UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
![]() | ||||||||||
☑ | Filed by the Registrant | ![]() | ☐ | Filed by a Party other than the Registrant |
Check the appropriate box: | ||
![]() | ||
☐ | Preliminary Proxy Statement | |
![]() | ||
☐ | CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) | |
![]() | ||
☑ | Definitive Proxy Statement | |
![]() | ||
☐ | Definitive Additional Materials | |
![]() | ||
☐ | Soliciting Material Pursuant to |
Brown-Forman Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): | ||
![]() | No fee required. | |
![]() | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
(1) Title of each class of securities to which transaction applies: | ||
(2) Aggregate number of securities to which transaction applies: | ||
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 | ||
(4) Proposed maximum aggregate value of transaction: | ||
(5) Total fee paid: | ||
![]() | Fee paid previously with preliminary materials. | |
![]() | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
(1) Amount Previously Paid: | ||
(2) Form, Schedule or Registration Statement No.: | ||
(3) Filing Party: | ||
(4) Date Filed: |
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 1 |
June 25, 2019
DEAR BROWN-FORMAN STOCKHOLDER:
STOCKHOLDER,
It is our pleasure to invite you to attend Brown-Forman Corporation’s 20192021 Annual Meeting of Stockholders, which will be held at the Brown-Forman Conference Center in Louisville, Kentucky, onThursday, July 25, 201922, 2021, at 9:30 A.M. (Eastern Daylight Time). Traditionally, our Annual Meeting is held at the Brown-Forman Conference Center in Louisville, Kentucky. However, like last year, in light of the ongoing public health impact of the COVID-19 pandemic, this year’s Annual Meeting will be held entirely online via video webcast to continue our support of the health and well-being of our stockholders and guests. Please see the Notice of Annual Meeting on the next page 3 for more information about how to attend and participate in this location andyear’s Annual Meeting online. We expect to return to hosting our admission procedures.
Annual Meetings in Louisville, Kentucky, next year.
Your vote is important to us.Please complete and return your proxy card, or vote by telephone or online as soon as possible, even if you plan to attend the Annual Meeting.
Meeting online.
We hope to see you join us on July 25.22. On behalf of the Board of Directors, thank you for your continued support.
Very truly yours,
![]() | ![]() | ||
![]() | ![]() | ||
President and Chief Executive Officer | GEORGE GARVIN BROWN IV
|
|
June 22, 2021
2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MEETING OF STOCKHOLDERS |
DATE: | Thursday, July 22, 2021 | |
TIME: | 9:30 A.M. (Eastern Daylight Time) | |
LOCATION: The Annual Meeting will be presented exclusively online at www.virtualshareholdermeeting.com/BFA2021 |
The Annual Meeting will be held entirely online via video webcast due to the public health impact of the ongoing COVID-19 pandemic and to continue our support of the health and well-being of our stockholders and guests. To attend and participate in the Annual Meeting online, please visit www.virtualshareholdermeeting.com/BFA2021. You will be able to watch and hear the meeting online. Class A stockholders will also be able to vote and submit questions to management during the Annual Meeting.
We are holding this meeting for the following purposes:
Class A stockholders of record at the close of business on June 17, 2019,14, 2021, are entitled to vote either online at the meeting, either in personAnnual Meeting or by proxy.
There are several waysYour vote is very important. Even if you plan to vote. You mayattend the Annual Meeting online, we encourage you to complete, sign, and date the enclosed proxy card and return it in the enclosed envelope, or you may vote by telephone (1-800-690-6903) or online (www.proxyvote.com). Whatever method you choose, please vote in advance of(www.proxyvote.com) prior to the Annual Meeting so your shares are represented and voted at the meeting if your plans change and you are unable to ensure that your shares will be voted as you direct.attend online. Instructions on telephone and online voting are on the proxy card enclosed with this Proxy Statement.
Louisville, Kentucky
June 25, 201922, 2021
By order of the Board of Directors
Matthew E. Hamel, Secretary
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 25, 2019:
The Notice of Annual Meeting, Proxy Statement, and Annual & Corporate Responsibility Report to Stockholders, which includes our Annual Report on Form 10-K for fiscal 2019, are available atwww.brown-forman.com/investors/annual-report/.
ADMISSION PROCEDURES
We are committed to providing a
safe, secure environment for our
stockholders directors, employees, and guests. To that
end, the Annual Meeting will be held
in virtual meeting format again this
year. Although you will not be able to
attend the Annual Meeting physically,
we hope the online meeting format will
allow attendance by all stockholders
regardless of location.
To be admitted to the Annual Meeting,
please observe visit www.virtualshareholder
meeting.com/BFA2021. If you are a
Class A stockholder, you will log into
the following procedures ifAnnual Meeting by entering your
unique 16-digit control number found on
your proxy card or voting instruction
form. If you plan are a Class B stockholder,
you will log into the Annual Meeting as a
guest. For more information about how
to attend the Annual Meeting.Meeting online,
please see “Attending the Annual
Meeting” on page 8. Additionally, you
can visit www.virtualshareholder
meeting.com/BFA2021 or contact
our Investor Relations Manager by
telephone at (502) 774-7658 or by email
at Investor_Relations@b-f.com for
more information about attending
the Annual Meeting online.
IMPORTANT NOTICE REGARDING
AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON
JULY 22, 2021:
The Notice of Annual Meeting, Proxy Statement,
and Integrated Annual Report, which includes
our Annual Report on Form 10-K for fiscal 2021,
are available at www.brown-forman.com/
investors/annual-report/.
4
5 |
If you do not register in advance, you may still be admitted if you present a photo ID along with your proxy card, brokerage statement, or other documentation of stock ownership.TABLE OF
CONTENTS
Table of Contents
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS6BROWN-FORMAN1
|
In this section, we highlight certain information about matters discussed in more detail in this Proxy Statement. As it is only a summary, we encourage you to read the entire Proxy Statement before voting.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, July 22, 2021 | |||
9:30 A.M. (Eastern Daylight Time) | |||
LOCATION: The Annual Meeting will be presented exclusively online at www.virtualshareholdermeeting.com/BFA2021 | |||
DATE OF DISTRIBUTION: The Notice of Annual Meeting of Stockholders, Proxy Statement, and proxy card are first being made available or mailed on or about June 22, 2021. |
PROPOSAL FOR STOCKHOLDER VOTING
Proposal | Our Board’s voting recommendation | ||
Election of WHERE TO FIND DETAILS: | ![]() |
|
PERFORMANCE AND COMPENSATION HIGHLIGHTS
We believeAt Brown-Forman, we stand by our executive compensation program continuesambition: “Nothing Better in the Market.” To deliver that level of value for our stockholders, we need to attract, motivate, reward, and retain a talented and diverse team of executives. These individualsexecutives prepared to lead those efforts. We believe that our efforts to be the best brand builder in the spirits industry, and enable us to deliver superior and sustainable value for our stockholders. The incentive payouts to our executivesexecutive compensation program, described in this Proxy Statement, reflectallows us to do just that—by linking executive pay to our company’s performance relative to our industry peers—both during the most recent fiscal year and over time.
The following charts compare basic trends in our company’s performance with respect to total shareholdertrends in the compensation of our President and Chief Executive Officer, Lawson E. Whiting. The three financial measurements (total stockholder return (TSR), diluted earnings per share (EPS), and underlying operating income growth with trends ingrowth) are intended to create a picture of the compensation of our former Chief Executive Officer, Paul C. Varga, and current Chief Executive Officer, Lawson E. Whiting. These metrics reflect long-term value generated for our stockholders, and the charts show how our compensation strategy aligns with thatour company’s performance.
OUR PERFORMANCE IN FISCAL 2019:2021
![]() | ![]() | ![]() |
![]() ![]() | ||
(1) | Reflects the originally reported growth in “underlying operating income” over the past five fiscal years. “Underlying operating income” is not derived in accordance with U.S. generally accepted accounting principles (GAAP). |
(2) | Total compensation for the Chief Executive Officer for the purpose of this graphic includes base salary, stock-settled stock appreciation rights, non-equity compensation, and all other |
2BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 7 |
PROXY SUMMARY | OUR DIRECTOR NOMINEES TO THE BOARD
OUR DIRECTOR NOMINEES TO THE BOARD
Our Board of Directors is asking Class A stockholders are being asked to vote on the election of the fourteeneleven directors named below. MoreYou can find more details about each director’s background,experience, qualifications, attributes, and skills and expertise can be found under “Election of Directors”Directors,” beginning on page 16. On December 31, 2018, our former Chairman and Chief Executive Officer, Paul C. Varga, retired from his role as an employee and officer of Brown-Forman, but continues to serve as a member of the Board through the upcoming Annual Meeting to be held on July 25, 2019 (the Annual Meeting). In anticipation of Mr. Varga’s retirement, Lawson E. Whiting was appointed to the Board on November 15, 2018, and became Chief Executive Officer of Brown-Forman on January 1, 2019.24.
BOARD NOMINEES | COMMITTEE MEMBERSHIP AS OF APRIL 30, 2021 | ||||||||||||||||||||||||||||||||||
Nominee Name & Occupation |
Age | Director Since | Director Category |
Audit |
Comp | Corp Gov & Nom |
Exec | ||||||||||||||||||||||||||||
Patrick Bousquet-Chavanne President and CEO, Americas, eShopWorld | 63 | 2005 | I | ● | ● | ||||||||||||||||||||||||||||||
Campbell P. Brown Incoming Chair of the Board, Brown-Forman | 53 | 2016 | B | ● | |||||||||||||||||||||||||||||||
Stuart R. Brown Managing Partner, Typha Partners, LLC | 56 | 2015 | B | ||||||||||||||||||||||||||||||||
John D. Cook Director Emeritus, McKinsey & Company | 68 | 2008 | I | ● | C | ● | |||||||||||||||||||||||||||||
Marshall B. Farrer Senior Vice President, President, Europe, Brown-Forman | 50 | 2016 | B, M | ||||||||||||||||||||||||||||||||
Kathleen M. Gutmann Chief Sales and Solutions Officer, United Parcel Service, Inc. | 52 | 2017 | I | ● | |||||||||||||||||||||||||||||||
Augusta Brown Holland Founding Partner, Haystack Partners LLC | 45 | 2015 | B | ||||||||||||||||||||||||||||||||
Michael J. Roney Retired Chief Executive Officer, Bunzl plc | 67 | 2014 | I | C | |||||||||||||||||||||||||||||||
Tracy L. Skeans Chief Operating Officer & Chief People Officer, Yum! Brands, Inc. | 48 | 2018 | I | ● | ● | ||||||||||||||||||||||||||||||
Michael A. Todman Retired Vice Chairman, Whirlpool Corporation | 63 | 2014 | I | C | ● | ||||||||||||||||||||||||||||||
Lawson E. Whiting President and Chief Executive Officer, Brown-Forman | 53 | 2018 | M | ● |
Board Nominees
Committee Membership | ||||||||||||||
Nominee Name & Occupation | Age | Director Since | Director Category | Audit | Comp | Corp Gov & Nom | Exec | |||||||
Patrick Bousquet-Chavanne | ||||||||||||||
Chief Executive Officer, Emaar Malls | 61 | 2005 | I | • | • | |||||||||
Campbell P. Brown | ||||||||||||||
Senior Vice President, President and Managing Director of Old Forester, Brown-Forman | 51 | 2016 | B, M | |||||||||||
Geo. Garvin Brown IV | ||||||||||||||
Chairman of the Board, Brown-Forman | 50 | 2006 | B | • | C | |||||||||
Stuart R. Brown | ||||||||||||||
Managing Partner, Typha Partners, LLC | 54 | 2015 | B | |||||||||||
Bruce L. Byrnes | ||||||||||||||
Retired Vice Chairman of the Board, The Procter & Gamble Company | 71 | 2010 | I | • | • | |||||||||
John D. Cook | ||||||||||||||
Director Emeritus of McKinsey & Company | 66 | 2008 | I | • | C | • | ||||||||
Marshall B. Farrer | ||||||||||||||
Senior Vice President, Managing Director of GTR and Developed APAC Region, Brown-Forman | 48 | 2016 | B, M | |||||||||||
Laura L. Frazier | ||||||||||||||
Owner and Chairman, Bittners LLC | 61 | 2016 | B | |||||||||||
Kathleen M. Gutmann | ||||||||||||||
Chief Sales and Solutions Officer, United Parcel Service, Inc. | 50 | 2017 | I | • | ||||||||||
Augusta Brown Holland | ||||||||||||||
Founding Partner, Haystack Partners LLC | 43 | 2015 | B | |||||||||||
Michael J. Roney | ||||||||||||||
Retired Chief Executive Officer, Bunzl plc | 65 | 2014 | I | C | ||||||||||
Tracy L. Skeans | ||||||||||||||
Chief Transformation and People Officer, Yum! Brands, Inc. | 46 | 2018 | I | • | ||||||||||
Michael A. Todman | ||||||||||||||
Retired Vice Chairman, Whirlpool Corporation | 61 | 2014 | I | C | ||||||||||
Lawson E. Whiting | ||||||||||||||
President and Chief Executive Officer, Brown-Forman | 51 | 2018 | M | • |
B=B=Brown Family Director M=M=Management Director I=I=Independent Director C=C=Committee Chair •●=Committee Member
FISCAL 2021
FISCAL 2019
20% | $338MM | |||||
|
|
|
|
Lawson E. Whiting,
President and Chief Executive Officer
(1) | |||||
information about our use of non-GAAP measures. |
![]() | Our strategic priorities have enabled us to build strong business momentum, and we believe they will allow us to deliver broad-based growth and value creation over the long term.” |
LAWSON E. WHITING
President and Chief Executive Officer
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS8BROWN-FORMAN3
INFORMATION |
ABOUT YOUR PROXY MATERIALS
Our Board of Directors (the Board) is soliciting proxies for our Annual Meeting of Stockholders.Stockholders to be held on July 22, 2021 (the Annual Meeting). This means that you can vote “by proxy” at the Annual Meeting — that is, you can instructby instructing us how you would like your shares to be voted, at the meeting even if you cannot personally attend.attend the Annual Meeting.
We are providing thisThis Proxy Statement and the accompanying materials towill help you make an informed decision on the mattersmatter to be considered at the Annual Meeting. We will begin mailing this Proxy Statement and the accompanying materials, and also make them available online, on or about June 25, 2019,22, 2021, to holders of record of our Class A and Class B common stock at the close of business on June 17, 2019,14, 2021, which is the “record date” for the Annual Meeting.
This Proxy Statement and our Integrated Annual & Corporate Responsibility Report, which includes our Annual Report on Form 10-K for fiscal 2019,2021, are available atwww.brown-forman.com/investors/annual-report/. You may request additional printed copies at any time using the contact information below.
Please let us know as soon as possible how you would like your shares voted. See “How to Vote” belowon the next page for details.
Contact Information
For information about your stock ownership or other stockholder services, please contact Steve Cassin, our Investor Relations Manager by telephone at (502) 774-7658, by e-mail at Steve_Cassin@b-f.com,Investor_Relations@b-f.com, or by mail at Brown-Forman Corporation, 850 Dixie Highway, Louisville, Kentucky 40210.
Reducing Duplicate Mailings
The Securities and Exchange Commission (SEC) permits us to deliver a single Proxy Statement and Integrated Annual & Corporate Responsibility Report to stockholders who share the same address and last name. Unless we receive contrary instructions from any stockholder in the household, evenEven if your household receives only one Proxy Statement and Integrated Annual & Corporate Responsibility Report, each stockholder will receive an individual proxy card. We implemented this “householding” process to reduce our printing costs and postage fees, and to reduce the environmental impact of our Annual Meeting. If you would like to enroll in householding, or if your household is already enrolled but you prefer to opt out of householding for next year, please inform us using the contact information above and we will promptly fulfill your request.
ATTENDING THE ANNUAL MEETING
In light of the public health impact of the ongoing COVID-19 pandemic, the Annual Meeting will be held exclusively online via video webcast to continue our support of the health and well-being of our stockholders and guests. Although you will not be able to attend the Annual Meeting physically, we hope the online meeting format will allow attendance by all stockholders regardless of location.
Although only Class A stockholders may vote and submit questions at the Annual Meeting, Class A and Class B stockholders who owned their shares as of the record date (or their legal proxies) are welcome to attend.attend the Annual Meeting online.
To be admitted to the Annual Meeting, please visit www.virtualshareholdermeeting.com/BFA2021. If you are a Class A stockholder, you will log into the Annual Meeting by entering your unique 16-digit control number found on your proxy card or voting instruction form. If you are a Class B stockholder, you will log into the Annual Meeting as a guest.
The meeting will start at 9:30 A.M. (Eastern Daylight Time) on Thursday, July 22, 2021. We encourage you to access the meeting prior to the start time to familiarize yourself with the virtual platform. Online access will be available starting at 9:00 A.M. (Eastern Daylight Time) on July 22, 2021.
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 9 |
The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and mobile phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong Internet connection from wherever they intend to participate in the Annual Meeting. If you planencounter any 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 stockholder meeting login page.
A webcast replay will be posted to attend, please register by July 23, 2019, onlineour Investor Relations website at asm.b-f.com or by contacting Steve Cassin usinghttps://investors.brown-forman.com/ following the contact information above. Please bring a photo ID and, if your shares are registered in the name of a bank, broker, or other holder of record, documentation of your stock ownership as of the record date.Please see “Admission Procedures” outlined in the Notice of Annual Meeting of Stockholders for full details.
Meeting.
VOTING
Who May Vote
If you held shares of Class A common stock at the close of business on the record date, you (or your legal proxies)proxy) may vote at the Annual Meeting. At the close of business on the record date, there were 169,038,689169,136,738 shares of Class A common stock outstanding and entitled to vote at the Annual Meeting. At the close of business on the record date, there were 308,489,725 sharesEach share of Class BA common stock outstanding. Class B shares are notis entitled to one vote.
If you purchased Class A common stock after the record date, you may vote those shares only if you receive a proxy to do so from the person who held the shares on the record date. Each share of Class A common stock is entitled to one vote. If you receive more than one proxy card or voting instruction card, you should complete, sign, date, and return each one (or follow the telephone or online voting instructions) because each card represents different shares.
At the close of business on the record date, there were 4309,690,957 shares of Class B common stock outstanding. Class B shares are not entitled to vote.BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ANNUAL MEETING INFORMATION | VOTING
How to Vote
Stockholders of record.STOCKHOLDERS OF RECORD.If your shares are registered directly in your name with our stock transfer agent, Computershare, you are considered the “stockholder of record” of those shares. If you are a stockholder of record of Class A common stock, you can give a proxy to be voted at the Annual Meeting:
![]() | ||||||||||
![]() | over the telephone by calling this toll-free number (1-800-690-6903); | ![]() | ![]() | ![]() online (www.proxyvote.com); or | ![]() | by completing, signing, dating, and mailing the enclosed proxy card in the envelope provided. |
Even if you plan to attend the Annual Meeting online, we encourage you to submit a proxy in advance. If you are voting by telephone or online, we must receive your proxy by 11:59 P.M., Eastern (Eastern Daylight Time,Time) on Wednesday, July 24, 2019,21, 2021, to ensure your vote is recorded. You mayTo override a proxy or change your voting instructions, by following the applicable procedure outlined below insee “Changing Your Vote.”
Vote” on the next page.
The telephone and online voting procedures are designed to authenticate your identity, enable you to give voting instructions, and confirm that those instructions are recorded properly. If you are a stockholder of record and wish to vote by telephone or online, please refer to the instructions on the enclosed proxy card.
Your proxy will authorize the individuals named on the proxy card to vote your shares in accordance with your instructions. These individuals also will have the obligation and authority to vote your shares as they see fit on any other matter properly presented for a vote at the Annual Meeting. If for any reason a director nominee is not available to serve, the individuals named as proxy holders may vote your shares at the Annual Meeting for another nominee. The proxy holders for this year’s Annual Meeting are Geo.George Garvin Brown IV, Lawson E. Whiting, and Matthew E. Hamel.
If you are a stockholder of record and you sign and return your proxy card (or give your proxy by telephone or online) without specifying how you want your shares to be voted, our proxy holders will vote your shares “FOR” the election of each of the nominees to the Board. With respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote your shares as recommended by the Board or, if no recommendation is given, using their own discretion. |
You may also vote at the Annual Meeting. For more information about how to attend the Annual Meeting, please see “Attending the Annual Meeting” on page 8.
10
“Street name” stockholders.STREET NAME” STOCKHOLDERS.If your shares are held in a stock brokerage account or by a bank (known as holding shares in ““street name”name”), you have the right to instruct your broker or bank how to vote your shares, and the broker or bank is required to vote in accordance with your instructions. To provide those instructions by mail, please complete, sign, date, and return your voting instruction cardform in the accompanying postage-paid envelope. Alternatively, if the broker or bank that holds your shares offers online or telephone voting, you will receive information about how to submit your voting instructions by those methods. You may vote in person at
For more information about how to attend the Annual Meeting, but only if you obtain a “legal proxy” fromplease see “Attending the broker or bank that holds your shares.Annual Meeting” on page 8.
If you are a street name stockholder and you do not instruct your broker how to vote, your broker is not permitted to vote your shares on the election of directors. Under the rules of various securities exchanges, brokers that hold your shares may generally use their discretion to vote on “routine” matters but not on |
Changing Your Vote
If you are astockholder of record, you may change your vote by submitting another proxy by telephone or online, by mailing another properly signed proxy card bearing a later date than your original one, or by attending the Annual Meeting and casting your vote in person.during the Annual Meeting. You also may revoke a proxy that you previously provided by delivering timely written notice of revocation to our Secretary, Matthew E. Hamel, at Brown-Forman Corporation, 850 Dixie Highway, Louisville, Kentucky 40210, or at Secretary@b-f.com.
If you hold your shares instreet nameand you wish to change or revoke your voting instructions, please refer to the materials your broker or bank provided to you for instructions.
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN5
ANNUAL MEETING INFORMATION | ANNOUNCEMENT OF VOTING RESULTS
Quorum Requirements
Business can be conducted at the Annual Meeting only if a quorum consisting of a majority of the outstanding shares of Class A common stock is present in person or represented by proxy. Abstentions will be counted as present for purposes of establishing a quorum.
Holders of Class A common stock who attend the Annual Meeting via the virtual meeting platform are also counted as present for purposes of the quorum requirement.
Votes Needed Forfor Approval
Proposal | Votes required to pass | Effect of abstentions and broker non-votes | ||||||
Election of directors | Nominees who receive a majority of the Class A votes cast (the number of shares voted “for” the nominee exceeds the number of shares voted “against” that nominee) will be elected. | No effect. | ||||||
|
Dividend Reinvestment and Employee Stock Purchase Plan Shares
Shares of Class A common stock held in Brown-Forman’s dividend reinvestment and employee stock purchase plans are included in your holdings and are reflected on your proxy card. These shares will be voted as you direct.
ANNOUNCEMENT OF VOTING RESULTS
We intend to announce the preliminary voting results at the Annual Meeting and to issue a press release announcing the final voting results later that day. In addition, we will report the final voting results by filing a Form 8-K with the SEC within four business days following the Annual Meeting.
PROXY SOLICITATION EXPENSES
Brown-Forman bears the cost of soliciting proxies. Beginning on or about June 25, 2019,22, 2021, which is the mailing date for these proxy materials, our directors, officers, and other employees may solicit proxies in person or by regular mail, email, phone, or online. These individuals will not receive additional compensation for soliciting proxies. We will, however, reimburse banks, brokers, nominees, and other fiduciaries for their reasonable charges and expenses incurred in forwarding our proxy materials to the beneficial owners of our stock held in street name.
6BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 11 |
GOVERNANCE |
Our Board is the policy-making body that is ultimately responsible for Brown-Forman’s business success and ethical culture. The Board oversees the performance of our senior management team, which is responsible for leading and operating Brown-Forman’s business. The Board’s primary responsibilities include retention, evaluation, and succession planning for the Chief Executive Officer and the Chair of the Board, as well as oversight of our corporate strategy, financial condition, executive compensation policies and practices, and enterprise risk management. The Board may hire independent advisors to help it perform its duties. | FOLLOWING THE ANNUAL MEETING: Diversity Age Mix Tenure on Board Composition | |||
BROWN-FORMAN IS A “CONTROLLED COMPANY.” As a publicly traded, family-controlled company, Brown-Forman enjoys a rare governance opportunity in that members of our controlling stockholder family, the Brown family, participate directly on our Board. We believe this governance structure gives us a distinct competitive advantage because Brown family members bring a long-term ownership perspective to our Board. This advantage is sustained by a careful balancing of the roles of our Board, management, and our stockholders—including the Brown family. | ||||
In evaluating candidates for Board membership, the Corporate Governance and Nominating Committee seeks directors who will represent the long-term best interests of all stockholders. As stated in our Corporate Governance Guidelines, all Brown-Forman directors should possess the highest personal and professional ethics, integrity, and values. The Board believes the best directors also have good judgment, candor, civility, business courage, experience with similar businesses or other organizations of comparable or larger size, and a lack of conflicts of interest. We also believe that a significant number of our directors should be independent. See “Our Independent Directors” on the next page to learn more. The Corporate Governance and Nominating Committee and the Board consider diversity in evaluating candidates for Board membership, though neither has adopted a formal diversity policy. The Board’s goal is to maintain a well-balanced composition that combines a variety of experiences, backgrounds, skills, and perspectives that enable the Board, as a whole, to guide Brown-Forman effectively in the pursuit of our strategic objectives. In evaluating potential Board candidates, the Corporate Governance and Nominating Committee considers an individual’s independence; business, professional, or public service experience; relevant industry knowledge, experience, and relationships; business judgment; financial expertise; leadership skills; age, gender, race, and ethnicity; time availability; and familial relation to our controlling family stockholders. | ||||
Our Board is the policy-making body that is ultimately responsible for Brown-Forman’s business success and ethical climate. The Board oversees the performance of our senior management team, which is responsible for leading and operating Brown-Forman’s business. The Board’s primary responsibilities include retention, evaluation, and succession planning for the Chief Executive Officer and the Chairman of the Board, as well as oversight of our corporate strategy, financial condition, executive compensation policies and practices, and enterprise risk management. The Board may retain independent advisors to help it perform its duties.
BROWN-FORMAN IS A “CONTROLLED COMPANY.”
As a publicly traded, family-controlled company, Brown-Forman enjoys a rare governance opportunity in that members of our controlling stockholder family, the Brown family, participate directly on our Board. We believe this governance structure gives us a distinct competitive advantage because Brown family members bring a long-term ownership perspective to our Board. This advantage is sustained by a careful balancing of the roles of our Board, management, and our stockholders — including the Brown family.
In evaluating candidates for Board membership, the Corporate Governance and Nominating Committee seeks directors who will represent the long-term best interests of all stockholders. As articulated in our Corporate Governance Guidelines, all Brown-Forman directors should possess the highest personal and professional ethics, integrity, and values. The Board believes the best directors have the following additional qualities: good judgment, candor, civility, business courage, experience with businesses and other organizations of comparable character and comparable or larger size, and a lack of conflicts of interest. We also believe that a significant number of our directors should be independent.
The Corporate Governance and Nominating Committee and the Board consider diversity in evaluating candidates for Board membership, though neither has adopted a formal policy to that effect. The Board’s goal is to maintain a well-balanced composition that combines a variety of experiences, backgrounds, skills, and perspectives to enable the Board, as a whole, to guide Brown-Forman effectively in the pursuit of our strategic objectives. In evaluating potential Board candidates, the Corporate Governance and Nominating Committee considers an individual’s independence; business, professional, or public service experience; relevant industry knowledge, experience, and relationships; business judgment; financial expertise; international experience; leadership skills; age, gender, race, and other personal characteristics; time availability; and familial relation to our controlling family stockholders.
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS12BROWN-FORMAN 7
CORPORATE GOVERNANCE | BOARD COMPOSITION
The Corporate Governance and Nominating Committee occasionally engageshires independent search firms to assist in identifyinghelp identify potential Board candidates. The Board has not adopted a formal policy regarding stockholder-nominated director candidates nominated by stockholders because the Corporate Governance and Nominating Committee believes the process it follows to identify and select Board members has been appropriate and effective. Any candidates submitted by stockholders will be evaluated in the same manner as all other director candidates.
How Our Controlled-Company Status Affects Our Board
Our Board has determined that Brown-Forman is a “controlled company” under New York Stock Exchange (NYSE) rules because more than 50% of our Class A voting stock is held by members of the Brown family.
As a controlled company, we are exempt from NYSE listing standards that require boardsnot required to have a majority of independent directors, a fully independent nominating/corporate governance committee, andor a fully independent compensation committee. As a matter of good corporate governance, the Board has voluntarily chosen to have a Compensation Committee that is composed entirely of directors who meet the NYSE’s heightened independence standards for compensation committee members.members and, following the Annual Meeting, a Board composed of a majority of independent directors. Our Board does not have a majority of independent directors or a fully independent nominating/corporate governance committee. We are not exempt from, and comply in full with NYSE requirements respectingregarding the independence and qualifications of our Audit Committee members.
Our Independent Directors
We recognize the value of having independent directors. Under NYSE listing rules, a director qualifies as “independent” if the board of directors affirmatively determines the director has no material relationship“material relationship” with the company. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships. While the focus is on independence from management, our Board considers all relevant facts and circumstances in making an independence determination. Our Board has determined that the following sevensix directors are independent under NYSE standards: Patrick Bousquet-Chavanne, Bruce L. Byrnes, John D. Cook, Kathleen M. Gutmann, Michael J. Roney, Tracy L. Skeans, and Michael A. Todman.
The Board has determined that Campbell P. Brown, Marshall B. Farrer, and Lawson E. Whiting are not independent because they are, or recently have been, members of Brown-Forman management. The Board elected not to make a determination with respect to the independence of Geo.George Garvin Brown IV, Stuart R. Brown, Laura L. Frazier, and Augusta Brown Holland.
|
Our Brown Family Directors
We believeThe Board believes it is strategically important for Brown family members to be actively engaged in the oversight of Brown-Forman.
Through participation on the Board, the Brown family’sfamily can contribute their long-term perspective is brought to bear, in some measure, upon each and every matter the Board considers. Brown family directors also serve as an effective link between the Board and the controlling family stockholders.
In addition, Board service allows the Brown family to actively oversee itstheir investment in the company. Currently, the Brown family directors are Campbell P. Brown, Geo.George Garvin Brown IV, Stuart R. Brown, Marshall B. Farrer, Laura L. Frazier, and Augusta Brown Holland.
8BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
CORPORATE GOVERNANCE | BOARD COMPOSITION
Our Management Directors
We believeThe Board believes it is important, from a corporate governance standpoint, for management to be represented on the Board. Currently, Campbell P. Brown, Marshall B. Farrer and Lawson E. Whiting serve in dual roles as Board members and Brown-Forman executives.
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 13 |
BROWN-FORMAN BOARD OF DIRECTORSDIRECTOR NOMINEES
![]() ![]()
|
|
| |||||||
![]() | ![]() | ![]() | |||||||
|
|
| |||||||
![]() | ![]() | ![]() | |||||||
|
|
| |||||||
![]() | ![]() | ![]() | |||||||
|
|
| |||||||
![]() | ![]() | ![]() | |||||||
|
| ![]()
George Garvin Brown IV and Laura L. Frazier will not stand for
at the Annual Meeting and will retire from the Board following the completion of their current terms. | |||||||
![]() | ![]() |
Recent Changes to Our Board
As previously disclosed, our President and Chief Executive Officer, Lawson E. Whiting, joined the Board on November 15, 2018. Paul C. Varga, our former Chairman and Chief Executive Officer, will retire from the Board as of the Annual Meeting.
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS14BROWN-FORMAN 9
CORPORATE GOVERNANCE | LEADERSHIP STRUCTURE
BOARD LEADERSHIP STRUCTURE | ||||
George Garvin Brown IV, a Brown | Lawson E. Whiting has served asPresident and Chief Executive Officer since 2019. | John D. Cook has served asLead Independent Directorsince 2012. |
Chairman2021 Board Leadership Transition
George Garvin Brown IV has served on the Board since 2006 and as our Chair of the Board since 2007. On January 22, 2021, Mr. Garvin Brown notified the company of his decision to retire from the Board at the Annual Meeting following the completion of his current term. Campbell P. Brown, if re-elected to the Board, will assume the role of Chair of the Board, succeeding Mr. Garvin Brown. Mr. Campbell Brown is a member of the Brown family and first joined the Board in 2016. Mr. Campbell Brown was an employee of Brown-Forman for 27 years, was a founding member of the Brown-Forman/Brown Family Shareholders Committee, and most recently served as Senior Vice President, President and Managing Director of Old Forester at Brown-Forman. In connection with Mr. Campbell Brown’s transition as incoming Chair of the Board, he stepped down from his management position at the company as of April 30, 2021.
In connection with Mr. Garvin Brown’s retirement and Mr. Campbell Brown’s transition to becoming the next Chair of the Board, the Board approved a reduction in the number of directors on the Board from thirteen to eleven effective immediately following the Annual Meeting. The Board also reviewed and adjusted the compensation payable to the Chair of the Board as part of its continued review of Board compensation.
Chair of the Board
Our Board believes that the determination of whetherdecision to separate or combine the roles of ChairmanChair of the Board and Chief Executive Officer should
depend largely upon the identity of the Chief Executive Officer and the composition of the Board at the time. For this reason, the Board does not have a policy on separation of these roles, but rather evaluates the situation on a case-by-case basis. Although these roleswe have beenhad a separate Chair of the Board and Chief Executive Officer since 2007, theythese roles have been combined in the past.
The strength of Brown-Forman’s governance structure is due, in part, to our unique relationship with our controlling family stockholders, the Brown family, who participate directly on our Board. We believe this governance structure offers us a distinct competitive advantage and aligns with long-term stockholder interests, given the multi-generational ownership perspective that Brown family members bring to our Board. As part of this approach, the Chair of the Board historically has been a member of the Brown family, and plays an important role in helping balance this long-term perspective with company aspirations.
structure offers us a distinct competitive advantage and aligns with long-term stockholder interests, given the multi-generational ownership perspective that Brown family members bring to our Board.” |
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 15 |
The duties of the Chair of the Board include presiding over and managing the meetings of the Board; setting the agenda for each Board meeting and consulting with management regarding materials to be presented to the Board; supporting a strong Board culture by fostering an environment of open dialogue, effective information flow, and constructive feedback among the Board and management; facilitating communication among the Board, management, and stockholders, including the Brown family; and encouraging director participation. When the roles are separated, the Chair of the Board also acts as an advisor to the Chief Executive Officer on strategic aspects of Brown-Forman’s business, and performs other duties as prescribed by the Board. George Garvin Brown IV has served in this role since 2007. Upon Mr. Garvin Brown’s retirement at the Annual Meeting, Campbell P. Brown, if re-elected to the Board, will assume the role of Chair of the Board.
Lead Independent Director
When a director who has not been determined to be independent holdsis also the office of ChairmanChair of the Board, as is currently the case, the Board may select one independent director (after considering the recommendation of the Corporate Governance and Nominating Committee) to serve as Lead Independent Director. The Lead Independent Director, if any, is elected annually. John D. Cook has served in this role since 2012.
As Lead Independent Director, Mr. Cook’s responsibilities include calling meetings of the independent directors and non-management directors, when necessary or advisable, and setting the agenda for and chairing those meetings. Other responsibilities appear in our Corporate Governance Guidelines, atwhich are available on our website (at www.brown-forman.com/about/corporate-governance/guidelines)guidelines/.
Mr. Cook chaired one executive session of non-management directors in fiscal 20192021 and called and presided over one executive session in fiscal 20192021 that was attended solelyonly by our independent directors.
President and Chief Executive Officer
As the President and Chief Executive Officer of Brown-Forman, Mr.Lawson E. Whiting is our highest rankinghighest-ranking executive officer and is responsible for Brown-Forman’s strategy, operations, and performance. Mr. Whiting also serves as a management member of our Board.
Why the Board Chose thisThis Leadership Structure
The Board has determined that this leadership structure currently serves the best interests of Brown-Forman and all of its stockholders. Having a Brown family member serve as ChairmanChair of the Board promotes the Brown family’s active oversight of, and engagement and participation in, the company and its business, and reflects the fact that Brown-Forman is controlled by the Brown family. In addition, because Mr. Brown handles the division of responsibilities associated withallows the position of ChairmanChair of the Board Mr. Whitingto dedicate their efforts to Board governance and lead the Board in its fundamental role of providing oversight and guidance regarding the business, strategy, and operations of the company, while the Chief Executive Officer can concentrate on strategymanaging the company and operations, whileproviding the Board still has access to histheir comprehensive knowledge of Brown-Forman’s business. The Lead Independent Director position provides leadership to, and fosters coordination among, our independent directors, enablingencouraging them to fulfillbring their role of bringing outside perspectives to the Board.
10BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
CORPORATE GOVERNANCE | BOARD GUIDELINES AND PROCEDURES
16
BOARD GUIDELINES AND PROCEDURES
Corporate Governance Guidelines
The Board believes transparency is a hallmark of good corporate governance. To that end, the Board has adopted the Corporate Governance Guidelines, that providewhich provides a framework for the Board to exercise its duties. Among other things, these guidelines contain policies and requirements regarding director qualifications; director responsibilities, including the Lead Independent Director’s role;responsibilities; meetings and attendance; committee composition and responsibilities; director compensation; and director access to management and independent advisors. The Corporate Governance Guidelines are published on our website atwww.brown-forman.com/about/corporate-governance/guidelines/.
Board and Committee Self-Assessment
The Corporate Governance Guidelines require the Board to conduct an annual self-assessment. Each Board committee (except the Executive Committee) also annually assesses how it performed during the preceding twelve-month period. These assessment procedures vary, from requiringvary. Some years we require members to complete questionnaires that call for both quantitative responses and free-ranging comments, to havingwhile other years we invite an independent third partyconsultant to interview each member and then synthesize themes that emerge. This past fiscal year, our Chairman of the Board engaged in a 360 degree feedback process facilitated by an outside consultant. The ChairmanChair of the Board, the Chief Executive Officer, and the Lead Independent Director consult at least annually regarding individual director performance.
Director Service on Other Public Company Boards
The Board recognizes that its members benefit from servicethe experience of serving on the boards of other companies.companies or nonprofit entities. The Board encourages that service, with the understanding that our directors must also have adequateenough time to devote tofor their work forwith Brown-Forman. The Corporate Governance Guidelines provide that any director who servesis employed full-time as an officer or employee of Brown-Forman or any other entity should not serve on more than two public company boards in addition to the Brown-Forman Board, which includes the board of any public company at which a director is employed. Directors who are not employed full-time may serve on up to three public company boards in addition to the Brown-Forman Board. Directors must inform the Chairman,Chair of the Board, the Lead Independent Director, the Chair or Secretary of the Corporate Governance and Nominating Committee, or the Secretary of the Board as soon as practicable that they will be, or have been, elected to serve on an additional public company board.
The Board recognizes that service on the boards of nonprofit entities can be important and time consuming as well, and encourages directors to engage in such service as long as they continue to have the time necessary to devote to their work for Brown-Forman.
Director Service
The Board is authorized to fix the size of the Board at a number between three and seventeen members. Directors are elected each year at the Annual Meeting of Stockholders by a majority of the votes cast by our Class A stockholders. Once elected, a director holds office until the next Annual Meeting of Stockholders or until a successor is elected and qualified, unless the director first resigns, retires, or is removed. The Board does not have term limits, but directors generally may not stand for re-election to the Board after reaching the age of 71.72. In exceptional circumstances, the Board may ask a director to remain on the Board after age 7172 if the director’s continued service would significantly benefit Brown-Forman. Service of a director beyond the age of 7172 requires a recommendation by the Corporate Governance and Nominating Committee and the approval of two-thirds of the Board (not including the director under consideration). The Board has determined that
Furthermore, the continued service of Bruce L. Byrnes as director would be of significant value to Brown-Forman and has requested that Mr. Byrnes stand for election at the Annual Meeting for an additional term. Mr. Byrnes has agreed to do so.
Board Meetings
The Board held six regular meetings and no special meetings during fiscal 2019. Absent an appropriate reason, all directors are expected to attend the Annual Meeting, all Board meetings, and all meetings of each committee on which they serve. All directors attended 75% or moreChair of the aggregate meetingsBoard, the Lead Independent Director, and/or the Chair of the Corporate Governance and Nominating Committee will discuss whether continued Board service is in the best interests of all stockholders with each director who has served for 15 years without having turned 72. However, the company’s Chief Executive Officer may serve on the Board for the duration of his or her tenure as the company’s Chief Executive Officer, and the Chair of the Board (or an equivalent role) may serve in that role for as long as the Board considers his or her service to be in the best interests of all stockholders. Similarly, other directors who are also employed by the company may serve for as long as the Board considers their service to be in the best interests of all stockholders, until they reach the retirement age of 72.
Brown family Board members who are not employees of the company may serve on the Board for a period of five to nine years.
Patrick Bousquet-Chavanne has served on our Board since 2005. The Chair of the Board and committees on which they served during fiscal 2019. All directors then serving attended the 2018 Annual Meeting.Chair of the Corporate Governance and Nominating Committee have discussed and agreed that Mr. Bousquet-Chavanne’s continued service as a director would be in the best interest of Brown-Forman and our stockholders.
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 17 |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN 11
ALL DIRECTORS ATTENDED 93% OR MORE OF THE AGGREGATE MEETINGS OF THE BOARD AND COMMITTEES ON WHICH THEY SERVED DURING FISCAL 2021. | Board Meetings The Board held six regular meetings and no special meetings during fiscal 2021. Absent an appropriate reason, all directors are expected to attend the Annual Meeting, all Board meetings, and all meetings of each committee on which they serve. All directors attended 93% or more of the aggregate meetings of the Board and committees on which they served during fiscal 2021. All directors attended the 2020 Annual Meeting of Stockholders virtually. Communication with Our Board Stockholders and other interested parties may communicate with our directors, including the non-management directors or the independent directors as a group, by writing to our Secretary, at 850 Dixie Highway, Louisville, Kentucky 40210, or at Secretary@b-f.com. The Secretary’s office will forward appropriate written communications to the individual director or group of directors to whom they are addressed, with copies to all other directors. We generally will not forward to directors a stockholder communication that the Secretary determines to be primarily commercial in nature, that relates to an improper or irrelevant topic, or that requests general information about Brown-Forman. |
CORPORATE GOVERNANCE| BOARD GUIDELINES AND PROCEDURES
Board Committees18
Our Board has four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, and the Executive Committee. Each Board committee operates under a written charter that is posted on our website atwww.brown-forman.com/about/corporate-governance/committee-composition/.
AUDIT COMMITTEE |
MET 9 TIMES IN FISCAL 2019
MET NINE TIMES IN FISCAL 2021
Committee Members:
• | Michael A. Todman (Chair) |
• | |
Patrick Bousquet-Chavanne • | Kathleen M. Gutmann |
• | Tracy L. Skeans |
The Board has delegated to the Audit Committee responsibility for overseeing Brown-Forman’s financial statements; audit process; system of internal accounting and financial controls; policies and processes for assessment and management of enterprise risks, including cyber security risk; compliance with legal and regulatory requirements; and internal audit function. In addition, the Audit Committee is solely responsible for hiring the independent auditor and oversees the independent auditor’s qualifications, independence, and performance. The Audit Committee’s responsibilities include preparing the Audit Committee Report that appears in this Proxy Statement on page 55.
The Audit Committee is responsible for overseeing Brown-Forman’s financial statements; audit process; system of internal accounting and financial controls; policies and processes for assessment and management of enterprise risks; compliance with legal and regulatory requirements; and the internal audit function. In addition, the Audit Committee is solely responsible for the appointment, replacement, and compensation of the independent auditor and oversees the independent auditor’s qualifications, independence, and performance. The Audit Committee’s responsibilities include preparing the Audit Committee Report that appears in this Proxy Statement on page 62.
Audit Committee members must satisfy director independence standards prescribed by the NYSE and mandated by the Sarbanes-Oxley Act. Each member of our Audit Committee satisfies all of these heightened independence standards. The Board has determined that each member of our Audit Committee is “financially literate” within the meaning of NYSE rules, and that Mr. Todman is an “audit committee financial expert” under SEC rules.
Audit Committee members must satisfy director independence standards prescribed by the NYSE and mandated by the Sarbanes-Oxley Act. Each member of our Audit Committee satisfies all of these heightened independence standards. The Board has determined that each member of our Audit Committee is “financially literate” within the meaning of the NYSE rules, and that Mr. Todman is an “audit committee financial expert” under SEC rules.
MET 5 TIMES IN FISCAL 2019
COMMITTEE REPORT |
We, the Compensation Committee of the Board of Directors of Brown-Forman Corporation, have reviewed and discussed with management the aboveforegoing Compensation Discussion and Analysis and, based on such review and discussion, have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE
Michael J. Roney, Chair
John D. Cook
Tracy L. Skeans
48
TABLES |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN39
The following table sets forth the compensation of our NEOs for the fiscal years shown below, calculated under SEC rules.
FISCAL 20192021 SUMMARY COMPENSATION TABLE
Change in | ||||||||||||||||||
Pension | ||||||||||||||||||
Value and | ||||||||||||||||||
Non-Qualified | ||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||
Stock | SSAR/Option | Incentive Plan | Compensation | All Other | ||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus(2) | Awards(3) | Awards(4) | Compensation(5) | Earnings(6) | Compensation(7) | Total | |||||||||
Lawson E. Whiting President and Chief Executive Officer | 2019 | $872,374 | $— | $459,765 | $450,009 | $1,147,350 | $729,193 | $37,202 | $3,695,893 | |||||||||
2018 | 597,524 | — | 184,620 | 227,510 | 931,719 | 402,500 | 33,732 | 2,377,605 | ||||||||||
2017 | 487,287 | — | 152,165 | 162,501 | 741,500 | 348,332 | 28,739 | 1,920,524 | ||||||||||
Jane C. Morreau Executive Vice President and Chief Financial Officer | 2019 | 620,842 | — | 321,836 | 315,011 | 747,180 | 1,027,251 | 33,088 | 3,065,208 | |||||||||
2018 | 598,978 | — | 306,754 | 270,008 | 966,665 | 772,978 | 31,264 | 2,946,647 | ||||||||||
2017 | 594,799 | — | 278,111 | 297,019 | 915,120 | 777,875 | 32,242 | 2,895,166 | ||||||||||
Mark I. McCallum Executive Vice President and Chief Brands Officer | 2019 | 678,140 | — | 226,255 | 221,454 | 886,006 | 532,313 | 34,517 | 2,578,685 | |||||||||
2018 | 661,480 | — | 244,267 | 215,006 | 1,173,350 | 450,726 | 30,466 | 2,775,295 | ||||||||||
2017 | 658,973 | — | 201,326 | 215,034 | 981,191 | 431,265 | 31,085 | 2,518,874 | ||||||||||
Matthew E. Hamel(8) Executive Vice President, General Counsel and Secretary | 2019 | 533,969 | — | 167,061 | 327,033 | 458,917 | 335,765 | 33,246 | 1,855,991 | |||||||||
Thomas Hinrichs(8)(9) Senior Vice President, International Division | 2019 | 477,044 | — | 126,020 | 123,352 | 558,170 | 21,421 | 167,008 | 1,473,015 | |||||||||
Paul C. Varga(10) Former Company Chairman and Chief Executive Officer | 2019 | 806,779 | — | 926,968 | 907,285 | 2,548,815 | 5,432,105 | 17,540 | 10,639,492 | |||||||||
2018 | 1,145,870 | — | 1,499,682 | 1,540,010 | 4,202,610 | 401,521 | 37,042 | 8,826,735 | ||||||||||
2017 | 1,143,865 | — | 1,236,048 | 1,540,031 | 3,864,400 | 1,044,793 | 35,863 | 8,865,000 |
Name and Principal Position | Year | Salary(1) | Bonus(2) | Stock Awards(3) | SSAR/Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(6) | All Other Compensation(7) | Total | |||||||||||||||||||||||||||
Lawson E. Whiting President and Chief Executive Officer
|
| 2021 |
| $ | 1,178,747 |
| $ | — |
|
| $2,020,860 |
|
| $1,575,002 |
|
| $2,986,774 |
|
| $1,006,606 |
|
| $344,120 |
|
| $9,112,109 |
| |||||||||
| 2020 |
|
| 1,074,760 |
|
| — |
|
| 1,480,080 |
|
| 1,225,001 |
|
| 660,412 |
|
| 1,720,684 |
|
| 35,470 |
|
| 6,196,407 |
| ||||||||||
| 2019 |
|
| 872,374 |
|
| — |
|
| 459,765 |
|
| 450,009 |
|
| 1,147,350 |
|
| 729,193 |
|
| 37,202 |
|
| 3,695,893 |
| ||||||||||
Jane C. Morreau Executive Vice President and Chief Financial Officer
|
| 2021 |
|
| 643,771 |
|
| — |
|
| 392,552 |
|
| 349,661 |
|
| 960,390 |
|
| 600,578 |
|
| 32,426 |
|
| 2,979,379 |
| |||||||||
| 2020 |
|
| 640,771 |
|
| — |
|
| 369,650 |
|
| 349,660 |
|
| 416,700 |
|
| 1,442,638 |
|
| 33,161 |
|
| 3,252,580 |
| ||||||||||
| 2019 |
|
| 620,842 |
|
| — |
|
| 321,836 |
|
| 315,011 |
|
| 747,180 |
|
| 1,027,251 |
|
| 33,088 |
|
| 3,065,208 |
| ||||||||||
Matthew E. Hamel Executive Vice President, General Counsel and Secretary |
| 2021 |
|
| 552,570 |
|
| — |
|
| 189,083 |
|
| 336,848 |
|
| 531,849 |
|
| 314,554 |
|
| 32,841 |
|
| 1,957,745 |
| |||||||||
| 2020 |
|
| 549,995 |
|
| — |
|
| 178,052 |
|
| 336,838 |
|
| 209,750 |
|
| 557,686 |
|
| 35,962 |
|
| 1,868,283 |
| ||||||||||
| 2019 |
|
| 533,969 |
|
| — |
|
| 167,061 |
|
| 327,033 |
|
| 458,917 |
|
| 335,765 |
|
| 33,246 |
|
| 1,855,991 |
| ||||||||||
Thomas W. Hinrichs (8) Senior Vice President, President, Emerging International
|
| 2021 |
|
| 480,658 |
|
| — |
|
| 145,226 |
|
| 258,714 |
|
| 727,745 |
|
| — |
|
| 129,027 |
|
| 1,741,370 |
| |||||||||
| 2020 |
|
| 473,487 |
|
| — |
|
| 137,188 |
|
| 259,540 |
|
| 268,533 |
|
| 11,681 |
|
| 207,022 |
|
| 1,357,451 |
| ||||||||||
| 2019 |
|
| 477,044 |
|
| — |
|
| 126,020 |
|
| 123,352 |
|
| 558,170 |
|
| 21,421 |
|
| 167,008 |
|
| 1,473,015 |
| ||||||||||
Kirsten M. Hawley (9) Senior Vice President, Chief People, Places, and Communications Officer
|
| 2021 |
|
| 442,983 |
|
| — |
|
| 145,109 |
|
| 129,255 |
|
| 585,090 |
|
| 273,967 |
|
| 34,449 |
|
| 1,610,853 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Salary includes holiday bonus and is based on the fiscal year beginning May 1, |
Length of Continuous Service | Amount of Holiday Bonus | ||
3 months but less than 6 months | 1/8 of monthly salary | ||
6 months but less than 5 years | 1/4 of monthly salary | ||
5 years but less than 10 years | 3/8 of monthly salary | ||
10 years or more | 1/2 of monthly salary |
(2) | Our NEOs do not receive non-performance-based compensation that would be considered a “Bonus” under SEC rules. |
(3) | Includes the aggregate grant date fair value of |
(4) | Includes the aggregate grant date fair value of SSARs granted during the respective fiscal years, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note |
40 BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
COMPENSATION TABLES | SUMMARY COMPENSATION
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 49 |
(5) | Amounts listed for fiscal | |
Short-Term Cash | Long-Term Cash | Total | |||||
Lawson E. Whiting | $812,600 | $334,750 | $1,147,350 | ||||
Jane C. Morreau | 432,000 | 315,180 | 747,180 | ||||
Mark I. McCallum | 443,106 | 442,900 | 886,006 | ||||
Matthew E. Hamel | 295,404 | 163,513 | 458,917 | ||||
Thomas Hinrichs | 380,575 | 177,595 | 558,170 | ||||
Paul C. Varga | 962,615 | 1,586,200 | 2,548,815 |
Name | Short-Term Cash | Long-Term Cash | Total | |||||||||
Lawson E. Whiting | $1,968,373 | $1,018,400 | $ | 2,986,774 | ||||||||
Jane C. Morreau | 622,710 | 337,680 | 960,390 | |||||||||
Matthew E. Hamel | 400,384 | 131,465 | 531,849 | |||||||||
Thomas W. Hinrichs | 538,654 | 189,091 | 727,745 | |||||||||
Kirsten M. Hawley | 396,150 | 188,940 | 585,090 |
(6) | Amounts represent changes between fiscal years in the actuarial present value of the accumulated pension benefits of each of the NEOs under the applicable pension or savings plan. Pension values may fluctuate significantly from year to year depending on a number of factors, including age, years of service, average annual earnings, and the assumptions used to determine the present value, such as the discount rate and mortality tables. Please see the Fiscal 2021 Pension Benefits Table on page |
Qualified | Non-Qualified | Total | |||||
Lawson E. Whiting | $94,678 | $634,515 | $729,193 | ||||
Jane C. Morreau | 149,800 | 877,451 | 1,027,251 | ||||
Mark I. McCallum | 116,188 | 416,125 | 532,313 | ||||
Matthew E. Hamel | 85,817 | 249,948 | 335,765 | ||||
Thomas Hinrichs | 21,421 | — | 21,421 | ||||
Paul C. Varga | 466,226 | 4,965,879 | 5,432,105 |
Name | Qualified | Non-Qualified | Total | |||||||||
Lawson E. Whiting | $104,051 | $902,555 | $ | 1,006,606 | ||||||||
Jane C. Morreau | 150,243 | 450,335 | 600,578 | |||||||||
Matthew E. Hamel | 97,566 | 216,988 | 314,554 | |||||||||
Thomas W. Hinrichs | — | — | — | |||||||||
Kirsten M. Hawley | 104,135 | 169,832 | 273,967 |
(7) | The following table sets forth each component of the “All Other Compensation” column for fiscal |
2021: |
Cost of Company- | |||||||||||
401(k) Matching | Provided Life | Cost of Company- | |||||||||
Name | Contribution(a) | Insurance | Leased Car(b)(c) | Other(d)(e) | Total | ||||||
Lawson E. Whiting | $18,417 | $3,179 | $13,956 | $1,650 | $37,202 | ||||||
Jane C. Morreau | 13,925 | 3,344 | 12,049 | 3,770 | 33,088 | ||||||
Mark I. McCallum | 14,028 | 3,113 | 13,988 | 3,388 | 34,517 | ||||||
Matthew E. Hamel | 13,969 | 2,779 | 12,498 | 4,000 | 33,246 | ||||||
Thomas Hinrichs | — | — | 18,162 | 148,846 | 167,008 | ||||||
Paul C. Varga | 3,844 | 2,444 | 11,252 | — | 17,540 |
Name | 401(k) Matching Contribution(a) | Cost of Company-Provided Life Insurance | Cost of Company-Leased Car(b)(c) | Other(d)(e)(f) | Total | |||||||||||||||
Lawson E. Whiting | $14,500 | $2,496 | $18,107 | $ | 309,017 | $ | 344,120 | |||||||||||||
Jane C. Morreau | 14,250 | 2,496 | 11,680 | 4,000 | 32,426 | |||||||||||||||
Matthew E. Hamel | 14,250 | 2,168 | 12,423 | 4,000 | 32,841 | |||||||||||||||
Thomas W. Hinrichs | — | — | 18,143 | 110,884 | 129,027 | |||||||||||||||
Kirsten M. Hawley | 14,250 | 1,799 | 14,400 | 4,000 | 34,449 |
(a) | For the period May 1, |
(b) | Values based on the cost to Brown-Forman during the fiscal year, including lease payments, maintenance, registration, and insurance premiums. |
(c) | Amounts shown for Mr. Hinrichs |
(d) | Reimbursement of financial planning expenses up to a limit of $4,000 for the fiscal year. |
(e) | Includes expatriate costs of $110,884 associated with Mr. Hinrichs’s assignment in the Netherlands, |
(f) | Includes trailing tax gross-up of $307,667 related to the exercise of SSARs earned by Mr. Whiting while on expatriate assignment in the U.K. in 2011. |
(8) | ||
Mr. Hinrichs is based in |
Compensation for Ms. Hawley is provided only for fiscal 2021. Ms. Hawley was not an |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN 41
COMPENSATION TABLES50 | GRANTS OF PLAN-BASED AWARDS
The following table contains information regarding the equity and non-equity awards granted to our NEOs during fiscal 20192021 under our 2013 Omnibus Compensation Plan. For additional information on the fiscal 20192021 awards, please see the Compensation Discussion and Analysis, which begins on page 24.32.
FISCAL 20192021 GRANTS OF PLAN-BASED AWARDS TABLE
All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards: | Grant Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Exercise or | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under | Estimated Possible Payouts Under | Securities | Base Price | of Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Award | Non-Equity Incentive Plan Awards(2) | Equity Incentive Plan Awards(3) | Underlying | of Option | and Option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Date | Type(1) | Threshold | Target | Maximum | Threshold | Target | Maximum | Options(4) | Awards(5) | Awards(6) | Grant Date | Award Type(1) | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Possible Payouts Under Equity Incentive Plan Awards (3) | All Other Option Awards: Number of Securities Underlying Options(4) | Exercise or Base Price of Option Awards(5) | Grant Date Fair Value of Stock and Option Awards(6) | ||||||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lawson E. Whiting |
| STC |
| $ | — |
| $ | 1,416,096 |
| $ | 2,832,192 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTC |
|
| — |
|
| 1,291,667 |
|
| 2,583,334 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| PBRSU |
|
| 14,284 |
|
| 28,567 |
|
| 42,851 |
|
| td,020,860 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
STC | $0 | $850,000 | td,700,000 |
| 7/30/2020 |
|
| SSAR |
|
| 107,803 |
|
| 69.21 |
|
| 1,575,002 |
| ||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 1,266,667 | 2,533,334 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRSU | 4,152 | 8,303 | 12,455 | $459,765 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 40,688 | $54.00 | 450,009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jane C. Morreau |
| STC |
|
| — |
|
| 495,000 |
|
| 990,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTC |
|
| — |
|
| 466,200 |
|
| 932,400 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| PBRSU |
|
| 2,775 |
|
| 5,550 |
|
| 8,325 |
|
| 392,552 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
STC | 0 | 450,000 | 900,000 |
| 7/30/2020 |
|
| SSAR |
|
| 23,933 |
|
| 69.21 |
|
| 349,661 |
| ||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 420,000 | 840,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRSU | 2,906 | 5,812 | 8,718 | 321,836 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 28,482 | 54.00 | 315,011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark I. McCallum | STC | 0 | 463,500 | 927,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 442,900 | 885,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRSU | 2,043 | 4,086 | 6,129 | 226,255 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 20,023 | 54.00 | 221,454 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew E. Hamel |
| STC |
|
| — |
|
| 318,270 |
|
| 636,540 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTC |
|
| — |
|
| 168,418 |
|
| 336,836 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| PBRSU |
|
| 1,337 |
|
| 2,673 |
|
| 4,010 |
|
| 189,083 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
STC | 0 | 309,000 | 618,000 |
| 7/30/2020 |
|
| SSAR |
|
| 23,056 |
|
| 69.21 |
|
| 336,848 |
| ||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 163,513 | 327,025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas W. Hinrichs(7) |
| STC |
|
| — |
|
| 411,815 |
|
| 823,629 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTC |
|
| — |
|
| 129,354 |
|
| 258,707 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| PBRSU |
|
| 1,027 |
|
| 2,053 |
|
| 3,080 |
|
| 145,226 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| SSAR |
|
| 17,708 |
|
| 69.21 |
|
| 258,714 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRSU | 1,509 | 3,017 | 4,526 | 167,061 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 29,569 | 54.00 | 327,033 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas Hinrichs(7) | STC | 0 | 410,364 | 820,728 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 241,391 | 482,782 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRSU | 1,138 | 2,276 | 3,414 | 126,020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 11,153 | 54.00 | 123,352 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul C. Varga(8) | STC | 0 | 1,006,920 | 2,013,840 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LTC | 0 | 1,209,707 | 2,419,414 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | PBRS-A | 8,370 | 16,740 | 25,110 | 926,968 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | SSAR | 82,033 | 54.00 | 907,285 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirsten M. Hawley |
| STC |
|
| — |
|
| 285,000 |
|
| 570,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTC |
|
| — |
|
| 258,500 |
|
| 517,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| PBRSU |
|
| 1,026 |
|
| 2,052 |
|
| 3,078 |
|
| 145,109 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| SSAR |
|
| 8,847 |
|
| 69.21 |
|
| 129,255 |
|
(1) | “STC”” represents short-term (or annual) incentive compensation payable in cash. “LTC” represents long-term incentive compensation payable in cash at the end of a three-year performance period. “PBRSU” represents the Class A common performance-based restricted stock units. “SSAR” represents Class B common stock-settled stock appreciation rights. |
(2) | Amounts represent the potential value of the short-term incentive compensation opportunity for the fiscal |
(3) | Amounts represent the estimated payouts of the PBRSU awards granted in fiscal |
(4) | The number of SSARs awarded for fiscal |
(5) | The exercise price for the SSARs represents the closing price of our Class B common stock on the grant date. |
(6) | Calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts appear in Note |
(7) | Mr. Hinrichs is based in | |
42 BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 51 |
COMPENSATION TABLES | OUTSTANDING EQUITY AWARDS
The following table lists the outstanding equity awards held by our NEOs as of April 30, 2019.2021. The year-end values shown in the table are based on the April 30, 2019,2021, closing prices for our Class A common stock, $52.30,$71.35 per share, and our Class B common stock, $53.29.$76.28 per share.
OUTSTANDING EQUITY AWARDS AT 20192021 FISCAL YEAR END TABLE
SSAR Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive | Plan Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan Awards: | Market or | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Payout Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities | Number of | Market Value | Unearned | of Unearned | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Underlying | Underlying | Shares or | of Shares or | Shares, Units | Shares, Units | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | SSAR | SSAR | Units of Stock | Units of Stock | or Other Rights | or Other Rights | SSAR AWARDS(1) | STOCK AWARDS(2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Grant | SSARs | SSARs | Exercise | Expiration | That Have Not | That Have Not | That Have Not | That Have Not | ||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Date | Exercisable | Unexercisable | Price | Date | Vested(3) | Vested(3)(4) | Vested(5)(6) | Vested(7) | Grant Date | Number of Securities Underlying Unexercised SSARs Exercisable | Number of Securities Underlying Unexercised SSARs Unexercisable | SSAR Exercise Price | SSAR Expiration Date | Number of Shares or Units of Stock That Have Not Vested(3) | Market Value of Shares or Units of Stock That Have Not Vested(4) | Equity Incentive Have Not Vested(5) | Equity Incentive Plan Awards: Market or | ||||||||||||||||||||||||||||||||||||||||
Lawson E. Whiting |
| 7/26/2012 |
|
| 19,763 |
| $ | 23.05 |
|
| 4/30/2022 |
| ||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2013 |
|
| 21,884 |
|
| 28.43 |
|
| 4/30/2023 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/24/2014 |
|
| 15,382 |
|
| 36.11 |
|
| 4/30/2024 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/23/2015 |
|
| 20,045 |
|
| 40.15 |
|
| 4/30/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/28/2016 |
|
| 28,903 |
|
| 38.48 |
|
| 4/30/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/27/2017 |
|
| 34,134 |
|
| 39.76 |
|
| 4/30/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 40,688 |
|
| 54.00 |
|
| 4/30/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 110,063 |
|
| 54.64 |
|
| 4/30/2029 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 107,803 |
|
| 69.21 |
|
| 4/30/2030 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 7,371 |
|
| $525,921 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 26,247 |
|
| $ 1,872,723 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2011 | 21,848 | td8.22 | 4/30/2021 |
| 7/30/2020 |
|
| 28,567 |
|
| 2,038,255 |
| ||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | 19,763 | 23.05 | 4/30/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | 21,884 | 28.43 | 4/30/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/24/2014 | 15,382 | 36.11 | 4/30/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/23/2015 | 20,045 | 40.15 | 4/30/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 28,903 | 38.48 | 4/30/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 34,134 | 39.76 | 4/30/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 40,688 | 54.00 | 4/30/2028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 6,064 | $318,347 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 5,832 | $306,169 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 12,455 | 651,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jane C. Morreau |
| 7/25/2013 |
|
| 23,601 |
| $ | 28.43 |
|
| 4/30/2023 |
| ||||||||||||||||||||||||||||||||||||||||||||||
| 7/24/2014 |
|
| 34,194 |
|
| 36.11 |
|
| 4/30/2024 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/23/2015 |
|
| 34,077 |
|
| 40.15 |
|
| 4/30/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/28/2016 |
|
| 52,827 |
|
| 38.48 |
|
| 4/30/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/27/2017 |
|
| 40,510 |
|
| 39.76 |
|
| 4/30/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 28,482 |
|
| 54.00 |
|
| 4/30/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 31,416 |
|
| 54.64 |
|
| 4/30/2029 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 23,933 |
|
| 69.21 |
|
| 4/30/2030 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 5,160 |
|
| 368,166 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 6,556 |
|
| 467,771 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2011 | 36,588 | td8.22 | 4/30/2021 |
| 7/30/2020 |
|
| 5,550 |
|
| 395,993 |
| ||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | 28,267 | 23.05 | 4/30/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | 23,601 | 28.43 | 4/30/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/24/2014 | 34,194 | 36.11 | 4/30/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/23/2015 | 34,077 | 40.15 | 4/30/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 52,827 | 38.48 | 4/30/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 40,510 | 39.76 | 4/30/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 28,482 | 54.00 | 4/30/2028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 11,080 | $581,677 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 9,870 | $518,299 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 8,718 | 455,951 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark I. McCallum | 7/28/2011 | 58,947 | $18.22 | 4/30/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2012 | 63,316 | 23.05 | 4/30/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/25/2013 | 40,678 | 28.43 | 4/30/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/24/2014 | 34,836 | 36.11 | 4/30/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/23/2015 | 28,399 | 40.15 | 4/30/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 38,241 | 38.48 | 4/30/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 32,258 | 39.76 | 4/30/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 20,023 | 54.00 | 4/30/2028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/28/2016 | 8,020 | $421,033 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/27/2017 | 7,716 | $405,075 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/26/2018 | 6,129 | 320,547 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew E. Hamel |
| 7/26/2012 |
|
| 56,531 |
| $ | 23.05 |
|
| 4/30/2022 |
| ||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2013 |
|
| 42,910 |
|
| 28.43 |
|
| 4/30/2023 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/24/2014 |
|
| 33,676 |
|
| 36.11 |
|
| 4/30/2024 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/23/2015 |
|
| 38,419 |
|
| 40.15 |
|
| 4/30/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/28/2016 |
|
| 56,472 |
|
| 38.48 |
|
| 4/30/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/27/2017 |
|
| 47,637 |
|
| 39.76 |
|
| 4/30/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 29,569 |
|
| 54.00 |
|
| 4/30/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 30,264 |
|
| 54.64 |
|
| 4/30/2029 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 23,056 |
|
| 69.21 |
|
| 4/30/2030 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 2,679 |
|
| 191,147 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 3,158 |
|
| 225,323 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 2,673 |
|
| 190,719 |
|
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS52BROWN-FORMAN 43
COMPENSATION TABLES | OUTSTANDING EQUITY AWARDS
OUTSTANDING EQUITY AWARDS AT 20192021 FISCAL YEAR END TABLE (CONTINUED)
SSAR Awards(1) | Stock Awards(2) | |||||||||||||||||
Equity Incentive | ||||||||||||||||||
Equity Incentive | Plan Awards: | |||||||||||||||||
Plan Awards: | Market or | |||||||||||||||||
Number of | Number of | Number of | Payout Value | |||||||||||||||
Securities | Securities | Number of | Market Value | Unearned | of Unearned | |||||||||||||
Underlying | Underlying | Shares or | of Shares or | Shares, Units | Shares, Units | |||||||||||||
Unexercised | Unexercised | SSAR | SSAR | Units of Stock | Units of Stock | or Other Rights | or Other Rights | |||||||||||
Grant | SSARs | SSARs | Exercise | Expiration | That Have Not | That Have Not | That Have Not | That Have Not | ||||||||||
Name | Date | Exercisable | Unexercisable | Price | Date | Vested(3) | Vested(3)(4) | Vested(5)(6) | Vested(7) | |||||||||
Matthew E. Hamel | 7/22/2010 | 64,126 | $15.09 | 4/30/2020 | ||||||||||||||
7/28/2011 | 60,980 | 18.22 | 4/30/2021 | |||||||||||||||
7/26/2012 | 56,531 | 23.05 | 4/30/2022 | |||||||||||||||
7/25/2013 | 42,910 | 28.43 | 4/30/2023 | |||||||||||||||
7/24/2014 | 33,676 | 36.11 | 4/30/2024 | |||||||||||||||
7/23/2015 | 38,419 | 40.15 | 4/30/2025 | |||||||||||||||
7/28/2016 | 56,472 | 38.48 | 4/30/2026 | |||||||||||||||
7/27/2017 | 47,637 | 39.76 | 4/30/2027 | |||||||||||||||
7/26/2018 | 29,569 | 54.00 | 4/30/2028 | |||||||||||||||
7/28/2016 | 5,923 | $310,945 | ||||||||||||||||
7/27/2017 | 5,697 | $299,082 | ||||||||||||||||
7/26/2018 | 4,526 | 236,684 | ||||||||||||||||
Thomas Hinrichs | 7/22/2010 | 6,503 | $15.09 | 4/30/2020 | ||||||||||||||
7/28/2011 | 12,302 | 18.22 | 4/30/2021 | |||||||||||||||
7/26/2012 | 14,457 | 23.05 | 4/30/2022 | |||||||||||||||
7/25/2013 | 11,134 | 28.43 | 4/30/2023 | |||||||||||||||
7/24/2014 | 8,808 | 36.11 | 4/30/2024 | |||||||||||||||
7/23/2015 | 11,134 | 40.15 | 4/30/2025 | |||||||||||||||
7/28/2016 | 14,966 | 38.48 | 4/30/2026 | |||||||||||||||
7/27/2017 | 12,647 | 39.76 | 4/30/2027 | |||||||||||||||
7/26/2018 | 11,153 | 54.00 | 4/30/2028 | |||||||||||||||
7/28/2016 | 3,143 | $165,002 | ||||||||||||||||
7/27/2017 | 3,026 | $158,834 | ||||||||||||||||
7/26/2018 | 3,414 | 178,552 | ||||||||||||||||
Paul C. Varga | 7/26/2012 | 235,630 | $23.05 | 4/30/2022 | ||||||||||||||
7/25/2013 | 158,757 | 28.43 | 4/30/2023 | |||||||||||||||
7/24/2014 | 155,424 | 36.11 | 4/30/2024 | |||||||||||||||
7/23/2015 | 196,435 | 40.15 | 4/30/2025 | |||||||||||||||
7/28/2016 | 273,905 | 38.48 | 12/31/2025 | |||||||||||||||
7/27/2017 | 231,052 | 39.76 | 12/31/2025 | |||||||||||||||
7/26/2018 | 82,033 | 54.00 | 12/31/2025 | |||||||||||||||
7/28/2016 | 49,233 | $2,584,625 | ||||||||||||||||
7/27/2017 | 47,082 | $2,471,711 | ||||||||||||||||
7/26/2018 | 25,110 | 1,313,253 |
SSAR AWARDS(1) | STOCK AWARDS(2) | |||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised SSARs Exercisable | Number of Securities Underlying Unexercised SSARs Unexercisable | SSAR Exercise Price | SSAR Expiration Date | Number of Shares or Units of Stock That Have Not Vested(3) | Market Value of Shares or Units of Stock That Have Not Vested(4) | Equity Incentive Have Not Vested(5) | Equity Incentive Plan Awards: Market or | |||||||||||||||||||||||||||||||
Thomas W. Hinrichs |
| 7/26/2012 |
|
| 14,457 |
| $ | 23.05 |
|
| 4/30/2022 |
| ||||||||||||||||||||||||||||
| 7/25/2013 |
|
| 11,134 |
|
| 28.43 |
|
| 4/30/2023 |
| |||||||||||||||||||||||||||||
| 7/28/2016 |
|
| 14,966 |
|
| 38.48 |
|
| 4/30/2026 |
| |||||||||||||||||||||||||||||
| 7/27/2017 |
|
| 12,647 |
|
| 39.76 |
|
| 4/30/2027 |
| |||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 11,153 |
|
| 54.00 |
|
| 4/30/2028 |
| |||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 23,319 |
|
| 54.64 |
|
| 4/30/2029 |
| |||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 17,708 |
|
| 69.21 |
|
| 4/30/2030 |
| |||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 2,021 |
|
| $144,198 |
| ||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 2,433 |
|
| $173,595 |
| ||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 2,053 |
|
| 146,482 |
| ||||||||||||||||||||||||||||||||
Kirsten M. Hawley |
| 7/28/2016 |
|
| 17,788 |
| $ | 38.48 |
|
| 4/30/2026 |
| ||||||||||||||||||||||||||||
| 7/27/2017 |
|
| 30,008 |
|
| 39.76 |
|
| 4/30/2027 |
| |||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 10,624 |
|
| 54.00 |
|
| 4/30/2028 |
| |||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 11,613 |
|
| 54.64 |
|
| 4/30/2029 |
| |||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 8,847 |
|
| 69.21 |
|
| 4/30/2030 |
| |||||||||||||||||||||||||||||
| 7/26/2018 |
|
| 1,925 |
|
| 137,349 |
| ||||||||||||||||||||||||||||||||
| 7/25/2019 |
|
| 2,424 |
|
| 172,952 |
| ||||||||||||||||||||||||||||||||
| 7/30/2020 |
|
| 2,052 |
|
| 146,410 |
|
(1) | SSAR awards are exercisable for shares of Class B common stock. All SSARs vest and become fully exercisable on the first day of the third fiscal year following the fiscal year of grant, and generally are exercisable for seven fiscal years thereafter (barring certain events that may require an award to become exercisable earlier). |
44 BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
COMPENSATION TABLES | OPTION EXERCISES AND STOCK VESTED
(2) | Represents Class A |
(3) | Reflects the number of shares of restricted Class A |
(4) | Market value for the shares of restricted Class A |
(5) | Amounts shown represent the estimated maximum possible payout of |
(6) | Market value for the PBRSU awards was determined by multiplying the number of Class A shares by | |
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 53 |
OPTION EXERCISES AND STOCK VESTED
The following table shows all SSAR awards exercised by the NEOs during fiscal 20192021 and the value realized upon exercise, as well as all stock awards in which our NEOs vested during fiscal 20192021 and the value realized upon vesting.
FISCAL 20192021 OPTION EXERCISES AND STOCK VESTED TABLE
Option/SSAR Awards(1) | Stock Awards(2) | |||||||||
Number of Class A | Number of Class B | |||||||||
Number of Shares | Value Realized | Shares Acquired | Shares Acquired | Value Realized | ||||||
Name | Acquired on Exercise | on Exercise(3) | on Vesting(4) | on Vesting(5) | on Vesting(6) | |||||
Lawson E. Whiting | — | $— | 4,233 | 1,058 | $277,767 | |||||
Jane C. Morreau(7) | 14,721 | 1,041,921 | 8,396 | 2,098 | 550,913 | |||||
Mark I. McCallum | — | — | 5,997 | 1,499 | 393,525 | |||||
Matthew E. Hamel(8) | 35,081 | 2,985,104 | 4,057 | 1,014 | 266,217 | |||||
Thomas Hinrichs(9) | 3,783 | 364,465 | 2,608 | 652 | 171,143 | |||||
Paul C. Varga | — | — | 29,631 | 7,404 | 1,743,385 |
SSAR Awards(1) | Stock Awards(2) | |||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(3) | Number of Class A Common Stock Acquired on Vesting(4) | Number of Class B Common Stock Acquired on Vesting(5) | Value Realized on Vesting(6) | |||||||||||||||||||
Lawson E. Whiting(7) | 21,848 | $1,206,949 | 4,782 | 1,196 | $345,626 | |||||||||||||||||||
Jane C. Morreau(8) | 28,267 | 1,593,778 | 7,945 | 1,986 | 574,170 | |||||||||||||||||||
Matthew E. Hamel(9) | 60,980 | 3,314,751 | 4,672 | 1,168 | 337,645 | |||||||||||||||||||
Thomas W. Hinrichs(10) | 12,302 | 736,558 | 2,481 | 621 | 179,349 | |||||||||||||||||||
Kirsten M. Hawley(11) | 14,032 | 332,067 | 2,943 | 737 | 212,768 |
(1) | All SSAR awards are settled in Class B common stock. |
(2) | Stock awards are in the form of Class A and Class B common stock. |
(3) | Equals the difference between the SSAR exercise price and the market price of the underlying shares at time of exercise, multiplied by the number of SSAR awards exercised. |
(4) | The grant date for all awards of Class A common |
(5) | The Class B common stock was issued as a result of the 5-for-4 stock split on February 28, 2018. |
(6) | Equals the sum of the closing price of each underlying security on the vesting date multiplied by the number of shares of the applicable class of common stock that vested. The closing price of our Class A common stock on |
(7) | Mr. Whiting exercised |
(8) | Ms. Morreau exercised 28,267 SSAR awards on January 4, 2021. |
(9) | Mr. Hamel exercised |
(10) | Mr. Hinrichs exercised |
(11) | Ms. Hawley exercised 14,032 SSAR awards on June 25, 2020. |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS BROWN-FORMAN 45
COMPENSATION TABLES | PENSION BENEFITS
We maintain both tax-qualified and non-qualified supplemental excess retirement plans. The following table shows the present value of accumulated pension benefits payable to each of our NEOs under our tax-qualified plan (Brown-Forman Corporation Salaried Employees Retirement Plan) and under our non-qualified excess plan (Brown-Forman Supplemental Executive Retirement Plan), based on the pension earned as of our most recent FASB ASC Topic 715 measurement date, April 30, 2019.2021. These plans are described below the table.
FISCAL 20192021 PENSION BENEFITS TABLE
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) | Payments During Last Fiscal Year | Plan Name | Number of Years | Present Value of Accumulated Benefit(1) | Payments During Last Fiscal Year | ||||||||||||||
Lawson E. Whiting | Qualified |
| 23.83 |
|
| $ 1,057,748 |
|
| $ — |
| ||||||||||||
Qualified | 21.83 | $713,838 | — | Non-Qualified |
| 23.83 |
|
| 4,313,765 |
|
| — |
| |||||||||
Non-Qualified | 21.83 | 1,930,385 | — | |||||||||||||||||||
Jane C. Morreau | Qualified | 27.58 | 1,361,669 | — | Qualified |
| 29.58 |
|
| 1,832,978 |
|
| — |
| ||||||||
Non-Qualified | 27.58 | 4,952,700 | — | |||||||||||||||||||
Mark I. McCallum | Qualified | 15.75 | 903,442 | — | ||||||||||||||||||
Jane C. Morreau | Non-Qualified |
| 29.58 |
|
| 6,524,607 |
|
| — |
| ||||||||||||
Non-Qualified | 15.75 | 3,594,244 | — | |||||||||||||||||||
Matthew E. Hamel | Qualified | 11.50 | 541,985 | — | Qualified |
| 13.50 |
|
| 805,599 |
|
| — |
| ||||||||
Matthew E. Hamel | Non-Qualified |
| 13.50 |
|
| 2,026,146 |
|
| — |
| ||||||||||||
Non-Qualified | 11.50 | 1,417,520 | — | |||||||||||||||||||
Thomas Hinrichs(2)(3) | Germany | 22.67 | 971,527 | — | ||||||||||||||||||
Paul C. Varga | Qualified | 31.67 | 1,530,256 | $27,578 | ||||||||||||||||||
Thomas W. Hinrichs(2)(3) | Germany |
| 24.67 |
|
| 958,154 |
|
| — |
| ||||||||||||
Non-Qualified | 31.67 | 18,180,130 | — | |||||||||||||||||||
Kirsten M. Hawley | Qualified |
| 24.00 |
|
| 1,048,250 |
|
| — |
| ||||||||||||
Non-Qualified |
| 24.00 |
|
| 1,686,940 |
|
| — |
|
(1) | Actuarial present value of each NEO’s accumulated pension benefit as of our FASB ASC Topic 715 measurement date, April 30, |
(2) | Mr. Hinrichs is a German |
(3) | Mr. Hinrichs is based in |
54
Brown-Forman Corporation Salaried Employees Retirement Plan
Most U.S. salaried employees, and all of our NEOs (except for Thomas W. Hinrichs), participate in the tax-qualified Brown-Forman Corporation Salaried Employees Retirement Plan. This is a funded, non-contributory, defined benefit pension plan that provides monthly retirement benefits based on the participant’s age at retirement, years of service, and “Final Average Compensation” (described below). Retirement benefits are not offset by Social Security benefits and are assumed for actuarial purposes to be payable at age 65. Participants vest in the plan after five years of service.
Brown-Forman Corporation Supplemental Executive Retirement Plan
U.S. federal tax law limits the amount of compensation that may be used annually to accrue benefits under our tax-qualified Salaried Employees Retirement Plan. For employees whose compensation exceeds these limits, including our NEOs, we maintain a non-qualified supplemental executive retirement plan (SERP). The SERP restores the benefits that are lost due to U.S. federal tax law limitations. The SERP also provides faster vesting for certain key employees who join us mid-career. All NEOs are vested in the SERP.
Pension Formula
The formula we use to calculate the combined total pension benefit under both plans includes the following factors:
Final Average Compensation (FAC) is the average compensation of the highest consecutive five calendar years in the last ten calendar years of employment. For this purpose, compensation is considered to be salary, holiday bonus, and short-term incentive compensation (not long-term cash or equity compensation).
46BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Social Security Covered Compensation (CC) is the average of the Social Security Taxable Wage Base in effect for each calendar year during the 35 years ending with the calendar year in which a participant reaches Social Security Retirement age.
COMPENSATION TABLES | NON-QUALIFIED DEFERRED COMPENSATIONCredited Service (Service) is the number of years and whole months during which the participant is employed by Brown-Forman at a location or division that participates in the pension plan, up to a maximum of 30 years.
The table below shows the pension formula and gives a sample calculation.
MONTHLY PENSION FORMULA FOR A PARTICIPANT RETIRING AT THE REGULAR RETIREMENT AGE OF 65
Generalized Formula | Sample | Amount | |||||||||||||
1.3% multiplied by FAC up to CC | 0.013 × $80,000 | = | $ | 1,040 | |||||||||||
1.75% multiplied by FAC above CC | 0.0175 × $320,000 | = | 5,600 | ||||||||||||
6,640 | |||||||||||||||
The sum of the above multiplied by years of service | × 30 | = | 199,200 | ||||||||||||
Divide by 12 to get the monthly pension (before reduction for early retirement or optional forms of payment) | ÷ 12 | = | $ | 16,600 |
Early retirement is available at age 55 under both plans. Mr. Hamel and Ms. Morreau Mr. McCallum and Mr. Hamel are the NEOs currently eligible for early retirement.
retirement under these plans.
Those who retire before age 65 under the final average pay formula have their pension payments reduced by 3% for each year (1/4 of 1% for each month) that payments start prior to age 65. Retirees also can reduce their pension payment to purchase optional forms of payment that protect a spouse or ensure a minimum payment period.
Once the final pension is determined, the federal rules that govern the maximum pension that can be paid under the qualified plan are applied to determine the portion to be paid under the qualified plan, and the remaining amount becomes payable under the non-qualified pension plan.
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 55 |
NON-QUALIFIED DEFERRED COMPENSATION
Effective January 1, 2011, we adopted the Brown-Forman Corporation Non-Qualified Savings Plan. Additional information on this plan may be found under “Brown-Forman Corporation Non-Qualified Savings Plan” on page 37.45. The following table provides information on plan contributions and earnings for our NEOs for fiscal 2019.2021.
FISCAL 2019 2021 NON-QUALIFIED DEFERRED COMPENSATION TABLE
Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY | Aggregate Earnings in Last FY(2) | Aggregate Withdrawals/ Distributions(3) | Aggregate Balance at Last FYE(4) | |||||||||||||||||||||||||
Executive Contributions in Last FY(1) | Registrant Contributions in Last FY | Aggregate Earnings in Last FY(2) | Aggregate Withdrawals/ Distributions(3) | Aggregate Balance at Last FYE(4) | ||||||||||||||||||||||||||
Lawson E. Whiting | $— | $— | $— | $— | $— |
| $ — |
|
| $ — |
|
| $ — |
|
| $ — |
|
| $ — |
| ||||||||||
Jane C. Morreau | 299,543 | — | 61,751 | — | 1,756,985 |
| — |
|
| — |
|
| 651,896 |
|
| 305,187 |
|
| 2,280,700 |
| ||||||||||
Mark I. McCallum | — | — | 52,628 | 204,641 | 1,002,006 | |||||||||||||||||||||||||
Matthew E. Hamel | — | — | — | — | — |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||||||
Thomas Hinrichs(5) | — | — | — | — | — | |||||||||||||||||||||||||
Paul C. Varga | 717,657 | — | 466,634 | 457,722 | 6,635,096 | |||||||||||||||||||||||||
Thomas W. Hinrichs(5) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||||||||||
Kirsten M. Hawley |
| — |
|
| — |
|
| 335,642 |
|
| 98,032 |
|
| 1,195,804 |
|
(1) | Contributions shown in this column are included in each NEO’s compensation reported in the Fiscal |
(2) | NEOs participating in the Savings Plan may notionally invest their plan balances in mutual funds within generally the same asset classes available to participants in our qualified 401(k) savings plan. The Savings Plan does not guarantee a return on deferred amounts. Earnings in this column represent deemed investment earnings or losses attributable to the change in market value of the notional investments. These amounts are not reported in the Fiscal |
(3) | Ms. Morreau and |
(4) | Amounts |
(5) | Mr. Hinrichs is not eligible for the |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN 47
COMPENSATION TABLES | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We do not provide our NEOs with any separate contract, agreement, or arrangement that allows for payments or benefits upon termination or a change in control or that discriminates in favor of an NEO in scope or terms of operation. We offer certain benefits to executives whose employment terminates before incentive awards are paid, depending upon the circumstances surrounding their termination. These benefits, shown in the table below, are intended to continue to link an executive’s compensation to Brown-Forman’s performance after the executive’s employment has ended and to avoid penalizing executives in situations where the termination was outside of their control.
TREATMENT OF SHORT-TERM AND LONG-TERM INCENTIVE AWARDS UPON TERMINATION OF EMPLOYMENT
Termination Event | Short-Term Cash | Long-Term Cash Incentives | SSARs | |||
Retirement(1) | Awards granted in the fiscal year of termination are pro-rated based on the time worked during that fiscal year, adjusted for performance, and paid at the same time and in the same manner as | Awards granted in the fiscal year of termination are pro-rated based on the time worked during that year, adjusted for performance, and paid soon after the end of the performance period. Outstanding unpaid awards are not reduced, but are adjusted for performance and paid soon after the end of the performance period. | Awards granted in the fiscal year of termination are pro-rated based on the time worked during that year. Other outstanding awards are not reduced. All awards become exercisable at the same time and in the same manner as for active employees. Retirees must exercise awards by the earlier of the original expiration date or the end of seven years following the date of retirement. | |||
InvoluntaryNot | Awards granted in the fiscal year of termination are pro-rated based on the time worked during | |||||
Death/PermanentDisability | Awards granted in the fiscal year of | Awards granted in the fiscal year of | Awards granted in the fiscal year of termination are pro-rated based on the time worked during that year. Other outstanding awards are not reduced. All awards become exercisable on the date of death or permanent disability. Awards must be exercised by the earlier of the expiration date or the end of five years following the date of death or termination of employment due to disability. | |||
Voluntary Terminationor Involuntary for PoorPerformance | Awards granted in the fiscal year of termination are forfeited. | All unearned or nonvested awards are forfeited. | All nonvested awards are forfeited. Exercisable awards may be exercised for up to 30 days, or, if earlier, until the original expiration date. | |||
Involuntary for Cause | All outstanding awards are forfeited. |
(1) | Retirement applies to those executives who leave Brown-Forman at or after age 55 with at least five years of service or at or after age 65 with any service. |
56
CHANGE IN CONTROL AND TERMINATION UPON CHANGE IN CONTROL
In the event of a change in control, as defined in the Brown-Forman 2013 Omnibus Plan or the Brown-Forman 2004 Omnibus Plan, as applicable, short-term and long-term incentive compensation cycles continue unaffected, and outstanding options and SSARs become immediately vested but remain exercisable according to their original vesting schedule. In the event an executive’s employment is terminated by Brown-Forman (or its successor) without cause or by the executive within 60 days after a constructive discharge, in either case within one year following a change in control, all outstanding awards become immediately vested and exercisable, restriction periods lapse, and cash awards are paid out pro-rata based on target performance and prorated through the effective date of termination. In the event of a change in control that modifies the capital structure of Brown-Forman (or its successors), the realizable value on exercise of outstanding options and SSARs is subject to adjustment as described in the applicable Omnibus Plan.
48BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
COMPENSATION TABLES | CHANGE IN CONTROL AND TERMINATION UPON CHANGE IN CONTROL
The following table illustrates the value of compensation available to our NEOs as if their employment were terminated on April 30, 2019,2021, the last day of our 2019 fiscal year,2021, under various scenarios. The compensation included is onlylimited to amounts that would have been payable as a direct result of theeach specified triggering event. This table excludes the value of pension benefits that are disclosed in the Fiscal 20192021 Pension Benefits Table on page 4653 and the amounts payable under deferred compensation plans that are disclosed in the Fiscal 2019 2021 Non-Qualified Deferred Compensation Table on page 47.55.
FISCAL 20192021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE(1)
Name | Death Benefit(2) | Holiday Bonus(3) | STC(4) | LTC(5) | PBRS(5) | SSARs(6) | Total | Death Benefit(1) | Holiday Bonus(2) | STC(3) | LTC(4) | PBRSUs(4) | SSARs(5) | Total | ||||||||||||||||||||||||||||
Lawson E. Whiting |
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Voluntary Termination | — | — | — | — | — | — | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Involuntary Termination Not for Cause | — | $17,375 | $812,600 | $2,010,500 | $1,275,886 | $889,960 | $5,006,321 | — | 20,503 | 1,968,374 | 3,518,400 | 4,436,900 | 4,050,459 | 13,994,636 | ||||||||||||||||||||||||||||
Retirement | — | 17,375 | 812,600 | 2,010,500 | 1,275,886 | 889,960 | 5,006,321 | — | 20,503 | 1,968,374 | 3,518,400 | 4,436,900 | 4,050,459 | 13,994,636 | ||||||||||||||||||||||||||||
Death | $2,000,000 | 17,375 | 850,000 | 1,997,500 | 956,707 | 889,960 | 6,711,542 | 3,000,000 | 20,503 | 1,416,096 | 3,766,667 | 4,436,900 | 4,050,459 | 16,690,625 | ||||||||||||||||||||||||||||
Change-in-Control | — | — | — | — | — | 889,960 | 889,960 | |||||||||||||||||||||||||||||||||||
Termination Upon Change-in-Control | — | 17,375 | 850,000 | 1,997,500 | 956,707 | 889,960 | 4,711,542 | |||||||||||||||||||||||||||||||||||
Jane C. Morreau(7) | ||||||||||||||||||||||||||||||||||||||||||
Change in Control | — | — | — | — | — | 4,050,459 | 4,050,459 | |||||||||||||||||||||||||||||||||||
Termination Upon Change in Control | — | 20,503 | 1,416,096 | 3,766,667 | 4,436,900 | 4,050,459 | 13,690,625 | |||||||||||||||||||||||||||||||||||
Jane C. Morreau(6) (7) |
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Voluntary Termination | — | 10,425 | 432,000 | 1,098,240 | 1,546,255 | 1,330,537 | 4,417,457 | — | 10,738 | 622,710 | 1,270,080 | 1,231,929 | 1,483,628 | 4,619,085 | ||||||||||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Involuntary Termination Not for Cause | — | 10,425 | 432,000 | 1,098,240 | 1,546,255 | 1,330,537 | 4,417,457 | — | 10,738 | 622,710 | 1,270,080 | 1,231,929 | 1,483,628 | 4,619,085 | ||||||||||||||||||||||||||||
Retirement | — | 10,425 | 432,000 | 1,098,240 | 1,546,255 | 1,330,537 | 4,417,457 | — | 10,738 | 622,710 | 1,270,080 | 1,231,929 | 1,483,628 | 4,619,085 | ||||||||||||||||||||||||||||
Death | 2,000,000 | 10,425 | 450,000 | 1,086,000 | 1,224,729 | 1,330,537 | 6,101,691 | 2,000,000 | 10,738 | 495,000 | 1,352,400 | 1,231,929 | 1,483,628 | 6,573,695 | ||||||||||||||||||||||||||||
Change-in-Control | — | — | — | — | — | 1,330,537 | 1,330,537 | |||||||||||||||||||||||||||||||||||
Termination Upon Change-in-Control | — | 10,425 | 450,000 | 1,086,000 | 1,224,729 | 1,330,537 | 4,101,691 | |||||||||||||||||||||||||||||||||||
Mark I. McCallum(7) | ||||||||||||||||||||||||||||||||||||||||||
Change in Control | — | — | — | — | — | 1,483,628 | 1,483,628 | |||||||||||||||||||||||||||||||||||
Termination Upon Change in Control | — | 10,738 | 495,000 | 1,352,400 | 1,231,929 | 1,483,628 | 4,573,695 | |||||||||||||||||||||||||||||||||||
Matthew E. Hamel(6) |
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Voluntary Termination | — | 11,364 | 443,106 | 1,320,100 | 1,146,655 | 1,002,858 | 3,924,083 | — | 9,217 | 400,384 | 468,300 | 607,189 | 1,476,716 | 2,961,805 | ||||||||||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Involuntary Termination Not for Cause | — | 11,364 | 443,106 | 1,320,100 | 1,146,655 | 1,002,858 | 3,924,083 | — | 9,217 | 400,384 | 468,300 | 607,189 | 1,476,716 | 2,961,805 | ||||||||||||||||||||||||||||
Retirement | — | 11,364 | 443,106 | 1,320,100 | 1,146,655 | 1,002,858 | 3,924,083 | — | 9,217 | 400,384 | 468,300 | 607,189 | 1,476,716 | 2,961,805 | ||||||||||||||||||||||||||||
Death | 2,000,000 | 11,364 | 463,500 | 1,302,900 | 904,781 | 1,002,858 | 5,685,403 | 2,742,000 | 9,217 | 318,270 | 500,349 | 607,189 | 1,476,716 | 5,653,741 | ||||||||||||||||||||||||||||
Change-in-Control | — | — | — | — | — | 1,002,858 | 1,002,858 | |||||||||||||||||||||||||||||||||||
Termination Upon Change-in-Control | — | 11,364 | 463,500 | 1,302,900 | 904,781 | 1,002,858 | 3,685,403 | |||||||||||||||||||||||||||||||||||
Matthew E. Hamel(7) | ||||||||||||||||||||||||||||||||||||||||||
Voluntary Termination | — | 8,948 | 295,404 | 487,363 | 846,710 | 1,480,965 | 3,119,390 | |||||||||||||||||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Involuntary Termination Not for Cause | — | 8,948 | 295,404 | 487,363 | 846,710 | 1,480,965 | 3,119,390 | |||||||||||||||||||||||||||||||||||
Retirement | — | 8,948 | 295,404 | 487,363 | 846,710 | 1,480,965 | 3,119,390 | |||||||||||||||||||||||||||||||||||
Death | 1,672,000 | 8,948 | 309,000 | 481,013 | 668,122 | 1,480,965 | 4,620,048 | |||||||||||||||||||||||||||||||||||
Change-in-Control | — | — | — | — | — | 1,480,965 | 1,480,965 | |||||||||||||||||||||||||||||||||||
Termination Upon Change-in-Control | — | 8,948 | 309,000 | 481,013 | 668,122 | 1,480,965 | 2,948,048 | |||||||||||||||||||||||||||||||||||
Thomas Hinrichs(7) | ||||||||||||||||||||||||||||||||||||||||||
Voluntary Termination | — | 7,989 | 343,915 | 609,026 | 502,387 | 392,783 | 1,856,100 | |||||||||||||||||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Involuntary Termination Not for Cause | — | 7,989 | 343,915 | 609,026 | 502,387 | 392,783 | 1,856,100 | |||||||||||||||||||||||||||||||||||
Retirement | — | 7,989 | 343,915 | 609,026 | 502,387 | 392,783 | 1,856,100 | |||||||||||||||||||||||||||||||||||
Death | — | 7,989 | 357,500 | 602,129 | 389,925 | 392,783 | 1,750,326 | |||||||||||||||||||||||||||||||||||
Change-in-Control | — | — | — | — | — | 392,783 | 392,783 | |||||||||||||||||||||||||||||||||||
Termination Upon Change-in-Control | — | 7,989 | 357,500 | 602,129 | 389,925 | 392,783 | 1,750,326 | |||||||||||||||||||||||||||||||||||
Change in Control | — | — | — | — | — | 1,476,716 | 1,476,716 | |||||||||||||||||||||||||||||||||||
Termination Upon Change in Control | — | 9,217 | 318,270 | 500,349 | 607,189 | 1,476,716 | 2,911,741 |
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 57 |
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN 49
COMPENSATION TABLES |FISCAL 2021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL AND TERMINATION UPON CHANGE IN CONTROLTABLE (CONTINUED)
Name | Death Benefit(1) | Holiday Bonus(2) | STC(3) | LTC(4) | PBRSUs(4) | SSARs(5) | Total | |||||||||||||||||||||
Thomas W. Hinrichs(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Voluntary Termination | $ | — | $ | 8,017 | $ | 538,654 | $ | 447,798 | $ | 464,274 | $ | 878,308 | $ | 2,337,052 | ||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | |||||||||||||||||||||
Involuntary Termination Not for Cause | — | 8,017 | 538,654 | 447,798 | 464,274 | 878,308 | 2,337,052 | |||||||||||||||||||||
Retirement | — | 8,017 | 538,654 | 447,798 | 464,274 | 878,308 | 2,337,052 | |||||||||||||||||||||
Death | — | 8,017 | 411,815 | 468,707 | 464,274 | 878,308 | 2,231,121 | |||||||||||||||||||||
Change in Control | — | — | — | — | — | 878,308 | 878,308 | |||||||||||||||||||||
Termination Upon Change in Control | — | 8,017 | 411,815 | 468,707 | 464,274 | 878,308 | 2,231,121 | |||||||||||||||||||||
Kirsten M. Hawley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Voluntary Termination | — | — | — | — | — | — | — | |||||||||||||||||||||
Involuntary Termination for Cause | — | — | — | — | — | — | — | |||||||||||||||||||||
Involuntary Termination Not for Cause | — | 7,389 | 396,150 | 705,940 | 456,711 | 550,556 | 2,116,746 | |||||||||||||||||||||
Retirement | — | 7,389 | 396,150 | 705,940 | 456,711 | 550,556 | 2,116,746 | |||||||||||||||||||||
Death | 1,456,000 | 7,389 | 285,000 | 752,000 | 456,711 | 550,556 | 3,507,656 | |||||||||||||||||||||
Change in Control | — | — | — | — | — | 550,556 | 550,556 | |||||||||||||||||||||
Termination Upon Change in Control | — | 7,389 | 285,000 | 752,000 | 456,711 | 550,556 | 2,051,656 |
(1) | ||
Death benefit includes amounts provided by Brown-Forman as an insurance benefit (generally available to all salaried employees) and additional amounts elected and paid for by each NEO as optional insurance coverage. |
(2) | Pro-rated holiday bonus is provided in the event of involuntary termination |
Prorated short-term cash incentives are provided in the event of involuntary termination |
(4) | Continued vesting of a pro-rated portion of long-term cash incentives and |
(5) | Continued vesting of a pro-rated portion of SSARs is provided in the event of involuntary termination |
(6) | As |
(7) | Ms. Morreau will hand off her duties as |
50BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
58
OWNERSHIP |
BENEFICIAL OWNERS OF MORE THAN 5% OF BROWN-FORMAN’S VOTING STOCK
The table below identifies each beneficial owner of more than 5% of our Class A common stock, our only class of voting stock, as of April 30, 2019.2021. Each of the beneficial owners listed in the table is an entity controlled by Brown family members.
The aggregate number of shares of Class A common stock beneficially owned by the persons in this table is 113,058,963113,214,304 shares, or 66.9%67% of the 168,999,423169,109,992 shares of Class A common stock outstanding as of the close of business on April 30, 2019.2021. Taking into account ownership of shares of our non-voting Class B common stock, the Brown family controls more than 50% of the economic ownership in Brown-Forman.
Amount and Nature of Beneficial Ownership Voting and Investment Power(1) | ||||||||||||||||||||||||
Amount and Nature of Beneficial Ownership Voting and Investment Power(1) | ||||||||||||||||||||||||
Name and Address | Sole | Shared | Total | Percent of Class | Sole | Shared | Total | Percent of Class | ||||||||||||||||
Wolf Pen Branch, LP Wolf Pen Branch GP, LLC(2) 4969 U.S. Highway 42, Suite 2000 Louisville, Kentucky 40222 | 94,850,659 | — | 94,850,659 | 56.1% | ||||||||||||||||||||
Wolf Pen Branch, LP Wolf Pen Branch GP, LLC(2) c/o The Glenview Trust Company 5900 U.S. Highway 42 Louisville, Kentucky 40241 |
| 95,006,000 |
|
| — |
|
| 95,006,000 |
|
| 56.2% |
| ||||||||||||
Avish Agincourt, LLC 829 West Main Street Louisville, Kentucky 40202 | 18,208,304 | — | 18,208,304 | 10.8% | 18,208,304 | — | 18,208,304 | 10.8% |
(1) | Based upon information furnished to Brown-Forman by the named persons and information contained in filings with the SEC. Under SEC rules, a person is deemed to beneficially own shares over which the person has or shares voting or investment power or as to which the person has the right to acquire beneficial ownership within 60 days (including shares underlying options or stock appreciation rights that are exercisable within 60 days). |
(2 | Wolf Pen Branch, LP has sole voting power with respect to the shares reflected in the table and sole investment power with respect to 42,000,000 shares of Class A common stock. Wolf Pen Branch GP, LLC has voting and investment power with respect to the same shares by virtue of serving as general partner of Wolf Pen Branch, LP. |
BROWN-FORMAN |
STOCK OWNERSHIP| STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of April 30, 2019,2021, the number and percentages of shares of our Class A and Class B common stock beneficially owned by each current director, each director nominee, each Named Executive Officer,NEO, and by all directors and executive officers as a group. Some shares shown below are beneficially owned by more than one person. As of the close of business on April 30, 2019,2021, there were 168,999,423169,109,992 shares of Class A common stock and 308,172,788309,618,997 shares of Class B common stock outstanding. In calculating the aggregate number of shares and percentages owned by all directors and executive officers as a group, which includes shares owned by persons not named in this table, we counted each share only once.
STOCK BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS AS OF APRIL 30, 20192021
Class A Common Stock(2)(3) Voting or Investment Power | Class B Common Stock(2)(3) Investment Power | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock(2)(3) Voting or Investment Power | Class B Common Stock(2)(3) Investment Power | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name(1) | Sole | Shared | Total | % of Class | Sole | Shared | Total | % of Class | Sole | Shared | Total | % of Class | Sole | Shared | Total | % of Class | |||||||||||||||||||||||||||||||||||||
Patrick Bousquet-Chavanne | — | — | — | * | 66,665 | — | 66,665 | * |
| — |
|
| — |
|
| — |
|
| * |
|
| 60,415 |
|
| — |
|
| 60,415 |
|
| * |
| |||||||||||||||||||||
Campbell P. Brown(4) | 3,917,120 | — | 3,917,120 | 2.3% | 2,554,484 | (5)(6) | 220,180 | 2,774,664 | * |
| 3,917,120 |
|
| — |
|
| 3,917,120 |
|
| 2.3% |
|
| 2,570,407 | (5) |
| 220,180 |
|
| 2,790,587 |
|
| * |
| ||||||||||||||||||||
Geo. Garvin Brown IV(4) | 3,466,933 | 18,012 | 3,484,945 | 2.1% | 2,077,357 | (7) | 11,935 | 2,089,292 | * | ||||||||||||||||||||||||||||||||||||||||||||
George Garvin Brown IV(4) |
| 3,466,933 |
|
| 18,012 |
|
| 3,484,945 |
|
| 2.1% |
|
| 2,069,003 | (6) |
| 11,935 |
|
| 2,080,938 |
|
| * |
| |||||||||||||||||||||||||||||
Stuart R. Brown | 1,427,350 | (8) | — | 1,427,350 | * | 478,460 | (9) | 9,739 | 488,199 | * |
| 1,424,649 |
|
| — |
|
| 1,424,649 |
|
| * |
|
| 504,967 |
|
| 10,587 |
|
| 515,554 |
|
| * |
| |||||||||||||||||||
Bruce L. Byrnes | — | — | — | * | — | — | — | * | |||||||||||||||||||||||||||||||||||||||||||||
John D. Cook | — | — | — | * | 37,184 | — | 37,184 | * |
| — |
|
| — |
|
| — |
|
| * |
|
| 31,045 |
|
| — |
|
| 31,045 |
|
| * |
| |||||||||||||||||||||
Marshall B. Farrer(4) | — | — | — | * | 36,808 | — | 36,808 | * |
| — |
|
| — |
|
| — |
|
| * |
|
| 31,931 |
|
| — |
|
| 31,931 |
|
| * |
| |||||||||||||||||||||
Laura L. Frazier | 424,346 | — | 424,346 | * | 664,118 | — | 664,118 | * |
| 424,346 |
|
| — |
|
| 424,346 |
|
| * |
|
| 664,118 |
|
| — |
|
| 664,118 |
|
| * |
| |||||||||||||||||||||
Kathleen M. Gutmann | — | — | — | * | — | — | — | * |
| — |
|
| — |
|
| — |
|
| * |
|
| — |
|
| — |
|
| — |
|
| * |
| |||||||||||||||||||||
Matthew E. Hamel | 25,543 | — | 25,543 | * | 447,901 | (6) | — | 447,901 | * |
| 31,115 |
|
| — |
|
| 31,115 |
|
| * |
|
| 460,089 | (5) |
| — |
|
| 460,089 |
|
| * |
| ||||||||||||||||||||
Thomas Hinrichs | 1,452 | — | 1,452 | * | 85,672 | — | 85,672 | * | |||||||||||||||||||||||||||||||||||||||||||||
Kirsten M. Hawley |
| 8,368 |
|
| — |
|
| 8,368 |
|
| * |
|
| 68,373 | (5) |
| — |
|
| 68,373 |
|
| * |
| |||||||||||||||||||||||||||||
Thomas W. Hinrichs |
| 2,702 |
|
| — |
|
| 2,702 |
|
| * |
|
| 72,207 |
|
| — |
|
| 72,207 |
|
| * |
| |||||||||||||||||||||||||||||
Augusta Brown Holland(4) | 1,183,964 | 5,559 | 1,189,523 | * | 562,676 | (10) | 8,566 | (11) | 571,242 | * |
| 1,178,016 |
|
| 6,024 |
|
| 1,184,040 |
|
| * |
|
| 768,894 | (7) |
| 45,303 | (8) |
| 814,197 |
|
| * |
| |||||||||||||||||||
Mark I. McCallum | 50,731 | — | 50,731 | * | 290,491 | — | 290,491 | * | |||||||||||||||||||||||||||||||||||||||||||||
Jane C. Morreau | 28,567 | — | 28,567 | * | 224,994 | — | 224,994 | * |
| 37,896 |
|
| — |
|
| 37,896 |
|
| * |
|
| 231,732 |
|
| — |
|
| 231,732 |
|
| * |
| |||||||||||||||||||||
Michael J. Roney | — | — | — | * | — | — | — | * |
| — |
|
| — |
|
| — |
|
| * |
|
| — |
|
| — |
|
| — |
|
| * |
| |||||||||||||||||||||
Tracy L. Skeans | — | — | — | * | — | — | — | * |
| — |
|
| — |
|
| — |
|
| * |
|
| — |
|
| — |
|
| — |
|
| * |
| |||||||||||||||||||||
Michael A. Todman | — | — | — | * | — | — | — | * |
| — |
|
| — |
|
| — |
|
| * |
|
| — |
|
| — |
|
| — |
|
| * |
| |||||||||||||||||||||
Paul C. Varga | 449,312 | — | 449,312 | * | 1,459,728 | — | 1,459,728 | * | |||||||||||||||||||||||||||||||||||||||||||||
Lawson E. Whiting | 5,797 | — | 5,797 | * | 129,274 | — | 129,274 | * |
| 11,661 |
|
| — |
|
| 11,661 |
|
| * |
|
| 192,432 |
|
| — |
|
| 192,432 |
|
| * |
| |||||||||||||||||||||
All Directors and Executive Officers as a Group(24 persons, including those named above)(12) | 10,994,582 | 23,571 | 11,018,153 | (13) | 6.5% | 9,440,781 | 250,420 | 9,691,201 | (14) | 3.1% | |||||||||||||||||||||||||||||||||||||||||||
All Directors and Executive Officers as a Group (22 persons, including those named above)(9) | 10,521,898 | 24,036 | 10,545,934 | (10) | 6.2% | 8,024,451 | 288,005 | 8,312,456 | (11) | 2.7% |
* Represents less than 1% of the class.
(1) | The address for each person named in the table is 850 Dixie Highway, Louisville, Kentucky 40210. |
(2) | Based upon company information, information furnished to Brown-Forman by the named persons, and information contained in filings with the SEC. Under SEC rules, a person is deemed to beneficially own shares over which the person has or shares voting or investment power or as to which the person has the right to acquire beneficial ownership within 60 days (including shares underlying options or stock appreciation rights that are exercisable within 60 days). |
60 |
STOCK OWNERSHIP| DELINQUENT SECTION 16(a) REPORTS
(3) | Includes the following Class B SSARs that are currently exercisable or that will become exercisable on or before June 29, |
Class A | Class B | |||||||||
Name | Restricted Stock | Deferred Stock Units | Restricted Stock | SSARs | Deferred Stock Units | |||||
Patrick Bousquet-Chavanne | — | 20,926 | — | — | 18,442 | |||||
Campbell P. Brown | — | — | — | 12,355 | — | |||||
Geo. Garvin Brown IV | — | 25,105 | — | — | 4,817 | |||||
Stuart R. Brown | — | 1,071 | — | — | — | |||||
Bruce L. Byrnes | — | 14,626 | — | — | 12,042 | |||||
John D. Cook | — | 20,178 | — | 12,188 | 18,790 | |||||
Marshall B. Farrer | — | — | 742 | 26,981 | — | |||||
Kathleen M. Gutmann | — | 4,868 | — | — | 681 | |||||
Matthew E. Hamel | 4,739 | — | 1,184 | 353,114 | — | |||||
Thomas Hinrichs | 2,514 | — | 629 | 79,304 | — | |||||
Augusta Brown Holland | — | 8,014 | — | — | 1,467 | |||||
Mark I. McCallum | 6,417 | — | 1,603 | 264,417 | — | |||||
Jane C. Morreau | 8,865 | — | 2,215 | 209,554 | — | |||||
Michael J. Roney | — | 18,282 | — | — | 4,032 | |||||
Tracy L. Skeans | — | 4,727 | — | — | — | |||||
Michael A. Todman | — | 13,070 | — | — | 2,730 | |||||
Paul C. Varga | 39,396 | — | 9,837 | 1,020,151 | — | |||||
Lawson E. Whiting | 4,852 | — | 1,212 | 127,825 | — |
Class A | Class B | |||||||||||||||||||||||
Name | PBRSUs | DSUs | �� PBRSUs | SSARs | DSUs | |||||||||||||||||||
Patrick Bousquet-Chavanne |
| — |
|
| 26,145 |
|
|
|
|
| — |
|
| — |
|
| 18,839 |
| ||||||
Campbell P. Brown |
| — |
|
| — |
|
|
|
|
| 346 |
|
| 24,987 |
|
| — |
| ||||||
George Garvin Brown IV |
| — |
|
| 36,652 |
|
|
|
|
| — |
|
| — |
|
| 4,921 |
| ||||||
Stuart R. Brown |
| — |
|
| 6,334 |
|
|
|
|
| — |
|
| — |
|
| — |
| ||||||
John D. Cook |
| — |
|
| 25,381 |
|
|
|
|
| — |
|
| — |
|
| 19,195 |
| ||||||
Marshall B. Farrer |
| — |
|
| — |
|
|
|
|
| 392 |
|
| 14,038 |
|
| — |
| ||||||
Kathleen M. Gutmann |
| — |
|
| 9,720 |
|
|
|
|
| — |
|
| — |
|
| 696 |
| ||||||
Matthew E. Hamel |
| 2,679 |
|
| — |
|
|
|
|
| — |
|
| 305,214 |
|
| — |
| ||||||
Kirsten M. Hawley |
| 1,925 |
|
| — |
|
|
|
|
| — |
|
| 58,420 |
|
| — |
| ||||||
Thomas W. Hinrichs |
| 2,021 |
|
| — |
|
|
|
|
| — |
|
| 64,357 |
|
| — |
| ||||||
Augusta Brown Holland |
| — |
|
| 13,518 |
|
|
|
|
| — |
|
| — |
|
| 1,499 |
| ||||||
Jane C. Morreau |
| 5,160 |
|
| — |
|
|
|
|
| — |
|
| 213,691 |
|
| — |
| ||||||
Michael J. Roney |
| — |
|
| 25,898 |
|
|
|
|
| — |
|
| — |
|
| 4,119 |
| ||||||
Tracy L. Skeans |
| — |
|
| 12,033 |
|
|
|
|
| — |
|
| — |
|
| — |
| ||||||
Michael A. Todman |
| — |
|
| 18,109 |
|
|
|
|
| — |
|
| — |
|
| 2,789 |
| ||||||
Lawson E. Whiting |
| 7,371 |
|
| — |
|
|
|
|
| — |
|
| 180,799 |
|
| — |
|
(4) | Campbell P. Brown, |
(5) | ||
Includes Class B common stock held in the 401(k) plan as of the close of business on April 30, |
(6) | Includes |
Includes 66,250 shares of Class B common stock pledged as security. |
(8) | Includes |
(9) | “All Directors and Executive Officers as a Group” includes |
(10) | Directors and executive officers as a group hold |
(11) | Includes |
DELINQUENT SECTION
Delinquent Section 16(a) REPORTS
Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors, and “beneficial owners” of more than 10% of our Class A common stock to file stock ownership reports and reports of changes in ownership with the SEC. Based on a review of those reports and written representations from the reporting persons, we believe that during fiscal 2019,2021, all transactions were reported on a timely basis except for one Form 4 by Laura L. FrazierAugusta Brown Holland reporting a gift transactions by twofrom a family truststrust from a prior fiscal year.
2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
DISCLOSURE |
CEO PAY RATIO
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires us to disclose the ratio between the annual total compensation of our CEO and the annual total compensation of our “median employee.”
In fiscal 2019,2021, the annual total compensation for our CEO, Mr. Whiting, was $3,695,893,$9,112,109, as disclosed in the Fiscal 20192021 Summary Compensation Table on page 40.48. In order to determine the annual total compensation of our median employee, Brown-Forman utilized the following approach:
Identified our global employee population as of February 1, 2021.
Compared payroll data of our global employee population using a consistently applied compensation measure of base salary (including overtime) and holiday bonus paid to our employees during the most recent tax year of January 1, 2020, to December 31, 2020.
Used the consistently applied compensation measure to identify the median employee.
Calculated the annual total compensation of our median employee in the same manner used to determine our CEO’s total compensation as disclosed in the Fiscal 2021 Summary Compensation Table.
In identifying our median employee, we did not utilize material estimates, statistical sampling, or assumptions. Following the above methodology, our median employee for fiscal 20192021 received an annual total compensation of $58,714.$57,080 in fiscal 2021. Consequently, the ratio of the annual total compensation for our CEO to the annual total compensation for our median employee in fiscal 20192021 was 63-to-1.160-to-1.
Brown-Forman believes it is important to follow SEC rules to ensure full compliance. However, givenGiven the impact of company performance on CEO pay, combined with employee demographics, varying competitive pay practices, and SEC rules that provide wide flexibility onfor how a company may calculate its pay ratio, we believe it is important to note that our reported ratio may not have been calculated in the same mannerway as the ratios disclosed by other companies. As a result, these ratios may not be a useful basis for comparison. Additional details on our compensation philosophy, objectives, and the decisions of our Compensation Committee may be found in our “Compensation Discussion and Analysis” beginning on page 24.32.
62
|
This section contains a report of the Audit Committee of the Board of Directors. It also explains the role of the Audit Committee and sets forth the fees paid to our independent registered public accounting firm.
REPORT OF AUDIT COMMITTEE
The Audit Committee is responsible for overseeing the integrity of the Company’scompany’s financial statements on behalf of the Board. Management is responsible for establishing and maintaining the Company’scompany’s internal controls, for preparing the financial statements, and for the public financial reporting process. The Company’scompany’s internal audit function is responsible for preparing and executing an annual internal audit plan under the supervision of the Director of Internal Audit, who is accountable to the Audit Committee. The independent registered public accounting firm is responsible for performing an audit of the Company’scompany’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and for issuing a report on its audit. The independent registered public accounting firm also reports on the effectiveness of the Company’scompany’s internal control over financial reporting. The Audit Committee reviews the work of management in respect of these matters and has direct responsibility for retaining, compensating, and overseeing the independent registered public accounting firm on behalf of the Board.
On behalf of the Board, the Audit Committee retained PricewaterhouseCoopersErnst & Young LLP (PwC)(EY) as the independent registered public accounting firm to audit the Company’scompany’s consolidated financial statements and the effectiveness of the Company’scompany’s internal control over financial reporting for fiscal 2019.2021. The Audit Committee reviewed and discussed with management and PwCEY the audited financial statements as of and for the fiscal year ended April 30, 2019.2021. In addition, the Audit Committee reviewed and discussed, with management, management’s assessment of the effectiveness of the Company’scompany’s internal control over financial reporting and, with PwC, PwC’sEY, EY’s evaluation of the Company’scompany’s system of internal controls. These discussions included meetings with PwCEY without representatives of management present, and executive sessions with the Director of Internal Audit.
The Audit Committee discussed with PwCEY matters required to be discussed by the applicable requirements of the PCAOB rules. PwCand SEC. EY provided the Audit Committee with the written disclosures and the letter required by the PCAOB for independent auditor communications with audit committees concerning independence, and the Audit Committee discussed with PwCEY the firm’s independence and ability to conduct the audit. The Audit Committee has determined that PwC’sEY’s provision of audit and non-audit services to the Companycompany is compatible with maintaining auditor independence.
Based on the foregoing, the Audit Committee recommended to the Board that the Company’scompany’s audited financial statements be included in the Company’scompany’s Annual Report on Form 10-K for the fiscal year ended April 30, 2019.2021.
AUDIT COMMITTEE
Michael A. Todman, Chair
Patrick Bousquet-Chavanne
Kathleen M. Gutmann
Tracy L. Skeans
BROWN-FORMAN |
Audit Matters | Fees Paid to Independent Registered Public Accounting Firm
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table presents the fees Brown-Forman incurred for the professional services provided by PwCthe company’s previous independent registered public accounting firm, PricewaterhouseCoopers LLP (PwC), for fiscal years 2018year 2020 and 2019.by EY for fiscal year 2021. All such fees were pre-approved by the Audit Committee in accordance with the policy described below.
Fiscal Years | |||||||
2018 | 2019 | ||||||
Audit Fees | $ | 2,417,000 | $ | 2,468,000 | |||
Audit-Related Fees | 230,000 | 60,000 | |||||
Tax Fees | 613,000 | 564,000 | |||||
All Other Fees | 3,000 | 24,000 | |||||
Total | $ | 3,263,000 | $ | 3,116,000 |
Fiscal Years | ||||||||
2020 | 2021 | |||||||
Audit Fees | $ | 2,421,000 | $ | 1,506,000 | ||||
Audit-Related Fees | — | 5,000 | ||||||
Tax Fees | 403,000 | 2,757,000 | ||||||
All Other Fees | 4,000 | 37,000 | ||||||
Total | $ | 2,828,000 | $ | 4,305,000 |
Audit Fees
This category consists of the audit of Brown-Forman’s annual financial statements included in the Annual Report on Form 10-K, attestation services relating to the report on internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, review of interim financial statements included in quarterly reports on Form 10-Q, services normally provided in connection with statutory and regulatory filings or engagements, and statutory audits required by foreign jurisdictions.
Audit-Related Fees
This category consists of fees related to the audits of employee benefit plans as well as for assurance and related services that are reasonably related to the audit or review of Brown-Forman’s financial statements but are not included in the Audit Fees category, such as assistance with interpretation of accounting standards.
category.
Tax Fees
This category consists principally of fees related to global tax compliance, tax planning, and transfer pricing services.
services, and expatriate tax return compliance.
All Other Fees
This category consists of fees for all other non-audit services not included in the above categories, including accounting research subscriptions.providing assessments and leading practices in areas such as enterprise risk management.
AUDIT COMMITTEE POLICY FOR PRE-APPROVAL POLICIES AND PROCEDURES OF INDEPENDENT AUDITOR SERVICES
It is the policy of the Audit Committee to pre-approve all audit services and permitted non-audit services (including an estimate of the fees or a range of fees) to be performed for Brown-Forman by its independent registered public accounting firm, subject to thede minimisexception for non-audit services described in the Securities Exchange Act of 1934. The Audit Committee pre-approvedis solely responsible for the fiscal 2019 auditappointment, replacement, and non-audit services provided by PwC. The non-audit services approved bycompensation of its independent auditor as well as oversees the Audit Committee also were reviewed to ensure compatibility with maintaining PwC’s independence.independent auditor’s qualifications, independence, and performance. The Audit Committee has delegatedestablished a policy requiring its pre-approval of all audit and permissible non-audit services provided by EY. The policy provides for the general pre-approval of specific types of services, gives detailed guidance to itsmanagement as to the specific services that are eligible for general pre-approval, and establishes requirements for annual pre-approval levels and subsequent specific pre-approval requests. The policy requires specific pre-approval of all other permitted services. For both types of pre-approval, the Audit Committee considers whether such services are consistent with the rules of the SEC and the PCAOB on auditor independence. The policy allows for the delegation to the Audit Committee Chair the authority to pre-approve proposed audit and non-auditaddress any requests for pre-approval of services that arise between meetings, with the understanding that any such decision will be reviewed at the next scheduled Audit Committee meeting. Duringmeetings other than the approval process,annual integrated audit engagement term and fees, and the Chair must report any pre-approval decisions to the Audit Committee considersat its next scheduled meeting. The policy prohibits the potential impact of the type of service on the independence of the registered public accounting firm. Services and fees must be deemed compatible with the maintenance of the registered public accounting firm’s independence, including compliance with SEC rules and regulations. The Audit Committee may not delegatefrom delegating to management the Audit Committee’s responsibility to pre-approve permitted any services of our independent registered public accounting firm. Throughout the year, the Audit Committee reviews any revisions to the estimates of fees initially approved.performed by EY.
The Audit Committee has adopted other policies in an effort to help ensure the independence of our independent registered public accounting firm. The Audit Committee must pre-approve PwC’s rendering of personal financial and tax advice to any of Brown-Forman’s designated executive officers. In addition, the Audit Committee has a policy that limits Brown-Forman’s ability to hire certain current and former employees of our independent registered public accounting firm.
5664BROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Audit Matters | Appointment of Independent Registered Public Accounting Firm
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
In fiscal 2020, the Audit Committee, with the assistance of management, issued a Request for Proposal (RFP) regarding the company’s engagement of an independent registered public accounting firm to audit the company’s consolidated financial statements for its fiscal year ending April 30, 2021. Thereafter, the Audit Committee conducted a comprehensive, competitive RFP process. The Audit Committee hasinvited several firms to participate in this RFP process, including PwC. In connection with the RFP process, the Audit Committee considered a variety of factors, including: the strength and cultural fit of the independent auditor’s engagement team and their understanding of our business; approach to a value-added audit; innovation and technology capabilities; competitive fixed-fee pricing; and transition approach. As a result of the RFP process, the Audit Committee appointed PwCEY to serve as our independent registered public accounting firm for the fiscal year endingended April 30, 2020. Through its predecessor Coopers & Lybrand L.L.P., PwC has served as Brown-Forman’s auditor continuously since 1933. A2021. We anticipate that a representative of PwCEY will attend the Annual Meeting, will have an opportunity to make a statement, and will be available to respond to appropriate questions. We know
Change of no direct or material indirect financial interestIndependent Registered Public Accounting Firm
As a result of the RFP process described above, on February 19, 2020, the Audit Committee approved the appointment of EY as our independent registered public accounting firm for the fiscal year ended April 30, 2021, and notified PwC of EY’s appointment. EY’s engagement as our independent registered public accounting firm began, and PwC’s engagement ended, on June 19, 2020 (the Engagement Date), the date that PwC hasissued its audit reports on our financial statements for the fiscal year ended April 30, 2020, and our internal control over financial reporting as of April 30, 2020.
The audit reports of PwC on our consolidated financial statements for each of the fiscal years ended April 30, 2019, and April 30, 2020, did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During our fiscal years ended April 30, 2019, and April 30, 2020, and prior to the Engagement Date: (i) there were no disagreements (as defined in Brown-Forman or anyItem 304(a)(1)(iv) of our subsidiaries, or of any connectionRegulation S-K and the related instructions thereto) between Brown-Forman and PwC on any matter of accounting principles or anypractices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to PwC’s satisfaction, would have caused PwC to make reference to the subject matter of the disagreements in connection with its reports on Brown-Forman’s consolidated financial statements for such fiscal years, and (ii) there were no reportable events (as described in Item 304(a)(1)(v) of Regulation S-K).
In accordance with Item 304(a)(3) of Regulation S-K, we provided PwC with copies of the Current Report on Form 8-K filed with the SEC on February 25, 2020 (the Initial Form 8-K) and the Current Report on Form 8-K/A filed with the SEC on June 24, 2020 (the Amended Form 8-K) reporting the change in our subsidiariesindependent registered public accounting firm for the fiscal year ended April 30,
2021, containing substantially the same disclosures as above. We requested that PwC provide us with PwCletters addressed to the SEC stating whether it agreed with the statements made by Brown-Forman contained in the capacityInitial Form 8-K and the Amended Form 8-K, and, if not, stating the respects in which it did not agree. Copies of promoter, underwriter, voting trustee, director, officer,PwC’s letters dated February 25, 2020, and June 24, 2020, are both filed as Exhibit 16.1 to the Initial Form 8-K and Amended Form 8-K, respectively.
During our fiscal years ended April 30, 2019, and April 30, 2020, and prior to the Engagement Date, neither we nor anyone on our behalf consulted with EY regarding (i) the application of accounting principles to a specified transaction, either completed or employee.proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided by EY to us that EY concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instruction thereto), or (iii) any reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERSBROWN-FORMAN57
BROWN-FORMAN | 2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | 65 |
INFORMATION
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Person Transactions
Rules and policies.RULES AND POLICIES.SEC regulations require disclosure of certain transactions between Brown-Forman and a “related person.” For purposes of these regulations, a “related person” generally includes any individual who was a director or executive officer at any time during the last fiscal year, a director nominee, a beneficial owner of more than 5% of our voting securities, and any immediate family member of any such person. To ascertaingather information regarding related person transactions, Brown-Forman has asked each director, director nominee, executive officer, and more than 5% beneficial owner to disclose any company transaction with a related person since May 1, 2018,2020, or any such proposed transaction. In accordance with our Related Person Transactions Policy, the Audit Committee is responsible for reviewing, and if appropriate, approving or ratifying related person transactions. The Audit Committee reviewed and approved the transactions described below for fiscal 2019.2021.
Employment of related persons.EMPLOYMENT OF RELATED PERSONS.As a family controlledfamily-controlled company, we employ individuals who are considered “related persons” under SEC regulations. As of April 30, 2019,2021, we employed two individuals — Campbell P. Brown and Marshall B. Farrer — who are directors of the company, Brown family members, and executive officers of the company. Each of these employees is compensated in a manner consistent with our employment and compensation policies applicable to all employees. The aggregate amount of compensation paid to each of these employees during fiscal 20192021 was: Campbell P. Brown $560,875$682,382 and Marshall B. Farrer $491,791.$553,068.
Other transactions.OTHER TRANSACTIONS.None.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is or has been an officer or employee of Brown-Forman, and no executive officer of Brown-Forman has served on the compensation committee or board of any company that employed any member of our Compensation Committee or Board of Directors either during fiscal year 20192021 or as of the date of this Proxy Statement.
Other Proposed Action at the Meeting
As of June 25, 2019,22, 2021, we know of no additional business that will come before the meeting. If any other matters are properly presented for voting at the Annual Meeting, the proxies will be voted on those matters as the Board may recommend, or, in the absence of a recommendation, in accordance with the judgment of the proxy holders.
STOCKHOLDER PROPOSALS FOR THE 20202022 ANNUAL MEETING
To be considered for inclusion in the Proxy Statement for the 20202022 Annual Meeting of Stockholders, stockholder proposals must be sent to 850 Dixie Highway, Louisville, Kentucky 40210, no later than February 26, 2020.22, 2022. Proposals should be sent to the attention of Matthew E. Hamel, our Secretary, and must comply with SEC requirements related to the inclusion of stockholder proposals in company-sponsored proxy materials. Any notice of a proposal submitted outside the process of Rule 14a-8 of the Securities Exchange Act of 1934, as amended, that a stockholder intends to bring at our 20202022 Annual Meeting of Stockholders should be sent to the attention of Matthew E. Hamel, our Secretary, at the address above between March 27, 2020,24, 2022, and April 26, 2020, and the proxies solicited by us for our 2020 Annual Meeting of Stockholders will confer discretionary authority to vote on any such matters without a description of them in the Proxy Statement for that Annual Meeting.23, 2022.
By Order of the Board of Directors | |
MATTHEW E. HAMEL | |
Secretary | |
Louisville, Kentucky June 22, 2021 |
66
![]() | |
58NON-GAAPBROWN-FORMAN 2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NON-GAAP FINANCIAL MEASURES
We use some financial measures in this Proxy Statement that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. Other companies may not define or calculate these non-GAAP measures in the same way.
“Underlying change” in measures of statements of operations.UNDERLYING CHANGE” IN MEASURES OF STATEMENTS OF OPERATIONS. We present changes in certain measures, or line items, of the statements of operations that are adjusted to an “underlying” basis. We use “underlying change” for underlying net sales and underlying operating income. To calculate underlying operating income,these measures, we adjust, as applicable, for (a) acquisitions and divestitures, (b) foreign exchange, (c) estimated net changes in distributor inventories, and (d) the establishment of our charitable foundation.foundation along with a subsequent commitment to the charitable foundation, and (e) a non-cash write-down of the Chambord brand name. We explain these adjustments below.
“ACQUISITIONS AND DIVESTITURES.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), and (c) the effects of operating activity related to acquired and divested brands for periods not comparable year over year (non-comparable periods). Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year.
In fiscal 2017, we acquired The BenRiach Distillery Company Limited (BenRiach). This adjustment removes (a) transaction and integration costs related to the acquisition and (b) operating activity for the acquired business for the non-comparable period. With respect to comparisons of fiscal 2017 to fiscal 2016, the non-comparable period comprised all months; with respect to comparisons of fiscal 2018 to fiscal 2017, the non-comparable period is the month of May.
In fiscal 2020, we acquired The 86 Company, which owns Fords Gin. This adjustment removes (a) transaction and integration costs related to the acquisition and (b) operating activity for the acquired business for the non-comparable period. With respect to comparison of fiscal 2020 to fiscal 2019, the non-comparable period comprised all months; with respect to comparisons of fiscal 2021 to fiscal 2020, the non-comparable period is the first quarter of fiscal 2021.
During the first quarter of fiscal 2021, we sold our Early Times, Canadian Mist, and Collingwood brands and related assets, which resulted in a pre-tax gain of $127 million, and entered into a related transition services agreement (TSA) for these brands. This adjustment removes (a) transaction and integration costs related to the divestiture, (b) the gain on sale, (c) operating activity for the non-comparable period, and (d) the net sales and operating expenses recognized in fiscal 2021 pursuant to the TSA related to (i) contract bottling services and (ii) distribution services in certain markets. With respect to comparisons of fiscal 2021 to fiscal 2020, the non-comparable period is the second, third, and fourth quarters of both fiscal 2021 and fiscal 2020.
During the third quarter of fiscal 2021, we acquired Part Time Rangers Holdings Limited, which owns Part Time Rangers RTDs. This adjustment removes (a) transaction and integration costs related to the acquisition and (b) operating activity for the acquired business for the non-comparable period. With respect to comparisons of fiscal 2021 to fiscal 2020, the non-comparable period is the third and fourth quarters of fiscal 2021.
BROWN-FORMAN | ||||
“FOREIGN EXCHANGE.” We calculate the percentage change in certain line items of the statements of operations in accordance with GAAP and adjust to exclude the cost or benefit of currency fluctuations. Adjusting for foreign exchange allows us to understand our business on a constant-dollar basis, as fluctuations in exchange rates can distort the underlying trend both positively and negatively. (In this Proxy Statement, “dollar” always means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.
“ESTIMATED NET CHANGES IN DISTRIBUTOR INVENTORIES.” This adjustment refers to the estimated net effect of changes in distributor inventories on changes in certain line items of the statements of operations. For each period compared, we use volume information from our distributors to estimate the effect of distributor inventory changes in certain line items of the statements of operations. We believe that this adjustment reduces the effect of varying levels of distributor inventories on changes in certain line items of the statements of operations and allows us to understand better our underlying results and trends.
“FOUNDATION.” In fiscal 2018, we established the Brown-Forman Foundation (the “Foundation”) with an initial $70 million contribution to support the company’s charitable giving program in the communities where our employees live and work. In the fourth quarter of fiscal 2021, we committed an additional $20 million to the Foundation. This adjustment removes the initial $70 million contribution and the subsequent $20 million commitment to the Foundation from our underlying SG&A expenses and underlying operating income to present our underlying results on a comparable basis.
“CHAMBORD IMPAIRMENT.” During fiscal 2020, we recognized a non-cash impairment charge of $13 million for our Chambord brand name.
We use the non-GAAP measures “underlying change” to: (a) to understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the board of directors, stockholders, and investment analysts.community. We provide reconciliations of the “underlying change” in net sales and operating income (non-GAAP) to the change in reported net sales and operating income (GAAP) in the following table.tables.
RECONCILIATION OF NON-GAAP UNDERLYING CHANGES
RECONCILIATION OF UNDERLYING NET SALES YEAR OVER YEAR CHANGE
Percentage Change Versus Prior Fiscal Year | ||||
2021 | ||||
Change in reported operating income (GAAP) | 3% | |||
Foreign exchange | -1% | |||
Estimated net change in distributor inventories | 4% | |||
Change in underlying net sales (non-GAAP) | 6% |
-
2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS68BROWN-FORMAN 59
APPENDIX A | RECONCILIATION OF NON-GAAP UNDERLYING CHANGES
RECONCILIATION OF NON-GAAP UNDERLYING CHANGES
In fiscal 2019, we retrospectively adjusted our prior year statements of operations in our Annual Report on Form 10-K to reflect the impact from the adoption of the Accounting Standards Update 2017-07 (related to pension), and other reclassified expenses related to certain marketing research and promotional agency costs. The impact of these changes, which had no effect on net income, was not material. These retrospective adjustments did impact our reported and underlying operating income growth rates for fiscal years 2015 and 2018. However, the long-term incentive compensation related to those fiscal years was not retrospectively adjusted. Below, we reconcile our reported operating income (GAAP) to our underlying operating income (non-GAAP) as presented in the year filed. We note the change in our reported and underlying growth rates related to these retrospective adjustments for fiscal years 2015 andyear 2018 below the chart.
RECONCILIATION OF UNDERLYING OPERATING INCOME GROWTH TO GAAP OPERATING INCOME GROWTHYEAR OVER YEAR CHANGE
Percentage change versus prior fiscal year | ||||||||||
2015(1) | 2016 | 2017 | 2018(2) | 2019 | ||||||
Change in reported operating income (GAAP) | 6% | 49% | -35% | 5% | 9% | |||||
Acquisitions and divestitures | — | -46% | 35% | — | — | |||||
Foundation | — | — | — | 7% | -7% | |||||
Foreign exchange | 6% | 4% | 4% | -2% | 3% | |||||
Estimated net change in distributor inventories | -3% | 1% | 3% | -2% | — | |||||
Change in underlying operating income (non-GAAP) | 9% | 8% | 7% | 8% | 5% |
Percentage Change Versus Prior Fiscal Year | ||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||
Change in reported operating income (GAAP) | -35% | 5% | 9% | -5% | 7% | |||||||||||||||
Acquisitions and divestitures | 35% | —% | —% | —% | -10% | |||||||||||||||
Foundation | —% | 7% | -7% | —% | 2% | |||||||||||||||
Foreign exchange | 4% | -2% | 3% | —% | -2% | |||||||||||||||
Estimated net change in distributor inventories | 3% | -2% | —% | -3% | 9% | |||||||||||||||
Chambord Impairment | —% | —% | —% | 1% | -1% | |||||||||||||||
Change in underlying operating income (non-GAAP) | 7% | 8% | 5% | -6% | 4% | |||||||||||||||
(1) Our retrospectively adjusted fiscal 2018 reported operating income grew 4% and underlying operating income grew 6%. There was no change to the reconciling items noted above. |
|
OTHER METRICS
“Return on average invested capital.RETURN ON AVERAGE INVESTED CAPITAL.”This measure refers to the sum of net income and after-tax interest expense, divided by average invested capital. Average invested capital equals assets less liabilities, excluding interest-bearing debt, and is calculated using the average of the most recent 13 month-end balances. After-tax interest expense equals interest expense multiplied by one minus our effective tax rate. We use this non-GAAP measure because we consider return on average invested capital to be a meaningful indicator of how effectively and efficiently we invest capital in our business.
60BROWN-FORMAN2019 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Our Priorities
When we look holistically across
“OUR COMPANY IS RESILIENT, AS EVIDENCED BY OUR ABILITY TO WITHSTAND THE UNCERTAINTY AND UPHEAVAL OF 2020, AND IT’S THIS RESILIENCY THAT HAS ALLOWED US TO IMPLEMENT CHANGES WITH CONFIDENCE.”
—George Garvin Brown IV, Outgoing Chair of the landscape of social, environmental, and economic issues to evaluate where we should focus our resources, we have identified four major priorities:
EVERYTHING WE DO TODAY DETERMINES WHO
AND WHERE WE WILL BE TOMORROW.Board
As this next generation begins, so does our 150th year. We look forward to celebrating our past, in part by doing what we have always done: making the most of our future.
![]() | ![]() | |||
850 DIXIE HIGHWAY, LOUISVILLE, KENTUCKY 40210 | BROWN-FORMAN.COM | |||
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time, on Wednesday, July 21, 2021. Have your proxy card in hand when you access the web site and enter the control number found on the right-hand side of this card to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/BFA2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time, on Wednesday, July 21, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D56819-P58941 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting, Proxy Statement, and Annual Report to Stockholders are available at www.proxyvote.com.
|