additional Reporting on Plastic Packaging
PROPOSAL 4 — STOCKHOLDER PROPOSAL REQUESTING ADDITIONAL REPORTINGON PLASTIC PACKAGING
KDP has been advised that the following stockholder proposal may be introduced at the Annual Meeting. The Board disclaims any responsibility for the content of the proposal and for the statements made in support thereof, which, except for minor formatting changes, are presented in the form received from the stockholder proponent. The stockholder proposal is required to be voted on at the Annual Meeting only if it is properly presented.
Betsy L Krieger CRUT, c/o As You Sow, 2020 Milvia St., Suite 500, Berkeley, CA 94704, the beneficial owner of 157 shares of KDP common stock, and other co-filers submitted this proposal.
WHEREAS: Without immediate and sustained new commitments throughout the plastics value chain, annual flows of plastic into oceans could nearly triple by 2040.1
The growing plastic pollution crisis poses increasing risks to Keurig Dr Pepper (KDP). Corporations could face an annual financial risk of approximately $100 billion should governments require them to cover the waste management costs of the packaging they produce.2 Governments around the world are increasingly enacting such policies, including taxing corporations for single-use plastic (SUP) packaging, including new laws in Maine, Oregon, Colorado, and California.3 The European Union has banned ten common SUP pollutants and imposed a tax on non-recycled plastic packaging waste.4
Pew Charitable Trusts’ groundbreaking study, Breaking the Plastic Wave, concluded that improved recycling alone is insufficient to address plastic pollution – instead, recycling must be coupled with reductions in use, materials redesign, and substitution.5 At least one-third of plastic use can be reduced, and reduction is the most viable solution from environmental, economic, and social perspectives.6
KDP recently committed to shareholders to increase use of reusable and refillable packaging (Reusables) and report a Reusables baseline assessment as part of its efforts to decrease SUP use.7 KDP has failed to meet these commitments, neglecting to state in its sustainability reporting what percentage, or total number, of packages are Reusables, and omitting information on the promised launch of new Reusables pilots.
Further, KDP is reporting increases in total plastic used by more than 7% since 2019, undermining the Company’s goal to reduce virgin plastic use by 20% by 2030.8
Competitors Coca-Cola Co. and PepsiCo have established Reusables packaging systems, with ambitious global goals for expansion. Coke has pledged to deliver 25% of beverages by volume in Reusables by 2030,9 and PepsiCo has committed to 20%.10 These companies are responding to consumer demand for sustainable packaging.11
KDP offers refillable glass bottles in Mexico and could demonstrate a commitment to decreasing total plastic used by expanding Reusables infrastructure to the United States. KDP could mitigate environmental, financial, regulatory, and reputational risk related to plastic pollution by setting timebound and quantifiable Reusables goals.
RESOLVED: Shareholders request the Board issue a report, at reasonable expense and excluding proprietary information, describing the potential and options for the Company to rapidly reduce dependence on single-use plastic packaging in alignment with the findings of the Pew Report or other authoritative sources.
1 | https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf, p.4 |
2 | https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf, p.9 |
3 | https://www.packworld.com/news/sustainability/article/22419036/four-states-enact-packaging-epr-laws |
4 | https://environment.ec.europa.eu/topics/plastics/single-use-plastics_en |
5 | https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf, p.9 |
6 | https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf, p.10 |
7 | https://www.greencentury.com/keurig-dr-pepper-steps-up-efforts-to-address-single-use-plastics-in-response-to-green-century-proposal/ |
8 | https://www.keurigdrpepper.com/content/dam/keurig-brand-sites/kdp/files/KDP-CR-Report-2022.pdf, p. 56 |
9 | https://www.asyousow.org/press-releases/2022/2/10/coca-cola-increase-sales-refillable-bottles |
10 | https://www.asyousow.org/press-releases/2022/12/6/pepsi-pledges-double-zero-waste-packaging-by-2030 |
11 | https://www.businessnewsdaily.com/15087-consumers-want-sustainable-products.html |
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 57 |
Proposal 4 — Stockholder Proposal Requesting Additional Reporting on Plastic Packaging
SUPPORTING STATEMENT: The approaches the Company evaluates in the report, at Board and management discretion, could include:
§ | Expanding global reuse and refill infrastructure; |
§ | Evaluating opportunities to set timebound reuse and refill goals at the country or regional level; |
§ | Establishing uniform methodology for the measurement of reuse and refill servings delivered; and |
§ | Publicly disclosing Company reuse and refill metrics. |
58 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
The Board’s Statement in Opposition
THE BOARD’S STATEMENTIN OPPOSITION
The Board recommends that stockholders vote AGAINST this stockholder proposal.
After careful consideration, the Board recommends that stockholders vote AGAINST this proposal because KDP has a focused corporate responsibility strategy that utilizes credible standards, robust disclosures, and intentionally designed roadmaps to set and measure progress toward achievement of our corporate responsibility goals. This includes previously adopted quantitative, time-bound goals to reduce our use of virgin plastic packaging and disclosures regarding our progress toward those goals, including leveraging reuse and refill options. In addition, we are already working with peers in the beverage industry to establish a common landscape analysis and measurement methodology for reuse and refill in the United States. In light of our existing disclosures, preparing the report requested by the proposal would be costly, duplicative of current efforts and would unnecessarily divert the Board’s and management’s attention and resources from overseeing KDP’s business strategy and day-to-day operations without providing meaningful additional information for our stockholders. As a result, and for the additional reasons set forth below, the Board believes that this proposal is unnecessary and not in the best interests of KDP and our stockholders and urges you to vote AGAINST this proposal.
KDP already has made meaningful commitments that address sustainable packaging, including setting quantitative and time-bound goals related to plastic packaging reduction and providing regular and transparent reporting on our progress relating to sustainable packaging.
At KDP, our environmental sustainability approach focuses on climate, water and packaging, with sustainable packaging among our top priorities. We are continually innovating our packaging designs and processes to reduce the amount of material used, with a particular focus on reducing our use of newly manufactured raw material for the creation of plastic products (virgin plastic). Important to this reduction will be incorporating more post-consumer recycled (PCR) content, eliminating unnecessary materials, redesigning packaging and exploring reuse and refill models, all of which are currently underway. This work is guided by our established and ambitious sustainable packaging goals, and we are making progress towards the achievement of these goals. Specifically:
§ | As of the end of 2022, 90% of our packaging was designed to be recyclable or compostable, with a goal of 100% by 2025. |
§ | We are committed to reducing our virgin plastic use by 20% across our product packaging portfolio by 2025, and we have already achieved an 11% reduction against the 2019 baseline as of the end of 2022. This was enabled in part by our recent efforts to significantly increase recycled content in plastic beverage bottles and several lightweighting accomplishments in which we reduced the weight of packaging. |
§ | In 2022, we also completed the conversion of all Core Hydration and 16 oz. Snapple products to bottles made from 100% recycled polyethylene terephthalate (rPET) plastic, which helped to achieve 18% post-consumer recycled content across our plastic packaging portfolio, with a goal of 25% by 2025. |
§ | Similarly, in 2022, we reached 24% of post-consumer recycled content across our packaging portfolio, with a goal of 30% by 2025. |
We annually disclose our progress against these goals in our annual Corporate Responsibility Report, which is available on the “Our Impact” page of our website. Contrary to the claims made in the stockholder proposal, our disclosures in both our annual Corporate Responsibility Report and our annual Ellen MacArthur Foundation Global Commitment reporting includes data on the percentage of our plastic packaging that is reusable or refillable as compared to our 2019 reusable baseline.
We believe we have already made meaningful progress on our current sustainable packaging goals, and, through innovative product and packaging design, continue to advance beyond the boundaries of those goals including reduced virgin plastic use in our Keurig brewers, development of plastic-free coffee pods and our evolving reuse-refill strategy.
As part of our commitment to circular design and innovation, we are committed to supporting the reuse, recycling, repurposing and composting of our products and packaging to reduce the use of virgin plastic. We use smart design as well as product and packaging innovation to optimize the use of materials, incorporate more recycled content and eliminate non-recyclable materials. This includes creating and testing innovative product and packaging solutions that will further reduce our plastic footprint and enhance the consumer experience. For example, as reported in 2022, our black K-Mini and K-Mini Plus brewers contain at least 50% PCR content, and our black K-Compact, K-Supreme Plus and K-Supreme Plus SMART brewers all contain at least 30% PCR content.
Recently in March of 2024, we introduced a multi-year innovation agenda for our Keurig® single serve brewing system including K-Rounds™ plastic-free pods which are created from expertly roasted coffee beans that are ground, pressed and wrapped in a protective plant-based coating. After brewing, K-Rounds plastic-free pods can be disposed of like coffee grounds and are expected to be certified compostable, as the Company is currently working through the certification process.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 59 |
The Board’s Statement in Opposition
We believe that reuse and refill options will be a key component of our strategy to advance the use of more sustainable packaging materials and designs. We already offer a number of products that align with options for refill, including traditional fountain beverages, which enable reusable cup options, and the My K-Cup Universal Reusable Filter for use in Keurig brewers, and we currently offer refillable glass bottles in Mexico where the infrastructure for collection, sanitation and refill currently exists. We are continuing to evolve and develop our reuse-refill strategy through pilot programs and other partnerships and the refinement of processes to track consumer use of reusable and refillable packaging. This year, we are conducting reuse and/or refill pilots with the intent to learn about drivers of success to scale such solutions, including measurement of retailer and consumer participation which will be critical to successful development of reuse-refill infrastructure. Because our sales footprint is largely in the U.S., where infrastructure for reuse and refill beyond fountain beverages is currently limited, our partnership with retailers and others will be key to unlocking the full potential of reuse-refill programs. Moreover, contrary to the claims made in the stockholder proposal, KDP continues to meet our commitments to stockholders and other stakeholders regarding reuse-refill actions. Consistent with those commitments, we expanded discussion on this topic within our 2022 Corporate Responsibility report, and as part of our 2023 Corporate Responsibility Report, which will be published later this year, we will also provide information about our plans to launch reuse-refill pilots in key U.S. markets including a new relationship with the Green Sports Alliance with the intent to explore pilots for reuse and refill delivery models in sports venues in the U.S.
We have a strong track record of collaborating with industry partners to help identify and promote long-term solutions to sustainable packaging, including a study underway to evaluate scale-up scenarios for beverage reuse/refill models in the U.S.
Addressing sustainable packaging issues can be complex and requires scalable systems changes. We engage with stakeholders to develop and execute our goals, programs and progress. These collaborations and partnerships foster trust, elevate our performance, help to identify emerging trends and allow us to find solutions to shared challenges.
There are currently no uniform standards that recycling facilities must follow when determining what materials or products to accept, which is one of the central challenges to supporting a closed loop for packaging. Combining our dollars and voices in unique partnerships, we collaborate closely with a number of stakeholders – including industry groups, NGOs, investment firms and policy makers – in order to catalyze critical recycling infrastructure improvements and consumer education across North America. For example, KDP invested alongside its beverage peers a collective $100 million to fund the American Beverage Association’s Every Bottle Back initiative. The program aims to modernize and improve community recycling through recycling infrastructure upgrades at local MRFs throughout the U.S. and supports “recycle right” behaviors through consumer education.
We also support smart policy solutions focused on efficient and equitable ways to increase material recovery, while reducing the economic and environmental costs of disposal. Our advocacy includes our support of a national Extended Producer Responsibility (EPR) program to generate strong environmental outcomes in an efficient and accountable manner, provide convenient services to consumers and move closer to a financially and operationally sustainable circular economy. KDP supports a national approach to EPR in order to avoid a patchwork of state-specific approaches that drive complexity, inefficiency and consumer confusion. However, in the absence of a national approach, we support well-designed EPR at the state level. In 2023, we became a founding member of the Circular Action Alliance (CAA), a U.S. non-profit Producer Responsibility Organization (PRO) established to administer and support the implementation of EPR laws for paper and packaging in the U.S. CAA has been selected as the single program steward in Colorado and California as well as appointed to Maryland’s EPR Advisory Council. The organization is well-positioned for additional states that adopt similar legislation in the future.
Applying our learnings from deep engagement in recycling in the U.S., we recognize that reuse and refill infrastructure will require a level of standardization in order to be successful. As such, we are working with key industry partners and circular economy experts to assess the viability and capital intensity of a variety of scale-up scenarios for beverage reuse/refill models in the U.S. This will include a landscape analysis and development of a science-based methodology to understand consumer adoption rates, costs, and impacts.
In light of KDP’s existing goals and robust disclosures regarding plastic reduction and KDP’s efforts to support the development of reuse and refill and recycling infrastructure, the Board believes that the additional report requested by the proposal is unnecessary and not in the best interest of our stockholders.
The Board unanimously recommends that KDP’s stockholders vote “AGAINST” the stockholder proposal requesting additional reporting on the use of plastic packaging |
60 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Other Matters
OTHER MATTERS
Q: | WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD? |
A: | You are receiving this Proxy Statement because you are a record holder or beneficially own shares of KDP common stock that entitle you to vote at the |
Q: | WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING? |
A: |
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Q: | WHEN AND WHERE IS THE ANNUAL MEETING? |
A: | The Annual Meeting will be held virtually on June |
Q: | HOW DO I ATTEND THE ANNUAL MEETING VIRTUALLY? |
A: | We will host the |
If you encounter any technical difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Meeting log-in page.
Q: | WHY IS THE ANNUAL MEETING BEING HELD VIRTUALLY? |
A: | Our Annual Meeting will be a virtual meeting of stockholders conducted via live webcast. By conducting our Annual Meeting solely online, we eliminate many of the costs associated with a physical meeting. In addition, we believe that hosting a virtual meeting facilitates stockholder attendance and participation by enabling stockholders to participate from any location around the world and improves our ability to communicate more effectively with our stockholders during the meeting. We have designed the virtual meeting to provide the same rights to participate as you would have at an in-person meeting, including providing opportunities to submit questions during the meeting. |
Q: | HOW DOES THE BOARD RECOMMEND THAT I VOTE? |
A: | The Board unanimously recommends that you vote FOR each director nominee in Proposal 1, FOR the advisory resolution |
Q: | WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS? |
A: | The following votes will be required to adopt each |
Proposal 1: A nominee for director will be elected if the votes cast “FOR” such nominee exceed the votes cast “AGAINST” such nominee.
Proposal 2: The proposal will be approved if votes cast “FOR” such proposal exceed the votes cast “AGAINST” such proposal.
Keurig Dr Pepper Inc. |
Other Matters
Proposal 3: The proposal will be approved if votes cast “FOR” such proposal exceed the votes cast “AGAINST” such proposal.
Proposal 4: The proposal will be approved if votes cast “FOR” such proposal exceed the votes cast “AGAINST” such proposal.
For each proposal, a broker non-vote (as described below), if any, or an abstention will not be counted as having been cast or actually voted on the applicable proposal, and therefore will have no effect on the vote, assuming a quorum is present.vote.
Q: | WHO CAN VOTE AT THE ANNUAL MEETING? |
A: | The Board has fixed the close of business on April |
On that date, we had 1,418,500,3841,355,573,815 shares of common stock, par value $0.01 per share, issued and outstanding. A holder of shares of our common stock is entitled to one vote for each share of our common stock on all matters properly brought before the Annual Meeting.
Q: | HOW CAN I VOTE MY SHARES AT THE ANNUAL MEETING? |
A: | Although we encourage you to complete and return a proxy prior to the Annual Meeting to ensure that your vote is counted, you can virtually attend the Annual Meeting and vote your shares online by visiting www.virtualshareholdermeeting.com/ |
Q: | HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE VIRTUAL ANNUAL MEETING? |
A: | Whether you hold shares directly as the stockholder of record or through a broker, trustee or other nominee as the beneficial owner, you may direct how your shares are voted by proxy without attending the virtual Annual Meeting. There are three ways to vote by proxy: |
By Internet — Stockholders who have received a paper copy of a proxy card or voting instruction form by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction form.
§ | By Internet — Stockholders who have received a Notice of Internet Availability or a paper copy of a proxy card or voting instruction form by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction form. |
By Telephone — Stockholders of record who live in the United States or Canada may submit proxies by telephone by calling 1-800-690-6903 and following the instructions. Stockholders of record who have received a proxy card by mail must have the control number that appears on their proxy card available when voting. Stockholders who are beneficial owners of their shares, but not stockholders of record, living in the United States or Canada and who have received a voting instruction form by mail may vote by phone by calling the number specified on the voting instruction form provided by their broker, trustee or nominee. Those stockholders should check the voting instruction form for telephone voting availability.
§ | By Telephone — Stockholders of record who live in the United States or Canada may submit proxies by telephone by calling 1-800-690-6903 and following the instructions. Stockholders of record must have the control number that appears on their proxy card available when voting. Stockholders who are beneficial owners of their shares, but not stockholders of record, living in the United States or Canada may vote by phone by calling the number specified on the voting instruction form provided by their broker, trustee or nominee. Those stockholders should check the voting instruction form for telephone voting availability. |
By Mail — Stockholders who have received a paper copy of a proxy card or voting instruction form by mail may submit proxies by completing, signing and dating their proxy card or voting instruction form and mailing it in the accompanying pre-addressed envelope.
§ | By Mail — Stockholders who have received a paper copy of a proxy card or voting instruction form by mail may submit proxies by completing, signing and dating their proxy card or voting instruction form and mailing it in the accompanying pre-addressed envelope. |
Telephone and Internet voting for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on June 8, 2022.9, 2024. Votes cast by mail must be received in sufficient time to allow processing. Votes received by mail prior to the day of the Annual Meeting will be processed, but votes received the day of the Annual Meeting may not be processed depending on the time received.Meeting. Shares represented by duly executed proxies in the accompanying proxy card or voting instruction form will be voted in accordance with the instructions indicated on such proxies or voting instruction forms and, if no such instructions are indicated thereon, will be voted (i) FOR each director nominee listed in the election proposal, (ii) FOR the approval of the advisory resolution to approve KDP’s executive compensation, and (iii) FOR the ratification of Deloitte & Touche LLP’s appointment as the Company’s independent auditor.auditor and (iv) AGAINST the stockholder proposal requesting additional reporting on plastic packaging.
Q: | WHAT IF I WANT TO CHANGE MY VOTE? |
A: | At any time prior to the completion of voting at the Annual Meeting, you may change your vote either by: |
giving written notice to our Corporate Secretary revoking your proxy;
by submitting a later-dated proxy by telephone or electronically before 11:59 p.m. Eastern Time on June 8, 2022;
by a later-dated mailed proxy received before the close of business on June 8, 2022; or
by voting online at the Annual Meeting.
§ | giving written notice to our Corporate Secretary revoking your proxy; |
submitting a later-dated proxy by telephone or electronically before 11:59 p.m. Eastern Time on June 9, 2024; |
§ | a later-dated mailed proxy received before the Annual Meeting; or |
§ | voting online at the Annual Meeting. |
62 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Other Matters
Q: | HOW MANY SHARES MUST BE PRESENT OR REPRESENTED TO CONDUCT BUSINESS AT THE ANNUAL MEETING? |
A: | The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of our common stock entitled to vote at the Annual Meeting or any adjournment thereof is necessary to constitute a quorum to transact business. Abstentions and broker non-votes (as described below), if any, are counted as present and entitled to vote for purposes of determining a quorum. |
Q: | WHAT IF I AM A BENEFICIAL OWNER AND I DO NOT GIVE MY NOMINEE VOTING INSTRUCTIONS? |
A: | If your shares are held by a broker, trustee or other nominee on your behalf and you do not |
Q: | HOW IS KDP DISTRIBUTING PROXY MATERIALS? |
A: | We are furnishing proxy materials to our stockholders primarily via “Notice and Access” delivery. On or about April |
If you received the Notice of Internet Availability by mail and would like to receive paper copies of the proxy materials in the mail on a one-time or ongoing basis, follow the instructions in the Notice of Internet Availability for making this request. If you would like to receive an electronic copy of the proxy materials by email on a one-time or ongoing basis, follow the instructions in the Notice of Internet Availability for making this request.
Q: | WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE COPY OF THE PROXY MATERIALS? |
A: | You may receive more than one copy of the proxy materials, including multiple paper copies of this Proxy Statement and multiple proxy cards or voting instruction forms. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one proxy card. If you hold your shares through a broker, trustee or another nominee, rather than owning shares registered directly in your name, you are considered the beneficial owner of shares held in street name. As the beneficial owner, you are entitled to direct the voting of your shares by your intermediary. Your intermediary will forward the proxy materials to you with a voting instruction form or provide electronic access to the materials and to voting facilities. To vote all of your shares by proxy, you must complete, sign, date and return each proxy card and voting instruction form that you receive. |
Q: | WHO WILL PAY FOR THIS SOLICITATION? |
A: | The cost of preparing, assembling, printing and mailing this Proxy Statement and the enclosed proxy card and the cost of soliciting proxies related to the Annual Meeting will be borne by us. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone, or by electronic communication by certain of our directors, officers, and employees, who will not receive any additional compensation for such solicitation activities. We have engaged Innisfree M&A Incorporated (“Innisfree”) to assist with the solicitation of proxies for an estimated fee of $25,000 plus expenses. In addition, Innisfree may be paid on a per-call basis to solicit stockholders. We will request brokers, trustees or other nominees to solicit their customers who are beneficial owners of shares of common stock listed of record in the name of the broker, trustee or other nominee and will reimburse such brokers, trustees or other nominees for their reasonable out-of-pocket expenses for such solicitation. |
Q: | WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING? |
A: | Other than the |
Keurig Dr Pepper Inc. |
Other Matters
Q: | I LIVE WITH OTHER KDP STOCKHOLDERS. WHY DID WE ONLY RECEIVE ONE COPY OF PROXY MATERIALS? |
A: | If you have consented to the delivery of only one set of proxy materials, as applicable, to multiple KDP stockholders who share your address, then only one set of proxy materials will be delivered to your household unless we have received contrary instructions from one or more of the stockholders sharing your address. We will promptly deliver, upon oral or written request, a separate set of proxy materials to any stockholder at your address. If, now or in the future, you wish to receive a separate set of proxy materials, as applicable, you may contact in writing Broadridge Financial Solutions, Inc. Householding Department at 51 Mercedes Way, Edgewood, New York, 11717, or call 1-866-540-7095. We will promptly deliver a separate copy of the Notice or proxy materials to a stockholder at a shared address to which a single copy was delivered, if requested. If you would like to opt out of householding for future deliveries of proxy materials, please contact your broker, bank or other nominee. Stockholders sharing an address who now receive multiple sets of proxy materials may request delivery of a single copy by calling Broadridge at the above number or writing to Broadridge at the above address. |
Q: | HOW DO I PRESENT A PROPOSAL OR NOMINATE A CANDIDATE FOR THE BOARD OF DIRECTORS FOR THE |
A: | If any of our stockholders intends to present a proposal for consideration at the |
Pursuant to Rule 14a-8 of the Exchange Act, stockholder proposals will need to be received by us not later than December 30, 2022,27, 2024, in order to be eligible for inclusion in the proxy statement and form of proxy distributed by the Board with respect to the 20232025 Annual Meeting. With respect to any notice of a proposal or director nomination that a stockholder intends to present for consideration at the 20232025 Annual Meeting, without inclusion of such proposal or director nomination in the proxy statement, and form of proxy, including director nominations, in accordance with Article II, Section 6(c) or 7(b) of our By-Laws, as applicable, notice of such stockholder proposalsproposal or director nomination will need to be received by us not sooner than February 9, 2023,10, 2025, but not later than March 11, 2023,12, 2025, in order to be presented at the 20232025 Annual Meeting. Stockholder proposals and director nominations must be sent to our principal executive offices, 6425 Hall of Fame Lane, Frisco, TX 75034, Attention: Corporate Secretary. To be in proper written form, a stockholder’s notice to the Company of a stockholder proposal must include the information set forth in Article II, Section 6(d) of our By-Laws and a stockholder’s notice to the Company of a director nomination must include the information set forth in Article II, Section 6(d)7(c) of our By-Laws.
In addition, to comply with Rule 14a-19 of the Exchange Act, the SEC’s universal proxy rule, if a stockholder intends to solicit proxies in support of director nominees submitted under the “advance notice” provisions of our By-Laws for our 2025 Annual Meeting, then we must receive proper written notice that sets forth all the information required by Rule 14a-19 of the Exchange Act by April 11, 2025. The notice requirement under Rule 14a-19 is in addition to the applicable advance notice requirements under our By-Laws as described above.
Annual Report to Stockholders
Our 2023 Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”) has been posted on our corporate website at www.keurigdrpepper.com and on the Internet at www.proxyvote.com. We will provide, without charge, a copy of our 2023 Annual Report for the fiscal year ended December 31, 2023 (including the financial statements but excluding the exhibits thereto) upon the written request of any stockholder of record or beneficial owner of our common stock. Requests should be directed to our Corporate Secretary at 6425 Hall of Fame Lane, Frisco, TX 75034.
Forward-Looking Statements
Certain statements contained herein are “forward-looking statements” within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as “outlook,” “guidance,” “anticipate,” “expect,” “believe,” “could,” “estimate,” “feel,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” “would,” and similar words. In particular, forward-looking statements include, but are not limited to, statements we make about our expectations for our operations and business and our corporate responsibility progress, plans, and goals (including environmental and human capital matters). Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially. The inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company’s filings with the SEC. Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K and subsequent filings with the SEC. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Keurig Dr Pepper Inc. |
Other Matters
Websites
Links to websites included in this Proxy Statement are provided solely for convenience. Content on the websites, including on our Company website, is not, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference herein or into any of our other filings with the SEC.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | 65 |
Appendix A
APPENDIX A — NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
This Proxy Statement includes certain non-GAAP financial measures, which differ from results using U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures should be considered as supplements to and should not be considered replacements for, or superior to, the GAAP measures. These measures may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define the non-GAAP financial measure in the same way. Non-GAAP financial measures typically exclude certain charges, including one-time costs that are not expected to occur routinely in future periods, described by the Company as “items affecting comparability.” The Company uses non-GAAP financial measures to evaluate our operating and financial performance and to compare such performance to that of prior periods and to the performance of our competitors. Additionally, we use non-GAAP financial measures in making operational and financial decisions and in our budgeting and planning process. We believe that providing non-GAAP financial measures to investors helps investors evaluate our operating performance, profitability and business trends in a way that is consistent with how management evaluates such performance.
Adjusted operating income. Adjusted operating income is defined as Income from operations, as adjusted for items affecting comparability. Management believes that Adjusted operating income is useful for investors in evaluating the Company’s operating results and understanding the Company’s operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.
Adjusted diluted EPS. Adjusted diluted EPS is defined as Diluted EPS, as adjusted for items affecting comparability. Management believes that Adjusted diluted EPS is useful for investors in providing period-to-period comparisons of the results of our operations since it adjusts for certain items affecting overall comparability.
Free cash flow. Free cash flow is defined as net cash provided by operating activities adjusted for purchases of property, plant and equipment, proceeds from sales of property, plant and equipment, and certain items excluded for comparison to prior year periods. Management uses this measure to evaluate the company’s performance and make resource allocation decisions.
Items affecting comparability. Items affecting comparability is defined as certain items that are excluded for comparison to prior year periods, adjusted for the tax impact as applicable. Tax impact is determined based upon an approximate rate for each item. For each period, management adjusts for (i) the unrealized mark-to-market impact of derivative instruments not designated as hedges in accordance with U.S. GAAP that do not have an offsetting risk reflected within the financial results, as well as the unrealized mark-to-market impact of our Vita Coco investment; (ii) the amortization associated with definite-lived intangible assets; (iii) the amortization of the deferred financing costs associated with the DPS Merger; (iv) the amortization of the fair value adjustment of the senior unsecured notes obtained as a result of the DPS Merger; (v) stock compensation expense and the associated windfall tax benefit attributable to the matching awards made to employees who made an initial investment in KDP; (vi) transaction costs for significant business combinations (completed or abandoned); (vii) non-cash changes in deferred tax liabilities related to goodwill and other intangible assets as a result of tax rate or apportionment changes; (viii) impairments recognized on certain intangible assets; and (ix) other certain items that are excluded for comparison purposes to prior year periods.
For the year ended December 31, 2023, the other certain items excluded for comparison purposes include (i) productivity expenses; (ii) restructuring expenses associated with the 2023 CEO Succession and Associated Realignment; (iii) costs related to significant non-routine legal matters, specifically the antitrust litigation; and (iv) the non-cash changes in deferred tax liabilities related to goodwill and other intangible assets included an immaterial non-cash true-up of the valuation of foreign deferred tax liabilities related to a prior period.
For the year ended December 31, 2022, the other certain items excluded for comparison purposes include (i) restructuring and integration expenses related to significant business combinations; (ii) productivity expenses; (iii) costs related to significant non-routine legal matters, specifically the antitrust litigation; (iv) the loss on early extinguishment of debt related to the redemption of debt; (v) incremental costs to our operations related to risks associated with the COVID-19 pandemic, which were incurred to either maintain the health and safety of our front-line employees or temporarily increase compensation to such employees to ensure essential operations continue during the pandemic; (vi) the gain on the sale of our investment in BA Sports Nutrition, LLC as a result of the settlement of the associated holdback liability; (vii) the gain on the settlement of our prior litigation with BA Sports Nutrition, LLC, excluding recoveries of previously incurred litigation expenses which were included in our adjusted results; (viii) losses recognized with respect to our equity method investment in Bedford Systems, LLC as a result of funding our share of their wind-down costs; (ix) foundational projects, which are transformative and non-recurring in nature; and (x) impairments recognized on certain intangible brand assets.
Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | A-1 |
Appendix A
For the year ended December 31, 2021, the other certain items excluded for comparison purposes include (i) restructuring and integration expenses related to significant business combinations; (ii) productivity expenses; (iii) costs related to significant non-routine legal matters; (iv) the loss on early extinguishment of debt related to the redemption of debt; (v) incremental costs to our operations related to risks associated with the COVID-19 pandemic; (vi) gains from insurance recoveries related to the February 2019 organized malware attack on our business operation networks in the Coffee Systems segment; (vii) the gain on the sale of our investment in BA Sports Nutrition, LLC; and (viii) impairment recognized on our equity method investment with Bedford Systems, LLC as a result of funding our share of their wind-down costs.
For the year ended December 31, 2020, the other certain items excluded for comparison purposes include (i) restructuring and integration expenses related to significant business combinations; (ii) productivity expenses; (iii) costs related to significant non-routine legal matters; (iv) the loss on early extinguishment of debt related to the redemption of debt; (v) incremental costs to our operations related to risks associated with the COVID-19 pandemic; (vi) impairment recognized on our equity method investments with Bedford Systems, LLC and LifeFuels, Inc. and (vii) impairment recognized on the Bai brand.
For the year ended December 31, 2019, the other certain items excluded for comparison purposes include (i) restructuring and integration expenses related to significant business combinations; (ii) productivity expenses; (iii) costs related to significant non-routine legal matters; (iv) the loss on early extinguishment of debt related to the redemption of debt; (v) the impact of the step-up of acquired inventory not associated with the DPS Merger; and (vi) the loss related to the February 2019 organized malware attack on our business operation networks in the Coffee Systems segment.
For the year ended December 31, 2018, the other certain items excluded for comparison purposes include (i) restructuring and integration expenses related to significant business combinations; (ii) productivity expenses; (iii) costs related to significant non-routine legal matters; (iv) the loss on early extinguishment of debt related to the redemption of debt; (v) the impact of the step-up of acquired inventory not associated with the DPS Merger; and (vi) tax reform associated with the Tax Cuts and Jobs Act of 2017.
Reconciliation of Certain Non-GAAP Information (unaudited)
| For the Year Ended December 31, 2023 | |||||||||||
(in millions) | Income from Operations | Net Income | Diluted EPS | |||||||||
Reported | $ | 3,192 | $ | 2,181 | $ | 1.55 | ||||||
Items Affecting Comparability: |
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Mark to market | 8 | 4 | — | |||||||||
Amortization of intangibles | 137 | 103 | 0.07 | |||||||||
Amortization of deferred financing costs | — | 1 | — | |||||||||
Amortization of fair value debt adjustment | — | 14 | 0.01 | |||||||||
Stock compensation | 17 | 11 | 0.01 | |||||||||
Restructuring - 2023 CEO Succession and Associated Realignment | 35 | 26 | 0.02 | |||||||||
Productivity | 259 | 196 | 0.14 | |||||||||
Impairment of intangible assets | 2 | 2 | — | |||||||||
Non-routine legal matters | 5 | 4 | — | |||||||||
Transaction costs | 2 | 2 | — | |||||||||
Change in deferred tax liabilities related to goodwill and other intangible assets | — | (26 | ) | (0.02 | ) | |||||||
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Adjusted | $ | 3,657 | $ | 2,518 | $ | 1.79 | ||||||
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A-2 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Appendix A
| For the Year Ended December 31, 2022 | |||||||||||
(in millions) | Income from Operations | Net Income | Diluted EPS | |||||||||
Reported | $ | 2,605 | $ | 1,436 | $ | 1.01 | ||||||
Items Affecting Comparability: |
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Mark to market | 150 | 302 | 0.21 | |||||||||
Amortization of intangibles | 138 | 103 | 0.07 | |||||||||
Amortization of deferred financing costs | — | 2 | — | |||||||||
Amortization of fair value debt adjustment | — | 15 | 0.01 | |||||||||
Stock compensation | 5 | 6 | — | |||||||||
Restructuring and integration costs - DPS Merger | 172 | 131 | 0.09 | |||||||||
Productivity | 230 | 174 | 0.12 | |||||||||
Impairment of intangible assets | 477 | 351 | 0.25 | |||||||||
Impairment of investment | — | 9 | 0.01 | |||||||||
Loss on early extinguishment of debt | — | 166 | 0.12 | |||||||||
Non-routine legal matters | 13 | 10 | 0.01 | |||||||||
COVID-19 | 14 | 10 | 0.01 | |||||||||
Gain on sale of equity method investment | — | (38 | ) | (0.03 | ) | |||||||
Gain on litigation | (271 | ) | (203 | ) | (0.14 | ) | ||||||
Transaction costs | 1 | 1 | — | |||||||||
Change in deferred tax liabilities related to goodwill and other intangible assets | — | (80 | ) | (0.06 | ) | |||||||
Foundational projects | 4 | 3 | ||||||||||
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Adjusted | $ | 3,538 | $ | 2,398 | $ | 1.68 | ||||||
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| For the Year Ended December 31, 2021 | |||||||||||
(in millions) | Income from Operations | Net Income | Diluted EPS | |||||||||
Reported | $ | 2,894 | $ | 2,146 | $ | 1.50 | ||||||
Items Affecting Comparability: |
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Mark to market | (57 | ) | (44 | ) | (0.03 | ) | ||||||
Amortization of intangibles | 134 | 103 | 0.07 | |||||||||
Amortization of deferred financing costs | — | 5 | — | |||||||||
Amortization of fair value debt adjustment | — | 14 | 0.01 | |||||||||
Stock compensation | 18 | 3 | — | |||||||||
Restructuring and integration costs - DPS Merger | 202 | 155 | 0.11 | |||||||||
Productivity | 163 | 123 | 0.09 | |||||||||
Impairment of investment | — | 62 | 0.04 | |||||||||
Loss on early extinguishment of debt | — | 81 | 0.06 | |||||||||
Non-routine legal matters | 30 | 23 | 0.02 | |||||||||
COVID-19 | 37 | 28 | 0.02 | |||||||||
Gain on sale of equity method investment | — | (400 | ) | (0.28 | ) | |||||||
Transaction costs | 2 | 2 | — | |||||||||
Change in deferred tax liabilities related to goodwill and other intangible assets | — | (19 | ) | (0.01 | ) | |||||||
Malware incident | (2 | ) | (2 | ) | — | |||||||
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Adjusted | $ | 3,421 | $ | 2,280 | $ | 1.60 | ||||||
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | A-3 |
Appendix A
| For the Year Ended December 31, 2020 | |||||||||||
(in millions) | Income from Operations | Net Income | Diluted EPS | |||||||||
Reported | $ | 2,480 | $ | 1,325 | $ | 0.93 | ||||||
Items Affecting Comparability: |
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Mark to market | (28 | ) | — | — | ||||||||
Amortization of intangibles | 133 | 98 | 0.07 | |||||||||
Amortization of deferred financing costs | — | 8 | 0.01 | |||||||||
Amortization of fair value debt adjustment | — | 18 | 0.01 | |||||||||
Stock compensation | 27 | 22 | 0.02 | |||||||||
Restructuring and integration costs - DPS Merger | 199 | 150 | 0.11 | |||||||||
Productivity | 128 | 95 | 0.07 | |||||||||
Impairment of intangible assets | 67 | 52 | 0.04 | |||||||||
Impairment of investment | — | 77 | 0.05 | |||||||||
Loss on early extinguishment of debt | — | 3 | — | |||||||||
Non-routine legal matters | 57 | 43 | 0.03 | |||||||||
COVID-19 | 128 | 97 | 0.07 | |||||||||
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Adjusted | $ | 3,191 | $ | 1,988 | $ | 1.40 | ||||||
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| For the Year Ended December 31, 2019 | |||||||
(in millions) | Net Income | Diluted EPS | ||||||
Reported | $ | 1,254 | $ | 0.88 | ||||
Items Affecting Comparability: |
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Mark to market | 3 | — | ||||||
Amortization of intangibles | 92 | 0.06 | ||||||
Amortization of deferred financing costs | 9 | 0.01 | ||||||
Amortization of fair value debt adjustment | 20 | 0.01 | ||||||
Stock compensation | 18 | 0.01 | ||||||
Restructuring and integration costs - DPS Merger | 186 | 0.13 | ||||||
Productivity | 73 | 0.05 | ||||||
Inventory step-up | 2 | — | ||||||
Loss on early extinguishment of debt | 9 | — | ||||||
Non-routine legal matters | 37 | 0.03 | ||||||
Transaction costs | 18 | 0.01 | ||||||
Malware incident | 6 | — | ||||||
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Adjusted | $ | 1,727 | $ | 1.22 | ||||
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A-4 | 2024 PROXY STATEMENT | Keurig Dr Pepper Inc. |
Appendix A
| Pro Forma For the Year Ended December 31, 2018 | |||||||
(in millions) | Net Income | Diluted EPS | ||||||
Reported | $ | 1,099 | $ | 0.78 | ||||
Items Affecting Comparability: |
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Mark to market | 56 | 0.04 | ||||||
Amortization of intangibles | 90 | 0.06 | ||||||
Amortization of deferred financing costs | 6 | — | ||||||
Amortization of fair value debt adjustment | 16 | 0.01 | ||||||
Stock compensation | 17 | 0.01 | ||||||
Restructuring and integration costs - DPS Merger | 127 | 0.09 | ||||||
Productivity | 21 | 0.01 | ||||||
Inventory step-up | 2 | — | ||||||
Loss on early extinguishment of debt | 10 | 0.01 | ||||||
Non-routine legal matters | 16 | 0.01 | ||||||
Transaction costs | 5 | — | ||||||
Tax reform | (7 | ) | — | |||||
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Adjusted | $ | 1,458 | $ | 1.04 | ||||
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Reconciliation of Free Cash Flow (unaudited)
| Twelve Months Ended December 31, | |||||||||||||||||||||||
(in millions) | 2019 | 2020 | 2021 | 2022 | 2023 | Total | ||||||||||||||||||
Net cash provided by operating activities | $ | 2,474 | $ | 2,456 | $ | 2,874 | $ | 2,837 | $ | 1,329 |
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Purchases of property, plant and equipment | (330 | ) | (461 | ) | (423 | ) | (353 | ) | (425 | ) |
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Proceeds from sales of property, plant and equipment | 247 | 203 | 122 | 168 | 9 |
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Free Cash Flow | $ | 2,391 | $ | 2,198 | $ | 2,573 | $ | 2,652 | $ | 913 | $ | 10,727 | ||||||||||||
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Keurig Dr Pepper Inc. | 2024 PROXY STATEMENT | A-5 |
KEURIG DR PEPPER INC.
53 SOUTH AVE.
BURLINGTON, MA 01803
SCAN TO
VIEW MATERIALS & VOTE
VOTE BY INTERNET - INTERNET—www.proxyvote.com or scan the QR Barcode above
KEURIG DR PEPPER INC. Use the Internet to transmit your voting instructions and for electronic delivery of
53 SOUTH AVE. information. Vote by 11:59 P.M. ET on 06/08/2022.June 9, 2024. Have your proxy card in hand when
BURLINGTON, MA 01803 you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During the Meeting - Go to www.virtualshareholdermeeting.com/KDP2024. You may attend the meeting via the Internet and vote during the meeting. Have the information 1 that is printed in the box marked by the arrow available and follow the instructions.
Investor Address Line 1 VOTE BY PHONE - PHONE—1-800-690-6903
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Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET
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John Sample Mark, sign and date your proxy card and return it in the postage-paid envelope we have 1234 ANYWHERE STREET 2 provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
ANY CITY, ON A1A 1A1 NY 11717.
CONTROL # → NAME
THE COMPANY NAME INC.—COMMON SHARES 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS A 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS B 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS C 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS D 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS E 123,456,789,012.12345 THE COMPANY NAME INC.—CLASS F 123,456,789,012.12345 THE COMPANY NAME INC.—401 K 123,456,789,012.12345
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The Board of Directors recommends you vote FOR 2 0 the following:
1. Election of Directors
Nominees For Against Abstain 0000000000
1A Timothy Cofer 0 0 0 The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain
1B Robert Gamgort 0 0 0 2. To approve, on an advisory basis, Keurig Dr 0 0 0 Pepper Inc.’s executive compensation.
1C Oray Boston 0 0 0 3. To ratify the appointment of Deloitte & Touche 0 0 0 LLP as Keurig Dr Pepper Inc.’s independent registered public accounting firm for fiscal
1D Joachim Creus 0 0 0 year 2024.
1E Olivier Goudet 0 0 0 The Board of Directors recommends you vote
AGAINST proposal 4. For Against Abstain
1F Juliette Hickman 0 0 0 4. To vote on a stockholder proposal requesting 0 0 0 additional reporting on plastic packaging, if properly presented at Annual Meeting.
1G Paul Michaels 0 0 0
1H Pamela Patsley 0 0 0 NOTE: Such other business as may properly come before the meeting or any adjournment or postponement thereof.
1I Lubomira Rochet 0 0 0 R1.0.0.6 1J Debra Sandler 0 0 0 1 _ 1K Robert Singer 0 0 0
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.
0000643572 SHARES
CUSIP # JOB # SEQUENCE #
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
0000565291_1 R1.0.0.24
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement are available at www.proxyvote.com
KEURIG DR PEPPER INC.
Annual Meeting of Stockholders
June 9, 2022 10:10, 2024 11:00 AM ET
This proxy is solicited by the Board of Directors
www.virtualshareholdermeeting.com/KDP2022
KDP2024
The stockholder(s) hereby appoint(s) Robert Gamgort, Anthony Shoemaker, and Mark Jackson, or any of them, as proxy holders, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Keurig Dr Pepper Inc. that the stockholder(s) is/are entitled to vote at the virtual Annual Meeting of Stockholders to be held live online at 10:11:00 a.m., ET, on Thursday,Monday, June 9, 2022,10, 2024, or any postponement or adjournment thereof. In their discretion, the proxy holders are authorized to vote upon such other business as may properly come before the virtual Annual Meeting of Stockholders or any postponement or adjournment thereof.
thereof (including, if applicable, for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unable to serve or for good cause will not serve).
This proxy, when properly executed and returned, will be voted in the manner directed herein. If no such direction is made, this proxy, when properly executed and returned, will be voted in accordance with the Board of Directors’ recommendations.
R1.0.0.6 _ 2 0000643572
IMPORTANT: CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.
0000565291_2 R1.0.0.24