Proxy Statement (Form DEF 14A)
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
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Notice of Annual Meeting
and
Proxy Statement
2025 Annual Meeting of Stockholders
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Dear Stockholder:
On behalf of the Board of Directors and the management of
Whether or not you plan to participate in the Annual Meeting, I strongly encourage you to vote as soon as possible to ensure that your shares are represented at the meeting. The accompanying Proxy Statement explains more about voting. Please read it carefully.
Thank you for your continued support.
Sincerely,
Chairman and Chief Executive Officer
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(980) 392-8298
NOTICE OF 2025 ANNUAL MEETING OF STOCKHOLDERS
To Stockholders of
The 2025 Annual Meeting of Stockholders (the "Annual Meeting") of
| 1. |
To elect the 12 directors nominated by the Board of Directors; |
| 2. |
To ratify the appointment of |
| 3. |
To approve the amendment to |
| 4. |
To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
The Board of Directors unanimously recommends that you vote "FOR" Items 1, 2 and 3. The proxy holders will use their discretion to vote on other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof.
Stockholders as of the close of business on
Your vote is important. Whether or not you plan to participate in the Annual Meeting, you are encouraged to vote as soon as possible to ensure that your shares are represented at the meeting. If you are a stockholder of record and received a paper copy of the proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote via the internet; (ii) vote by telephone; or (iii) complete, sign, date and retuyour proxy card in the postage-paid envelope provided. If you are a stockholder of record and received only a Notice of Internet Availability of Proxy Materials by mail, you may vote your shares by proxy at the internet site address listed on your Notice. If you hold your
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shares through an account with a bank, broker or similar organization, please follow the instructions you receive from the stockholder of record to vote your shares.
By Order of the Board of Directors,
E. Beauregarde Fisher III
Executive Vice President, General Counsel and Secretary
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders To Be Held on
The Notice of Annual Meeting and Proxy Statement and the 2024 Annual Report to Stockholders
are available at www.proxyvote.com.
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PROXY STATEMENT
The Board of Directors (the "Board of Directors" or the "Board") of
General Information
Why did I receive these materials?
You received these materials because the Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. This Proxy Statement includes information that
What is a proxy?
The Board is asking for your proxy. This means you authorize persons selected by the Company to vote your shares at the Annual Meeting in the way that you instruct. All shares represented by valid proxies received and not revoked before the Annual Meeting will be voted in accordance with the stockholder's specific voting instructions.
Why did I receive a one-pagenotice regarding internet availability of proxy materials instead of a full set of the proxy materials?
The
What is included in these materials?
These materials include:
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the Notice of Annual Meeting and Proxy Statement; and |
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the 2024 Annual Report to Stockholders, which contains the Company's audited consolidated financial statements. |
If you received a paper copy of these materials by mail, these materials also include the proxy card or voting instruction form for the Annual Meeting.
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What items will be voted on at the Annual Meeting?
There are three proposals scheduled to be voted on at the Annual Meeting:
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the election of the 12 directors nominated by the Board of Directors; |
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the ratification of the appointment of |
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the approval of the amendment to |
The Board is not aware of any other matters to be brought before the Annual Meeting. If other matters are properly raised at the Annual Meeting, the proxy holders may vote any shares represented by proxy in their discretion.
What are the Board's voting recommendations?
The Board unanimously recommends that you vote your shares:
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"FOR"the election of each of the 12 directors nominated by the Board of Directors; |
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"FOR"the ratification of the appointment of |
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"FOR"the approval of the amendment to |
Who can participate in the Annual Meeting?
The Annual Meeting will be held exclusively via live audio webcast at www.virtualshareholdermeeting.com/COKE2025. Participation in the Annual Meeting is limited to:
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stockholders as of the close of business on |
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holders of valid proxies for the Annual Meeting; and |
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invited guests. |
To participate in the Annual Meeting via live audio webcast, you will need the 16-digit control number, which can be found on the proxy card, voting instruction form or Notice of Internet Availability provided or the instructions that you received by email. The Annual Meeting will begin promptly at
When is the record date and who is entitled to vote?
The Board set
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outstanding as of the close of business on the record date is entitled to 20 votes on any matter properly presented at the Annual Meeting. All outstanding shares of Common Stock and Class B Common Stock are entitled to vote as a single class on all matters presented in this Proxy Statement.
What is a stockholder of record?
A stockholder of record or registered stockholder is a stockholder whose ownership of
How do I vote?
You may vote by any of the following methods:
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Electronically during the Annual Meeting. Stockholders of record and beneficial owners of shares held in street name may participate in the Annual Meeting via live audio webcast and cast their vote online during the meeting prior to the closing of the polls by visiting www.virtualshareholdermeeting.com/COKE2025. |
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Via the internet or by telephone. Stockholders of record may vote by proxy, via the internet or by telephone, by following the instructions included in the proxy card or Notice of Internet Availability provided or the instructions received by email. If you are a beneficial owner of shares held in street name, your ability to vote via the internet or by telephone depends on the voting procedures of the stockholder of record (e.g., your bank, broker or other nominee). Please follow the instructions included in the voting instruction form or Notice of Internet Availability provided to you by the stockholder of record. |
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By mail. Stockholders of record and beneficial owners of shares held in street name may vote by proxy by completing, signing, dating and returning the proxy card or voting instruction form provided. |
How can I revoke my proxy or change my vote?
Stockholders of record. You may revoke your proxy or change your vote at any time prior to the taking of the vote at the Annual Meeting by (i) submitting a written notice of revocation to the Company's Secretary at
Beneficial owners of shares held in street name. You may revoke or change your voting instructions by participating in the Annual Meeting via live audio webcast and voting online during the meeting prior to the closing of the polls or by following the specific instructions provided to you by the stockholder of record (e.g., your bank, broker or other nominee).
What happens if I vote by proxy and do not provide specific voting instructions?
Stockholders of record. If you are a stockholder of record and you vote by proxy, via the internet, by telephone or by returning a properly executed and dated proxy card by mail, without providing specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion for any other matters properly presented for a vote at the Annual Meeting.
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Beneficial owners of shares held in street name. If you are a beneficial owner of shares held in street name and you do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on "routine" matters but cannot vote on "non-routine"matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a "non-routine"matter, the organization that holds your shares will inform the inspector of election that it does not have the authority to vote on that matter with respect to your shares. This is referred to as a "broker non-vote."
Proposal 1, the election of directors, is considered a "non-routine"matter. Consequently, without your voting instructions, the organization that holds your shares cannot vote your shares on this proposal. Proposals 2 and 3, the ratification of the appointment of
What is the voting requirement to approve each of the proposals?
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Proposal 1, Election of Directors. Directors shall be elected by a plurality of the votes cast (meaning that the 12 director nominees who receive the highest number of votes cast "for" their election will be elected as directors). There is no cumulative voting with respect to the election of directors. |
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Proposal 2, Ratification of the Appointment of Independent Registered Public Accounting Firm. Ratification of the appointment of |
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Proposal 3, Approval of the Amendment to |
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Other Items. Approval of any other matters requires the affirmative vote of a majority of the total votes of all shares of Common Stock and Class B Common Stock present in person or represented by proxy and entitled to vote on the item at the Annual Meeting (meaning that of the total votes of all shares of Common Stock and Class B Common Stock represented at the Annual Meeting and entitled to vote, a majority of them must be voted "for" the item for it to be approved). |
What is the quorum for the Annual Meeting? How are "withhold" votes, abstentions and broker non-votestreated?
The presence, in person or by proxy, of the holders of a majority of the votes eligible to be cast by the holders of Common Stock and Class B Common Stock voting together as a single class is necessary for the transaction of business at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person for the purpose of establishing a quorum at the meeting. Your shares are counted as being present if you participate in the Annual Meeting via live audio webcast and cast your vote online during the meeting prior to the closing of the polls by visiting www.virtualshareholdermeeting.com/COKE2025, or if you vote by proxy, via the internet, by telephone or by returning a properly executed and dated proxy card or voting instruction form by mail. "Withhold" votes, abstentions and broker
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non-votesare counted as present for the purpose of determining a quorum for the Annual Meeting; however, broker non-votesare not counted as present for the purpose of determining a quorum for Proposal 1, the election of directors.
With respect to Proposal 1, the election of directors, only "for" and "withhold" votes may be cast. "Withhold" votes will have no effect on the election of director nominees. Broker non-voteswill not be considered votes cast for the foregoing purpose and will therefore have no effect on the election of director nominees.
With respect to Proposals 2 and 3, the ratification of the appointment of
Will I be given the opportunity to submit questions during the Annual Meeting?
Yes. Stockholders as of the close of business on the record date will be able to submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/COKE2025. The Company will try to answer as many stockholder-submitted questions as time permits, and, in the event the Company receives more questions than it can answer during the allotted period of time, the Company will answer them in the order received. However, the Company reserves the right to edit profanity or other inappropriate language and to exclude questions that are not pertinent to meeting matters, do not comply with the meeting rules of conduct, or are otherwise inappropriate. If the Company receives substantially similar questions, it will group such questions together and provide a single response to avoid repetition.
Who pays for solicitation of proxies?
The Company is paying the cost of soliciting proxies and will reimburse its transfer agent, brokerage firms, financial institutions and other custodians, nominees, fiduciaries and stockholders of record for their reasonable out-of-pocketexpenses for sending proxy materials to stockholders and obtaining their proxies. In addition to soliciting the proxies by mail and the internet, certain of the Company's directors, officers and employees, without compensation, may solicit proxies personally or by telephone, facsimile and email. The Company has retained
What are the expected voting results?
The Company expects each of the proposals to be approved by the stockholders. The Board has been informed that
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20,087,880 votes and an aggregate of 72.2% of the total voting power of Common Stock and Class B Common Stock together as of the record date):
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"FOR"the election of each of the 12 directors nominated by the Board of Directors; |
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"FOR"the ratification of the appointment of |
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"FOR"the approval of the amendment to |
Where can I find the voting results of the Annual Meeting?
The Company will announce preliminary or final voting results at the Annual Meeting and publish final results in a Current Report on Form 8-Kfiled with the
What is the address of
The mailing address of
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Security Ownership of Directors, Director Nominees and Executive Officers
The table below shows the number of shares of Common Stock and Class B Common Stock beneficially owned as of the close of business on
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Name of Beneficial Owner |
Class | Number of Shares and Nature of Beneficial Ownership |
Percentage of Class |
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | (1) | * | ||||||||
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Common Stock | - | * | |||||||||
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Jason D. (J.D.) Hickey |
Common Stock | - | * | |||||||||
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Common Stock | 100 | (2) | * | ||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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Common Stock | - | * | |||||||||
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E. Beauregarde Fisher III |
Common Stock | - | * | |||||||||
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Directors, director nominees and executive officers as a group (excluding |
Common Stock | 100 | * | |||||||||
| * |
Less than 1% of the outstanding shares of such class. |
| (1) |
Excludes (i) 535,178 shares of Class B Common Stock held by the |
| (2) |
Held jointly with |
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Principal Stockholders
The following table provides information about the beneficial ownership of Common Stock and Class B Common Stock as of the close of business on
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Name and Address of Beneficial Owner |
Class | Number of Shares and Nature of Beneficial Ownership |
Percentage of Class(1) |
Total Votes |
Percentage of Total Votes(1) |
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and |
Common Stock Class |
1,004,394
1,004,394 |
(2)
(3)(4) |
11.5%
99.97% |
20,087,880 | 72.2% | ||||||||
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Common Stock | 1,883,546 | (5) | 24.4% | 1,883,546 | 6.8% | ||||||||
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Common Stock | 578,432 | (6) | 7.5% | 578,432 | 2.1% | ||||||||
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Common Stock | 565,870 | (7) | 7.3% | 565,870 | 2.0% | ||||||||
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A total of 7,713,088 shares of Common Stock and 1,004,696 shares of Class B Common Stock were outstanding as of the close of business on |
| (2) |
Consists of 1,004,394 shares of Class B Common Stock beneficially owned as described below in Footnote 3 that are convertible into shares of Common Stock. |
| (3) |
Consists of (i) 535,178 shares of Class B Common Stock held by the |
| (4) |
The trust described above in clause (ii) of Footnote 3 has the right to acquire 292,386 shares of Class B Common Stock from Coca-ColaConsolidated in exchange for an equivalent number of shares of Common Stock. In the event |
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| of such an exchange, |
| (5) |
This information is based upon a Schedule 13D/A filed jointly with the |
| (6) |
This information is based upon a Schedule 13G/A filed with the |
| (7) |
This information is based upon a Schedule 13G/A filed with the |
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Proposal 1:
Election of Directors
The Board of Directors currently consists of 12 members and has no vacancies. On the recommendation of the Executive Committee, the Board has nominated the 12 persons listed below for election as directors at the Annual Meeting. If elected, each nominee will serve until his or her term expires at the 2026 Annual Meeting of Stockholders or until his or her successor is duly elected and qualified. All of the nominees are currently serving as directors and were elected to the Board at the 2024 Annual Meeting of Stockholders. Each nominee has agreed to be named in this Proxy Statement and to serve if elected.
Although the Company knows of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxy holders intend to vote your shares for any substitute nominee proposed by the Board.
The Board of Directors unanimously recommends that you vote "FOR" the election of each of the 12nominees listed below.Unless otherwise specified, proxies will be voted "FOR"the election of each of the 12 nominees listed below.
Director Nominees
Listed below are the 12 persons nominated for election to the Board of Directors. The following paragraphs include information about each director nominee's business background, as furnished to the Company by the nominee, and additional experience, qualifications, attributes or skills that led the Board of Directors to conclude that the nominee should serve on the Board.
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Name |
Age |
Principal Occupation |
Director Since |
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70 | Chairman of the Board and Chief Executive Officer of |
1986 | |||||
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56 | President, Europe East Operations, |
2023 | |||||
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68 | President, |
2001 | |||||
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43 | Vice Chair of the Board of |
2011 | |||||
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66 | Managing Partner, |
2016 | |||||
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Jason D. (J.D.) Hickey |
53 | President and Chief Executive Officer, |
2024 | |||||
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69 | President, |
2011 | |||||
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67 | Non-ExecutiveVice Chairman of the Board of |
2016 | |||||
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56 | President and Chief Operating Officer of |
2018 | |||||
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77 | Chairman, |
2008 | |||||
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72 | Partner, |
2001 | |||||
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71 | Vice President of Corporate Community Affairs, |
2017 | |||||
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Consolidated and, as a member of the founding family of
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diverse executive experience and extensive experience serving on multiple boards qualify her to serve as a member of the Board.
Jason D. (J.D.) Hickey, M.D.
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from
With both a medical and legal background,
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("CCE"), a distributor, marketer and manufacturer of nonalcoholic beverages primarily for
As the current Chairman of
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The executive leadership skills
Coca-ColaConsolidated is party to an amended and restated stock rights and restrictions agreement, dated
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. These corporate governance materials are also available in print free of charge to any stockholder upon request by contacting the Company in writing at
Any modifications to these corporate governance materials will be reflected, and the Company intends to post any amendments to, or waivers from, the Code of Ethics for Senior Financial Officers (to the extent required to be disclosed pursuant to
on the investor relations portion of the Company's website,
. By referring to the Company's website,
, or any portion thereof, including the investor relations portion of the Company's website, the Company does not incorporate its website or its contents into this Proxy Statement.
Consolidated qualifies as a "controlled company" under the Nasdaq listing standards.
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In conducting its review of director independence, the Board, except as noted below, considered all transactions, relationships or arrangements between each director (and his or her immediate family members and affiliates) and each of
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Name |
Matter(s) Considered |
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Sharon A. Decker |
Ordinary course sponsorship agreements and beverage sales to Tryon International Equestrian Center, an affiliate of |
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William H. Jones |
Ordinary course beverage sales to |
The Board did not consider transactions with entities in which a director or an immediate family member of a director served only as a trustee or a director because the Board believes that the nature of the separate relationships the Company and the director or the immediate family member of the director each have with these organizations would not interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board also did not consider transactions involving de minimis amounts of ordinary course beverage sales or de minimis amounts of entertainment of directors paid for by employee-directors, executive officers or the Company.
Based on its review, the Board has determined that the following seven directors, comprising more than one-halfof the Board, are independent:
The independent members of the Board meet at least twice each year in executive session without the other directors.
Board Leadership Structure
The Board does not have a general policy regarding the separation of the roles of Chairman of the Board and Chief Executive Officer, or CEO. The Company's Amended and Restated By-laws(the "By-laws")permit these positions to be held by the same person, and the Board believes that it is in the best interests of
The Corporate Governance and Nominating Guidelines of the Company provide for a Lead Independent Director. The Lead Independent Director is an independent director appointed annually by the Board. In
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Board Committees
The Board of Directors has a standing
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Name |
Audit Committee | Compensation Committee |
Executive Committee | |||
| J. |
Chairman | |||||
| Elaine |
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| Sharon A. Decker | X | X | ||||
| Morgan |
X | |||||
| James |
X | |||||
| Jason D. (J.D.) Hickey | ||||||
| William H. Jones | X | |||||
| Umesh M. Kasbekar | ||||||
| David |
X | |||||
| James |
Chairman | X | X | |||
| Dennis A. Wicker | X | Chairman | X | |||
| Richard T. Williams | X |
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Each committee of the Board of Directors functions pursuant to a written charter adopted by the Board. The following table provides information about the operation and key functions of these committees:
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Committee |
Key Functions and Additional Information |
Number of Meetings in Fiscal 2024 |
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Audit Committee |
• Assists the Board in its oversight of (i) the Company's accounting and financial reporting processes, (ii) the integrity of the Company's financial statements, (iii) the Company's compliance with legal and regulatory requirements, (iv) the qualifications and independence of the Company's independent registered public accounting firm and (v) the performance of the Company's internal audit function and the Company's independent registered public accounting firm. • Appoints, compensates, retains and oversees the work of the Company's independent registered public accounting firm. • Reviews and discusses with management and the Company's independent registered public accounting firm the annual and quarterly financial statements and earnings releases. • Considers and pre-approvesall audit services, internal control-related services and permissible non-auditservices proposed to be performed by the Company's independent registered public accounting firm. • Assists the Board in its oversight of risk management by periodically reviewing with management the Company's enterprise risk management, including data protection, cybersecurity, business continuity and operational risks, and the steps management has taken to monitor and mitigate such risk exposures. Provides adequate cybersecurity oversight to the Company through periodic review of its cybersecurity risks, potential events, and risk mitigation results. • Reviews and, if appropriate, approves or ratifies related person transactions. • Monitors the adequacy of the Company's reporting and internal controls. • Reports regularly to the Board. • The Board of Directors has determined that each of Messrs. Helvey and Morgan is an "audit committee financial expert" within the meaning of the |
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Compensation Committee |
• Oversees the administration of the Company's compensation plans. • Reviews and approves the compensation of the executive officers. • Reviews and approves the compensation of the members of the Board. • Reviews and approves employment offers and arrangements, severance arrangements, retirement arrangements, change in control arrangements and other benefits for each executive officer. • Oversees regulatory compliance and risk regarding compensation matters. • Appoints individuals to serve as members of the Corporate Benefits Committee for the broad-based employee health and welfare and retirement benefit plans sponsored by the Company and receives periodic reports from such committee regarding its significant actions. • Reports regularly to the Board. |
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Executive Committee |
• Assists the Board in handling matters that need to be addressed before the next scheduled Board meeting. • Identifies, evaluates and recommends director candidates to the Board. • Reports regularly to the Board. |
1 |
The Board may also establish other committees from time to time as it deems necessary.
Director Meeting Attendance
The Board of Directors held five meetings during fiscal 2024. Each incumbent director attended, or participated by means of remote communication in, 75% or more of the aggregate number of meetings of the Board and committees of the Board on which the director served during fiscal 2024. Absent extenuating circumstances, each director is required to attend, or
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participate by means of remote communication in, the Company's annual meeting of stockholders. Eleven of the Company's 12 incumbent directors participated in the Company's 2024 Annual Meeting of Stockholders, which was held virtually via live audio webcast.
Director Nomination Process
The Board does not have a standing Nominating Committee composed solely of independent directors. The Board is not required to have such a committee because
The Board of Directors has delegated to the Executive Committee the responsibility for identifying, evaluating and recommending director candidates to the Board, subject to the final approval of the Controlling Stockholder who is also the Chairman of the Executive Committee. Because
In identifying potential director candidates, the Executive Committee may seek input from other directors, executive officers, employees, community leaders, business contacts, third-party search firms and any other sources deemed appropriate by the Executive Committee. The Executive Committee will also consider director candidates appropriately recommended by stockholders.
In evaluating director candidates, the Executive Committee does not set specific, minimum qualifications that must be met by a director candidate. Rather, the Executive Committee considers the following factors in addition to any other factors deemed appropriate by the Executive Committee:
| • |
whether the candidate is of the highest ethical character and shares the values of the Company; |
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whether the candidate's reputation, both personal and professional, is consistent with the image and reputation of the Company; |
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whether the candidate possesses expertise or experience that will benefit the Company and that is desirable given the current makeup of the Board; |
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whether the candidate represents a diversity of viewpoints, backgrounds, experiences or other demographics; |
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whether the candidate is "independent" as defined by the applicable Nasdaq listing standards and other applicable laws, rules or regulations regarding independence; |
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whether the candidate is eligible to serve on the Audit Committee or other Board committees under the applicable Nasdaq listing standards and other applicable laws, rules or regulations; |
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whether the candidate is eligible by reason of any legal or contractual requirements affecting the Company or its stockholders; |
| • |
whether the candidate is free from conflicts of interest that would interfere with the candidate's ability to perform the duties of a director or that would violate any applicable listing standard or other applicable law, rule or regulation; |
| • |
whether the candidate's service as an executive officer of another company or on the boards of directors of other companies would interfere with the candidate's ability to devote sufficient time to discharge his or her duties as a director; and |
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if the candidate is an incumbent director, the director's overall service to the Company during the director's term, including the number of meetings attended, the level of participation and the overall quality of performance of the director. |
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Diversity is one of the various factors the Executive Committee may consider in identifying director candidates, but the Executive Committee does not have a formal policy regarding Board diversity. All director candidates, including candidates appropriately recommended by stockholders, are evaluated in accordance with the process described above. The Executive Committee will not recommend any potential director candidate that is not acceptable to the Controlling Stockholder.
Board Diversity
The matrix below summarizes the voluntary self-identified gender and demographic background statistics for the Board. For our prior year's matrix, see the Company's definitive proxy statement relating to the 2024 Annual Meeting of Stockholders filed with the
Board Diversity Matrix (As of
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Total Number of Directors |
12 | |||||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender |
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Part I: Gender Identity |
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Directors |
3 | 9 | - | - | ||||||||||||
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Part II: Demographic Background |
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African American or Black |
- | 1 | - | - | ||||||||||||
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Alaskan Native or Native American |
- | - | - | - | ||||||||||||
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Asian |
- | 1 | - | - | ||||||||||||
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Hispanic or Latino |
- | - | - | - | ||||||||||||
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Native Hawaiian or Pacific Islander |
- | - | - | - | ||||||||||||
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White |
3 | 7 | - | - | ||||||||||||
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Two or More Races or Ethnicities |
- | - | - | - | ||||||||||||
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LGBTQ+ |
- | |||||||||||||||
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Did Not Disclose Demographic Background |
- | |||||||||||||||
Stockholder Recommendations of Director Candidates
Stockholders may recommend a director candidate to be considered for the Company's 2026 Annual Meeting of Stockholders by submitting the candidate's name in accordance with provisions of the By-laws, which require advance notice to the Company and certain other information. Written notice must be received by the Company's Secretary at
The notice must contain certain information about both the director candidate and the stockholder submitting the nomination, as set forth in the By-laws, including (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director, such nominee's name, age, business address and, if known, residence address, principal occupation or employment, the class and number of shares of any capital stock of the Company which are beneficially owned by such person and all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors or is otherwise required by the
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books, the class or series and number of shares of the Company which are directly or indirectly owned beneficially and of record by such stockholder or any Stockholder Associated Person and any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Company or with a value derived in whole or in part from the value of any class or series of shares of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise (a "Derivative Instrument") directly or indirectly owned beneficially by such stockholder or any Stockholder Associated Person, and any other direct or indirect opportunity of such stockholder or any Stockholder Associated Person to profit or share in any profit derived from any increase or decrease in the value of the shares of the Company, any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or any Stockholder Associated Person has a right to vote any shares of any security of the Company, any short interest of such stockholder or any Stockholder Associated Person in any security of the Company (for purposes of the By-laws, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), any rights to dividends on the shares of the Company owned beneficially by such stockholder or any Stockholder Associated Person that are separated or separable from the underlying shares of the Company, any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or any Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, and any performance-related fees (other than an asset-based fee) that such stockholder or any Stockholder Associated Person is entitled to receive, either directly or indirectly, based on any increase or decrease in the value of shares of the Company or Derivative Instruments. A stockholder who is interested in recommending a director candidate should request a copy of the By-laws by writing to the Company's Secretary at
Universal Proxy Rules for Director Nominations
In addition to satisfying the foregoing requirements under the By-laws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company's nominees for the 2026 Annual Meeting of Stockholders must provide notice that sets forth the information required by Rule 14a-19(b) under the Exchange Act.
Prohibitions Against Hedging,
Under
Policy for Review of Related Person Transactions
The Company has a written policy and procedures for the review, approval or ratification of any transactions that could potentially be required to be reported under the
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Company into the transaction. Prior to the Company entering into any related person transaction involving any executive officer other than the Chief Executive Officer or the General Counsel and/or their immediate family members, the General Counsel must review the material facts of the transaction and determine whether to approve the entry by the Company into the transaction. All determinations by the General Counsel under the policy will be reported to the Audit Committee at its next regularly scheduled meeting.
The policy includes certain categories of pre-approved transactions. For transactions that are not pre-approved, the Audit Committee or the Company's General Counsel, as applicable, in assessing a transaction with a related person, may consider all relevant facts and circumstances, including, without limitation, (i) the commercial reasonableness of the terms of the transaction and whether the transaction is on terms no more favorable than the terms generally available to an unaffiliated third party under the same or similar circumstances, (ii) the significance of the transaction to investors in light of all circumstances, (iii) the materiality of the related person's direct or indirect interest in the transaction taking into account factors such as the importance of the interest to the related person and the amount involved in the transaction, (iv) the materiality of the transaction to the Company, (v) if the related person is a director or a nominee for election as a director or a member of their immediate families, the impact of the transaction on the director's or director nominee's independence under applicable guidelines and regulations and (vi) the actual or apparent conflict of interest of the related person participating in the transaction.
The Board of Directors also forms special committees, composed of independent and disinterested members of the Board, from time to time for the purpose of approving certain related person transactions.
Related Person Transactions
The Company's business consists primarily of the distribution, marketing and manufacture of nonalcoholic beverages of
Share Purchase Agreement with CCCBI
On
Pursuant to the Purchase Agreement entered into on
Beverage Distribution and Manufacturing Agreements with
The Company has (i) rights to distribute, promote, market and sell certain nonalcoholic beverages of
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Beverage Distribution Agreements with
For more information about the accounting treatment of the quarterly acquisition related sub-bottling payments, see Note 16 to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for fiscal 2024.
The CBA contains provisions that apply in the event of a potential sale of the Company or its aggregate business primarily related to the distribution, promotion, marketing and sale of beverages and beverage products of
The CBA further provides:
| • |
the right of |
| • |
the requirement that the Company maintain an annual equivalent case volume per capita change rate that is not less than one standard deviation below the median of the rates for all |
| • |
the requirement that the Company make minimum, ongoing capital expenditures in its distribution business at a specified level. |
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The CBA prohibits the Company from producing, manufacturing, preparing, packaging, distributing, selling, dealing in or otherwise using or handling any beverages, beverage components or other beverage products (i) other than the beverages and beverage products of
For more information about the CBA, see "Item 1. Business" in the Company's Annual Report on Form 10-K for fiscal 2024.
Beverage Manufacturing Agreement with
Under the RMA, the Company's aggregate business primarily related to the manufacture of certain beverages of
The RMA prohibits the Company from manufacturing any beverages, beverage components or other beverage products (i) other than the beverages and beverage products of
For more information about the RMA, see "Item 1. Business" in the Company's Annual Report on Form 10-K for fiscal 2024.
Concentrates and Syrups; Marketing Programs
The Company's agreements with
Coca-ColaConsolidated has an incidence-based pricing agreement with
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The CBA requires the Company to use all approved means and to spend such funds on advertising and other forms of marketing as reasonably required to create, stimulate and satisfy demand for
Although
The following table summarizes the significant cash transactions between Coca-ColaConsolidated and
| $ Amount (in thousands) |
||||
|
Payments made by Coca-ColaConsolidated to |
2,109,748 | |||
|
Payments made by |
274,322 | |||
| (1) |
This excludes acquisition related sub-bottling payments made by Coca-ColaConsolidated to CCR as well as the payment made to repurchase shares pursuant to the Purchase Agreement entered into on |
Amended and Restated Stock Rights and Restrictions Agreement
On
| • |
so long as no person or group controls more of the voting power of Coca-ColaConsolidated than is collectively controlled by |
| • |
so long as no person or group controls more of the voting power of Coca-ColaConsolidated than is controlled by the Harrison Family, the Company has a right of first refusal with respect to any proposed disposition by |
| • |
as long as |
| • |
|
| • |
as long as |
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|
|
The Amended and Restated Stock Rights and Restrictions Agreement also provides
Other Related Person Transactions
A trust of which
The Board's Role in Risk Oversight
Management is responsible for managing the risks that
The Audit Committee assists the Board in its oversight of risk management in the areas of financial reporting, internal controls, cybersecurity and compliance with legal and regulatory requirements. With respect to the Audit Committee's oversight of cybersecurity risks, information technology leadership annually provides a detailed cybersecurity update to the Audit Committee. Additionally, on a quarterly basis, the Audit Committee receives a summarized cybersecurity update, including the results of employee phishing testing programs and the results of quarterly cybersecurity disclosure questionnaires. In the event of a material cybersecurity incident, the Audit Committee will report such incident to the full Board.
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The Compensation Committee assists the Board in its oversight of the evaluation and management of risks related to
The Board believes that this division of responsibilities is the most effective risk management approach and that the Board leadership structure supports this approach. With his in-depth knowledge and understanding of
Communications with the Board of Directors
Stockholders and other interested parties can communicate directly with any of the Company's directors by sending a written communication to a director at
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Director Compensation
The table below sets forth the compensation paid to each non-employee director who served on the Board of Directors in fiscal 2024. Directors who are also employees of
2024 Director Compensation Table
|
Name |
Fees Earned or Paid in Cash ($)(1) |
All Other Compensation ($) |
Total ($) |
|||||||||
|
Elaine |
190,000 | - | 190,000 | |||||||||
|
Sharon A. Decker |
196,400 | - | 196,400 | |||||||||
|
James |
196,400 | - | 196,400 | |||||||||
|
Jason D. (J.D.) Hickey(2) |
120,055 | - | 120,055 | |||||||||
|
William H. Jones |
196,400 | - | 196,400 | |||||||||
|
Umesh M. Kasbekar(3) |
190,000 | 355,000 | 545,000 | |||||||||
|
James |
221,200 | - | 221,200 | |||||||||
|
Dennis A. Wicker |
236,200 | - | 236,200 | |||||||||
|
Richard T. Williams |
193,200 | - | 193,200 | |||||||||
| (1) |
The amounts shown in this column represent the aggregate amounts of all fees earned or paid in cash for services as a director in fiscal 2024. |
| (2) |
|
| (3) |
|
The elements of compensation for the Company's non-employee directors are as follows:
|
Base Annual Retainer for Non-Employee Directors |
$ | 190,000 | ||
|
Supplemental Annual Retainer for Chairman of the Audit Committee |
20,000 | |||
|
Supplemental Annual Retainer for Chairman of the Compensation Committee |
15,000 | |||
|
Supplemental Annual Retainer for Lead Independent Director |
20,000 | |||
|
Fee for Each Audit, Compensation and Executive Committee Meeting Attended |
1,600 |
The Compensation Committee reviews and approves the compensation of the members of the Board. In approving annual director compensation, the Compensation Committee considers recommendations of management and approves the recommendations with such modifications as the committee deems appropriate.
Under the Company's Director Deferral Plan, non-employee directors may defer payment of all or a portion of their annual retainer and meeting fees. Deferred fees are deemed to be invested in mutual funds selected by the directors from a predetermined list of funds. For fees deferred after 2013, a director may elect to receive a lump sum payment or installment payments as of a designated date or after the director retires or resigns, provided that if the director attains age 79, the lump sum payment or installment payments will be paid when the director attains age 79. The amount of each installment payment is based on the retuon the selected investment fund(s) during the installment payment period. Fees
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deferred prior to 2014 are paid in a lump sum payment if the director's service on the Board terminates prior to age 65. If the director retires at or after age 65, the director may elect to receive a lump sum payment or installment payments of fees deferred prior to 2014, with the amount of each installment payment based on an assumed retuof 8% during the installment payment period.
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Compensation Discussion and Analysis
This section explains
| Chairman of the Board and Chief Executive Officer | ||
| Executive Vice President and Chief Financial Officer | ||
| President and Chief Operating Officer | ||
| Executive Vice President, Franchise Beverage Operations | ||
| E. Beauregarde Fisher III | Executive Vice President, General Counsel and Secretary |
This discussion includes statements regarding financial and operating performance targets in the limited context of the Company's executive compensation program. Investors should not evaluate these statements in any other context. These statements are not statements of management's expectations of future results or guidance.
Executive Summary
The goals for the Company's executive compensation program are to provide compensation that is:
| • |
competitive to attract and retain appropriate executive talent; |
| • |
affordable and appropriately aligned with stockholder interests; |
| • |
fair, equitable and consistent as to each component of compensation; |
| • |
designed to motivate the executive officers to achieve the Company's annual and long-term strategic and financial goals and to reward performance based on the attainment of those goals; |
| • |
designed to appropriately balance risk and reward in the context of the Company's business environment and long-range business plans; |
| • |
designed to consider individual value and contribution to the Company's success; |
| • |
reasonably balanced across types and purposes of compensation, particularly with respect to fixed compensation objectives, short-term and long-term performance-based objectives and retention and retirement objectives; |
| • |
sensitive to, but not exclusively reliant upon, market benchmarks; and |
| • |
responsive to the Company's succession planning objectives. |
The Compensation Committee of the Board (referred to as the "Committee" in this section and the "Executive Compensation Tables" section) seeks to accomplish these goals in a way that is consistent with the purpose and core values of the Company and the long-term interests of the Company and its stockholders and employees.
In making decisions about executive compensation, the Committee relies primarily on its general experience and subjective considerations of various factors, including the Company's strategic business goals, compensation survey data and each executive officer's position, experience, level of responsibility, individual job performance, contributions to the Company's corporate performance, job tenure and future potential. The Committee does not set specific targets or benchmarks for overall compensation or for allocations between different elements and types of compensation. However, the Committee does assess whether the compensation for each of the executive officers is within a reasonably competitive range between the 50th and 75th percentiles of companies of similar size and whether any variation above or below the range is appropriate.
The Committee oversees the compensation program for the Company's executive officers with the assistance of senior management. The Committee reviews, approves and determines all elements of compensation for each executive officer.
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The following table lists the key elements of the Company's fiscal 2024 executive compensation program:
Key Elements of the Company's Fiscal 2024 Executive Compensation Program
|
Element |
Description |
Purpose |
||
|
Base Salaries |
Fixed cash compensation based on position, experience, level of responsibility, individual job performance, contributions to the Company's corporate performance, job tenure and future potential. | Provide a fixed, baseline level of cash compensation. | ||
|
Annual Bonus Plan |
Cash payment tied to performance during the fiscal year. | Motivate executive officers to achieve the Company's annual strategic and financial goals. | ||
|
Long-Term Performance Plan |
Cash payment tied to performance over a three-year performance period. The CEO does not participate in this plan. | Promote retention and motivate executive officers and other key employees to achieve the Company's long-term strategic and financial goals. | ||
| Long-Term Performance Equity Plan | Incentive awards granted to the CEO with payouts based on the Company's achievement of specified performance goals during the applicable performance period. Awards settled in cash, shares of Class B Common Stock or a combination of cash and shares of Class B Common Stock. | Promote the best interests of the Company and its stockholders by providing the CEO with incentive compensation linked to the Company's achievement of its long-term strategic and financial goals. | ||
|
Officer Retention Plan |
Supplemental nonqualified defined benefit plan providing retirement and severance benefits. | Promote retention of executive officers hired prior to |
||
|
Long-Term Retention Plan |
Supplemental nonqualified defined contribution plan providing retirement and severance benefits. | Attract executive talent and promote retention with a long-term perspective. | ||
|
Achievement Recognition Award |
Discretionary cash payment to recognize exceptional performance in recent years. | Recognize and reward executive officers for sustained excellence in achieving outstanding performance results, generating stockholder returns and executing the Company's long-term strategy. | ||
| Supplemental Savings Incentive Plan | Supplemental nonqualified deferred compensation plan enabling executive officers to defer a portion of their annual salary and awards under the Annual Bonus Plan, the Long-Term Performance Plan and the Long-Term Performance Equity Plan. | Promote retention, encourage executive officers to save for retirement and provide retirement savings in a tax-efficient manner. | ||
|
Other Benefits and Executive Compensation Policies |
Premiums paid for long-term disability and life insurance, annual executive allowance, personal use of corporate aircraft, executive physicals and income and employment tax gross-ups. | Attract and retain executive talent and enhance security and efficiency. |
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Determining Executive Compensation
Discretion and Subjective Judgment of Committee
The Committee reviews, approves and determines all elements of compensation for the executive officers.
In determining base salaries, annual and long-term incentive targets and all other matters related to executive compensation, the Committee relies primarily on its general experience and subjective considerations of various factors, including the Company's strategic business goals, compensation survey data and each executive officer's position, experience, level of responsibility, individual job performance, contributions to the Company's corporate performance, job tenure and future potential.
Annual Compensation Reviews
The Committee conducts an annual review of executive officer compensation to determine if changes are appropriate. As part of this review, management submits recommendations to the Committee for review and approval.
Management's recommendations are determined based on an annual compensation review process conducted by senior management, including the named executive officers. This process includes the President and Chief Operating Officer and the Executive Vice President, General Counsel and Secretary meeting with each executive officer's supervising manager to discuss self-assessments completed by each executive officer, job performance reviews completed by each executive officer's supervising manager, comparative compensation data provided by management's compensation consultant and other information relevant to determine whether to recommend any adjustments to such executive officer's compensation. Based on this process, the President and Chief Operating Officer and the Executive Vice President, General Counsel and Secretary make specific compensation recommendations to the CEO and the Vice Chair. The CEO and the Vice Chair review and approve the compensation recommendations for all executive officers, including the named executive officers, before they are reviewed by the Committee.
Following a review of management's recommendations, the Committee approves the compensation recommendations for the executive officers with any modifications the Committee deems appropriate. The Committee may also adjust compensation for specific individuals at other times during the fiscal year.
Role of
Management retained KoFerry to assist with an overall review of the executive compensation program and to provide general advice and counsel regarding various executive and director compensation matters. During the first quarter of fiscal 2024, KoFerry completed a comparative study of the Company's executive compensation program relative to peer companies and survey data, which was considered by the Committee in connection with its decisions regarding compensation for fiscal 2024 (the "2024 Executive Compensation Review"). In fiscal 2024, a KoFerry representative attended the Committee's meetings and also met in executive session with the Committee.
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The 13 peer group companies used for the 2024 Executive Compensation Review were all publicly traded companies similar in size to the Company and in the food and beverage industry. The peer group consisted of the following companies:
|
Company Name |
2023 Net Reported Revenues ($ in billions) |
|||
|
Brown-Forman Corporation |
$ | 4.228 | ||
|
Campbell Soup Company |
9.357 | |||
|
Constellation Brands, Inc. |
9.453 | |||
|
Flowers Foods, Inc. |
5.091 | |||
|
Keurig Dr Pepper Inc. |
14.814 | |||
|
Lancaster Colony Corporation |
1.823 | |||
|
McCormick & Company, Incorporated |
6.662 | |||
|
Molson Coors Beverage Company |
11.702 | |||
|
Monster Beverage Corporation |
7.140 | |||
|
Post Holdings, Inc. |
6.991 | |||
|
Primo Water Corporation |
1.772 | |||
|
The Hain Celestial Group, Inc. |
1.797 | |||
|
TreeHouse Foods, Inc. |
3.432 | |||
|
Coca-Cola Consolidated, Inc. |
6.654 | |||
|
Median |
6.662 | |||
|
Average |
6.482 | |||
Management and the Committee used the KoFerry study and other publicly available compensation surveys and data as a point of reference to assess whether the compensation for each of the executive officers was within a reasonably competitive range between the 50th and 75th percentiles of companies of similar size and whether any variation above or below the range was appropriate.
Base Salaries
Base salaries are the foundation of the Company's executive compensation program. They provide a fixed, baseline level of cash compensation based on each executive officer's position, experience, level of responsibility, individual job performance, contributions to the Company's corporate performance, job tenure and future potential. Base salary levels also impact amounts paid under other elements of the Company's executive compensation program, including annual bonuses and long-term performance awards and certain retirement benefits.
The Committee approved the following adjustments to the named executive officers' base salaries effective
|
Name |
2023 Base Salary | 2024 Base Salary | % Increase | |||||||
|
Mr. Harrison |
$ | 1,334,607 | $ | 1,374,645 | 3.0% | |||||
|
Mr. Anthony |
$ | 602,213 | $ | 620,279 | 3.0% | |||||
|
Mr. Katz |
$ | 980,045 | $ | 1,038,848 | 6.0% | |||||
|
Mr. Chambless |
$ | 720,978 | $ | 742,608 | 3.0% | |||||
|
Mr. Fisher |
$ | 652,208 | $ | 671,774 | 3.0% | |||||
The Committee awarded an above target merit increase to
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Annual Bonus Plan
All of the named executive officers participate in the Company's Annual Bonus Plan. The Company's Annual Bonus Plan provides each executive officer the opportunity to receive an annual cash award based on the achievement of corporate performance goals and individual performance.
The formula for computing annual bonus payouts is as follows:
|
Base Salary |
x |
Target Bonus Percentage |
x |
Overall Goal Achievement Factor (%) |
x |
Individual Performance Factor |
= |
Bonus Award Earned |
||||||||||||||||
Target Bonus Percentage
In the first quarter of each fiscal year, the Committee approves a target bonus percentage for each executive officer, expressed as a percentage of base salary. Target bonus percentages are determined based on the position and level of responsibility of each executive officer, historical grant practices of the Company and market benchmark data provided by KoFerry.
The target bonus percentages for the named executive officers for fiscal 2024 were as follows:
|
Name |
2024 Target Bonus Percentage (% of Base Salary) |
||||
|
|
100% | ||||
|
|
75% | ||||
|
|
100% | ||||
|
|
75% | ||||
|
|
75% | ||||
The target bonus percentages for the named executive officers remained unchanged from fiscal 2023 as a percentage of base salary.
Overall Goal Achievement Factor
The overall goal achievement factor is calculated based on the Company's achievement of annual corporate performance goals determined for each performance measure under the Annual Bonus Plan. The target performance goal for each performance measure was in each case equal to or greater than the target performance in the Company's fiscal 2024 operating plan. The following table summarizes the performance measures and related corporate performance goals approved by the Committee for fiscal 2024:
| Performance Goals | ||||||||||||||
|
Performance Measure |
Weight | Threshold | Target | Maximum | ||||||||||
|
EBIT |
40% | |||||||||||||
|
Free Cash Flow |
40% | |||||||||||||
|
Revenue |
20% | |||||||||||||
The Committee selected EBIT, Free Cash Flow and Revenue (each, as defined below) as the performance measures for fiscal 2024 because the Committee believes the Revenue performance measure, together with the profitability performance measures, encourage senior management to grow top-line revenue with a strong emphasis on profitability and generation of free cash flow. While both EBIT and Free Cash Flow measure profitability, EBIT measures the current year's operating profitability, taking into account all cash and non-cash expenses other than interest and taxes. Free Cash Flow, on the other hand, measures the Company's ability to generate sufficient profit to fund spending on equipment and
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assets as well as changes in working capital which will support the generation of profit in future years. The Committee chose to use both profitability measures to provide a balanced assessment of the Company's current profitability and its ability to sustain profitability over the longer term. There were no changes from fiscal 2023 to fiscal 2024 in the relative weights assigned to the performance measures.
The performance measures are defined as follows:
| • |
"EBIT"(1) is the acronym for Earnings Before Interest and Taxes and means income from operations determined on a consolidated basis in accordance with |
| • |
"Free Cash Flow"(1) means the change in long-term debt and obligations under financing leases (both current and noncurrent), net of cash and cash equivalents; and |
| • |
"Revenue"(1) means net sales revenue determined on a consolidated basis in accordance with GAAP, as adjusted. |
| (1) |
"EBIT," "Free Cash Flow" and "Revenue" are non-GAAP financial performance measures used solely for evaluating the Company's performance in connection with the determination of the amount of incentive compensation earned under the Annual Bonus Plan for fiscal 2024 (the "2024 Annual Bonus Plan"). Non-GAAP financial measures are not an alternative for the Company's reported results prepared in accordance with GAAP. See Appendix A for a reconciliation to GAAP financial measures. |
The Committee also approved the threshold, target and maximum performance goals for each performance measure under the 2024 Annual Bonus Plan. If the threshold goal is not achieved for a given measure, there will be no payout on that measure. Increasingly larger payouts will be awarded for levels of achievement between the threshold and maximum performance goals.
The following table summarizes the payout range for each performance goal:
|
Performance Goal Achievement |
Payout Percentage | |
|
Less than threshold |
0% | |
|
Threshold to target |
50% - 99% | |
|
Target to maximum |
100% - 149% | |
|
Maximum and greater |
150% |
In accordance with the terms of the Annual Bonus Plan, in determining the overall goal achievement factor, the Committee may make adjustments to the actual levels of achievement under each corporate performance measure to ensure that each corporate performance measure reflects the Company's normalized operating performance in the ordinary course of business. See Appendix A for detail on any adjustments made.
The following table reflects the calculation of the overall goal achievement factor for fiscal 2024:
|
Performance Measure |
Weight |
Target Performance Goal |
Adjusted Goal |
Payout |
Weighted |
|||||||||||||
|
EBIT |
40% | $ | 877.0 million | $ | 921.6 million | 150.0% | 60.0% | |||||||||||
|
Free Cash Flow |
40% | $ | 400.0 million | $ | 440.1 million | 150.0% | 60.0% | |||||||||||
|
Revenue |
20% | $ | 6.519 billion | $ | 6.510 billion | 97.6% | 19.5% | |||||||||||
|
Overall Goal Achievement Factor |
139.5% | |||||||||||||||||
| (1) |
"EBIT," "Free Cash Flow" and "Revenue" are non-GAAP financial performance measures. See Appendix A for a reconciliation to GAAP financial measures. |
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Individual Performance Factor
The Committee determines the individual performance factor for each named executive officer during the first quarter of each fiscal year based on its subjective judgment of the named executive officer's performance for the prior fiscal year, including consideration of the named executive officer's annual performance evaluation, the ability of the executive to produce results in a manner that honors the Company's values and demonstrates servant leadership, special projects the executive was assigned during the fiscal year and management's recommendations. The target individual performance factor is 1.0 and the maximum individual performance factor is 1.5. For fiscal 2024, the Committee assigned an above-target individual performance factor of 1.43 to each of the named executive officers in view of the Committee's determination that each named executive officer's outstanding leadership and performance during the fiscal year helped enable the Company to outperform its target levels of performance for the fiscal year and resulted in significant value creation for our stockholders.
Annual Bonus Calculation
Based on the Committee's determinations as described above, the bonus amounts paid to the named executive officers for fiscal 2024 were calculated as follows:
|
Name |
Base Salary |
x |
Target (% of Base |
x |
Overall Goal |
x | Individual Performance Factor |
= | Bonus Award Earned |
|||||||||||||||
|
Mr. Harrison |
$ | 1,374,645 | x | 100% | x | 139.5% | x | 1.43 | = | $ | 2,742,211 | |||||||||||||
|
Mr. Anthony |
$ | 620,279 | x | 75% | x | 139.5% | x | 1.43 | = | $ | 928,023 | |||||||||||||
|
Mr. Katz |
$ | 1,038,848 | x | 100% | x | 139.5% | x | 1.43 | = | $ | 2,072,345 | |||||||||||||
|
Mr. Chambless |
$ | 742,608 | x | 75% | x | 139.5% | x | 1.43 | = | $ | 1,111,043 | |||||||||||||
|
Mr. Fisher |
$ | 671,774 | x | 75% | x | 139.5% | x | 1.43 | = | $ | 1,005,067 | |||||||||||||
Long-Term Performance Plan
The Long-Term Performance Plan delivers a targeted percentage of base salary to each participant based on the achievement of long-term strategic and financial goals of the Company. The Long-Term Performance Plan is offered to the executive officers and other key employees. A three-year performance cycle is generally established each fiscal year for determining compensation under the Long-Term Performance Plan.
The Committee approved the Long-Term Performance Plan to promote retention of executive officers and other key employees, to increase the proportion of their total performance-based compensation and to provide an incentive to achieve the Company's long-term strategic and financial goals.
The general formula for computing awards under the Long-Term Performance Plan is as follows:
|
Target Award |
x |
Long-Term Performance Factor (%) |
= |
Award Earned |
2024 Long-Term Performance Plan
In the first quarter of fiscal 2024, the Committee established the Long-Term Performance Plan for the fiscal 2024-fiscal 2026 three-year performance period (the "2024 Long-Term Performance Plan").
The Committee approved target awards under the 2024 Long-Term Performance Plan based on its consideration of the base salary, position and level of responsibility of each executive officer, succession planning considerations, historical grant practices of the Company and market benchmark data provided by KoFerry. Payouts with respect to the target awards will be made in early fiscal 2027 depending on the Company's achievement of specified corporate performance goals during the three-year performance period.
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The following table reflects the target awards granted to the following participating named executive officers under the 2024 Long-Term Performance Plan:
| 2024 Long-Term Performance Plan Target Awards | ||||||||
|
Name |
% of Base Salary | $ Amount | ||||||
|
|
75 | % | $ | 465,210 | ||||
|
|
150 | % | $ | 1,558,272 | ||||
|
|
75 | % | $ | 556,956 | ||||
|
|
75 | % | $ | 503,831 | ||||
The target award percentages for the above named executive officers remained unchanged from fiscal 2023 as a percentage of base salary.
The long-term performance factor is calculated based on the Company's achievement of corporate performance goals during the three-year performance period. The following table summarizes the corporate performance measures and weights approved by the Committee for the 2024 Long-Term Performance Plan:
|
Performance Measure |
Weight |
|
|
Free Cash Flow |
30% | |
|
EBIT |
50% | |
|
EBIT Margin |
20% |
The 2024 Long-Term Performance Plan includes three-year aggregate Free Cash Flow, three-year aggregate EBIT and three-year average EBIT Margin (each, as defined below) weighted 30%, 50% and 20%, respectively, as performance measures. The Committee included Free Cash Flow as a performance measure to encourage senior management to focus on the Company's operating efficiency, cash generation and working capital management. The Committee believes the EBIT and EBIT Margin performance measures focus senior management on enhancing the efficiency and quality of earnings along with the profitability from operations. The Committee believes the achievement of goals with respect to all of these measures is consistent with the long-term interests of the Company's stockholders.
The three-year performance measures are determined based on the three calendar years in the performance period and are defined as follows:
| • |
"Free Cash Flow"(1) has the meaning as defined in the above description of the Annual Bonus Plan beginning on page 35; |
| • |
"EBIT"(1) has the meaning as defined in the above description of the Annual Bonus Plan beginning on page 35; and |
| • |
"EBIT Margin"(1) means the percentage determined by dividing EBIT by Revenue (each measure as defined in the above description of the Annual Bonus Plan beginning on page 35). |
| (1) |
"Free Cash Flow," "EBIT" and "EBIT Margin" are non-GAAP financial performance measures used solely for evaluating the Company's performance in connection with the determination of the amount of incentive compensation earned under the 2024 Long-Term Performance Plan. Non-GAAP financial measures are not an alternative for the Company's reported results prepared in accordance with GAAP. See Appendix A for a reconciliation to GAAP financial measures. |
The Committee approved the threshold, target and maximum performance goals for each performance measure under the 2024 Long-Term Performance Plan. The target performance goals are set at a level believed by management to be reasonably achievable. The economic and business environment facing the Company remains challenging and therefore the Company's ability to achieve the target goals under the 2024 Long-Term Performance Plan is uncertain.
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If the threshold goal is not achieved for a given measure, there will be no payout on that measure. Increasingly larger payouts will be awarded for levels of achievement between the threshold and maximum performance goals.
The following table summarizes the payout range for each performance goal:
|
Performance Goal Achievement |
Payout Percentage | |
|
Less than threshold |
0% | |
|
Threshold to target |
50% - 99% | |
|
Target to maximum |
100% - 149% | |
|
Maximum and greater |
150% |
In accordance with the terms of the Long-Term Performance Plan, in determining the long-term performance factor, the Committee may make adjustments to the actual levels of achievement under each corporate performance measure to ensure that each corporate performance measure reflects the Company's normalized operating performance in the ordinary course of business. In general, these potential adjustments relate to unplanned or unanticipated events and nonrecurring items. Examples of such adjustments would be mark-to-market adjustments required on the Company's hedges for certain commodities such as fuel and aluminum, costs related to supply chain optimization efforts and facility purchases and impacts from changes in capital structure from share repurchases, dividend levels and debt issuances.
Awards, if any, under the 2024 Long-Term Performance Plan will be paid in early fiscal 2027 based on the Company's audited consolidated financial results for fiscal 2024 through fiscal 2026 and any adjustments made by the Committee. Consistent with the Company's historical practice of compensating executive officers (other than the CEO) in cash, the awards will be paid in cash instead of equity due to the limited number of shares of
2022 Long-Term Performance Plan
In the first quarter of fiscal 2022, the Committee established the Long-Term Performance Plan for the fiscal 2022-fiscal 2024 three-year performance period (the "2022 Long-Term Performance Plan"). Awards under the 2022 Long-Term Performance Plan were paid in early fiscal 2025 based on the Company's audited consolidated financial results for fiscal 2022 through fiscal 2024 and the adjustments made by the Committee described below. The awards were calculated as follows:
|
Name |
2022 Long-Term Performance Plan Target Awards |
x |
Long-Term Performance Factor |
= | Award Earned | |||||||||||
|
|
$ | 426,094 | x | 150.0% | = | $ | 639,141 | |||||||||
|
|
$ | 1,336,425 | x | 150.0% | = | $ | 2,004,638 | |||||||||
|
|
$ | 519,936 | x | 150.0% | = | $ | 779,904 | |||||||||
|
|
$ | 465,863 | x | 150.0% | = | $ | 698,795 | |||||||||
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The following table reflects the calculation of the long-term performance factor under the 2022 Long-Term Performance Plan:
|
Performance Measure(1) |
Weight |
Target Performance Goal |
Adjusted Goal |
Payout |
Weighted |
|||||||||
|
EBIT |
50% | $ | 1,467.4 million | $ | 2,403.0 million | 150.0% | 75.0% | |||||||
|
Free Cash Flow |
30% | $ | 575.0 million | $ | 1,220.2 million | 150.0% | 45.0% | |||||||
|
EBIT Margin |
20% | 7.74% | 12.11% | 150.0% | 30.0% | |||||||||
|
Long-Term Performance Factor |
150.0% | |||||||||||||
| (1) |
"EBIT," "Free Cash Flow" and "EBIT Margin" are defined as described in the "2022 Long-Term Performance Plan" section beginning on page 38 of our definitive proxy statement filed with the |
| (2) |
"EBIT," "Free Cash Flow" and "EBIT Margin" are non-GAAP financial performance measures used solely for evaluating the Company's performance in connection with the determination of the amount of incentive compensation earned under the 2022 Long-Term Performance Plan. Non-GAAP financial measures are not an alternative for the Company's reported results prepared in accordance with GAAP. See Appendix A for a reconciliation to GAAP financial measures. |
In accordance with the terms of the Long-Term Performance Plan, in determining the long-term performance factor, the Committee made adjustments to the actual levels of achievement under each corporate performance measure to ensure that each corporate performance measure over the three-year performance period reflected the Company's normalized operating performance in the ordinary course of business. See Appendix A for detail on the adjustments made.
Long-Term Performance Equity Plan
In
In the first quarter of fiscal 2022, the Committee approved an incentive award to
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Performance Plan described above. The amount of the incentive award earned by
|
Name |
2022 Long-Term Performance Equity Plan Award |
x |
Long-Term |
= |
Bonus Award Earned |
|||||||||||||
|
|
$ | 6,850,000 | x | 150.0% | = | $ | 10,275,000 | |||||||||||
Officer Retention and Long-Term Retention Plans
Historically, the Committee has emphasized retention as a key objective of the Company's executive compensation program. The Company maintains two supplemental retirement plans-the Officer Retention Plan (the "ORP") and the Long-Term Retention Plan (the "LTRP")-for the purpose of attracting and retaining executive talent until retirement and promoting a long-term perspective. These plans are also provided in light of the Company's historical practice of not using equity as a significant component of executive total compensation (except for the CEO). The material terms of the ORP and the LTRP are described beginning on pages 48 and 50, respectively.
Achievement Recognition Award
In
During the recent three-fiscal year period ended
In light of these significant achievements, the Committee approved achievement recognition awards to the named executive officers and other executives in
Supplemental Savings Incentive Plan
The Supplemental Savings Incentive Plan (the "SSIP") allows the executive officers to defer a portion of their annual salary and awards under the Annual Bonus Plan, the Long-Term Performance Plan and the Long-Term Performance Equity Plan. The Company currently matches up to 50% of the first 6% of base salary deferred into the SSIP. The Company may also make additional discretionary contributions to participants' SSIP accounts.
In connection with his recruitment by the Company and in lieu of any awards under the ORP or the LTRP, the Committee approved annual discretionary contributions to the SSIP account of
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account of
Prior to 2006, participants could elect to receive a fixed annual retuof up to 13% on their account balances. This election provided participants with an above-market rate of retuand resulted in a long-term fixed liability for the Company that was not contingent on its corporate performance. For these reasons, the Committee eliminated the option to receive a fixed rate of retufor all deferrals and Company contributions made on or after
Other Benefits and Executive Compensation Policies
401(k) Savings Plan
The Company maintains a tax-qualifieddefined contribution plan (the "401(k) Savings Plan") with a cash or deferred arrangement under Section 401(k) of the Internal Revenue Code for substantially all of its employees who are not part of collective bargaining agreements, including the named executive officers. Employee elective deferral contributions to the 401(k) Savings Plan are made, at the election of the employee, on a pre-taxbasis or Roth after-taxbasis and are subject to contribution limitations in the Internal Revenue Code. The Company currently matches up to 100% of the first 4% of base salary deferred under the 401(k) Savings Plan. The Company may make an additional discretionary contribution equal to 100% of an additional 1% of base salary deferred under the 401(k) Savings Plan. The Company funded all of the discretionary matching contribution for fiscal 2024.
Severance and Change in Control
The Company's executive officers, including the named executive officers, do not have employment agreements, but they are entitled to certain payments under the various plans described in this section in connection with a termination of employment or a change in control of the Company. With respect to termination of employment, each executive officer is entitled to certain payments upon termination without cause, voluntary resignation or termination due to death or disability. The terms of the severance provisions are described beginning on page 52.
Change in control benefits are provided to ensure that, in the event of a friendly or hostile change in control, the Company's executive officers will be able to advise the Board about the potential transaction without being unduly influenced by personal considerations, such as fear of losing their jobs as a result of a change in control.
The Committee does not consider the change in control provisions in determining the forms or amounts of other compensation. The terms of the change in control provisions are described beginning on page 52.
Personal Benefits
The Company provides personal benefits to the named executive officers that management and the Committee believe are reasonable, competitive and consistent with the Company's overall objectives of attracting and retaining executive talent and enhancing security and efficiency. The Committee believes the value of providing these benefits to the named executive officers outweighs the cost of the benefits. The cost of these benefits to
Each of the named executive officers is provided with an annual executive allowance. Each named executive officer has the flexibility to keep or spend the allowance and is not required to report to the Company how the allowance is spent. The Company provides the annual executive allowance to minimize decisions regarding the types of benefits provided, to provide the named executive officers choice and flexibility and to fix the Company's expenses with respect to these types of benefits.
Each of the named executive officers received an annual executive allowance for fiscal 2024. The amount of the allowance was
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The Company continues to pay long-term disability and life insurance premiums for the named executive officers. In fiscal 2022, the Company adopted an executive health assessment program for its senior management employees, including the executive officers. The program reimburses participants for the cost of an annual comprehensive physical examination. The Company encourages executive officers to participate in the program because it helps participants evaluate their current health and assists them with the prevention, early detection and management of any medical conditions.
The Board requires the CEO to use the Company's corporate aircraft whenever reasonable for both business and personal travel. This benefit increases the level of safety and security for
Other executive officers may use the Company's corporate aircraft for personal purposes with the CEO's permission and subject to the oversight of the Committee and the Board. Depending on availability, family members of executive officers may travel on the corporate aircraft to accompany executives on business. There is nominal or no incremental cost to the Company for these passengers.
The Company purchases or otherwise receives tickets to cultural, sporting and other entertainment events for business development and network building purposes and to support these activities in the communities in which we operate. Our employees, including the executive officers, may make personal use of any tickets that are not otherwise being used for business purposes. The Company incurs no or de minimis incremental cost in connection with the executive officers' personal use of the tickets, and the Committee believes attendance at these events by our employees, including the executive officers, enhances the Company's profile in the communities in which we operate.
For certain elements of compensation, the Company also pays income and employment tax gross-upsto provide the full benefit of the compensation.
Tax and Accounting Considerations
The Committee considers the tax and accounting effects of compensation elements when designing the Company's incentive and equity compensation plans. In order to maintain flexibility in compensating executive officers, however, the Committee has not adopted a policy that all compensation must be deductible for federal income tax purposes.
Under Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, the Company may not deduct compensation in excess of
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Executive Compensation Tables
The following tables and related narratives present the compensation for the named executive officers in the format specified by the
I. 2024 Summary Compensation Table
|
Principal Position (a) |
Year (b) |
Salary ($) (c) |
Bonus ($) (d) |
Non-Equity Incentive Plan Compensation ($) (e) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) |
All Other Compensation ($) (g) |
Total ($) (h) |
|||||||||||||||||||||
|
|
2024 | 1,365,406 | 4,250,000 | 13,017,211 | 45,756 | 355,019 | 19,033,392 | |||||||||||||||||||||
|
Chairman of the Board and |
2023 | 1,319,941 | 4,250,000 | 12,729,829 | 1,089,198 | 392,033 | 19,781,001 | |||||||||||||||||||||
| 2022 | 1,263,042 | - | 12,814,543 | 57,692 | 553,849 | 14,689,126 | ||||||||||||||||||||||
|
|
2024 | 616,110 | 350,000 | 1,567,164 | - | 317,571 | 2,850,845 | |||||||||||||||||||||
|
Executive Vice President and Chief Financial Officer |
2023 | 594,347 | 350,000 | 1,527,437 | - | 214,815 | 2,686,599 | |||||||||||||||||||||
| 2022 | 564,544 | - | 1,532,145 | - | 209,466 | 2,306,155 | ||||||||||||||||||||||
|
|
2024 | 1,025,278 | 1,000,000 | 4,076,983 | 140,297 | 764,504 | 7,007,062 | |||||||||||||||||||||
|
President and Chief Operating Officer |
2023 | 959,485 | 1,000,000 | 3,914,134 | 235,061 | 639,551 | 6,748,231 | |||||||||||||||||||||
| 2022 | 885,333 | - | 3,092,816 | - | 635,330 | 4,613,479 | ||||||||||||||||||||||
|
|
2024 | 737,616 | 350,000 | 1,890,947 | 262,589 | 225,234 | 3,466,386 | |||||||||||||||||||||
|
Executive Vice President, Franchise Beverage Operations |
2023 | 714,579 | 350,000 | 1,842,956 | 512,491 | 204,985 | 3,638,719 | |||||||||||||||||||||
| 2022 | 688,878 | - | 1,869,581 | 22,013 | 212,231 | 2,792,703 | ||||||||||||||||||||||
|
E. Beauregarde Fisher III |
2024 | 667,259 | 350,000 | 1,703,862 | - | 370,250 | 3,091,371 | |||||||||||||||||||||
|
Executive Vice President, General Counsel and Secretary |
2023 | 645,041 | 350,000 | 1,660,643 | - | 321,438 | 2,977,122 | |||||||||||||||||||||
| 2022 | 617,235 | - | 1,675,147 | - | 316,306 | 2,608,688 | ||||||||||||||||||||||
Salary (Column (c))
The amounts shown in the "Salary" column include amounts deferred by the named executive officers under the 401(k) Savings Plan and the SSIP.
Bonus (Column (d))
The amounts shown in the "Bonus" column include the achievement recognition award paid to the named executive officers as a discretionary bonus.
Non-EquityIncentive Plan Compensation (Column (e))
The amounts shown in the "Non-EquityIncentive Plan Compensation" column represent (i) for
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Plan and (ii) for the other named executive officers, the performance-based cash awards earned under the 2024 Annual Bonus Plan and the 2022 Long-Term Performance Plan, as follows:
|
Name |
2024 Annual Bonus Plan ($) |
2022 Long-Term Performance Equity Plan ($) |
2022 Long-Term Performance Plan ($) |
Total ($) |
||||||||||||
|
|
2,742,211 | 10,275,000 | - | 13,017,211 | ||||||||||||
|
|
928,023 | - | 639,141 | 1,567,164 | ||||||||||||
|
|
2,072,345 | - | 2,004,638 | 4,076,983 | ||||||||||||
|
|
1,111,043 | - | 779,904 | 1,890,947 | ||||||||||||
|
|
1,005,067 | - | 698,795 | 1,703,862 | ||||||||||||
Change in Pension Value and Nonqualified Deferred Compensation Earnings (Column (f))
The following table breaks out the amounts shown in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column for fiscal 2024:
|
Name |
Officer Retention Plan ($)(1) |
Nonqualified Deferred Compensation Earnings ($)(2) |
Total ($) |
|||||||||
|
|
- | 45,756 | 45,756 | |||||||||
|
|
- | - | - | |||||||||
|
|
140,297 | - | 140,297 | |||||||||
|
|
235,284 | 27,305 | 262,589 | |||||||||
|
|
- | - | - | |||||||||
| (1) |
The amounts shown in this column reflect the aggregate increase in the present value of each named executive officer's benefit under the ORP from the beginning of the fiscal year to the end of the fiscal year. For fiscal 2024, the present value of |
| (2) |
The amounts shown in this column reflect the portion of annual earnings on Messrs. Harrison's and Chambless' principal balance under the SSIP that is deemed to be "above-market interest" under the |
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All Other Compensation (Column (g))
The table below describes each component of the "All Other Compensation" column for fiscal 2024. The amounts shown reflect the incremental cost to
|
Name |
Company Contributions to Defined Contribution Plans ($) |
Life Insurance ($) |
Tax Gross-Ups ($) |
Executive Allowance ($) |
Personal Use of Corporate Aircraft ($) |
Other ($) |
Total ($) |
|||||||||||||||||||||
|
Mr. Harrison |
58,212 | 17,304 | 78,193 | 45,000 | 145,170 | 11,140 | 355,019 | |||||||||||||||||||||
|
Mr. Anthony |
285,583 | 10,494 | 4,709 | 15,000 | - | 1,785 | 317,571 | |||||||||||||||||||||
|
Mr. Katz |
687,639 | 9,793 | 19,678 | 25,000 | 17,809 | 4,585 | 764,504 | |||||||||||||||||||||
|
Mr. Chambless |
149,362 | 14,613 | 25,084 | 25,000 | - | 11,175 | 225,234 | |||||||||||||||||||||
|
Mr. Fisher |
340,912 | 6,867 | 2,886 | 15,000 | - | 4,585 | 370,250 | |||||||||||||||||||||
The following describes each of the benefits reflected in the above table:
Company Contributions to Defined Contribution Plans. The Company makes matching and discretionary contributions to the named executive officers' accounts under the SSIP and the 401(k) Savings Plan and to the accounts of the named executive officers (other than Messrs. Harrison and Anthony) under the LTRP. The Company currently matches up to 50% of the first 6% of base salary deferred into the SSIP. The Company may also make additional discretionary contributions to participants' SSIP accounts. The Company makes matching contributions to the named executive officers' accounts under the 401(k) Savings Plan of up to 5% of each named executive officer's eligible compensation based on the Company's annual performance. The Company's matching contribution is comprised of a 4% fixed component and a 1% discretionary component. The Company funded all of the discretionary matching contribution for fiscal 2024. The amount of the Company contribution to a named executive officer's supplemental benefits account under the LTRP is determined based on the named executive officer's position and level of responsibility, performance, job tenure and future potential, and is specified in an individual participation agreement with the named executive officer at the time the named executive officer commences participation in the LTRP.
Life Insurance. The Company pays excess group life insurance and individual life insurance for the named executive officers.
Tax Gross-Ups. The Company pays income and employment tax gross-upswith respect to certain long-term disability and life insurance premiums, personal use of corporate aircraft and
Executive Allowance. The annual executive allowance is intended to establish an equitable distribution among the named executive officers of the monies previously spent on executive perquisites. Each named executive officer has the flexibility to keep or spend the allowance and is not required to report to the Company how the allowance is spent.
Personal Use of
Other. Other is comprised of premiums for supplemental long-term disability insurance and the cost of any annual comprehensive physical examination.
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II. 2024 Grants of Plan-Based Awards
The following table shows grants of plan-based awards made to the named executive officers in
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | ||||||||||||||||||||||
|
Name |
Plan(1) | Threshold ($)(2) |
Target ($)(3) |
Maximum ($)(4) |
||||||||||||||||||
|
|
ABP LTPEP |
137,465 715,000 |
1,374,645 7,150,000 |
3,092,952 10,725,000 | ||||||||||||||||||
|
|
ABP LTPP |
46,521 46,521 |
465,210 465,210 |
1,046,721 697,814 | ||||||||||||||||||
|
|
ABP LTPP |
103,885 155,827 |
1,038,848 1,558,272 |
2,337,407 2,337,407 | ||||||||||||||||||
|
|
ABP LTPP |
55,696 55,696 |
556,956 556,956 |
1,253,150 835,434 | ||||||||||||||||||
|
|
ABP LTPP |
50,383 50,383 |
503,831 503,831 |
1,133,619 755,746 | ||||||||||||||||||
| (1) |
Incentive award opportunities were granted under the following plans in fiscal 2024: |
| ABP |
2024 Annual Bonus Plan |
| LTPEP |
2024 Long-Term Performance Equity Plan |
| LTPP |
2024 Long-Term Performance Plan |
The material terms of each plan are described in the "Compensation Discussion and Analysis" section beginning on page 31.
| (2) |
The threshold award amounts shown for the ABP, the LTPEP and the LTPP are equal to 50% of the lowest weighted performance measure. The lowest weighted performance measure under the ABP, the LTPEP and the LTPP was 20%. |
| (3) |
The target award amounts shown for the ABP were computed using an individual performance factor of 1.0. |
| (4) |
The maximum award amounts shown for the ABP were computed using an individual performance factor of 1.5 and an overall goal achievement factor of 150.0%. The maximum award amounts shown for the LTPP were computed using a long-term performance factor of 150.0%. |
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III. Defined
The Company maintains the ORP, a supplemental nonqualified defined benefit plan, for some of the Company's key executives, including certain of the named executive officers. In
|
Name |
Plan |
Number of Years Credited Service (#)(1) |
Present Value of Accumulated Benefit ($)(2) |
Payments During Last Fiscal Year ($) |
||||||||||||
|
|
Officer Retention Plan | 29 | 12,906,293 | - | ||||||||||||
|
|
Officer Retention Plan | - | - | - | ||||||||||||
|
|
Officer Retention Plan | 12 | 1,214,264 | - | ||||||||||||
|
|
Officer Retention Plan | 19 | 2,780,034 | - | ||||||||||||
|
|
Officer Retention Plan | - | - | - | ||||||||||||
| (1) |
The amounts shown in this column are equal to the number of years of benefit service for which the executive has received credit under the ORP. None of the named executive officers has received benefit credit service under the ORP for years of service in addition to their actual years of service with the Company which are as follows: |
| (2) |
The amounts shown in this column are the present values of each named executive officer's accumulated benefits under the ORP as of |
Officer Retention Plan
The Company maintains the ORP, which is a supplemental nonqualified defined benefit plan, to provide some of the Company's key executives, including certain of the named executive officers, with retirement benefits in excess of Internal Revenue Code limitations as well as additional supplemental retirement benefits. In
Under the ORP, the named executive officers are entitled to the full amount of their accrued benefit under the plan upon reaching age 60, the normal retirement age under the plan. The amount of each participant's normal retirement benefit is determined based on the participant's position and level of responsibility, performance and job tenure, and is specified in the participant's individual agreement under the ORP.
Participants who terminate employment prior to normal retirement age are eligible to receive a benefit based on their accrued retirement benefit if their employment is terminated due to death or total disability or their vested accrued retirement benefit if their employment is terminated other than due to death or total disability. Participants are also eligible to receive a benefit based on the benefit they would have accrued through age 60 if they are employed upon a change in control. The benefits payable upon death, total disability, severance or a change in control are described beginning on page 52.
Generally, plan benefits are paid in the form of equal monthly installments over a period of 10, 15 or 20 years, as elected by the participant upon joining the plan. The monthly installment amounts are computed using an 8% discount rate using simple interest compounded monthly. However, in the event of death, the benefits are payable in a lump sum, and, in the event of a change in control, the benefits become payable in either a lump sum or in equal monthly installments over a period of five, 10 or 15 years, at the election of the participant.
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As of
|
Name |
Estimated Annual Retirement Benefit ($) |
Number of Years Payable (#) |
||||||
|
|
1,624,991 | 15 | ||||||
|
|
- | - | ||||||
|
|
359,573 | 10 | ||||||
|
|
294,894 | 20 | ||||||
|
|
- | - | ||||||
Each named executive officer (other than Messrs. Anthony and Fisher who are not eligible to participate in the ORP because they commenced employment with the Company after
IV. 2024 Nonqualified Deferred Compensation
Supplemental Savings Incentive Plan
The Company maintains the SSIP, a supplemental nonqualified deferred compensation plan, for its key executives, including the named executive officers. The following table provides information regarding the named executive officers' accounts and benefits under the SSIP for fiscal 2024:
|
Name |
Executive Contributions in Fiscal 2024 ($)(1) |
Company Contributions in Fiscal 2024 ($)(2) |
Aggregate Earnings in Fiscal 2024 ($)(3) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at ($)(4) |
|||||||||||||||
|
|
81,924 | 40,962 | 2,311,683 | - | 17,890,310 | |||||||||||||||
|
|
61,611 | 268,483 | 246,520 | - | 1,776,871 | |||||||||||||||
|
|
61,517 | 30,758 | 88,970 | - | 993,017 | |||||||||||||||
|
|
88,514 | 22,128 | 1,258,425 | - | 5,527,231 | |||||||||||||||
|
|
175,724 | 20,018 | 185,462 | - | 1,436,595 | |||||||||||||||
| (1) |
All amounts shown in this column are also reported in the "Salary" or "Non-EquityIncentive Plan Compensation" columns of the 2024 Summary Compensation Table. |
| (2) |
All amounts shown in this column are also reported in the "All Other Compensation" column of the 2024 Summary Compensation Table. |
| (3) |
Of the amounts shown in this column, the following amounts are reported as above-market earnings on deferred compensation in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column of the 2024 Summary Compensation Table: |
| (4) |
Of the amounts shown in this column, the following amounts were reported in the Summary Compensation Tables of the Company's proxy statements for previous years: |
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The Company currently matches up to 50% of the first 6% of base salary deferred into the SSIP. The Company may also make additional discretionary contributions to participants' SSIP accounts.
Participants are immediately vested in all amounts of base salary and bonus deferred by them. The Company's contributions to participants' accounts, other than transition contributions, vest in 20% annual increments and become fully vested upon the completion of five years of service. The transition contributions vested in 20% annual increments from
Amounts deferred by participants and contributions made by the Company before
Amounts deferred by participants and contributions made by the Company on or after
Balances in fixed benefit accounts and pre-2006supplemental accounts become payable, as elected by a participant, either upon "termination of employment" or on a date designated by the participant between the year the participant turns 55 and the year the participant turns 70. Balances in post-2005 supplemental accounts may be distributed, as elected by a participant, either upon "termination of employment" or on a date designated by the participant that is at least two years after the year that a salary deferral or other contribution was made and not later than the year the participant turns 70. A "termination of employment" occurs upon the later of (i) a participant's severance, retirement or attainment of age 55 while totally disabled and, (ii) at the election of the plan administrator, the date when the participant is no longer receiving severance benefits.
Balances in fixed benefit accounts are payable in equal monthly installments over a period of 10 or 15 years, at the election of the participant. The monthly payment amount for a fixed benefit account is calculated using a discount rate that is equal to the applicable rate of interest on the account, as described above. Balances in pre-2006supplemental accounts are payable in equal monthly installments over a period of 10 or 15 years, at the election of the participant. The monthly payment amount for a pre-2006supplemental account is calculated by dividing the vested account balance by the number of remaining monthly payments. Balances in post-2005 supplemental accounts are payable in either a lump sum or in equal monthly installments over a period of five, 10 or 15 years, at the election of the participant. The monthly payment amount for a post-2005 supplemental account is calculated by dividing the vested account balance by the number of remaining monthly payments.
In the event of death or a change in control, all account balances become payable in either a lump sum or in equal monthly installments over a period of five, 10 or 15 years, at the election of the participant. In each case, the account balances and monthly payments are generally computed in the same manner as described above, except participants are deemed fully vested in their account balances, and, in the case of a change in control, the account balances and monthly payments for fixed benefit accounts are computed using the maximum 13% rate of retuand 13% discount rate, respectively. Additional information regarding amounts payable to each of the named executive officers upon a termination of employment, death or a change in control is provided in the following section.
Long-Term Retention Plan
The LTRP is a supplemental nonqualified defined contribution plan that provides supplemental retirement benefits to the Company's key executives. The LTRP was adopted in
50
Table of Contents
A participant in the LTRP earns a Company contribution to a supplemental benefits account for each year of employment with the Company through age 60, the normal retirement age under the plan. The amount of the Company contribution for each participant is determined based on the participant's position and level of responsibility, performance, job tenure and future potential, and is specified in the participant's individual agreement under the LTRP. The amount contributed to a participant's supplemental benefits account is invested in investment choices that are similar to the choices available under the 401(k) Savings Plan. The balance of a participant's supplemental benefits account is 50% vested through a participant's attainment of age 51 while employed by the Company and becomes vested ratably for each year of continued employment thereafter through age 60. The balance of a participant's supplemental benefits account also becomes vested in the event of the participant's death or disability or a change in control of the Company. The vested balance of a participant's supplemental benefits account is payable following termination of employment in either a lump sum or in equal monthly installments over a period of 10, 15 or 20 years, at the election of the participant.
The following table provides information regarding the named executive officers with accounts and benefits under the LTRP for fiscal 2024:
|
Name |
Company Contributions in Fiscal 2024 ($)(1) |
Aggregate Earnings in Fiscal 2024 ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at ($) |
||||||||||
|
|
639,630 | 293,747 | - | 3,551,057 | ||||||||||
|
|
109,984 | 407,360 | - | 1,793,099 | ||||||||||
|
|
303,795 | 303,714 | - | 2,592,661 | ||||||||||
| (1) |
All amounts shown in this column are also reported in the "All Other Compensation" column of the 2024 Summary Compensation Table. |
51
Table of Contents
V. 2024 Potential Payments Upon Termination or Change in Control
The table below shows the estimated benefits payable to each named executive officer in the event of the named executive officer's termination of employment under various scenarios or a change in control of the Company. The amounts shown assume termination of employment or a change in control on
|
Name and Plans |
Voluntary Resignation or Termination Without Cause ($) |
Termination for Cause ($) |
Death ($) |
Disability ($) |
Retirement ($)(1) |
Change in Control ($) |
||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Officer Retention Plan(2) |
14,411,990 | - | 14,411,990 | 14,411,990 | 14,411,990 | 14,411,990 | ||||||||||||||||||
|
Supplemental Savings Incentive Plan(2) |
17,890,310 | 17,890,310 | 17,890,310 | 17,890,310 | 17,890,310 | 17,890,310 | ||||||||||||||||||
|
Annual Bonus Plan(3) |
2,742,211 | - | 2,742,211 | 2,742,211 | 2,742,211 | 2,742,211 | ||||||||||||||||||
|
Long-Term Performance Equity Plan(4) |
16,950,000 | - | 16,950,000 | 16,950,000 | 16,950,000 | 16,950,000 | ||||||||||||||||||
|
Total |
51,994,511 | 17,890,310 | 51,994,511 | 51,994,511 | 51,994,511 | 51,994,511 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Supplemental Savings Incentive Plan(2) |
1,200,257 | 1,200,257 | 1,776,871 | 1,776,871 | 1,776,871 | 1,776,871 | ||||||||||||||||||
|
Annual Bonus Plan(3) |
928,023 | - | 928,023 | 928,023 | 928,023 | 928,023 | ||||||||||||||||||
|
Long-Term Performance Plan(4) |
1,055,141 | - | 1,055,141 | 1,055,141 | 1,055,141 | 1,055,141 | ||||||||||||||||||
|
Total |
3,183,421 | 1,200,257 | 3,760,035 | 3,760,035 | 3,760,035 | 3,760,035 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Officer Retention Plan(2) |
1,289,063 | - | 1,718,750 | 1,718,750 | - | 2,500,000 | ||||||||||||||||||
|
Long-Term Retention Plan |
1,963,260 | - | 3,551,057 | 3,551,057 | - | 3,551,057 | ||||||||||||||||||
|
Supplemental Savings Incentive Plan(2) |
993,017 | 993,017 | 993,017 | 993,017 | - | 993,017 | ||||||||||||||||||
|
Annual Bonus Plan(3) |
2,072,345 | - | 2,072,345 | 2,072,345 | - | 2,072,345 | ||||||||||||||||||
|
Long-Term Performance Plan(4) |
2,004,638 | - | 3,327,223 | 3,327,223 | - | 3,327,223 | ||||||||||||||||||
|
Total |
8,322,323 | 993,017 | 11,662,392 | 11,662,392 | - | 12,443,642 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Officer Retention Plan(2) |
2,368,929 | - | 2,632,143 | 2,632,143 | - | 3,000,000 | ||||||||||||||||||
|
Long-Term Retention Plan |
1,148,179 | - | 1,793,099 | 1,793,099 | 1,148,179 | 1,793,099 | ||||||||||||||||||
|
Supplemental Savings Incentive Plan(2) |
5,527,231 | 5,527,231 | 5,527,231 | 5,527,231 | 5,527,231 | 5,527,231 | ||||||||||||||||||
|
Annual Bonus Plan(3) |
1,111,043 | - | 1,111,043 | 1,111,043 | 1,111,043 | 1,111,043 | ||||||||||||||||||
|
Long-Term Performance Plan(4) |
1,284,057 | - | 1,284,057 | 1,284,057 | 1,284,057 | 1,284,057 | ||||||||||||||||||
|
Total |
11,439,439 | 5,527,231 | 12,347,573 | 12,347,573 | 9,070,510 | 12,715,430 | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Long-Term Retention Plan |
1,389,606 | - | 2,592,661 | 2,592,661 | - | 2,592,661 | ||||||||||||||||||
|
Supplemental Savings Incentive Plan(2) |
1,436,595 | 1,436,595 | 1,436,595 | 1,436,595 | - | 1,436,595 | ||||||||||||||||||
|
Annual Bonus Plan(3) |
1,005,067 | - | 1,005,067 | 1,005,067 | - | 1,005,067 | ||||||||||||||||||
|
Long-Term Performance Plan(4) |
698,795 | - | 1,152,068 | 1,152,068 | - | 1,152,068 | ||||||||||||||||||
|
Total |
4,530,063 | 1,436,595 | 6,186,391 | 6,186,391 | - | 6,186,391 | ||||||||||||||||||
| (1) |
Messrs. Harrison, Anthony and Chambless are the only named executive officers who have satisfied the age and/or service eligibility requirements for retirement under the plans. |
| (2) |
Amounts shown for the ORP and the SSIP for the named executive officers assume payment as a lump sum as of |
52
Table of Contents
| specified in the plans. Messrs. Katz and Chambless did not meet the definition of retirement under the ORP, but would receive the amounts shown under the "Voluntary Resignation or Termination Without Cause" column. |
| (3) |
Amounts shown for the Annual Bonus Plan were calculated using the actual level of achievement of the performance goals for fiscal 2024. |
| (4) |
Amounts shown in all of the columns for the Long-Term Performance Equity Plan and the Long-Term Performance Plan were calculated using the actual level of achievement of the performance goals for the fiscal 2022 - fiscal 2024 performance period and assuming the achievement of target performance goals for the three-year performance periods ending in fiscal 2025 and fiscal 2026. The amounts for the three-year performance periods ending in fiscal 2025 and fiscal 2026 were prorated, when applicable, for the portion of the performance periods the executive was employed prior to the date of the triggering event. |
None of the Company's executive officers, including the named executive officers, has any special employment or severance agreements. The executive officers are entitled, however, to certain payments (as illustrated in the above table) under the terms of the Company's existing compensation and benefit plans in connection with the termination of their employment or a change in control of the Company. The following narrative describes the terms of those plans as they relate to a termination of employment or a change in control.
Officer Retention Plan
The ORP, the material terms of which are described beginning on page 48, contains special provisions for severance, death, total disability or a change in control.
In the event of death or total disability, each participant becomes fully vested in the amount of the participant's accrued benefit under the ORP.
Upon termination without cause or voluntary resignation, each participant's accrued benefit is 50% vested until age 51, with the vesting percentage increasing by 5% each year beginning at age 51 until fully vested at age 60. All rights to any benefits under the ORP are forfeited if a participant is terminated for cause.
In the event of a "change in control" of the Company, each participant is entitled to an amount equal to the normal retirement benefit otherwise payable to the participant at age 60 under the ORP. A "change in control" occurs under the ORP:
| (i) |
when a person or group other than the Harrison Family acquires shares of the Company's capital stock having the voting power to designate a majority of the Board; |
| (ii) |
when a person or group other than the Harrison Family acquires or possesses shares of the Company's capital stock having power to cast (A) 30% or more of the votes regarding the election of the Board and (B) a greater percentage of the votes regarding the election of the Board than the shares owned by the Harrison Family; |
| (iii) |
upon the sale or disposition of all or substantially all of the Company's assets and the assets of the Company's subsidiaries outside the ordinary course of business other than to a person or group controlled by the Company or the Harrison Family; or |
| (iv) |
upon a merger or consolidation of the Company with another entity where the Company is not the surviving entity. |
The death benefit under the ORP is payable in a lump sum. The other severance and change in control benefits are payable in equal monthly installments over a period of 10, 15 or 20 years, as elected by the participant. The amount of each monthly installment is computed using an 8% discount rate using simple interest compounded annually. The change in control benefit is also payable in a lump sum, at the election of the participant.
53
Table of Contents
Under the ORP, each participant has generally agreed not to compete with the Company for three years after termination from employment for any reason. The non-competeprovision does not apply to actions occurring after both a termination of employment and a change in control of the Company.
Supplemental Savings Incentive Plan and Long-Term Retention Plan
The SSIP and the LTRP also provide for the payment of the named executive officers' vested account balances upon termination of employment, death or a change in control. A "termination of employment" occurs under the SSIP upon a participant's severance, retirement or attainment of age 55 while totally disabled. A "termination of employment" occurs under the LTRP upon a participant's severance other than for cause, retirement or total disability. The definition of a "change in control" is the same definition used for the ORP, as described above. The material terms of the SSIP and the LTRP, including when account balances become vested and the options to receive lump sum or installment payments, are described beginning on pages 49 and 50, respectively.
Annual Bonus Plan
The Annual Bonus Plan, the material terms of which are described beginning on page 35, provides for certain payments to the named executive officers in the event of a termination of their employment or a change in control of the Company.
In the event of the total disability, retirement or death of a participant during any fiscal year, the participant (or the participant's estate) is entitled to a pro-ratabonus based on the portion of the fiscal year completed by the participant and the actual overall goal achievement factor attained for that year.
In the event of a "change in control," each participant is entitled to a pro-rataportion of the participant's target award under the Annual Bonus Plan, based on the portion of the fiscal year completed.
The term "retirement" is defined in the Annual Bonus Plan as a participant's termination of employment other than on account of death and (i) after attaining age 60, (ii) after attaining age 55 and completing 20 years of service or (iii) as the result of total disability. The definition of a "change in control" is the same definition used for the ORP, as described above.
Long-Term Performance Plan
The Long-Term Performance Plan, the material terms of which are described beginning on page 37, also provides for certain payments to the named executive officers in the event of a termination of their employment or a change in control of the Company.
In the event of the total disability, retirement or death of a participant after the completion of the first year of a performance period but prior to the end of a performance period, and in the event of the subsequent attainment of the performance goals applicable to such participant, the participant (or the participant's estate) is entitled to a pro-rataaward based on the portion of the performance period completed by the participant.
In the event of a "change in control," each participant is entitled to a pro-rataportion of the participant's target award for the performance period, based on the portion of the performance period completed.
The definition of "retirement" is the same definition used for the Annual Bonus Plan, as described above. The definition of a "change in control" is the same definition used for the ORP, as described above.
Long-Term Performance Equity Plan
The Long-Term Performance Equity Plan, the material terms of which are described beginning on page 40, also provides for certain payments to
54
Table of Contents
In the event of
In the event of a "change in control,"
The definition of "retirement" is the same definition used for the Annual Bonus Plan, as described above. The definition of a "change in control" is the same definition used for the ORP, as described above.
VI. Pay Ratio Disclosure
The
Based on the methodology and material assumptions described below, the Company has estimated these amounts to be as follows:
|
Median annual total compensation of all employees (excluding |
$ | 58,839 | ||
|
Annual total compensation of |
$ | 19,033,392 | ||
|
Ratio of |
323:1 |
The
The annual total compensation of
55
Table of Contents
|
Value of Initial Fixed
On:
|
||||||||||||||||
|
Year
(a)
|
Summary
Compensation Table Total for PEO ($) (b)
|
Compensation
Actually Paid to PEO ($) (c)
|
Average
Summary Compensation Table Total for Non-PEO
Named Executive (d)
|
Average
Compensation Actually Paid to Non-PEO
Named Executive (e)
|
Total
Shareholder Return ($)
(f)
|
Shareholder Return ($)
(g)
|
Net Income
(in thousands) ($) (h)
|
Income
from Operations (in thousands) ($) (i)
|
||||||||
|
2024
|
19,033,392
|
19,033,392
|
4,103,916
|
4,142,222
|
447.02
|
129.61
|
633,125
|
920,350
|
||||||||
|
2023
|
19,781,002
|
18,691,804
|
4,012,668
|
3,945,318
|
322.05
|
128.64
|
408,375
|
834,451
|
||||||||
|
2022
|
14,689,127
|
14,689,127
|
3,080,257
|
3,219,288
|
176.08
|
133.81
|
430,158
|
641,047
|
||||||||
|
2021
|
13,545,136
|
13,512,275
|
2,937,130
|
2,982,161
|
212.36
|
124.18
|
189,580
|
439,171
|
||||||||
|
2020
|
12,467,192
|
12,280,332
|
2,398,616
|
2,400,346
|
91.05
|
107.23
|
172,493
|
313,378
|
||||||||
(ii) the aggregate change in the present value of
(iii) the aggregate value of
defined benefit pension plan (which was terminated effective
|
Year
|
Summary
Compensation Table Total for PEO ($) |
Deduct Aggregate
Change in Actual Present Value in ORP ($) |
Add Service Costs &
Prior Service Costs for ORP ($) |
Compensation
Actually Paid to PEO ($) |
||||
|
2024
|
19,033,392
|
-
|
-
|
19,033,392
|
||||
|
2023
|
19,781,002
|
1,089,198
|
-
|
18,691,804
|
||||
|
2022
|
14,689,127
|
-
|
-
|
14,689,127
|
||||
|
2021
|
13,545,136
|
32,861
|
-
|
13,512,275
|
||||
|
2020
|
12,467,192
|
186,860
|
-
|
12,280,332
|
Named Executive Officers (Column (e))
named executive officers for each of the covered years,
(ii) the average of the aggregate change in the present value of their benefits under the ORP during the covered year
(iii) the average of the aggregate value of their benefits under the ORP attributable to their service during the covered year. None of the
named executive officers received any stock or option awards during the covered years.
named executive officers for fiscal years 2024, 2023, 2022, 2021 and 2020:
|
Year
|
Average Summary
Compensation Table Total for Non-PEO Named Executive
Officers
($) |
Deduct Average of the
Aggregate Change in Actual Present Value in ORP ($) |
Add Average Service
Costs & Prior Service Costs for ORP ($) |
Average
Compensation Actually Paid to Non-PEO
Named |
||||
|
2024
|
4,103,916
|
93,895
|
132,201
|
4,142,222
|
||||
|
2023
|
4,012,668
|
181,313
|
113,962
|
3,945,318
|
||||
|
2022
|
3,080,257
|
-
|
139,032
|
3,219,288
|
||||
|
2021
|
2,937,130
|
85,045
|
130,076
|
2,982,161
|
||||
|
2020
|
2,398,616
|
102,672
|
104,402
|
2,400,346
|
and
Company,
e PEO and average
named executive officer CAP and the Company's cumulative indexed total shareholder retu(TSR) (assuming an initial fixed investment of $100 on December 27, 2019) for fiscal years 2020, 2021, 2022, 2023 and 2024:
named executive officer CAP and the Company's net income for fiscal years 2020, 2021, 2022, 2023 and 2024:
named executive officer CAP and the Company's income from operations for fiscal years 2020, 2021, 2022, 2023 and 2024:
the financial performance measures that the Company considers to have been the most important in linking PEO and
named executive officer CAP in fiscal 2024 to Company performance. The financial performance measures in this table are not ranked.
|
1
|
Income from Operations | |
|
2
|
EBIT
(1)
|
|
|
3
|
EBIT Margin
(1)
|
|
|
4
|
Free Cash Flow
(1)
|
|
|
5
|
Revenue
(1)
|
|
(1)
|
"EBIT," "EBIT Margin," "Free Cash Flow" and "Revenue" are
non-GAAP
financial performance measures. See Appendix A for a reconciliation to GAAP financial measures. |
|
VIII.
|
Policies and Practices Related to the Grants of Certain Equity Awards Close in Time to the Release of Material
Non-Public
Information |
information into account when determining the timing of the grants and the terms of the awards.
Table of Contents
Equity Compensation Plan Information
The following table provides information as of December 31, 2024, concerning the Company's outstanding equity compensation arrangements as of that date:
|
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) (a) |
Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights ($) (b) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) (c) |
|||||||||
|
Equity compensation plans approved by security holders |
- | - | 300,000 | (1) | ||||||||
|
Equity compensation plans not approved by security holders |
- | - | - | |||||||||
|
Total |
- | - | 300,000 | (1) | ||||||||
| (1) |
Represents 300,000 shares of Class B Common Stock reserved for issuance pursuant to awards that may be made in the future under the Long-Term Performance Equity Plan. |
60
Table of Contents
Consideration of Risk Related to Compensation Programs
The Company has considered its compensation policies and practices for all employees and determined that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on Coca-ColaConsolidated. As described in the "Compensation Discussion and Analysis" section beginning on page 31, the Compensation Committee and management have designed Coca-ColaConsolidated's executive compensation program to achieve a number of goals, including the following:
| • |
Motivating the executive officers to achieve Coca-ColaConsolidated's annual and long-term strategic and financial goals and rewarding performance based on the attainment of those goals; |
| • |
Appropriately balancing risk and reward in the context of the Company's business environment and long-range business plans; |
| • |
Being affordable and appropriately aligned with stockholder interests; and |
| • |
Being reasonably balanced across types and purposes of compensation, particularly with respect to fixed compensation objectives, short-term and long-term performance-based objectives and retention and retirement objectives. |
In light of these goals, the Compensation Committee, senior management and human resources personnel considered risk as they designed the various elements of the Company's compensation programs.
The Company notes the following factors with respect to the determination that any risks arising from the compensation policies and practices are not reasonably likely to have a material adverse effect on Coca-ColaConsolidated:
| • |
The belief that the Company's compensation programs are reasonably balanced across types of compensation and the various objectives they are designed to reward; |
| • |
While Coca-ColaConsolidated does not engage in compensation benchmarking, the Company does retain a compensation consultant to conduct comparative studies of the Company's executive compensation relative to peer companies and survey data; |
| • |
The Annual Bonus Plan, the Long-Term Performance Plan and the Long-Term Performance Equity Plan provide for payouts based on the achievement of key financial goals under Coca-ColaConsolidated's annual and long-range strategic plan and provide for increased payout as financial performance increases and less or no payout as financial performance decreases. Awards under these plans do not provide for payouts based on individual transactions that could transfer liability to Coca-ColaConsolidated beyond the award date; |
| • |
The specific corporate performance goals for the Annual Bonus Plan, the Long-Term Performance Plan and the Long-Term Performance Equity Plan are initially developed based on the Company's annual budget. The Executive Vice President and Chief Financial Officer and the Executive Vice President, General Counsel and Secretary of Coca-ColaConsolidated then use financial models to determine the appropriate award criteria and target goals for each plan. The financial models and plan goals are reviewed with and approved by the Chairman and Chief Executive Officer and the President and Chief Operating Officer of Coca-ColaConsolidated before being presented to, reviewed with and approved by the Compensation Committee; |
| • |
Performance goals are generally based on corporate and individual performance and are not based on other goals that may create increased risk such as the performance of individual business units or the accomplishment of particular tasks where the income and risk from the tasks extend over a significantly longer period of time; and |
| • |
The Company adopted the Coca-ColaConsolidated, Inc. Incentive-Based Compensation Recovery Policy, effective August 1, 2023, to enable recovery of performance-based compensation awarded to or earned by executive officers if the Company is required to restate its financial results, regardless of the executive officers' fault. The Policy is intended to comply with the requirements of Section 10D of the Exchange Act and Nasdaq Listing Rule 5608. |
61
Table of Contents
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires
Compensation Committee Interlocks and Insider Participation
Compensation Committee Report
The Compensation Committee has reviewed and discussed the "Compensation Discussion and Analysis" section included in this Proxy Statement with management and, based on such review and discussions, recommended to the Board that the "Compensation Discussion and Analysis" section be included in this Proxy Statement and in
Submitted by the Compensation Committee of the Board.
62
Table of Contents
Audit Committee Report
The primary purpose of the Audit Committee is to assist the Board in its oversight of all material aspects of the accounting and financial reporting processes, internal controls and internal audit function of the Company, including its compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Management has primary responsibility for the Company's consolidated financial statements and reporting processes, including its internal controls and disclosure controls and procedures. The Company's independent registered public accounting firm,
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements included in the Company's Annual Report on Form 10-Kfor fiscal 2024. This review included a discussion of the quality and acceptability of the Company's financial reporting and internal controls. During the past fiscal year, the Audit Committee discussed with the Company's independent registered public accounting firm the matters required to be discussed by applicable requirements of the
Based on the reviews, discussions and disclosures referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements of the Company for fiscal 2024 be included in its Annual Report on Form 10-Kfor such fiscal year.
Submitted by the Audit Committee of the Board.
63
Table of Contents
Proposal 2:
Ratification of the Appointment of
Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors has appointed
The Company expects that representatives of
Stockholder ratification of the Audit Committee's appointment of
The Board of Directors unanimously recommends that you vote "FOR" the ratification of the appointment of
Fees Paid to Independent Registered Public Accounting Firm
The following table presents fees for professional audit services rendered by
| Fiscal 2024 ($) |
Fiscal 2023 ($) |
|||||||
|
Audit Fees(1) |
2,215,000 | 1,833,481 | ||||||
|
Audit-Related Fees |
- | - | ||||||
|
Tax Fees |
- | - | ||||||
|
All Other Fees(2) |
2,000 | - | ||||||
|
Total |
2,217,000 | 1,833,481 | ||||||
| (1) |
Audit Fees consist of the aggregate fees billed for the respective fiscal year for professional services rendered by the independent registered public accounting firm for the audit of the Company's annual consolidated financial statements and the effectiveness of its internal control over financial reporting, and the review of the Company's interim consolidated financial statements included in the Company's Quarterly Reports on Form 10-Q.Audit Fees also consist of the aggregate fees billed for the respective fiscal year for services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
| (2) |
All Other Fees in fiscal 2024 consist of a license fee for the use of disclosure checklist tools. |
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Audit Committee Pre-Approvalof Audit and Non-AuditServices
The Audit Committee's policy is to pre-approveall audit and permissible non-auditservices to be performed by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. All such services provided in fiscal 2024 were pre-approvedby the Audit Committee. Pre-approvalis generally provided for up to one year and any pre-approvalis detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval,and the fees for the services performed to date.
The Audit Committee has delegated pre-approvalauthority to its Chairman when necessary due to timing considerations. Any services pre-approvedby such Chairman must be reported to the full Audit Committee at its next scheduled meeting.
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Proposal 3:
Approval of the Amendment to
The Board of Directors has unanimously adopted, and recommends that
General
The Proposed Amendment, subject to stockholder approval, would amend Article FOURTH, subsection (a) of the Restated Certificate of Incorporation, as follows (additions are shown as underlined and deletions are shown as struck through):
"FOURTH.
(a) The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 80,100,000440,100,000, consisting of:
(1) 30,000,000300,000,000shares of Common Stock having a par value of $1.00 per share;
(2) 10,000,000100,000,000shares of Class B Common Stock having a par value of $1.00 per share;
(3) 20,000,000 shares of Class
(4) 50,000 shares of Convertible Preferred Stock having a par value of $100.00 per share;
(5) 50,000 shares of Non-ConvertiblePreferred Stock having a par value of $100.00 per share; and
(6) 20,000,000 shares of Preferred Stock having a par value of $0.01 per share.
Upon the effectiveness of the Certificate of Amendment to this Restated Certificate of Incorporation adding this sentence (the "Effective Time"), each issued share of Common Stock and ClassB Common Stock immediately prior to the Effective Time shall automatically be subdivided and reclassified into 10 shares of Common Stock and ClassB Common Stock, respectively, with the par value remaining at $1.00 per share. Each certificate that immediately prior to the Effective Time represented shares of Common Stock or ClassB Common Stock (each, an "Old Certificate") shall thereafter represent that number of shares of Common Stock or ClassB Common Stock into which the shares of Common Stock or ClassB Common Stock represented by the Old Certificate shall have been subdivided and reclassified.
All references herein to the term "preferred stock" shall be deemed to include the Preferred Stock, the Convertible Preferred Stock and the Non-ConvertiblePreferred Stock."
Other than the replacement of the existing Article FOURTH, subsection (a) with the text set forth above, the remainder of the Restated Certificate of Incorporation will remain unchanged after the effectiveness of the Proposed Amendment. If the Proposed Amendment is not approved by the Company's stockholders, the Restated Certificate of Incorporation will remain unchanged.
Purpose and Effect of the Proposed Amendment
The primary purpose of the Proposed Amendment is to effect the Stock Split. Because there is an insufficient number of authorized shares of Common Stock and Class B Common Stock to accommodate the Stock Split, the Proposed Amendment also increases the number of authorized shares of Common Stock and Class B Common Stock. On March 4, 2025, the Board approved the Stock Split, subject to and contingent upon stockholder approval and the effectiveness of the Certificate of Amendment to the Restated Certificate of Incorporation. The Restated Certificate of Incorporation currently authorizes the issuance of up to 30,000,000 shares of Common Stock and 10,000,000 shares of Class B Common Stock. As of March 17, 2025, there were 7,713,088 shares of Common Stock and 1,004,696 shares of Class B Common Stock issued and outstanding.
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The Board believes that the Stock Split is in the best interests of the Company and its stockholders. The trading price of the Common Stock has risen significantly over the past few years, with the closing market price of the Common Stock on March 17, 2025 reaching $1,316.01 as reported on Nasdaq. The Board believes the Stock Split would help reset the market price of the Common Stock, which we believe would make shares of Common Stock more affordable, easier to manage, and more attractive to a broader group of potential investors and support liquidity in the trading of such shares.
Shares of Class B Common Stock are convertible into shares of Common Stock on a share-for-sharebasis and, in order to maintain the proportional voting rights between the holders of Common Stock and the holders of Class B Common Stock, the Stock Split applies to both classes of stock. The Proposed Amendment would not affect the Class
If the Stock Split is effected, each stockholder of record as of the close of business on the Effective Date (as defined below) will become the record owner of nine additional shares of Common Stock for each share of Common Stock then owned of record by such stockholder and nine additional shares of Class B Common Stock for each share of Class B Common Stock then owned of record by such stockholder. All shares issued as a result of the Stock Split will be issued in book-entry form, either through the Direct Registration System or as a credit to an existing account of a stockholder of record. Therefore, certificates representing shares of Common Stock or Class B Common Stock currently issued should be retained by each stockholder and should not be returned to the Company or to its transfer agent, as it will not be necessary to submit outstanding certificates for exchange.
In connection with the Stock Split, and pursuant to the anti-dilution adjustment provisions in the Company's Long-Term Performance Equity Plan, proportionate adjustments will be made to the number of shares of Class B Common Stock, as applicable, that remain available for issuance pursuant to such plan, as well as to the outstanding awards under such plan.
Additionally, if the Stock Split is effected, the amount of Common Stock and Class B Common Stock accounts reflected in the Company's consolidated financial statements will be increased to reflect the additional shares issued at a par value of $1.00 per share, and the amount of additional paid-incapital will be reduced by the same amount, with no overall net effect on total equity.
The Proposed Amendment also proportionately increases the number of authorized shares of Common Stock and Class B Common Stock because there is currently an insufficient number of authorized shares of both classes of stock to accommodate the Stock Split. A proportionate increase in the number of authorized shares of Common Stock and Class B Common Stock would also have the additional benefit of preserving the relative proportion of outstanding or reserved shares to unissued shares of Common Stock and Class B Common Stock. Also, in addition to the number of authorized shares of Common Stock and Class B Common Stock required to effectuate the Stock Split, the Proposed Amendment accounts for an increase in the number of authorized shares of Common Stock and Class B Common Stock that will be available for additional issuances by the Board. Except for shares reserved for issuance under existing equity compensation plans and shares that would be issued pursuant to the Stock Split, the Board has no current plans to issue additional shares of Common Stock or Class B Common Stock. However, the Board regularly evaluates the trading price of the Common Stock and may decide that an additional stock dividend or split may be in the best interests of the Company and its stockholders from time to time.
The additional shares of Common Stock and Class B Common Stock authorized by the Proposed Amendment, if and when issued, would have the same rights and privileges as the shares of Common Stock and Class B Common Stock, respectively, currently authorized under the Restated Certificate of Incorporation. The par value per share of the Common Stock and the Class B Common Stock would not be affected by the Proposed Amendment.
Although the Board has not proposed the increase in authorized shares of Common Stock and Class B Common Stock to discourage tender offers or takeover attempts of the Company, the availability of additional authorized shares of Common Stock and Class B Common Stock for issuance could, under certain circumstances, be construed as having the effect of discouraging a merger, tender offer, proxy contest or other attempt to obtain control of the Company.
Effective Date of the Proposed Amendment and the Stock Split
If the Proposed Amendment is approved by the Company's stockholders, the Company intends to file a Certificate of Amendment to the Restated Certificate of Incorporation with the Secretary of State of the
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Proposed Amendment and the Stock Split would become effective at the time of such filing (such date, the "Effective Date"). It is expected that such filing will take place on or about May 15, 2025. However, the Board of Directors reserves the right to determine the exact timing of the Stock Split and, notwithstanding stockholder approval of the Proposed Amendment and without further action by the stockholders, to elect not to proceed with the filing of the Certificate of Amendment to the Restated Certificate of Incorporation if, at any time prior to filing the Certificate of Amendment, the Board determines that it is no longer in the best interests of the Company and its stockholders to proceed with the Stock Split.
The Board of Directors unanimously recommends that you vote "FOR" the approval of the Proposed Amendment to the Restated Certificate of Incorporation. Unless otherwise specified, proxies will be voted "FOR"the approval of the Proposed Amendment to the Restated Certificate of Incorporation.
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Additional Information
Stockholder Proposals for the 2026 Annual Meeting of Stockholders
Any stockholder proposal intended to be included in
In addition, any stockholder proposal intended to be presented at the 2026 Annual Meeting of Stockholders, but that will not be included in
2024 Annual Report to Stockholders
This Proxy Statement is accompanied by the 2024 Annual Report to Stockholders, and these materials are also available at www.proxyvote.comand the investor relations portion of the Company's website,www.cokeconsolidated.com. The 2024 Annual Report to Stockholders, which contains the audited consolidated financial statements and other information about the Company, is not incorporated in this Proxy Statement and is not to be deemed a part of the proxy soliciting material.
Annual Report on Form 10-K
The Company will provide without charge to each person solicited pursuant to this Proxy Statement, upon the written request of any such person, a copy of the Company's Annual Report on Form 10-K for fiscal 2024, including the financial statements and the financial statement schedules, required to be filed with the
Householding
The
Please contact the stockholder of record directly if you have any questions or wish to revoke your decision to household or to receive an additional copy of this Proxy Statement, the 2024 Annual Report to Stockholders or the Notice of Internet Availability for members of your household.
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Appendix A:
Reconciliation of Non-GAAPFinancial Performance Measures
This proxy statement includes non-GAAPfinancial measures, including "EBIT," "EBIT Margin," "Free Cash Flow" and "Revenue" that are defined in the "Compensation Discussion and Analysis" section beginning on page 31 and are adjusted for the purpose of determining incentive compensation for our executive officers.
The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP)related to our 2022 Long-Term Performance Plan and our 2022 Long-Term Performance Equity Plan:
| EBIT | ||||||||||||
|
Description of Adjustment (in thousands) |
Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | |||||||||
|
Income from Operations |
$ | 641,047 | $ | 834,451 | $ | 920,350 | ||||||
|
Fair value adjustments for commodity derivative instruments |
$ | 2,906 | $ | 1,061 | $ | 1,275 | ||||||
|
Supply chain and asset optimization expenses |
$ | 606 | $ | 1,296 | $ | - | ||||||
|
Total Impact of Adjustments |
$ | 3,512 | $ | 2,357 | $ | 1,275 | ||||||
|
Adjusted EBIT Results |
$ | 644,559 | $ | 836,808 | $ | 921,625 | ||||||
|
Three-Year Cumulative EBIT |
$ | 2,402,992 | ||||||||||
| EBIT Margin | ||||||||||||
|
Description of Adjustment (in thousands) |
Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | |||||||||
|
Net Sales |
$ | 6,200,957 | $ | 6,653,858 | $ | 6,899,716 | ||||||
|
Adjusted EBIT |
$ | 644,559 | $ | 836,808 | $ | 921,625 | ||||||
|
Adjusted EBIT Margin |
10.39 % | 12.58 % | 13.36 % | |||||||||
|
Three-Year Average EBIT Margin |
12.11 % | |||||||||||
| Three-Year Free Cash Flow | ||||||||||||
|
Description of Adjustment (in thousands) |
December 31, 2021 |
December 31, 2024 |
Cash Inflow/(Outflow) |
|||||||||
|
Current portion of Debt and Long-term debt |
$ | 723,443 | $ | 1,786,348 | $ | (1,062,905 | ) | |||||
|
Cash & Cash Equivalents and Short-term investments |
$ | 142,314 | $ | 1,437,034 | $ | 1,294,720 | ||||||
|
Three-Year Free Cash Flow |
$ | 231,815 | ||||||||||
|
Adjustments to Three-Year Free Cash Flow: |
||||||||||||
|
The Coca-Cola Company Share Repurchase (July 2024) |
$ | 553,723 | ||||||||||
|
Special Dividend paid in 2024 ($16/share) |
$ | 150,000 | ||||||||||
|
Purchase of Snyder Production Center (March 2022) |
$ | 60,000 | ||||||||||
|
Nashville Production |
$ | 56,000 | ||||||||||
|
Open Market Share Repurchases (November 2024) |
$ | 51,645 | ||||||||||
|
Interest paid on 2024 Bonds (December 2024) |
$ | 32,356 | ||||||||||
|
Special Dividend paid in 2023 ($3/share) |
$ | 28,121 | ||||||||||
|
Increase in Quarterly Regular Dividend (from $0.25 to $0.50) |
$ | 18,742 | ||||||||||
|
Increase in Quarterly Regular Dividend (from $0.50 to $2.50) |
$ | 17,529 | ||||||||||
|
Dutch Auction Tender Offer Share Repurchase (June 2024) |
$ | 13,312 | ||||||||||
|
Share Repurchase Transaction Costs (2024) |
$ | 6,974 | ||||||||||
|
Total Free Cash Flow Adjustments |
$ | 988,402 | ||||||||||
|
Adjusted Three-Year Free Cash Flow |
$ | 1,220,217 | ||||||||||
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The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP)related to our Annual Bonus Plan:
|
Description of Adjustment (in thousands) |
Fiscal 2024 | |||
|
Net Sales |
$ | 6,899,716 | ||
|
Non-tradesales in 2024 (excluded from ABP) |
$ | (345,586 | ) | |
|
External transportation sales (excluded from ABP) |
$ | (43,926 | ) | |
|
Total Impact of Adjustments |
$ | (389,512 | ) | |
|
Adjusted Revenue Results |
$ | 6,510,204 | ||
| Fiscal 2024 Free Cash Flow | ||||||||||||
|
Description of Adjustment (in thousands) |
December 31, 2023 |
December 31, 2024 |
Cash Inflow/(Outflow) |
|||||||||
|
Current portion of Debt and Long-term debt |
$ | 599,159 | $ | 1,786,348 | $ | (1,187,189 | ) | |||||
|
Cash & Cash Equivalents and Short-term investments |
$ | 635,269 | $ | 1,437,034 | $ | 801,765 | ||||||
|
Fiscal 2024 Free Cash Flow |
$ | (385,424 | ) | |||||||||
|
Adjustments to Free Cash Flow: |
||||||||||||
|
The Coca-Cola Company Share Repurchase |
$ | 553,723 | ||||||||||
|
Special Dividends & Increase to Regular Dividend |
$ | 167,529 | ||||||||||
|
Open Market Share Repurchases |
$ | 51,645 | ||||||||||
|
Interest paid on 2024 Bonds |
$ | 32,356 | ||||||||||
|
Dutch Auction Tender Offer Share Repurchase |
$ | 13,312 | ||||||||||
|
Share Repurchase Transaction Costs |
$ | 6,974 | ||||||||||
|
Total Free Cash Flow Adjustments |
$ | 825,539 | ||||||||||
|
Adjusted Fiscal 2024 Free Cash Flow |
$ | 440,115 | ||||||||||
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Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting and Proxy Statement and the 2024 Annual Report to Stockholders are available at www.proxyvote.com. V62479-P24987
Attachments
Disclaimer
Proxy Statement (Form DEF 14A)
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