UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Soliciting Material Pursuant to |
DARDEN RESTAURANTS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Darden Restaurants, Inc. Annual Meeting of Shareholders and Proxy Statement |
Wednesday, September 21, 2022 10:00 a.m., Eastern Time |
Our Brands | |
August 5, 2019
Dear Shareholders:
On behalf of your Board of Directors, it is our pleasure to invite you to attend the 20192022 Annual Meeting of Shareholders of Darden Restaurants, Inc. We will hold the Annual Meeting on Wednesday, September 18, 2019,21, 2022, at 10:00 a.m., Eastern Time, online via the internet at Rosen Shingle Creek, 9939 Universal Blvd., Orlando, Florida 32819.www.virtualshareholdermeeting.com/DRI2022. All holders of our outstanding common shares as of the close of business on July 24, 2019,27, 2022, are entitled to vote at the meeting.
We will furnish proxy materials to shareholders via the Internet,internet, which allows us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting.
The notice of meeting and Proxy Statement contain details about the business to be conducted at the Annual Meeting. Please read these documents carefully. We will set aside time atprovide an opportunity during the meeting for discussion of each item of business and provide you with the opportunitywe anticipate responding to ask questions.shareholder questions as described in this Proxy Statement. If you will need special assistance atduring the meeting because of a disability, please contact Matthew R. Broad, Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, Darden Restaurants, Inc., 1000 Darden Center Drive, Orlando, Florida 32837, phone (407) 245-4043.
Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. Please refer to the proxy card or Notice of Availability of Proxy Materials for more information on how to vote your shares at the meeting.
Your vote is important. Thank you for your support.
Sincerely,
Eugene I. Lee, Jr.
Executive Chairman of the Board of Directors
Notice of 2022 Annual
Meeting of Shareholders
To be held on September 21, 2022
Annual Meeting of Shareholders | ||||||
Date and Time: Wednesday, September 21, 2022 | ||||||
Place: Online, via the internet at | Wednesday, July 27, 2022 |
Items of Business | How to Vote | |||||||||
Item 1. To elect a full Board of Item 2. To obtain advisory approval of the Company’s executive compensation; Item 3. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending May 28, 2023; Item 4. To transact such other business, if any, as may properly come before the meeting and any adjournment. | ||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held on September | Internet by going to the website shown on your proxy card or Notice of Availability of Proxy Materials and following the instructions for Internet voting set forth on such proxy card or Notice | by completing, signing, dating and returning the proxy card | ||||||||
Telephone by telephone at the number shown on your proxy card and following the instructions on such proxy card (If you reside in the United States or Canada) | During the Meeting Shareholders of record and beneficial owners will be able to vote their shares electronically during the Annual Meeting. However, even if you plan to participate in the Annual Meeting online, we recommend that you vote by proxy so that your votes will be counted if you later decide not to participate in the Annual Meeting. | |||||||||
Who Can Vote | ||||||||||
You can vote during the Annual Meeting and any adjournment if you were a holder of record of our common stock at the close of business on July 27, 2022. | ||||||||||
Date of | ||||||||||
This Notice of the Annual Meeting of Shareholders and the Proxy Statement are first being distributed or otherwise furnished to shareholders on or about August |
8, 2022. | ||||||
By Order of the Board of Directors | ||||||
Matthew R. Broad | ||||||
Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | DARDEN RESTAURANTS, INC. 1000 Darden Center Drive Orlando, Florida 32837 |
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Executive Summary | 43 | |||
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COMPENSATION COMMITTEE REPORT | 54 | |||
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | 55 | |||
ASSESSMENT OF RISK OF COMPENSATION PROGRAMS | ||||
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Proxy Statement for Annual Meeting of Shareholders to be held on September 21, 2022 |
The Board of Directors (the Board) of Darden Restaurants, Inc. (Darden, the Company, we, us or our) is soliciting your proxy for use at the Annual Meeting of Shareholders to be held on September 18, 2019.21, 2022. This Proxy Statement summarizes information concerning the matters to be presented at the meeting and related information that will help you make an informed vote at the meeting. This Proxy Statement and the proxy card are first being distributed or otherwise furnished to shareholders on or about August 5, 2019.8, 2022. Capitalized terms used in this Proxy Statement that are not otherwise defined are defined in Appendix A B to this document.
This summary highlights certain information discussed in more detail in this Proxy Statement.
2022 Annual Meeting of Shareholders
Date & Time: | Wednesday, September 21, 2022, 10:00 a.m., E.T. | |
Location: | Online, via the internet at www.virtualshareholdermeeting.com/DRI2022 |
Matters Presented for Vote at the Meeting
The matters to be voted upon at this meeting, along with the Board’s recommendation, are set forth below.
Proposals | Required Approval | Board Recommendation | Page Reference | |||||
Proposal 1. Election of - M. Shân Atkins - Ricardo Cardenas - Juliana L. Chugg - James P. Fogarty - Cynthia T. Jamison - Eugene I. - Nana Mensah - William S. Simon - Charles M. - Timothy J. Wilmott | Majority of | ✓ | For Each Nominee | p. | ||||
Proposal 2. Advisory Approval of the Company’s Executive Compensation | Majority of | ✓ | For | p. | ||||
Proposal 3. Ratification of Appointment of the Company’s Independent Registered Public Accounting Firm for the Fiscal Year Ending May | Majority of | ✓ | For | p. |
2022 Proxy Statement 1
Darden is a full-service restaurant company, and as of May 29, 2022, we owned and operated 1,867 restaurants through subsidiaries in the United States and Canada under the Olive Garden®, LongHorn Steakhouse®, Cheddar’s Scratch Kitchen®, Yard House®, The Capital Grille®, Seasons 52®, Bahama Breeze®, Eddie V’s Prime Seafood®and The Capital Burger®trademarks.
Strategy Summary
Throughout fiscal 2022, our operating philosophy remained focused on strengthening the core operational fundamentals of the business by providing an outstanding guest experience rooted in culinary innovation, attentive service, engaging atmosphere, and integrated marketing. Darden enables each brand to reach its full potential by leveraging our scale, insights, and experience in a way that protects uniqueness and competitive advantages.
We manage our business organized around one core mission and one driving philosophy that keeps us focused on actions that will help us to be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere, making every guest loyal.
A full-service restaurant company with …
1 Mission | Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. | |||||||||||||
4 Competitive Advantages | Significant Scale | ● | Extensive Data & Insights | ● | Rigorous Strategic Planning | ● | Results- Oriented Culture | |||||||
1 Driving Philosophy | Back-To-Basics | |||||||||||||
Culinary Innovation & Execution | ● | Attentive Service | ● | Engaging Atmosphere | ● | Integrated Marketing | ||||||||
8 Iconic Brands |
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2 Darden Restaurants, Inc.
Fiscal 2022
We finished fiscal 2022 in a position of strength, despite fiscal 2022 continuing to be impacted by the COVID-19 pandemic and wider macroeconomic instability. Despite the ongoing uncertainty in the global and national economy, we remain focused on driving profitable sales growth and managing the business for the long term. While the economic environment is uncertain, we believe that we are in a position of strength to navigate through it. Our strength begins with our strategy. Our four competitive advantages of Significant Scale, Extensive Data & Insights, Rigorous Strategic Planning, and our Results-Oriented Culture position us well to successfully navigate any environment. We will continue to leverage our advantages, and our superior financial position, to make the right long-term investments in our business and execute against our strategy. And our Back-to-Basics Operating Philosophy continues to guide us as we pursue our mission: “Be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal.” | We ended fiscal 2022 with the following key financial results: | |
Key Highlights | ||
We invested in our great people, our team members, in many ways including: Increasing the minimum hourly earnings for restaurant team members to $12, effective January 1, 2022, inclusive of income earned through gratuities. As a result, on average, our hourly team members earn more than $21 an hour, inclusive of income earned through gratuities. We continued to invest in technology enhancements to improve the off-premise and in-restaurant guest experience, including mobile apps, internet ordering capabilities and tabletop ordering and payment options. We served our communities with a focus on fighting hunger in fiscal 2022: we donated $2.0 million to Feeding America through the Darden Foundation, including providing ten additional mobile food trucks to local food banks with exceptionally high need, and contributed 4.2 million pounds of food through our Harvest program – amounting to 3.5 million meals. | ||
2022 Proxy Statement 3
10 Nominees |
Each of our ten director nominees is committed to our core values (integrity and fairness, respect and caring, inclusion and diversity, always learning – always teaching, being “of service,” teamwork and excellence). We seek directors who have an inquisitive and objective perspective, practical wisdom, mature judgment and a wide range of experience in the business world. The Company delivered strong performance in fiscal 2019, as evidenced by these results, bothstrives to maintain a Board that reflects gender, ethnic, racial and other diversity and also fosters diversity of which serve as performance metrics underthought. In 2021, we amended our Director Nomination Protocols to commit that the Company’s compensation plans. (See pp. 31-32initial candidate pool for detailsany vacancy on these measures and related compensation results.)
Consolidated Adjusted Diluted Net Earnings Per Share from Continuing Operations for fiscal 2019(1) | Darden Same-Restaurant Sales Growth vs. Prior Year for fiscal 2019 |
$5.82 | 2.5% |
Our Director Nominees |
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| Committee Memberships | |||||||||
Nominee and Primary Occupation | Age | Director Since | A | C | F | N | ||||||
MARGARET SHÂN ATKINS Retired Co-Founder and Managing Director, | 65 | 2014 | ¡ | ¡ | ||||||||
RICARDO CARDENAS President and Chief Executive Officer and Previous President and Chief Operating Officer, Darden Restaurants, Inc. | 54 | 2022 | ||||||||||
JULIANA L. CHUGG Retired Executive Vice President and Chief Brand | 54 | 2022 | ¡ | ¡ | ||||||||
JAMES P. FOGARTY CEO, FULLBEAUTY Brands, Inc. | 54 | 2014 | ● | ¡ | ||||||||
CYNTHIA T. JAMISON Retired turnaround CFO | 62 | 2014 | ● | ¡ | ¡ | |||||||
EUGENE I. LEE, JR. Executive Chairman and Previous Chairman and CEO, | 61 | 2015 | ||||||||||
NANA MENSAH Chairman and Chief Executive Officer, | 70 | 2016 | ¡ | ● | ||||||||
WILLIAM S. SIMON Senior Advisor to KKR & Co. | 62 | 2014 | ¡ | ● | ||||||||
CHARLES M. SONSTEBY Retired Vice Chairman, | 68 | 2014 | ¡ | ¡ | ¡ | ¡ | ||||||
TIMOTHY J. WILMOTT Retired Chief Executive Officer, | 64 | 2018 | ¡ | ¡ |
A = Audit C = Compensation F = Finance N = Nominating and Governance ● = Chair ¡ = Member
4 Darden Restaurants, Inc.
Our Board seeks to maintain the highest standards of corporate governance and ethical business conduct, including the following highlights:
Our Board has a Lead Independent Chairman of the Board,Director, and seveneight of our eightten nominees for the Board are independent;
All directors are elected annually and we have a majority vote standard for uncontested elections;
All Board committees are composed of only independent directors;
The Board and committees conduct annual self-assessments;
The Board met in executive session at each of its quarterly meetings during fiscal 2019;2022;
Directors and executive officers are subject to robust stock ownership requirements;
10 percent of shareholders can call a special meeting; and
We have no supermajority voting requirements.
Our fiscal 20192022 compensation programs were designed to create a strong alignment between pay and performance for our executives. Highlights of our executive compensation programs include:
At the Company’s 20182021 Annual Meeting, approximately 93.294.5 percent of the votes cast were in favor of the advisory vote to approve executive compensation; and
Over 8786 percent of our CEO’s and 7275 percent of our other Named Executive Officers’ (NEOs) target total direct compensation for fiscal 2019 is2022 was tied to performance.
We have included a detailed Executive Summary in our Compensationthe “Compensation Discussion and AnalysisAnalysis” section of this Proxy Statement.
We are committed to protecting our planet for future generations and sourcing food with care.
Darden’s current key Sustainability areas of focus are:
Protecting our Planet | With more than 1,850 restaurant locations, we view conservation efforts at our restaurants as the first line of action in managing climate risks and resource volatility. |
To that end, we track and report to our management and the Board on p. 26the following metrics annually:
Ø | Taking Action on Climate - Greenhouse gas (GHG) emissions (Scope 1 & 2) |
Ø | Energy – Average Usage per Restaurant |
Ø | Water – Average Usage per Restaurant |
Ø | Waste – Recycling Rate |
We are committed to providing disclosure to our shareholders on these and other sustainability metrics. We disclose all of these metrics on our corporate website, www.darden.com, and we include the GHG emissions in our annual report on Form 10-K.
2022 Proxy Statement 5
Climate Change |
Climate change is a significant global challenge. As a business, we must prepare for both the risks and opportunities of a changing climate.
In fiscal 2022 Darden engaged with experts to assess the impacts of our entire value chain, including upstream suppliers and downstream impacts. The results will inform strategy and action in the areas of energy, GHG emissions, waste and water. Operational metrics are reported on our website, www.darden.com.
To help us manage climate risk, we are committed to:
Measuring and reporting our Scope 3 GHG emissions by the end of fiscal 2022. This is in addition to Scope 1 & 2 emissions from US owned and operated restaurants, which we already report publicly on our website, www.darden.com, and in our annual report on Form 10-K.
Fiscal 2022 update: We engaged with experts to conduct an initial measurement of our Scope 3 emissions for a representative, pre-Covid fiscal year (FY19). Details on our Scope 3 GHG emissions footprint are reported on our website, www.darden.com.
Aligning our climate approach to the Task Force on Climate-related Financial Disclosures (TCFD) by creating a framework that covers Governance, Strategy, Risk Management, and Metrics & Targets.
Fiscal 2022 update: As a first step toward this commitment, in fiscal 2022 Darden worked with an external consultant to assess our current emissions reporting and governance compared to TCFD recommendations. This work will enhance cross-department understanding of climate risks and opportunities and enable us to improve climate change management.
To help us tackle the climate impacts of our business, we have committed to:
Creating a strategy to address Scope 1 & 2 GHG emissions with the goal of achieving 100% renewable energy for our US-based, owned and operated restaurants.
Fiscal 2022 update: Throughout fiscal 2022, Darden engaged with experts and energy providers on opportunities to source renewable energy for our operations.
Sourcing Food with Care | We lead in food safety and quality while also caring for farm animals and holding our suppliers to our Food Principles. We know that where our ingredients come from and how they are grown are integral elements in the recipe for preparing great food for our guests. Darden’s Food Principles are our foundation for sourcing food for our guests sustainably. |
Darden takes animal welfare very seriously. A key tenet of our approach is to work with protein suppliers who are committed to the improvement of animal welfare. We have a responsibility to ensure that animals are treated with respect and care in the process of providing nutritious food that is served in our restaurants. Our Animal Welfare Policy defines Darden’s position and outlines our approach and strategy in this area.
In 2019, we established an Animal Welfare Council, which unites a cross-functional group of academics and thought leaders in the care of animals in food supply chains. This group is supporting Darden in our continued efforts to improve animal welfare outcomes and, most recently, started to map out a framework and process for working with chicken suppliers on key welfare areas, including medically important antibiotic usage.
6 Darden Restaurants, Inc.
In fiscal 2022, Darden engaged the majority of its poultry suppliers through a supplier survey to better understand current animal welfare and antibiotics positioning and practices. We have started to translate those learnings and develop a pilot program aiming to further test and define our outcome-based approach.
Additional measures we take to ensure best practices in our food sourcing include:
Ø | We require third-party audits to ensure that our Animal Welfare Policy is upheld by suppliers producing our animal products. |
Ø | We manage our suppliers by: |
Conducting rigorous evaluations to verify food safety procedures and product quality.
Holding all partners accountable to our Supplier Code of Conduct.
Assigning our Total Quality team and third-party partners to perform ongoing audits every year to ensure food safety and product quality.
Ø | Restaurant leaders are thoroughly trained on our robust food safety and restaurant cleanliness practices and conduct in-depth walk-throughs twice each day. |
Ø | We use a third-party partner to conduct quarterly inspections at every restaurant to validate our strict food safety protocols. |
Please visit the Our Impact section of our website at www.darden.com for updates on our animal welfare efforts.
Inclusion and Diversity Highlights
| At Darden, everyone is welcome to a seat at our table. |
Our History Shapes Our Commitment
When our founder Bill Darden opened his first restaurant in 1938, he employed anyone willing to work hard, work smart and grow with the company – without regard to race, gender or background.
Ensuring an inclusive and diverse workplace is at the very heart of Darden and our brands. We are strengthened by a diversity of cultures, perspectives, attitudes and ideas. We honor each other’s heritage and uniqueness. We prioritize our inclusion and diversity efforts not just because it is the right thing to do – but because it makes us better. It leads to innovation of thought, fuels our growth as a company and creates great places to work for our team members. Our strategy to uphold our founder’s legacy is rooted in advancing workplace diversity, creating an inclusive environment and building on our commitment.
2022 Proxy Statement.Statement 7
The Board reviews and evaluates human capital metrics, strategic objectives and other initiatives with respect to the Company’s workforce. We have added detailed human capital metrics to our annual report on Form 10-K and to our corporate website. We have also added our EEO-1 data to our corporate website disclosure. Some key inclusion and diversity highlights are set forth below.
Our Team (as of year-end fiscal 2022 unless otherwise indicated) | ||||
Our strategy to uphold our founder’s legacy is rooted in advancing workplace diversity, creating an inclusive environment and building on our commitment. We report details about these strategic initiatives on our corporate website.
Advance Workplace Diversity | Create an Inclusive Environment | Build on Our Commitment | ||||||
✓ Increase our pipeline of diverse leaders ✓ Ensure all levels of our team reflect the diversity of our talent in our industry and communities ✓ Expand inclusive hiring and development best practices across all our brands | ✓ Expand inclusion and diversity awareness and training to all team member populations ✓ Equip all leaders with the tools and resources to foster an inclusive environment for team members and guests ✓ Utilize Employee Resource Groups to engage, retain and advance our team | ✓ Make a positive impact in the communities we serve ✓ Continue to invest in diverse suppliers |
8 Darden Restaurants, Inc.
Our Board is Committed to the Highest Standards of Corporate Governance and Ethical Business Conduct
Corporate governance guidelines, policies and practices are the foundation for the effective and ethical governance of all public companies. Our Board is committed to the highest standards of corporate governance and ethical business conduct, providing accurate information with transparency and complying fully with the laws and regulations applicable to our business. The Company’s corporate governance structure is designed to ensure that the Company’s policies and practices are aligned with shareholder interests and corporate governance best practices. Executive management supports the Board’s commitment to be transparent through shareholder outreach efforts. We offer our shareholders an opportunity to engage in dialogue with us about aspects of our corporate governance and discuss any areas of concern. Our corporate governance practices are governed by our Articles of Incorporation, Bylaws, Corporate Governance Guidelines, Board committee charters, Shareholder Communication Procedures, Codes of Business Conduct and Ethics and Insider Trading Policy. You can access these documents at
www.darden.com underThe Board has adopted Corporate Governance Guidelines that specifically address the Company’s key governance practices and policies. The Nominating and Governance Committee of the Board oversees governance issues and recommends changes to the Company’s governance guidelines, policies and practices as appropriate. Our Corporate Governance Guidelines cover many important topics, including:
Director responsibilities;
Director qualification standards;
Director independence;
Director access to senior management and independent advisors;
Director compensation;
Director orientation and continuing education;
Codes of Business Conduct and Ethics;
Risk oversight;
Related party transactions;
Approval of CEO and senior management succession plans;
Annual compensation review of CEO and executive officers;
2022 Proxy Statement 9
Human capital management;
An annual evaluation in executive session of the CEO by the independent directors, led by the Chairman of the Compensation Committee; and
An annual performance evaluation of the Board and each of the Board committees, and an even more in-depth performance evaluation of the Board led by an outside consultant no less often than every two years.
The Corporate Governance Guidelines also include policies on certain specific subjects, including those that:
Require meetings at least four times annually of the independent directors in executive session without our CEO or other members of management present;
Require a letter of resignation from directors upon a significant change in their personal circumstances, including a change in or termination of their principal job responsibilities;
Limit the number of other public company boards, thatin addition to Darden, on which directors may serve on;
Provide that no member of the Audit Committee may serve on the audit committee of more than three public companies, including the Company;
Require the Nominating and Governance Committee to annually review the directors’ time commitments, considering other public company board memberships and leadership roles, including service as chairman of the board, lead independent director or other equivalent role of any public company, before recommending directors for election to the Board, and to conduct individual evaluations of the time commitments of members who serve on four or more total public company boards; and
Provide a mandatory retirement age for directors.
Our Corporate Governance Guidelines require that at least two-thirds of the Board be independent directors, as defined under the rules (the NYSE Rules) of the New York Stock Exchange (NYSE). The NYSE Rules and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), include the additional requirements that members of the Audit Committee may not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company other than their director compensation and may not be affiliated with the Company or its subsidiaries. The NYSE Rules and Rule 10C-1 under the Exchange Act provide that when determining the independence of members of the Compensation Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company which is material to the director’s ability to be independent from management in connection with Compensation Committee duties, including, but not limited to, consideration of the sources of compensation of Compensation Committee members, including any consulting, advisory or other compensatory fees paid by the Company, and whether any Compensation Committee member is affiliated with the Company or any of its subsidiaries or affiliates. Compliance by Audit Committee members and Compensation Committee members with these requirements is separately assessed by the Board.
The Board has reviewed, considered and discussed each current director’s relationships, both direct and indirect, with the Company in order to determine whether such director meets the
10 Darden Restaurants, Inc.
independence requirements of the applicable sections of the NYSE Rules (there are no nominees for election as directors at the Annual Meeting who are not current directors). The Board has affirmatively determined that, other than Mr. Lee and Mr. Cardenas, who isare employed by the Company, seveneight of the eightten nominees (Mses.(Mmes. Atkins, Chugg and Jamison and Messrs. Fogarty, Mensah, Simon, Sonsteby and Wilmott) have no direct or indirect material relationship with us (other than their service as directors) and qualify as independent under the NYSE Rules. The Board has also affirmatively determined that each member of the Audit Committee and the Compensation Committee meets the applicable requirements of the NYSE Rules and the Exchange Act.
In making independence determinations, the Board considers that in the ordinary course of business, transactions may occur between the Company, including its subsidiaries, and entities with which some of our directors are or have been affiliated. The Board has concluded that any such transactions were immaterial in fiscal 2019.
The Company’s Corporate Governance Guidelines include a policy pertaining to related party transactions in which Interested Transactions with a Related Party, as those terms are defined below, are prohibited without prior approval of the Board. The Board will review the material facts of the proposed transaction and will either approve or disapprove of the transaction. In making its determination, the Board considers whether the Interested Transaction is consistent with the best interests of the Company and its shareholders and whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, as well as the extent of the Related Party’s interest in the transaction. A director may not participate in any discussion or approval of an Interested Transaction for which he or she is a Related Party, except to provide all material information as requested. Only those directors that meet the requirements for designation as a “qualified director” under the Florida Business Corporation Act will participate in the approval of an Interested Transaction. If an Interested Transaction will be ongoing, the Board may establish guidelines for the Company’s management to follow in its dealings with the Related Party.
An “Interested Transaction” as defined in the policy is any transaction, arrangement or relationship (or series of similar transactions, arrangements or relationships) in which (i) the amount involved exceeds $120,000 in any calendarfiscal year, (ii) the Company is a participant, and (iii) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity), but does not include any salary or compensation paid by the Company to a director or for the employment of an executive officer that is required to be reported in the Company’s proxy statement.
A “Related Party” as defined in the policy is any (i) person who is or was since the beginning of the last fiscal year an executive officer, director or nominee for election as a director of the Company, (ii) beneficial owner of more than five percent of the Company’s common stock, or (iii) immediate family member of any of the foregoing.
An “immediate family member” as defined in the policy is any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,father-in-law,son-in-law,daughter-in-law,brother-in-law, or sister-in-law of the person in question and any person (other than a tenant or employee) sharing the household of the person in question.
There are no Interested Transactions or other related party transactions or relationships required to be reported in this Proxy Statement under Item 404 of the SEC’s Regulation S-K.
2022 Proxy Statement 11
We do not have a “classified board” or other system where directors’ terms are staggered; instead, our full Board is elected annually. The Company’s Bylaws provide that in an uncontested election, each director will be elected by a majority of the votes cast; provided that, if the election is contested, the directors will be elected by a plurality of the votes cast. In an uncontested election, if a nominee for director who is a director at the time of election does not receive the vote of at least the majority of the votes cast at any meeting for the election of directors at which a quorum is present, the director will promptly tender his or her resignation to the Board and remain a director until the Board appoints an individual to fill the office held by such director.
The Nominating and Governance Committee will recommend to the Board whether to accept or reject the tendered resignation or whether other action should be taken. The Board is required to act on the tendered resignation, taking into account the Nominating and Governance Committee’s recommendation, and publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision and the rationale within 90 days from the date of certification of the election results. If a director’s resignation is not accepted by the Board, such director will continue to serve until his or her successor is duly elected, or his or her earlier resignation or removal. If a director’s resignation is accepted by the Board, then the Board, in its sole discretion, may fill the vacancy or decrease the size of the Board. To be eligible to be a nominee for election or reelection as a director of the Company, a person must deliver to our Corporate Secretary a written agreement that he or she will abide by these requirements.
Under our Bylaws, the Board will consist of not less than three nor more than fifteen members as determined from time to time by resolution of the Board. Currently,On March 22, 2022, the Board voted to increase the size of the Board from eight to nine, and elected Ms. Chugg to fill the vacancy created by that increase. On December 15, 2021, the Board voted to increase the number of directors of the Company by one and elected Mr. Cardenas as a director, to be effective May 30, 2022. As a result of these changes, the Board currently consists of eightten members, all of whom have agreed to stand for reelection at the 20192022 Annual Meeting.
The Company’s Corporate Governance Guidelines provide that the positions of Chairman of the Board and CEO may, in the judgment of the Board, be combined, and if the Chairman position is held by separate persons and that the position of Chairman be held by anCEO or another non-independent director, then the independent director.directors will choose a Lead Independent Director from among the independent directors. The Board believes that separatingthe decision as to whether the same person should serve in the roles of Chairman and CEO allows for better alignmentshould be made by the Board, from time to time, in its business judgment after considering the relevant factors, including the specific needs of corporate governance with shareholder interests and aids in the Board’s oversight of managementbusiness and the Board’s ability to carry out its roles and responsibilities on behalfbest interests of the shareholders. In December 2021, the Board voted to separate the roles of Chairman and CEO and elected Eugene I. Lee, Jr. to serve as the Executive Chairman of the Board effective May 30, 2022 and elected Ricardo Cardenas to serve as President and CEO and as a member of the Board of Directors, also effective on that date. Charles M. Sonsteby, who had served as Chairman from April 2016 to December 2020, was elected to serve as Lead Independent Director in December 2020 and continues in that role to this date. As Lead Independent Director, Mr. Sonsteby, along with the other independent non-employee directors, brings experience, oversight and expertise from outside the Company and industry, while our Executive Chairman, Mr. Lee, brings Company and industry-specific experience and expertise. Our President and CEO, Mr. Cardenas also brings a long history of Company management experience and expertise to his new role. The Board also believes that the separation of the roles of Chairman and CEO allows the CEO to focus more of hisat this time and energy on operating and managingwill allow the Company and leverages the Chairman’s experience. Charles M. Sonsteby has served as Chairman since April 2016. As Chairman,to continue to benefit from Mr. Sonsteby, alongLee’s decades of restaurant operating experience beyond his planned retirement from employment with the other independent non-employee directors, brings experience, oversightCompany in
12 Darden Restaurants, Inc.
September 2022 and expertise from outsidewill ease the Company and industry, while our CEO,transition of leadership to Mr. Lee, brings company and industry-specific experience and expertise.
The Company’s Corporate Governance Guidelines provide that the Chairman presideswill preside at all meetings of the Board, includingexcept that the Lead Independent Director will preside at the Board’s executive sessions of independent directors. The ChairmanLead Independent Director approves Board meeting agendas, including approving meeting schedules to assure that there is sufficient time for discussion of all agenda items, and other information sent to the Board, advises the committee chairs with respect to agendas and information needs relating to committee meetings, serves as liaison between the Chairman and performsthe independent directors, has the authority to call meetings of the independent directors as he or she deems appropriate and is available for consultation and direct communications if requested by major shareholders. The Chairman and the Lead Independent Director perform other duties as the Board may from time to time delegate to assist the Board in fulfilling its responsibilities. The independent directors may meet without management present at any other times as determined by the Chairman, as applicable.
The Board is actively engaged and involved in talent management. The Board reviews the Company’s people strategy in support of its business strategy at least annually. This includes a detailed discussion of the Company’s leadership bench and succession plans with a focus on key positions at the senior leadership level. Annually, the CEO provides the Board with an assessment of senior executives and their potential to succeed him, and an assessment of persons considered successors to senior executives. The Nominating and Governance Committee also recommends policies regarding succession in the event of an emergency impacting the CEO or the planned retirement of the CEO. Strong potential leaders are given exposure and visibility
To foster our value of always learning – always teaching, the Corporate Governance Guidelines encourage director education. Upon initial election to the Board of Directors, the Company’s management conducts an orientation program of materials and briefing sessions to educate new directors about the Company’s business and other topics to assist them in carrying out their duties. Directors may also attend a variety of external continuing education programs of their own selection at the Company’s expense. In addition, the Board receives regular updates from management and external experts regarding new developments in corporate governance, legal developments or other appropriate topics from time to time.
2022 Proxy Statement 13
Full Board The ultimate responsibility for risk oversight rests with the Board. The Board assesses major risks facing the Company and reviews options for their mitigation. Each Committee of the Board reviews the policies and practices developed and implemented by management to assess and manage risks relevant to the Committee’s responsibilities, and reports to the full Board on the results of its discussions. |
Audit Committee | Compensation Committee | Finance Committee | Nominating and Governance Committee | |||||||||||||||||||
Oversees the Company’s financial reporting processes and internal controls, including the process for assessing risk of fraudulent financial reporting and significant financial risk exposures, and the steps management has taken to monitor, mitigate and report those exposures. In addition to its other duties, the Audit Committee oversees the Company’s policies and procedures regarding compliance with applicable laws and regulations and the Company’s Codes of Business Conduct and Ethics. The Audit Committee also oversees the Company’s enterprise risk management (ERM) process and the comprehensive assessment of key strategic financial, operational and regulatory risks identified by management, including cybersecurity and data protection risks. The Audit Committee discusses ERM with the full Board, which is ultimately responsible for oversight of this process. | Provides oversight of the risks associated with the Compensation Committee responsibilities in its charter; reviews the Company’s incentive and other compensation arrangements to confirm that compensation does not encourage unnecessary or excessive risk taking and reviews and discusses, at least annually, the relationship between risk management policies and practices, corporate strategy and executive compensation; and discusses with the Company’s management the results of its review and any disclosures required by Item 402(s) of Regulation S-K relating to the Company’s compensation risk management. | Oversees the Company’s major financial risk exposures and management’s monitoring, mitigation activities and policies in connection with financial risk, including: capital structure; investment portfolio, including employee benefit plan investments; financing arrangements, credit and liquidity; proposed major transactions, such as mergers, acquisitions, reorganizations and divestitures; share repurchase programs; hedging or use of derivatives; commodity risk management; cash investment; liquidity management; short-term borrowing programs; interest rate risk; foreign exchange risk; off balance sheet arrangements, if any; proposed material financially-related amendments to the Company’s indentures, bank borrowings and other instruments; and reputational risk to the extent such risk arises from the topics under discussion. The Finance Committee also reviews the adequacy of the insurance coverage on the Company’s assets. | Oversees risks related to the Company’s corporate governance; director succession planning; political and charitable contributions; insider trading; environmental and social responsibility; and reputational risk to the extent such risk arises from the topics under discussion. |
14 Darden Restaurants, Inc.
Our Compliance and Ethics Office (Compliance Office), with the support of our management and Board, aims to ensure that all of our employees, business partners, franchisees and suppliers adhere to high ethical business standards, and is under the direction of our Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary. At the core of the Compliance Office is our Code of Conduct that applies to all Company employees (Employee Code of Conduct). We also have a Code of Ethics for CEO and Senior Financial Officers (CEO and Senior Financial Officer Code of Ethics) that highlights specific responsibilities of our CEO and senior financial officers, and a Code of Business Conduct and Ethics for the membersMembers of ourthe Board of Directors (the Board Code of Conduct, and together with the Employee Code of Conduct and the CEO and Senior Financial Officer Code of Ethics, our Codes of Business Conduct and Ethics). A major objective of the Compliance Office is to educate
We promote ethical behavior by encouraging our employees to talk to supervisors or other personnel when in doubt about the best course of action in a particular situation. To encourage employees to raise questions and report possible violations of laws or our Codes of Business Conduct and Ethics, we will not allow retaliation for reports made in good faith. We also provide a confidential hotline to allow employees to confidentially, anonymously report concerns regarding questionable accounting behavior. We are also committed to promoting compliance and ethical behavior by the third parties with whom we conduct business, and have implemented Codes of Business Conduct that are acknowledged by our international franchisees and certain suppliers.
2022 Proxy Statement 15
Our executive officers as of the date of this Proxy Statement are listed below.
Ricardo Cardenas, | Our President and Chief Executive Officer since May 2022. Prior to that, Mr. Cardenas served as our President and Chief Operating Officer since January 2021 and Senior Vice President, Chief Financial Officer since 2016. He was Senior Vice President, Chief Strategy Officer of the Company from 2015 to 2016, prior to which he served as Senior Vice President, Finance, Strategy and Technology from 2014 to 2015. He was Executive Vice President of Operations for LongHorn Steakhouse from 2013 to 2014 and Senior Vice President of Operations for LongHorn Steakhouse’s Philadelphia Division from 2012 to 2013. He served as Senior Vice President of Finance for Red Lobster, which the Company previously owned, from 2010 to 2012. Mr. Cardenas originally joined the Company in 1984 as an hourly employee and served in various positions of increasing responsibility, including Vice President of Finance for Olive Garden, prior to the positions described above. | |
Matthew R. Broad, | Our Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary since 2015. Prior to joining Darden, he served as Executive Vice President, General Counsel and Chief Compliance Officer for OfficeMax, Incorporated from 2004 to 2013. Prior to that, he was Associate General Counsel with Boise Cascade Corporation from 1989 to 2004. | |
Todd A. Burrowes, | Our President, LongHorn Steakhouse since 2015. He rejoined the Company after serving as President, Ruby Tuesday Concept and Chief Operations Officer of Ruby Tuesday, Inc. from 2013 to 2015. Prior to that, he served as Executive Vice President of Operations for LongHorn Steakhouse from 2008 until 2013. He joined the Company in 2002 as Regional Manager of LongHorn Steakhouse before being promoted to Director of Management Training. In 2004, he was promoted to Regional Vice President of Operations for LongHorn Steakhouse. | |
Susan M. Connelly, | Our Senior Vice President, Chief Communications and Public Affairs Officer since 2019. She served as Senior Vice President, Communications and Corporate Affairs from 2015 to 2019. She joined the Company in 2007 as Director, State and Local Government Relations and was promoted to Vice President, Government Relations in 2014. |
16 Darden Restaurants, Inc.
Daniel J. Kiernan, | Our President, Olive Garden since 2018, prior to which he was our Executive Vice President of Operations for Olive Garden since 2011. He began his career with Olive Garden in 1992 as a Manager in Training and has held a series of roles of increasing responsibility with Olive Garden, serving as a General Manager from 1993 to 1994, as Director of Operations from 1994 to 2002, as Senior Vice President of the Chicago Division from 2002 to 2008 and as Senior Vice President, Operations Excellence from 2008 to 2011. | |
Sarah H. King, | Our Senior Vice President, Chief People and Diversity Officer since May 2021, prior to which she served as Senior Vice President, Chief Human Resources Officer since 2017. Prior to joining Darden, Sarah spent 19 years with Wyndham Worldwide Corporation in various human resources leadership positions worldwide. Most recently, from 2010 through 2017, she served as Executive Vice President, Human Resources for Wyndham Vacation Ownership. | |
John W. Madonna, | Our Senior Vice President, Corporate Controller since 2016, prior to which he served as our Senior Vice President, Accounting since 2015. Prior to that, he was a Director in Corporate Reporting from 2010 through 2013 when he was promoted to Senior Director, Corporate Reporting and then to Vice President of Corporate Reporting in 2014. During 2009 he served the LongHorn Steakhouse team in 2009 as Manager, Financial Planning & Analysis. He joined the Company in 2005 as Manager, Corporate Reporting. | |
M. John Martin, | Our President, Specialty Restaurant Group since August 2020. Prior to that appointment, he served as President of Seasons 52 since 2018, President of Eddie V’s since 2014 and President of The Capital Grille since 2004. He joined The Capital Grille in 1990 and held several positions of increasing responsibility before being promoted to Vice President of Operations in 2001. | |
Douglas J. Milanes, | Our Senior Vice President, Chief Supply Chain Officer since 2015, prior to which he served as Senior Vice President, Purchasing since 2013. Prior to joining Darden, Doug served as Vice President, Global Procurement and Operations for Pfizer Inc. from 2008 to 2012 and as Chief Financial Officer for Pfizer’s Capsugel Division from 2005 to 2008. |
2022 Proxy Statement 17
Richard L. Renninger, | Our Senior Vice President, Chief Development Officer since 2016. Prior to joining Darden, he was Chief Development Officer for First Watch Restaurants, Inc., from 2012 to 2016. Prior to that, he served as Executive Vice President & Chief Development Officer for OSI Restaurant Partners (now Bloomin’ Brands, Inc.) from 2008 to 2012 and their Senior Vice President of Real Estate and Development from 2005 to 2008. Prior to joining OSI, he served as Vice President of Real Estate for RARE from 2002 to 2005. | |
Rajesh Vennam, | Our Senior Vice President, Chief Financial Officer and Treasurer since January 2021. Prior to that, he served as Senior Vice President, Corporate Finance and Treasurer of the Company since September 2020. He served as Senior Vice President, Finance and Analytics from May 2016 through September 2020. From November 2014 through May 2016, Mr. Vennam served as Vice President, Financial Planning and Analysis and Investor Relations for The Fresh Market, Inc., a specialty grocery retailer which during the period of Mr. Vennam’s service was publicly traded on the NASDAQ exchange. From 2013 to 2014, Mr. Vennam served in a variety of roles at Red Lobster, ultimately serving as Senior Vice President of Financial Planning & Analysis and Treasury of Red Lobster Hospitality, LLC, the entity to which the Company sold its Red Lobster restaurants in 2014. From 2010 through 2013, Mr. Vennam served as Director of Financial Planning & Analysis for LongHorn Steakhouse. Mr. Vennam joined the Company in 2003 and served in a variety of positions of increasing responsibility, including as a Manager of Treasury prior to the positions described above. |
18 Darden Restaurants, Inc.
Election of Ten Directors from the Named Director Nominees
Our Board of Directors currently has eightten members, and each director stands for election every year. The Nominating and Governance Committee believes that an eighta ten member Board of Directors is currently appropriate for Darden. In keeping with good governance practices, the Board will continue to seek a diversity of talent and experience to draw upon and to ensure its ability to appropriately staff committees of the Board. The Board also will continue to self-evaluate and to consider various matters as to its size. As appropriate, the Board may determine to increase or decrease its size, including in order to accommodate the availability of an outstanding candidate.
The following eightten director nominees are standing for election at this 20192022 Annual Meeting of Shareholders
✓ | Your Board recommends that you vote FOR each of the nominees to the Board. |
2022 Proxy Statement 19
Board Nominees
The following information is as of the date of this Proxy Statement. Included is information provided by each nominee, such as his or her age, all positions currently held, principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he or she currently serves as a director or has served as a director during the past five years. In addition to the specific information presented below regarding the experience, qualifications, attributes and skills that led our Board to the conclusion that the nominee should serve as a director, we also believe that each of our director nominees has a reputation for integrity, honesty and adherence to high ethical standards. Darden’s mission is to be financially successful through great people consistently delivering outstanding food, drinks and service in an inviting atmosphere making every guest loyal. This mission is supported by our core values of integrity and fairness, respect and caring, inclusion and diversity, always learning – always teaching, being “of service,” teamwork and excellence. As noted in our Corporate Governance Guidelines, our directors should reflect these core values, possess the highest personal and professional ethics, and be committed to representing the long-term interests of our shareholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment.
Board Summary
10 Nominees
Our board’s composition reflects our core value of inclusion and diversity along many metrics of diversity, reflecting racial and ethnic diversity, gender diversity and a wide diversity of areas of expertise and experience, as reflected in the graphics below.
Independence | Racial/Ethnic Diversity | Gender Diversity | Tenure | |||
20 Darden Restaurants, Inc.
BOARD EXPERIENCE AND EXPERTISE MATRIX
OPERATIONAL AND FUNCTIONAL EXPERIENCE AND EXPERTISE | ||||||||||||||||||||
Restaurant Industry | ¡ | ● | ¡ | ● | ● | ● | ● | ● | ¡ | |||||||||||
Retail or Hospitality Operations | ● | ● | ● | ● | ● | ● | ● | ● | ● | ¡ | ||||||||||
Consumer Marketing/Brand Building | ● | ¡ | ● | ● | ● | ● | ● | ¡ | ¡ | |||||||||||
Information Technology / Cybersecurity | ¡ | ● | ● | ● | ● | ¡ | ● | |||||||||||||
Supply Chain/Logistics | ¡ | ¡ | ¡ | ¡ | ● | ● | ||||||||||||||
Real Estate Development | ¡ | ¡ | ● | ¡ | ¡ | ¡ | ¡ | |||||||||||||
Franchising | ¡ | ¡ | ● | ¡ | ● | ¡ | ● | |||||||||||||
Mergers and Acquisitions/Business Development | ● | ● | ● | ¡ | ¡ | ● | ● | ● | ● | |||||||||||
Corporate Governance | ● | ¡ | ● | ¡ | ¡ | ● | ¡ | |||||||||||||
International Operations | ¡ | ¡ | ¡ | ● | ● | ● | ||||||||||||||
Finance and Accounting | ● | ● | ● | ● | ● | ¡ | ||||||||||||||
Human Resources / Human Capital Management | ¡ | ● | ¡ | ¡ | ¡ | ¡ | ¡ | ● | ||||||||||||
Legal | ¡ | ¡ | ||||||||||||||||||
Public Policy | ¡ | ¡ | ¡ | |||||||||||||||||
Social and Environmental Responsibility | ¡ | ¡ | ¡ |
● = Cornerstone element of career success ¡ = Meaningful involvement during career, including directorships
2022 Proxy Statement 21
Biographies
MARGARET SHÂN ATKINS | ||||||||||
Ms. Atkins is a retired consumer and retail executive. She was most recently Co-Founder and Managing Director of Chetrum Capital LLC, a private investment firm, a position she held from 2001 through 2017. Prior to founding Chetrum, she spent most of her executive career in the consumer/retail sector, including various positions with Sears, Roebuck & Co., a major North American retailer where she was promoted to Executive Vice President in 1999, and fourteen years with Bain & Company, an international management consultancy, where she was a leader in the global consumer and retail practice. She began her career as a public accountant at what is now PricewaterhouseCoopers LLP, a major accounting firm, and holds designations as a Chartered Professional Accountant and Chartered Accountant (Ontario) and as a Certified Public Accountant (Illinois). | ||||||||||
She also holds the highest level of certification as a professional director in both the USA (NACD.DC) and Canada (ICD.D). Current Public Directorships:
• | ||||||||||
Prior Public Board Service Within the Past Five Years:
• Qualifications: | ||||||||||
The Nominating and Governance Committee concluded that Ms. Atkins is qualified and should serve, in part, because of her retail industry, operations, strategic planning and financial expertise, and public-company director experience. |
Age 65 | Tenure 7 | |||||||||
Independent Director Director since 2014 | ||||||||||
Darden Committees: • Audit • Nominating and Governance | ||||||||||
RICARDO (RICK) CARDENAS Mr. Cardenas was named President and Chief Executive Officer and elected to the Board of Directors effective May 2022. Prior to that, Mr. Cardenas served as our President and Chief Operating Officer since January 2021 and Senior Vice President, Chief Financial Officer since 2016. He was Senior Vice President, Chief Strategy Officer of the Company from 2015 to 2016, prior to which he served as Senior Vice President, Finance, Strategy and Technology from 2014 to 2015. He was Executive Vice President of Operations for LongHorn Steakhouse from 2013 to 2014 and Senior Vice President of Operations for LongHorn Steakhouse’s Philadelphia Division from 2012 to 2013. He served as Senior Vice President of Finance for Red Lobster, which the Company previously owned, from 2010 to 2012. Mr. Cardenas originally joined the Company in 1984 as an hourly employee and served in various positions of increasing responsibility, including Vice President of Finance for Olive Garden, prior to the positions described above. Current Public Directorships: • Tractor Supply Company, an operator of retail farm and ranch stores, since 2019 Prior Public Board Service Within the Past Five Years: None Qualifications: The Nominating and Governance Committee concluded that Mr. Cardenas is qualified and should serve, in part, because of his extensive senior management and leadership experience with our Company. | ||||||||||
Age 54 | Tenure 0.5 | |||||||||
President and Chief Director since 2022 | ||||||||||
Darden Committees: • None |
22 Darden Restaurants, Inc.
JULIANA L. CHUGG Ms. Chugg is the retired Executive Vice President and Chief Brand Officer of Mattel, Inc. a leading global toy company and owner of a portfolio of children’s and family entertainment franchises, a position she held from 2015 through 2018. Prior to that, she served as Partner of Noble Endeavors LLC during 2015. Ms. Chugg has also served in various leadership roles at General Mills, Inc. and its predecessor Pillsbury from 1996 through 2014, including serving as Senior Vice President of General Mills, Inc. and President of the Meals division from 2010 through 2014. Current Public Directorships: • VF Corporation, one of the world’s largest apparel, footwear and accessories companies, since 2009 Prior Public Board Service Within the Past Five Years: • Kontoor Brands, Inc., a global lifestyle apparel company, from 2019 through 2021 • Caesars Entertainment Corporation, a global leader in gaming and hospitality, from 2018 through 2020 Qualifications: The Nominating and Governance Committee concluded that Ms. Chugg is qualified and should serve, in part, because of her retail and food industry brand management, marketing, operations and strategic planning expertise, and public-company director experience. | ||||||||||
Age 54 | Tenure 0.5 | |||||||||
Independent Director Director since 2022 | ||||||||||
Darden Committees: • Audit • Nominating and Governance | ||||||||||
JAMES P. FOGARTY | ||||||||||
Mr. Fogarty has been the CEO at FULLBEAUTY Brands, Inc., a privately-held branded multi-channel retailer focused on fashion apparel and home goods for plus-sized women and men, since June 2019. Previously, he was the CEO and a director of Orchard Brands, a multi-channel marketer of apparel and home products, from 2011 until its sale in 2015, at which time he became a Senior Advisor to Bluestem Group Inc., the acquirer of Orchard Brands, through 2015. Prior to that, Mr. Fogarty was a private investor from 2010 to 2011. From 2009 until 2010, Mr. Fogarty was President, CEO and director of Charming Shoppes, Inc., a multi-brand, specialty apparel retailer. Other prior executive positions held by Mr. Fogarty include Managing Director of Alvarez & Marsal, an independent global professional services firm, from 1994 until 2009, President and COO of Lehman Brothers Holdings (subsequent to its Chapter 11 bankruptcy filing) from 2008 until 2009, President and CEO of American Italian Pasta Company, the largest producer of dry pasta in North America, from 2005 through 2008, CFO of Levi Strauss & Co., a brand-name apparel company, from 2003 until 2005, and from 2001 through 2003, he served as Senior Vice President and CFO and for a period as a director of The Warnaco Group, a global apparel maker. | ||||||||||
Current Public Directorships: None
• Assertio Therapeutics, Inc. (formerly known as Depomed Inc.), a specialty pharmaceutical company, | ||||||||||
Qualifications: | ||||||||||
The Nominating and Governance Committee concluded that Mr. Fogarty is qualified and should serve, in part, because of his operational and turnaround experience, and his significant executive officer and director experience at a variety of public and private companies. |
Age 54 | Tenure 7 | |||||||
Independent Director Director since 2014 | ||||||||
Darden Committees: • Compensation (Chairperson) • Finance |
2022 Proxy Statement 23
CYNTHIA T. JAMISON | ||||||||||
Ms. Jamison is a retired turnaround CFO. She most recently served as CFO of AquaSpy, Inc. from 2010 to 2013. Prior to AquaSpy she held six other CFO and/or COO roles in both public and private companies as a Partner with Tatum, LLC, an executive services firm focusing exclusively on providing interim CFO Services to public and private equity companies. She also led the CFO Practice at Tatum for four years where she had responsibility for over 300 CFO Partners and sat on the | ||||||||||
Current Public Directorships:
• • | ||||||||||
| Prior Public Board Service Within the Past Five Years: None
| |||||||||
The Nominating and Governance Committee concluded that Ms. Jamison is qualified and should serve, in part, because of her status as a financial expert and experienced audit committee member and chair, as well as her senior management, leadership, financial and strategic planning, corporate governance and public company executive compensation experience. |
Age 62 | Tenure 7 | |||||||||
Independent Director Director since 2014 | ||||||||||
Darden Committees: • Audit (Chairperson) • Compensation • Finance | ||||||||||
EUGENE I. | ||||||||||
Mr. Lee | ||||||||||
Current Public Directorships:
| ||||||||||
Prior Public Board Service Within the Past Five Years: None | ||||||||||
Qualifications: The Nominating and Governance Committee concluded that Mr. Lee is qualified and should serve, in part, because of his extensive senior management and leadership experience with our Company. |
Age 61 | Tenure 6 | |||||||
Executive Chairman Director since 2015 | ||||||||
Darden Committees: None |
24 Darden Restaurants, Inc.
NANA MENSAH Mr. Mensah has been the Chairman and Chief Executive Officer of | ||||||||||
Current Public Directorships: None | ||||||||||
Prior Public Board Service Within the Past Five Years:
company, and of other companies that manufacture or sell tobacco, smokeless tobacco, nicotine replacement therapy and digital vapor products, from 2004 to 2017 | ||||||||||
Qualifications: The Nominating and Governance Committee concluded that Mr. Mensah is qualified and should serve, in part, because of his extensive experience in the restaurant industry, including operating, turnaround, international and mergers and acquisitions and his experience as a public company director. |
Age 70 | Tenure 5 | |||||||||
Independent Director Director since 2016 | ||||||||||
Darden Committees: • Compensation • Finance (Chairperson) | ||||||||||
WILLIAM S. SIMON | ||||||||||
Mr. Simon has been Senior Advisor to KKR & Co., an investment firm, since 2014, and President of WSS Venture Holdings, LLC, a consulting and investment company, since 2014. Mr. Simon is the former Executive Vice President of Wal-Mart Stores, Inc., a global retailer, and former President and CEO of Walmart U.S., the largest division of Wal-Mart Stores, Inc., which consists of retail department stores, from 2010 to 2014. Mr. Simon also served as Executive Vice President and COO of Walmart U.S. from 2007 to 2010 and Executive Vice President of Professional Services and New Business Development from 2006 to 2007. Prior to joining Walmart, Mr. Simon held senior executive positions at Brinker International, Inc., a casual dining restaurant company, Diageo North America, Inc., a multinational alcoholic beverages company, and Cadbury Schweppes plc, a multinational confectionery company. Mr. Simon also served as Secretary of the Florida Department of Management Services and served 25 years in the U.S. Navy and Naval Reserves. | ||||||||||
Current Public Directorships:
Prior Public Board Service Within the Past Five Years:
cable, | ||||||||||
to 2020
| • | |||||||||
GameStop Corp., a global video game retailer, from 2020 to 2021 • Academy Sports and Outdoors, Inc., a premier sports, outdoor and lifestyle retailer, from 2020 to 2021 Qualifications: The Nominating and Governance Committee concluded that Mr. Simon is qualified and should serve, in part, because of his senior level executive experience in large, complex, retailing and global brand management companies and his extensive experience in retail operations, food service and restaurants, as well as consumer packaged goods. |
Age 62 | Tenure 9 | |||||||
Independent Director Director since 2014; previously served from 2012 until 2014 and rejoined in October 2014 | ||||||||
Darden Committees: • Audit • Nominating and |
2022 Proxy Statement 25
CHARLES M. | ||||||||||
Mr. Sonsteby is the retired Vice Chairman of The Michaels Companies, Inc., the largest arts and crafts specialty retailer in North America and parent company of Michaels Stores, Inc., a role he held from June 2016 until his retirement in October 2017. He had served as CFO and Chief Administrative Officer of that company and its predecessor from 2010 to 2016. Prior to that, Mr. Sonsteby served as the CFO and Executive Vice President of Brinker International, Inc., a casual dining restaurant company, from 2001 to 2010. He joined Brinker in 1990 as Director of the Tax, Treasury and Risk Management departments and thereafter served in various capacities, including as Senior Vice President of Finance from 1997 to 2001 and as Vice President and Treasurer from 1994 to 1997. | ||||||||||
Current Public Directorships:
2016 | ||||||||||
| Prior Public Board Service Within the Past Five Years: None | |||||||||
Qualifications: The Nominating and Governance Committee concluded that Mr. Sonsteby is qualified and should serve, in part, because of his restaurant operations and executive leadership experience with several major brands, and his experience as a public company director. |
Age 68 | Tenure 7 | |||||||||
Lead Independent Director Director since 2014 | ||||||||||
Darden Committees: None | ||||||||||
TIMOTHY J. WILMOTT | ||||||||||
Mr. Wilmott | ||||||||||
Current Public Directorships: None
| ||||||||||
Prior Public Board Service Within the Past Five Years: | ||||||||||
• Penn National Gaming, Inc., from 2014 to 2019 Qualifications: The Nominating and Governance Committee concluded that Mr. Wilmott is qualified and should serve, in part, because of his entertainment business operations and executive leadership experience, and his experience as a public company director. | ||||||||||
Age 64 | Tenure 3 | |||||||||
Independent Director Director since 2018 | ||||||||||
Darden Committees: • Compensation • Nominating and Governance |
26 Darden Restaurants, Inc.
TableProposal 2
Advisory Approval of Contents
In accordance with SEC rules, the Board asks shareholders for advisory approval of the Company’s executive compensation on an annual basis. Accordingly, we are asking our shareholders to provide an advisory, nonbinding vote to approve the compensation awarded to our NEOs, as we have described it in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, beginning on pp. 26 and 38, respectively.
As described in detail in the “Compensation Discussion and Analysis” section, beginning on p. 26, the Compensation Committee oversees the executive compensation program and compensation awarded, adopting changes to the program and awarding compensation as appropriate to reflect Darden’s circumstances and to promote the main objectives of the program. These objectives include: to help us attract, motivate, reward and retain superior leaders who are capable of creating sustained value for our shareholders, and to promote a performance-based culture that is intended to align the interests of our executives with those of our shareholders.
We are asking our shareholders to indicate their support for our NEO compensation. We believe that the information we have provided in this Proxy Statement demonstrates that our executive compensation program was designed appropriately and is working to ensure that management’s interests are aligned with our shareholders’ interests to support long-term value creation.
You may vote for or against the following resolution, or you may abstain. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and procedures described in this Proxy Statement.
Resolved, that the compensation awarded to Darden’s NEOs for fiscal 2019,2022, as disclosed in this Proxy Statement pursuant to SEC rules, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion, is hereby APPROVED.
While this vote is advisory and not binding on our Company, the Board and the Compensation Committee expect to consider the outcome of the vote, along with other relevant factors, when considering future executive compensation decisions.
✓ | Your Board recommends that you voteFOR approval of the foregoing resolution. |
2022 Proxy Statement 27
The Audit Committee of the Board is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm. The Audit Committee has appointed KPMG LLP (KPMG) as our independent registered public accounting firm for the fiscal year ending May 31, 2020.28, 2023. KPMG has served as our independent registered public accounting firm continuously since 1996.
The Audit Committee annually reviews KPMG��sKPMG’s qualifications, performance, independence and fees in making its decision whether to engage KPMG. The focus of the process is to select and retain the most qualified firm to perform the annual audit. During the review and selection process, the Audit Committee considers a number of factors, including:
Recent and historical KPMG audit performance;
The relevant experience, expertise and capabilities of KPMG and our specific audit engagement team in relation to the nature and complexity of our business;
A review of KPMG’s independence and internal quality controls;
Any legal or regulatory proceedings that raise concerns about KPMG’s qualifications or ability to continue to serve as our independent auditor, including reports, findings and recommendations of the Public Company Accounting Oversight Board (PCAOB);
The appropriateness of KPMG’s fees for audit and non-audit services; and
The length of time that KPMG has served as our independent auditor, the benefits of maintaining a long-term relationship and controls and policies for ensuring that KPMG remains independent.
In order to assure continuing auditor independence, in conjunction with the assessment above and the mandated rotation of the audit firm’s lead engagement partner, the Audit Committee and its chairperson are involved when the selection of a new lead engagement partner is required. In addition, the Audit Committee is responsible for the audit fee negotiations with KPMG.
Based on its annual review, the Audit Committee and the Board believe that the continued retention of KPMG to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders.
Shareholder approval of this appointment is not required, but the Board is submitting the selection of KPMG for ratification in order to obtain the views of our shareholders. If the appointment is not ratified, the Audit Committee will reconsider its selection. Even if the appointment is ratified, the Audit Committee, which is solely responsible for appointing and terminating our independent registered public accounting firm, may in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. Representatives of KPMG are expected to be presentin attendance online at the Annual Meeting and will be given an opportunity to make a statement and to respond to appropriate questions by shareholders.
✓ | Your Board recommends that you vote FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending May 28, 2023. |
28 Darden Restaurants, Inc.
Your Board recommends that you vote FOR ratificationMeetings of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending May 31, 2020.
Meetings. At the 20182021 Annual Meeting, the following eight directors were elected to the Company’s Board of Directors: Margaret Shân Atkins, James P. Fogarty, Cynthia T. Jamison, Eugene I. Lee, Jr., Nana Mensah, William S. Simon, Charles M. Sonsteby and Timothy J. Wilmott.
Communications with Board.
We believe that communication between the Board, shareholders and other interested parties is an important part of our corporate governance process. To this end, the Board has adopted Shareholder Communication Procedures that are available at www.darden.com underThe Corporate Secretary will act as agent for the ChairmanLead Independent Director in facilitating direct communications to the Board. The Corporate Secretary will review, sort and summarize the communications. The Corporate Secretary will not, however, “filter out” any direct communications from being presented to the ChairmanLead Independent Director without instruction from the Chairman,Lead Independent Director, and in such event, any communication that has been filtered out will be made available to any non-employee director who asks to review it. The Corporate Secretary will not make independent decisions with regard to what communications are forwarded to the Chairman.Lead Independent Director. The Corporate Secretary will send a reply to the sender of each communication acknowledging receipt of the communication.
Identifying and Evaluating Director Nominees.
Our Nominating and Governance Committee has adopted a Director Nomination Protocol that, together with our Bylaws, describes in detail the process we use to fill vacancies and add new members to the Board. The Protocol is available at www.darden.com underUnder the Director Nomination Protocol, in general, while there are no specific minimum qualifications for nominees, any candidate for service on the Board should possess the highest personal and professional ethics and be committed to representing the long-term interests of our shareholders. Director candidates should be committed to our core values (integrity and fairness, respect and caring, inclusion and diversity, always learning – always teaching, being “of service,” teamwork and excellence) and have an inquisitive and objective perspective, practical wisdom,
2022 Proxy Statement 29
mature judgment and a wide range of experience in the business world. We also will consider the candidate’s independence under applicable NYSE listing standards and our Corporate Governance Guidelines. In identifying and evaluating nominees for the Board, the Board assesses the background of each candidate in a number of different ways including a wide variety of qualifications, attributes and other factors and recognizes that diverse viewpoints and experiences enhance the Board’s effectiveness.
When reviewing and making initial recommendations on new candidates, the Nominating and Governance Committee considers how each prospective member’s unique background, expertise and experience will contribute to the Board’s overall perspective and ability to govern. In identifying or selecting nominees for the Board, the Company’s Corporate Governance Guidelines and the Director Nomination Protocol provide that the Company seeks Board members who will bring to the Board a deep and wide range of experience in the business world and who have diverse problem-solving talents. We seek people who have demonstrated high achievement in business or another field, so as to enable them to provide strategic support and guidance for the Company. The Company strives to maintain a Board that reflects the gender, ethnic, racial and other diversity, of our work force and restaurant guests, and also fosters diversity of thought. Recruiting, hiring and nurturing the careers of women and minorities and increasing the diversity of our suppliers are top priorities, and the Company also intends to maintain the diversity of its Board.
The Nominating and Governance Committee will identify potential candidates to recommend to the full Board and a search firm may be engaged to identify additional candidates and assist with initial screening. The Nominating and Governance Committee will ensure that the initial candidate pool for any vacancy on the Board, including any pool developed by a search firm, will include candidates with diversity of gender, race and/or ethnicity. The Nominating and Governance Committee and the Chairman of the Board will perform the initial screening and review the credentials of all candidates to identify candidates that they feel are best qualified to serve. The Chairman of the Nominating and Governance Committee, working with the Chairman of the Board, will obtain background and reference information, as appropriate, for the candidates under consideration. The Nominating and Governance Committee will review all available information concerning the candidates’ qualifications and,
Director Candidates Recommended by Shareholders.
The Nominating and Governance Committee will consider candidates recommended by shareholders. The procedures that shareholders should use to nominate directors are provided in our Bylaws. There are no differences in the manner of evaluation if the nominee is recommended by a shareholder.Director Attendance at Annual Meeting of Shareholders
. Our Corporate Governance Guidelines provide that directors are expected to attend all scheduled Board and committee meetings and the annual meeting of shareholders. Each of the directors standing for reelection this year who was then in office attended the30 Darden Restaurants, Inc.
General.
Our Board has four standing committees that operate under charters adopted by the Board: Audit, Compensation, Finance, and Nominating and Governance. Each charter is available at www.darden.com underAudit Committee
. Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee consists ofThe Board has determined that Mses. Atkins and Jamison and Mr.Messrs. Simon and Sonsteby are each an “audit committee financial expert” as such term is defined by SEC rules, and therefore possess financial management expertise as required of at least one Audit Committee member by the NYSE listing standards. In addition, the Board has determined that all members of the Audit Committee are financially literate under the NYSE listing standards. The Audit Committee met eight times during fiscal 20192022 and has sole responsibility for appointing and terminating our independent registered public accounting firm. The Audit Committee’s primary purpose is to assist the Board in its oversight responsibilities to shareholders, specifically with respect to:
The integrity of our financial statements and our internal controls over financial reporting;
The qualifications and independence of our independent registered public accounting firm and internal auditing function;
The provision of a channel of communication among the Board, the independent auditor, internal audit function, management and other concerned individuals;
The assistance to the Board in meeting its fiduciary duties to shareholders and the Company;
The performance of our internal audit function and independent registered public accounting firm; and
The risks associated with the foregoing.
Some of the Audit Committee’s specific responsibilities include the following:
Review and discuss the Company’s unaudited quarterly and audited annual financial statements with management and the independent auditor prior to filing the Company’s Quarterly Reports on Form 10-Q or Annual Report on Form 10-K, respectively;
Review with management and the independent auditor the Company’s quarterly and year-end financial results prior to the public release of earnings;
Directly appoint, retain, compensate, oversee, evaluate and terminate the Company’s independent auditor;
Pre-approve
At least annually consider the independence of the independent auditor;
Oversee the Company’s enterprise risk management process and review and evaluate the policies and practices developed and implemented by management with respect to risk assessment and risk management; and
2022 Proxy Statement 31
Establish procedures for receipt, retention and treatment of complaints received by the Company on accounting, internal controls over financial reporting or auditing matters, as well as for confidential, anonymous submissions by Company employees of concerns regarding accounting or auditing matters.
Another purpose of our Audit Committee is to furnish the report required by the SEC’s proxy rules that appears below in this Proxy Statement under the heading “Audit Committee Report.”
Compensation Committee
. The Compensation Committee consists ofThe Compensation Committee met five times during fiscal 2019.2022. The primary responsibilities of our Compensation Committee include the following:
Annually review and approve corporate goals and objectives relevant to the CEO’s compensation, evaluate the CEO’s performance in light of those goals and objectives, and make recommendations to the other independent directors who will, together with the Compensation Committee, determine and approve the CEO’s compensation based on this evaluation (the CEO may not be present during any Compensation Committee deliberations or voting with respect to his compensation);
Make recommendations to the other independent directors who will, together with the Compensation Committee, review and approve the compensation for employee directors other than the CEO;
Periodically, as and when appropriate, recommend to the other independent directors who will, together with the Compensation Committee, review and approve the following as they affect the CEO and other employee directors: (a) any employment agreements and severance arrangements; (b) any change in control agreements and change in control provisions affecting any elements of compensation and benefits; and (c) any special or supplemental compensation and benefits, including supplemental retirement benefits and the perquisites provided during and after employment under a “plan” as defined under Item 402(a)(6)(ii) of the SEC’s Regulation S-K;
Review and approve the compensation of and compensation policy for the executive officers and such other employees of the Company and its subsidiaries as directed by the Board, other than the CEO and other employee directors, including but not limited to: (a) the annual base salary level, (b) the annual cash bonus incentive opportunity level under the applicable annual incentive bonus plan, and (c) the long-term incentive opportunity level under the applicable long-term incentive plan for each executive officer (other than the CEO and other employee directors);
Periodically, as and when appropriate, review and approve the following as they affect the executive officers other than the CEO and other employee directors: (a) any employment agreements and severance arrangements; (b) any change in control agreements and change in control provisions affecting any elements of compensation and benefits; and (c) any special or supplemental compensation and benefits, including supplemental retirement benefits and the perquisites provided during and after employment under a “plan” as defined under Item 402(a)(6)(ii) of the SEC’s Regulation S-K;
Annually review and approve the objective performance measures and the performance targets for executive officers participating in the Company’s annual incentive bonus plans and long-term incentive plans and certify the performance results under such measures and targets;
Determine, amend and monitor compliance with the stock ownership guidelines applicable to executive officers and take actions to address any violation of the stock ownership guidelines;
32 Darden Restaurants, Inc.
Review and discuss with management the Compensation Discussion and Analysis required to be included in our Proxy Statement and Annual Report on Form 10-K and, based on such review and discussion, make a recommendation to the Board that the Compensation Discussion and Analysis be so included;
Prepare a Compensation Committee Report for inclusion in our Proxy Statement and/or annual Form 10-K;
Monitor the Company’s compliance with the requirements under the Sarbanes-Oxley Act of 2002 relating to the participation of directors and officers in the Company’s compensation and employee benefit plans or programs;
Oversee the Company’s compliance with SEC rules and regulations regarding shareholder approval of certain executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, and any applicable requirements under NYSE rules that shareholders approve equity compensation plans;
Provide recommendations to the Board of Directors on compensation-related proposals to be considered at the Company’s annual meeting, including the frequency of advisory votes on executive compensation;
Review and consider the results of any advisory vote on executive compensation and otherwise oversee the Company’s engagement with shareholders on the subject of executive compensation;
Review and make recommendations to the Board with respect to adopting, amending and overseeing the policies and practices related to the Company’s recoupment, or the forfeiture by employees, of incentive compensation;
Establish, terminate, amend or modify Company’s employee benefit plans or programs; and
Provide oversight of the risks associated with the foregoing.
The Compensation Committee may delegate its powers under the Darden Restaurants, Inc. 2015 Omnibus Incentive Plan, as amended (the 2015 Plan), to one or more directors, including a director who is also a senior executive officer of Darden, except that the Compensation Committee may not delegate its powers under the 2015 Plan with regard to our executive officers or directors who are subject to Section 16 of the Exchange Act, or in such a manner as would cause the Plan to not comply with the requirements of Section 162(m) of the Internal Revenue Code. Under its charter, the Compensation Committee may delegate any of its administrative responsibilities under our compensation and benefit plans, subject to the applicable rules of the SEC, NYSE and the Internal Revenue Code,Service, to any other person or persons, to the extent permitted by law.
See “Compensation Discussion and Analysis — Process for Determining Fiscal 20192022 Executive Compensation —
Finance Committee
. The Finance Committee consists ofThe Finance Committee met twothree times during fiscal 2019.2022. The primary responsibilities of our Finance Committee are to:
Review financial policies and performance objectives developed by management pertaining to cash flow, capital spending and finance requirements; cash and debt balances, other key credit metrics, and credit ratings; dividend policy; investment criteria, including capital investment hurdle rates; and financial risk management strategies, including hedging and the use of derivatives;
2022 Proxy Statement 33
and credit ratings; dividend policy; investment criteria, including capital investment hurdle rates; and financial risk management strategies, including hedging and the use of derivatives; |
Review significant changes to our capital structure, financial arrangements, capital spending and acquisition and disposition plans and making recommendations as needed to the Board regarding the financial structure, financial condition and financial strategy of the Company including the timing and maturity of debt, terms and interest rates of individual issues; common stock sales, repurchases or splits and any changes in dividends; proposed mergers, acquisitions, divestitures, joint ventures and strategic investments; any material diversification of the Company’s business; and authorization for any material prepayment, redemption or repurchase of debt for the purpose of satisfying sinking fund obligations;
Review the Company’s proposed annual consolidated budget included in its business plan, recommending such budget to the full Board for approval, and periodically reviewing the Company’s performance against such budget as reasonably required or requested by the Board;
Review material banking relationships and lines of credit;
Review the adequacy of the insurance coverage on the Company’s assets;
Review, to the extent material, the financial impact to the Company of existing and proposed compensation and employee benefit programs; and
Periodically assess the effectiveness of the Company’s investor relations program and its interaction with the research analyst community.
Nominating and Governance Committee
. The Nominating and Governance Committee consists ofThe Nominating and Governance Committee met fivesix times during fiscal 2019.2022. The primary responsibilities of the Nominating and Governance Committee are to:
Identify individuals qualified to become Board members, consistent with criteria approved by the Board, and select, or recommend that the Board select, the director nominees for the next annual meeting of shareholders, or in the case of a vacancy on the Board, recommend an individual to fill such vacancy;
Review and recommend to the Board the appropriate organizational and board leadership structure;
Review the adequacy of our corporate governance principles on a regular basis;
Develop and recommend to the Board a set of corporate governance guidelines applicable to the Company;
Review the Company’s stock ownership guidelines for non-employee directors, recommend to the Board revisions to such guidelines as it deems desirable or appropriate, and monitor compliance with such guidelines;
Oversee the Board’s self-evaluation process, and provide the Board advice regarding Board succession;
Review each director’s time commitments, considering other public company board memberships and leadership roles, and determine whether or not each director has adequate time to commit to their responsibilities as a director;
Recommend to the Board the membership for each Board committee and any changes to the Board’s committee structure as it deems advisable;
34 Darden Restaurants, Inc.
Review the Company’s compliance with SEC and NYSE rules and other applicable legal or regulatory requirements pertaining to corporate governance; and
Provide oversight of the risks associated with the foregoing.
Among the Nominating and Governance Committee’s other specific duties, it also is responsible for:
Reviewing resignations tendered by a director if, in an uncontested election, the director does not receive the vote of at least a majority of the votes cast at any meeting for the election of directors, and recommending to the Board whether to accept or reject the tendered resignation, or whether other action should be taken;
Reviewing and assessing the Company’s environmental and social responsibility policies, goals and programs and making recommendations to management based on such review and assessment; and
Making recommendations to the other independent directors who will, together with the Nominating and Governance Committee, determine and approve the compensation for the non-employee independent directors.
The Nominating and Governance Committee has adopted a Director Nomination Protocol that, together with our Bylaws, describes the process by which we intend to fill vacancies and add new members to the Board. The Protocol is described in more detail above under the subheading “Board of Directors —
Identifying and Evaluating Director Nominees.” The Nominating and2022 Proxy Statement 35
The terms of the Director Compensation Program apply to all directors who are elected to the Board and are not employees of the Company or any of its subsidiaries. Directors who also are our employees do not receive additional compensation for serving on the Board. Shares for equity awards pursuant to the Director Compensation Program are drawn from our shareholder-approved equity compensation plan in effect at the time and pursuant to which we are authorized to grant share-based awards to directors. Currently, grants of share-based awards to directors are made from the 2015 Plan. All of our non-employee directors have been determined by the Board to be independent under applicable NYSE listings standards and our Corporate Governance Guidelines.
Our Nominating and Governance Committee periodically reviews our Director Compensation Program and recommends any changes to the Board for approval. The Nominating and Governance Committee acts with the assistance of Pearl Meyer and Partners, the Board’s independent compensation consultant. Pearl Meyer and Partners provides market data on director compensation programs at comparable companies, including companies in the peer groups described in the “Compensation Discussion and Analysis.”
Our current Director Compensation Program, which has been in effect since September 2018,2021, is set forth below.
Directors receive the following compensation amounts in accordance with each of the roles in which they serve on the Board: | ||
All directors: | An annual cash retainer of | |
An annual equity grant, which will be paid 100 percent in the form of restricted stock units (RSUs) and will have a fair market value of | ||
Committee Chairs: | An annual cash retainer of: | |
Audit | $ | |
Compensation | $20,000 | |
Nominating and Governance | $ | |
Finance | $15,000 | |
Committee Members: | An annual cash retainer of: | |
Audit | $ | |
Compensation | $10,000 | |
Nominating and Governance | $ | |
Finance | $7,500 | |
Lead Independent Director: | An annual equity grant, which will be paid 100 percent in the form of RSUs and will have a fair market value of $50,000 at the date of grant. |
The annual cash retainers are due and paid quarterly, in arrears, unless the director elects to defer the payment. Directors may elect to receive, in lieu of their cash compensation, immediately vested RSUs of equal value to the foregone cash fees. If the director chooses to defer payment by receiving RSUs, he or she will receive dividend equivalents on such RSUs.
36 Darden Restaurants, Inc.
For the annual equity grant delivered in RSUs, the number of RSUs received equals the award value divided by the fair market value of our common stock on the date of grant. The RSUs vest on the earlier of (i) the first anniversary of the grant date or (ii) the date of the next annual meeting of shareholders. A director may elect to defer receipt of these RSUs until completion of Board service. Directors receive dividend equivalents on the RSUs to the extent the RSUs vest. The annual cash retainers and equity grants are pro-rated for directors who serve only a portion of the fiscal year.
Each of our directors is required to own the Company’s common shares with a value of at least five times the annual Board cash retainer, with a mandatory hold on all shares until the ownership guideline is achieved. However, the directors may sell enough shares to pay taxes in connection with their awards, even if the ownership guideline has not yet been achieved. As of May 26, 2019,29, 2022, all of the directors were in compliance with the stock ownership guidelines.
The Company reimburses directors for travel to Board meetings and related expenses, and for costs incurred in connection with attending continuing education programs. In addition, the Company provides a dining benefit to our directors because we believe it is important for our directors to experience dining in our restaurants in order to better perform their duties to our Company.
The table below sets forth, for each person who served as a non-employee director during fiscal 2019,2022, the amount of fees earned or paid in cash, the number of stock awards granted and all other compensation for his or her service in fiscal 2019.2022. Fees earned that were paid in the form of RSUs are detailed in the notes to the table.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||
M. Shân Atkins | 107,500 | 130,033 | — | — | — | — | 237,533 | ||||||||||||||
James P. Fogarty | 112,500 | 130,033 | — | — | — | — | 242,533 | ||||||||||||||
Cynthia T. Jamison | 127,349 | 130,033 | — | — | — | — | 257,382 | ||||||||||||||
Nana Mensah | 102,500 | 130,033 | — | — | — | — | 232,533 | ||||||||||||||
William S. Simon | 115,000 | 130,033 | — | — | — | — | 245,033 | ||||||||||||||
Charles M. Sonsteby | 143,736 | 180,018 | — | — | — | — | 323,754 | ||||||||||||||
Timothy J. Wilmott | 70,398 | 130,033 | — | — | — | — | 200,431 |
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||||
M. Shân Atkins |
| 116,868 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 276,808 |
| |||||||
Juliana L. Chugg |
| 22,747 |
|
| 79,992 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 102,739 |
| |||||||
James P. Fogarty |
| 119,368 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 279,308 |
| |||||||
Cynthia T. Jamison |
| 139,368 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 299,308 |
| |||||||
Nana Mensah |
| 116,868 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 276,808 |
| |||||||
William S. Simon |
| 126,868 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 286,808 |
| |||||||
Charles M. Sonsteby |
| 136,717 |
|
| 209,997 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 346,714 |
| |||||||
Timothy J. Wilmott |
| 111,868 |
|
| 159,940 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 271,808 |
|
(1) | |
Includes all fees earned, including annual Board retainer, |
The annual retainers were payable pro rata at the end of each fiscal quarter and the amounts shown may have been delivered as cash or RSUs. The RSUs granted in lieu of cash fees are immediately vested, however the settlement of the restricted stock unitsRSUs may be deferred. Amounts received as restricted stock unitsRSUs in lieu of cash fees were as follows: Mr. Mensah, 895Ms. Chugg, 180 units with a market value of $102,341;$22,687; Mr. Wilmott, 613Sonsteby, 149 units with a market value of $70,259.$20,371; Mr. Wilmott, 797 units with a market value of $111,750. The number of units delivered is based on the amount of compensation earned divided by the closing price for our common stock on the NYSE on the grant date.
(2) | |
Amounts in this column represent the grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (ASC Topic 718) for fiscal |
2022 Proxy Statement 37
September |
The aggregate number of shares subject to outstanding stock-based awards as of May 26, 201929, 2022 for each director is provided in the table below:
| Outstanding Awards | |||||||
Name | Stock Options | Restricted Stock Units | ||||||
M. Shân Atkins |
| — |
|
| 10,907 |
| ||
James P. Fogarty |
| 3,123 |
|
| 9,034 |
| ||
Juliana L. Chugg |
| — |
|
| 786 |
| ||
Cynthia T. Jamison |
| — |
|
| 12,829 |
| ||
Nana Mensah |
| — |
|
| 6,842 |
| ||
William S. Simon |
| — |
|
| 1,064 |
| ||
Charles M. Sonsteby |
| — |
|
| 15,407 |
| ||
Timothy J. Wilmott |
| — |
|
| 8,239 |
|
Outstanding Awards | |||
Name | Stock Options | Restricted Stock Units | |
M. Shân Atkins | 3,123 | 6,996 | |
James P. Fogarty | 3,123 | 7,045 | |
Cynthia T. Jamison | 3,123 | 8,918 | |
Nana Mensah | — | 6,669 | |
William S. Simon | — | 1,103 | |
Charles M. Sonsteby | 3,123 | 10,066 | |
Timothy J. Wilmott | — | 1,716 |
(3) | |
The Company provides a dining benefit to our directors to experience dining in our restaurants. This benefit does not appear in the Director Compensation Table because the value did not meet the minimum disclosure requirements established by the SEC. |
38 Darden Restaurants, Inc.
This table shows the beneficial ownership of our common shares as of May 26, 201929, 2022 by our directors, director nominees, executive officers named in the Summary Compensation Table, and all of our directors and executive officers as a group. Under applicable SEC rules, the definition of beneficial ownership for purposes of this table includes shares over which a person has sole or shared voting power, or sole or shared power to invest or dispose of the shares, whether or not a person has any economic interest in the shares, and also includes shares for which the person has the right to acquire beneficial ownership within 60 days of May 26, 2019.29, 2022. Except as otherwise indicated, a person has sole voting and investment power with respect to the common shares beneficially owned by that person.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership of Common
| Common Shares Beneficially Owned as Percent of Common Shares | ||||||
M. Shân Atkins | 12,557 | * | ||||||
Todd A. Burrowes | 81,394 | * | ||||||
Ricardo Cardenas | 160,962 | * | ||||||
Juliana L. Chugg | 2,105 | * | ||||||
James P. Fogarty | 28,722 | * | ||||||
Cynthia T. Jamison | 18,726 | * | ||||||
Eugene I. Lee, Jr. | 400,706 | * | ||||||
M. John Martin | 48,675 | * | ||||||
Nana Mensah | 6,355 | * | ||||||
William S. Simon | 7,948 | * | ||||||
Charles M. Sonsteby | 39,375 | * | ||||||
Rajesh Vennam | 14,675 | * | ||||||
Timothy J. Wilmott | 24,269 | * | ||||||
All directors and executive officers as a group | 1,149,577 | * |
* | Less than one percent. |
(1) | |
Includes common shares subject to stock options exercisable within 60 days of May |
Includes restricted stock unitsRSUs awarded to directors and RSUs and PSUs awarded to executives that will settle in stock and that are vested or will vest within 60 days of May 26, 2019,29, 2022, as follows: Ms. Atkins, 5,893;9,843; Mr. Burrowes, 6,959; Mr. Cardenas, 9,887; Ms. Chugg, 180; Mr. Fogarty, 5,942;7,970; Ms. Jamison, 7,815;11,765; Mr. Lee, 67,492; Mr. Martin, 5,016; Mr. Mensah, 5,566;5,778; Mr. Sonsteby, 8,539; and14,010; Mr. Vennam, 1,601; Mr. Wilmott, 613.
(2) | |
For any individual or group, the percentages are calculated by dividing (a) the number of shares beneficially owned by that individual or group, which includes shares underlying options exercisable within 60 days and |
2022 Proxy Statement 39
This table shows all shareholders that we know to beneficially own more than five percent of our outstanding common shares as of May 26, 2019.29, 2022. As indicated in the footnotes, we have based this information on reports filed by these shareholders with us and with the SEC.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(2) | ||||||
Capital World Investors 333 South Hope Street, 55th Fl. Los Angeles, CA 90071 |
| 16,040,321 | (3) |
| 12.94 | % | ||
Capital International Investors 333 South Hope Street, 55th Fl. Los Angeles, CA 90071 |
| 15,037,975 | (4) |
| 12.12 | % | ||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 |
| 14,011,265 | (5) |
| 11.30 | % | ||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022 |
| 8,652,000 | (6) |
| 6.98 | % |
(1) | ||
“Beneficial ownership” is defined under the SEC rules to mean more than ownership in the usual sense. Under applicable rules, you beneficially own our common shares not only if you hold them directly, but also if you indirectly (such as through a relationship, a position as a director or trustee, or a contract or understanding) have or share the power to vote, sell or acquire them within 60 days. |
(2) | |
The |
(3) | Based on a Schedule 13G filed February 14, 2022, as of December 31, 2021, Capital World Investors beneficially owned an aggregate of 16,040,321 shares, and had sole power to vote 16,028,436 shares and sole dispositive power over 16,040,321 shares. |
Based on a Schedule 13G filed February 14, 2022, as of December 31, 2021, Capital International Investors beneficially owned an aggregate of 15,037,975 shares, and had sole power to vote 15,015,418 shares and sole dispositive power over 15,037,975 shares. |
(5) | Based on a Schedule 13G/A filed February |
(6) | |
Based on a Schedule 13G/A filed |
2022 Proxy Statement 41
Name | Position with Company at Fiscal 2022 Year-End | New Position Effective May 30, 2022 | ||
Eugene I. Lee, Jr. | Chairman and Chief Executive Officer | Executive Chairman | ||
Ricardo Cardenas | President and Chief Operating Officer | President and Chief Executive Officer | ||
Rajesh Vennam | Senior Vice President, Chief Financial Officer and Treasurer | |||
Todd A. Burrowes | President, LongHorn Steakhouse | |||
M. John Martin | President, Specialty Restaurant Group |
The Compensation Committee believes that our success depends in large measure on our ability to attract and retain highly qualified officersleaders who are motivated to put forth maximum effort on our behalf andserve with purpose on behalf of our shareholders. We have a strong link between payCompany, our team members and performance: our compensation programs are designed to alignstakeholders. During fiscal 2022, Darden’s management demonstrated excellence in execution as we proved the performance objectivesstrength of our executives withcompetitive advantages and emerged from the interestsimpacts of shareholders.the COVID-19 pandemic.
42 Darden Restaurants, Inc.
During fiscal 2022, our business was able to return to operations largely free from the COVID-19 pandemic restrictions that materially affected our business during fiscal 2020 and fiscal 2021. We opened new restaurants, grew sales across the brand portfolio and continued to benefit from our robust strategic planning and other strategic advantages. Our strong financial performance reflected the dedication and experience of our restaurant teams and the tenacious leadership of our executive team. Our fiscal 2022 pay outcomes reward that excellent performance. With a return to pre-pandemic operations, we also returned to our pre-pandemic compensation plan design.
Fiscal 2022 Compensation and Performance Highlights Included | ||
People Highlights: • Demonstrated the strength of our executive bench and succession planning through execution of a smooth succession plan, as our Chairman and CEO, Gene Lee, transitioned to the Executive Chairman role effective May 30, 2022 and our President and Chief Operating Officer assumed the President and CEO role on that date. • In January 2022, we increased the minimum hourly earnings for restaurant team members to $12, inclusive of income earned through gratuities. • We regularly invest in comprehensive benefits that allow our team members to be at their best. In fiscal 2022, we strengthened our free Employee Assistance Program to better support our team members and their families with mental health counseling, financial advice, legal consultations and professional referrals from licensed experts. Compensation Plan Design Highlights for Fiscal 2022: • Granted select increases for fiscal 2022 to base salary, target annual incentive opportunities, and/or long-term incentive grant values to restore pay competitiveness following no increases other than for promotions since fiscal 2020. • Restored the annual incentive plan design substantially similar to the pre-pandemic plan design, with a single performance period and separate metrics for Darden (30% same restaurant sales (SRS), 70% EPS) and specific Brands (30% SRS, 70% Operating Profit). • Made no changes to the long-term incentive award mix (25% RSUs, 25% Options, and 50% PSUs), but made changes to the PSU design, primarily to change the peer comparison group for Total Shareholder Return to the S&P 500 to better reflect our Company’s broad competition for talent and to make adjustments to the performance and payout scales. | Financial highlights for fiscal 2022: |
2022 Proxy Statement 43
Process for Determining Executive Compensation
The strategy continues to work:Compensation Committee is responsible for approving the Company’s fiscal 2019 performance was strong, demonstrated byexecutive compensation structure and resulting pay outcomes for our named executive officers. It is the financialintent of the Compensation Committee that pay outcomes for the named executive officers clearly demonstrate our commitment to linking pay outcomes to business results described below. This strong performance waswith a focus on shareholder value creation, while also considering continued retention of our senior executives and engagement of our leadership team during challenging times for our industry as a result of the focusedCOVID-19 pandemic. The Compensation Committee is responsible for (a) the design of executive compensation structure and strategic leadership of the Boardprograms and the executive leadership team. Our “Back-to-Basics” operating philosophy remained the foundation for our fiscal 2019 strategic objectives: continuing to leverage our competitive advantages that we see as keys to unlocking sales growth(b) approving rigorous goals, evaluating results and expanding margins. Because there were no material changesdetermining payouts with respect to the Company’s business strategyannual and performance expectations heading into fiscal 2019, the Compensation Committee made no significant changes to the executive compensation programs for fiscal 2019.
Executive Pay Governance
The Compensation Committee also believes that the following demonstrates the Company’scontinues its commitment to sound overall governance of executive compensation:
What we do: | What we don’t do: | |
• Fully independent Compensation Committee | • No guaranteed bonuses | |
• Independent executive compensation consultant | • No excise tax gross ups | |
• Majority of our target pay opportunity for our NEOs is in the form of “at risk” incentives | • No option repricing | |
• Annual incentives have multiple performance measures and capped payouts to mitigate risk | • No dividends paid on unvested long-term incentives | |
• Long-term incentives granted in multiple award types to achieve multiple objectives | • No hedging, pledging or short sales of Company securities by officers or directors | |
• Clawback policy to allow us to recover incentive compensation in the event of a financial restatement due to fraud | • No excessive | |
• Robust executive officer and outside director stock ownership requirements with mandatory holding requirements until requirements are met | • No | |
• Minimum three-year vesting period on annual equity awards | • No | |
• |
Independent Consultant
Pearl Meyer and Partners (Pearl Meyer) has served as the independent consultant to the Compensation Committee since fiscal 2015. In selecting Pearl Meyer, the Compensation Committee considered the independence factors prescribed by the SEC and the NYSE and concluded that Pearl Meyer was independent and that its work did not raise any conflict of interest. In its role as independent consultant, Pearl Meyer reports to, and is directed by, the Compensation Committee. The primary services provided by the consultant are expected to include assisting with peer group review, periodic competitive market studies, periodic review and
44 Darden Restaurants, Inc.
Compensation Peer Group
The Compensation Committee periodically reviews the pay levels and practices of peer companies in order to assess the competitive positioning of Darden’s pay levels and plan designs.
FY 2022 Peer Group | ||
Aramark Corporation | ||
The Gap, Inc. | ||
AutoZone, Inc. | Hilton Worldwide Holdings, Inc. | |
Bath & Body Works, Inc. | Nordstrom, Inc. | |
Bloomin’ Brands, Inc. | O’Reilly Automotive, Inc. | |
Brinker International, Inc. | Restaurant Brands International, Inc. | |
Chipotle Mexican Grille, Inc. | Ross Stores, Inc. | |
Dick’s Sporting Goods, Inc. | Royal Caribbean Cruises, Ltd. | |
Domino’s Pizza, Inc. | Tractor Supply Company | |
Foot Locker Retail, Inc. | Yum! Brands, Inc. |
This peer group of 16 companies consists of 18 companies in the restaurant, retail and retailhospitality industries with financial characteristics within a tight range of the Company’s own characteristics. Our peer group reflected a median market capitalization of $8.3 billion, corporate revenue of $7.5$18.1 billion and system-widecorporate revenue of $8.6 billion, each as of November 2017.
The peer group extends beyond restaurant operators because there are a limited number of restaurant operators of comparable size to Darden and because the Company competes for talent with, and has some business model similarities to, companies in the retail industry.
Darden’s executive talent and Total Rewards philosophy continues to beremains unchanged and is focused on attracting, motivating and rewarding well-qualifiedhighly-qualified executives for achieving business results and demonstrating leadership behaviors that drive our business.results-oriented people culture. We are committed to a pay for performance culturephilosophy that includes high standards of ethical behavior and corporate governance and we structure compensation programs with the following principles in mind:
• | Compensation Design Supports Our Business Strategy and Is Aligned with Shareholders’ Interests – We have designed our Total Rewards program, and our incentive plans in particular, to meet our primary goal of aligning with shareholders; specifically, to drive strong and sustainable sales and earnings growth balanced with prudent capital management to maximize total shareholder return (TSR). |
• | Majority of Compensation Is Aligned with Performance – Total direct compensation (salary, annual incentives and long-term incentives) for our NEOs is structured so that more than two-thirds of the total value at target is attributable to Company performance. |
2022 Proxy Statement 45
The target pay opportunities approved by the Compensation Committee reflect this pay for performance with 8786 percent of our CEO’sMr. Lee’s and 7275 percent of the other Named Executive Officers’named executive officers’ target total direct compensation tied to performance:
Fiscal 20192022 CEO and Other NEO Total Direct Compensation Mix at Target(1)
(1) | Mr. Lee, our current Executive Chairman, served as our Chairman and CEO for all of fiscal 2022. Percentages are calculated based on salary and incentive targets in place at fiscal 2022 year end. |
(2) | Reflects the average of the NEOs as of the end of fiscal 2022, other than Mr. Lee. |
Our Total Rewards program for NEOs is comprised of base salary, annual incentives, long-term incentives, modest perquisites and savings plans. Our NEOs also are eligible to participate in theas well as health and benefitsretirement plans available to our U.S. salaried employees.
Base Salary | Paid in cash | Helps to attract and retain highly qualified executives to carry out our strategic objectives. | ||||||
Annual | Paid in cash | • Drives Company performance. • Target bonus opportunity set as a percentage of base salary. • Actual payout based on financial performance against pre-established objectives. | ||||||
Long-Term Incentives | Awarded 25% in Options, 25% in RSUs, 50% in PSUs | • Drives Company performance, aligns interests of executives with those of shareholders. • Retains executives through long-term vesting. • Provides potential wealth accumulation. | ||||||
Base Salary
We provide competitive base salaries to our NEOs in recognition of their job responsibilities. In addition to external competitive market data (what our peer companies and general industry pay for similar positions), we consider individual work experience, leadership, knowledge, and internal parity
46 Darden Restaurants, Inc.
among those performing likesimilar jobs when setting salary levels. Annual salary increases are primarily driven by individual performance and contributions while also considering the relative position of the individual’s salary to market data.
Named Executive Officer | Base Salary at fiscal 2022 year-end | |||
Eugene I. Lee, Jr. | $1,300,000 | |||
Ricardo Cardenas | $ 800,000 | |||
Rajesh Vennam | $ 625,000 | |||
Todd A. Burrowes | $ 700,000 | |||
M. John Martin | $ 700,000 |
Annual IncentivesIncentive Plan
As discussed above, we provided annual cash incentive opportunities to our NEOs under the 2015 Plan for fiscal year 2019. The terms of2022 pursuant to the fiscal 2019 annual awards required that the Company have positive consolidated earnings from continuing operations for the fiscal year in order for awards to be made for that year.Darden Restaurants, Inc. Annual Incentive Plan adopted effective June 1, 2020. In addition to that condition,June 2021, the Compensation Committee hasset targets and metrics for fiscal 2022. Under the discretion to establish the elements used to determine individual annual incentive awards, if any, to be made, subject to certain limitations. Underplan design, “Target Bonus Opportunity” is determined by multiplying Base Salary Earnings by the terms of the 2019Target AIP%. The annual awards, the Compensation Committee established that the maximum award payable to an individual NEO under the 2015 Plan for the plan year may not exceed ten million dollars. The bonusincentive amounts actually paidawarded for fiscal 20192022 to our NEOs were based solely on the Target Bonus Opportunity multiplied by the Company or Business Unitbusiness unit performance rating, per the following formula approved by the Compensation Committee:
Base Salary Earnings | x | Target | x | Company Performance Rating |
Company Performance RatingRigorous Goal Setting
The Company maintains a rigorous annual business planning and long-term strategic planning process that we consider to be one of our key competitive advantages. The core financial objective of these plans is to achieve long-term total shareholder returns for our shareholders of 10 to 15 percent, as reflected in our long-term value creation framework. The Company’s management creates the annual business plan in consultation with the Board and reports on progress with respect to the plan throughout the year. The annual business plan includes specific measurable goals for all of the key metricsmeasures that the Company and the Board
Earnings per share growth is one of the Company performance ratings for eachmain components of our NEOs vary depending upontotal shareholder return, the NEO’s role and responsibilities and are aligned with the sales and earnings growth metrics that we describe to investors inultimate objective of our long-term value creation framework. The Compensation Committee adopted same-restaurant sales growth as one of our annual performance metrics in fiscal 2015, after extensive shareholder engagement on the compensation program design. Same-restaurant sales growth is a year-over-year comparison of each period’s sales volumes for restaurants open at least 16 months. Same-restaurant sales growth is a key one-yearone year indicator of performance in our industry (and does not take into account the sales from new restaurants opened or acquired during the fiscal year). The Company’s long-term value creation framework includes an annual target, over time, for Darden same-restaurant sales growth of 1 to 3 percent. The Darden same-restaurant sales growth target for fiscal 2022 reflects the impacts of the COVID-19 pandemic on sales during fiscal 2021. Our second and more heavily weighted annual performance measures are Adjusted Diluted Net Earnings Per Share (Adjusted EPS)(EPS) or Business Unit Adjusted Operating Income (Adjusted OI).Income. Earnings per share growth is one of the main components of total shareholder return, the ultimate objective of our long-term value creation framework.
The Company performance rating for each NEOMessrs. Cardenas, Lee and Vennam for fiscal 2022 is based solely onthe Darden results forCompany Performance Rating.
2022 Proxy Statement 47
For our NEOs other thanwho lead restaurant brands or segments, Mr. Burrowes and Mr. Kiernan, whoseMartin, Company performance ratings are based on business unit results (80 percent)Performance Rating is determined as 20% multiplied by the Darden Company Performance Rating plus 80% multiplied by the applicable Business Unit Performance Rating. Mr. Burrowes is rewarded according to the LongHorn Performance Rating and Darden results (20 percent). Company performance measures and weighting for fiscal 2019 were:
Darden Company Performance Rating |
|
|
|
| ||||||||||||
Performance Measure | Minimum | Target | Maximum | Weight | ||||||||||||
Darden Diluted Net EPS, fiscal 2022 |
| $5.83 |
|
| $7.00 |
|
| $8.17 |
|
| 70 | % | ||||
Darden same-restaurant sales growth |
| 18.5 | % |
| 24.7 | % |
| 30.8 | % |
| 30 | % |
LongHorn Performance Rating |
|
|
|
| ||||||||||||
Performance Measure | Minimum | Target | Maximum | Weight | ||||||||||||
LongHorn Operating Income, fiscal 2022 |
| $214.1 |
|
| $258.4 |
|
| $302.7 |
|
| 70 | % | ||||
LongHorn same-restaurant sales growth |
| 6.8 | % |
| 13.7 | % |
| 20.7 | % |
| 30 | % |
Specialty Restaurant Group (SRG) Performance Rating |
|
|
|
| ||||||||||||
Performance Measure | Minimum | Target | Maximum | Weight | ||||||||||||
SRG Operating Income, fiscal 2022 |
| $134.1 |
|
| $161.9 |
|
| $189.6 |
|
| 70 | % | ||||
SRG same-restaurant sales growth |
| 34.9 | % |
| 41.3 | % |
| 47.8 | % |
| 30 | % |
The Compensation Committee establishes(and the Board, with respect to Mr. Lee) established threshold, target and maximum performance goals for each measure each year, withannual performance metric which would result in total potential payouts ranging from 0 to 200 percent of each participant’s target bonus opportunity. ��The Compensation Committee sets these goals after reviewingDue to the Company’s business planuncertainty inherent in forecasting results for fiscal 2022 as the economy continued to be impacted by the COVID-19 pandemic and other macroeconomic factors, the payout curves for the fiscal year. For the same-restaurant sales growth measure, the annual targetincentives were designed to include a flat area, or “strike zone,” providing for a given fiscal year varies based ontarget payout for results that “straddle” the EPS or operating income targets by a variety of factors that impact the business plan, including macroeconomic forces, consumer and industry trends, competitive forces, the Company’s strategic initiatives and other factors, and may be higher or lower than either the target or the actual result for the prior fiscal year. For the Adjusted EPS and business unit Adjusted OI measures, the Compensation Committee sets targets that reflect the Company’s business plan. For fiscal 2019, after considering the Company’s business plan and relevant factors, the Compensation Committee set the annual same-restaurant sales growth target for the Darden awards at 2.0 percent and the Adjusted EPS target at $5.47 per share.
Performance and Pay Results for Fiscal 2019
The Compensation Committee (and the Board with respect to Messrs. Cardenas and Lee) evaluated the Company’s financial performance and certified the following Company performance results for fiscal 2019:
Performance Measure | Weight | Target | Actual | Total Payout (% of Target) |
Darden | 160% | |||
Same-Restaurant Sales Growth | 30% | 2.0% | 2.5% | |
Adjusted EPS | 70% | $5.47 | $5.82 | |
Olive Garden | 189% | |||
Same-Restaurant Sales Growth | 30% | 2.1% | 3.9% | |
Adjusted OI ($ in millions) | 70% | $550.5 | $580.5 | |
LongHorn | 159% | |||
Same-Restaurant Sales Growth | 30% | 2.3% | 3.3% | |
Adjusted OI ($ in millions) | 70% | $164.3 | $173.3 |
Darden Company Performance Rating | Target | Results | Weight | Company (% of Target) | ||||||||||||
Darden Diluted Net EPS fiscal 2022 |
| $7.00 |
|
| $7.40 |
|
| 70% |
|
| 128% |
| ||||
Darden same-restaurant sales growth |
| 24.7 | % |
| 30.9 | % |
| 30% |
|
| 200% |
| ||||
TOTAL Company performance rating |
| 150% |
|
LongHorn Performance rating | Target | Results | Weight | LongHorn (% of Target) | ||||||||||||
LongHorn Operating Income, fiscal 2022 | �� |
| $258.4 |
|
| $268.4 |
|
| 70% |
|
| 115% |
| |||
LongHorn same-restaurant sales growth |
| 13.7 | % |
| 28.1 | % |
| 30% |
|
| 200% |
| ||||
TOTAL LongHorn performance rating |
| 141% |
|
48 Darden Restaurants, Inc.
SRG Performance Rating | Target | Results | Weight | SRG (% of Target) | ||||||||||||
SRG Operating Income, fiscal 2022 |
| $161.9 |
|
| $193.6 |
|
| 70% |
|
| 200% |
| ||||
SRG same-restaurant sales growth |
| 41.3 | % |
| 59.1 | % |
| 30% |
|
| 200% |
| ||||
TOTAL SRG performance rating |
| 200% |
|
The final individual annual incentive awards for the NEOs employed by the Company as of the end of fiscal 2022 as determined by the Compensation Committee (and the Board with respect to Messrs. Cardenas and Lee) are set forth below.
Named Executive Officer | Target % of Salary | Business Weighting | Total Payout (As % of Target) | Actual Award(1) |
Eugene I. Lee, Jr. | 200% | Darden 100% | 160% | $3,200,000 |
Ricardo Cardenas | 90% | Darden 100% | 160% | $989,307 |
David C. George | 100% | Darden 100% | 160% | $1,193,077 |
Todd A. Burrowes | 85% | LongHorn 80% / Darden 20% | 159%/160% | $813,741 |
Daniel J. Kiernan | 75% | Olive Garden 80% / Darden 20% | 189%/160% | $743,810 |
(1) Based on Company/business unit payout percentage. |
Named Executive Officer | Target % of Salary | Business Weighting | Total Payout (% of Target) | Actual Award(1) | ||||||||||
Eugene I. Lee, Jr. |
| 200 | % | Darden 100% |
| 150% |
| $ | 3,744,231 |
| ||||
Ricardo Cardenas |
| 100 | % | Darden 100% |
| 150% |
| $ | 1,193,510 |
| ||||
Rajesh Vennam |
| 85 | % | Darden 100% |
| 150% |
| $ | 769,291 |
| ||||
Todd A. Burrowes |
| 85 | % | LongHorn 80% / |
| 141% / 150% |
| $ | 837,055 |
| ||||
M. John Martin |
| 85 | % | SRG 80% / |
| 200% / 150% |
| $ | 1,116,524 |
|
(1) | Actual awards are based on actual salary paid during fiscal 2022 |
Long-Term Incentives
The purpose of the long-term incentive program is to motivate and reward achievement of our long-term objectives of winning financially and creating long-term value for our shareholders. The long-term awards made in July 20182021 for the fiscal 20192022 grants were made under the 2015 Plan.
For fiscal 2019, no significant2022, we made only minimal changes were made to theour long-term incentive plan design. The mandatory one-year holding period on the portion of the PSU awards that vest on the third anniversary of the grant date was eliminated.compared to fiscal 2021. Continued emphasis was placed on the pay and performance linkage by granting one half of the total LTIlong-term incentive grant value in performance stock units (PSUs) tied to relative TSR.TSR, with the new reference index set as the S&P 500 Index. The remainingmaximum payout opportunity percentage was increased from 150% percent under the prior plan design to 200% beginning with the fiscal 2022 grants. The other half of the grant value was equally split between stock options and restricted stock units.
Performance Stock Units -— Relative TSR (1/2 of the grant value):
Share denominated units;
Vest 50 percent on the third anniversary of the grant date, and 50 percent on the fourth anniversary of the grant date;
0 - 150– 200 percent payout opportunity based upon relative TSR as compared to a group of publicly-traded restaurant companies over the three-year performance period; the companies in our comparison group are listed below;the S&P 500 Index at the time of the grant; and
Settled in stock.stock, with dividends paid in cash at time of settlement.
Stock Options (1/4 of the grant value):
Granted with an exercise price equal to the closing stock price on the grant date;
Vest 50 percent on the third anniversary of the grant date and 50 percent on the fourth anniversary of the grant date; and
Maximum term of 10 years.
2022 Proxy Statement 49
Restricted Stock Units (1/4 of the grant value):
Share denominated units;
Vest 100 percent on the third anniversary of the grant date; and
Settled in stock.
Fiscal 20192022 Annual Long-Term Incentive Grants
The Compensation Committee (and the Board with respect to Mr. Lee) approved grants to the following NEOs, effective July 25, 201829, 2021 in accordance with the plan design, as detailed below:
Named Executive Officer | Target Grant Value | Number of Options(1) | Number of Restricted Stock Units(2) | Number of PSUs (TSR)(2) | |||||
Eugene I. Lee, Jr | $ | 5,000,000 | 78,916 | 13,029 | 26,058 | ||||
Ricardo Cardenas | $ | 1,300,000 | 20,518 | 3,388 | 6,775 | ||||
David C. George | $ | 1,500,000 | 23,675 | 3,909 | 7,817 | ||||
Todd A. Burrowes | $ | 1,000,000 | 15,783 | 2,606 | 5,212 | ||||
Daniel J. Kiernan | $ | 700,000 | 11,048 | 1,824 | 3,648 | ||||
(1) Number of options based on the Black-Scholes valuation on the first day of the fiscal year and the average closing stock price on the NYSE for the fiscal month preceding the month in which the grant is made. | |||||||||
(2) Number of Restricted Stock Units and PSUs based on the average closing stock price on the NYSE for the fiscal month preceding the month in which the grant is made. |
Named Executive Officer | Target Grant Value | Number of Options(1) | Number of Restricted Stock Units(2) | Target Number of PSUs(2) | ||||||||||||
Eugene I. Lee, Jr | $ | 5,500,000 |
|
| 33,326 |
|
| 9,365 |
|
| 18,729 |
| ||||
Ricardo Cardenas | $ | 2,200,000 |
|
| 13,330 |
|
| 3,746 |
|
| 7,492 |
| ||||
Rajesh Vennam | $ | 1,200,000 |
|
| 7,271 |
|
| 2,043 |
|
| 4,086 |
| ||||
Todd A. Burrowes | $ | 1,200,000 |
|
| 7,271 |
|
| 2,043 |
|
| 4,086 |
| ||||
M. John Martin | $ | 1,200,000 |
|
| 7,271 |
|
| 2,043 |
|
| 4,086 |
|
(1) | Number of options based on the Black-Scholes valuation on the first day of the fiscal year and the average closing stock price on the NYSE for the two fiscal weeks ending before the week prior to the grant date. |
(2) | Number of Restricted Stock Units and PSUs based on the average closing stock price on the NYSE for the two fiscal weeks ending before the week prior to the grant date. |
Performance Results and Payouts from Prior Long-Term Incentive Plan Grants
Fiscal 20192022 was the final year of the three-year period for PSUs that were granted at the beginning of fiscal 20172020 for the performance period covering fiscal 2017-20192020-2022 (the 20172020 grants). For the 20172020 grants, made under our 2015 Plan, the PSUs are settled in stock, and the number of shares earned are based upon the results of a three-year performance period. The earned PSUs vest in two tranches: 50 percent of the earned PSUs vested on July 27, 201924, 2022 and the remaining earned PSUs will vest inon July 2020. Each NEO was granted 50 percent24, 2023. Payout of their targetthe PSUs is based on three-year average return on invested capital (ROIC) and 50 percent based upon relative total shareholder return (TSR). The terms of versus the plan required that the Company have positive consolidated earnings from continuing operations for the yearS&P Consumer Discretionary Index, as established in which the grant was made in order for any payouts under these PSUs.
ROIC FY 2017-2019 | FY 2017 | FY 2018 | FY 2019 | 3 Year Average Result(1) | 3 Year Average Target | Earned Percentage |
Darden | 20.1% | 21.6% | 23.7% | 21.8% | 20.4% | 150% |
Olive Garden | 25.7% | 26.7% | 27.2% | 26.5% | 25.7% | 125% |
LongHorn | 13.7% | 14.3% | 14.9% | 14.3% | 14.2% | 105% |
(1) Results adjusted from reported results for incentive calculation purposes. |
The Compensation Committee certified that the Company’s three-year TSR performance ranked at the 100
Results | Target Percentile | Percentile Result | Earned Percentage |
FY 2017-19 | 50 | 100 | 150% |
Measure and Targets | ||||
Darden Relative TSR Percentile Rank(1) | Earned Percentage | |||
>75th | 150% | |||
75th | 150% | |||
50th | 100% | |||
33rd | 50% | |||
<33rd | 0% |
Results | Target Percentile | Percentile Result | Earned Percentage(1) | |||||||||
FY 2020-22 | 50th | 36th | 57% |
(1) | Straight line interpolation between 33rd and 75th percentiles, capped at 150% of target based on targets under the 2020 grants |
50 Darden Restaurants, Inc.
CEO Special Award Performance Results and Vesting
On June 22, 2017, the Board approved a special additional equity grant to Mr. Lee under the Company’s 2015 Plan. Effective June 29, 2017, Mr. Lee received a grant of Contents
2022 | 2021 Adjusted EBITDA | 2020 Adjusted EBITDA | 2019 Adjusted EBITDA | 2018 Adjusted EBITDA | Five-Year Adjusted EBITDA | Five-Year Adjusted EBITDA Target | Earned May 29, 2022 | |||||||||||||
$1,530.6 | $1,038.7 | $793.9 | $1,183.8 | $1,099.3 |
| $5,646.3 |
|
| exceeds $1,000.0 |
|
| 32,694 |
|
Adjusted EBITDA means, with respect to a fiscal year, the Company’s consolidated earnings before interest, taxes, depreciation, and/or amortization, excluding the effects of non-core, non-operating, or non-recurring items, acquisitions and divestitures and changes in accounting principles, in each case as disclosed in the Company’s financial statements. A reconciliation of adjusted EBITDA to earnings (loss) from continuing operations for each of the applicable fiscal years is set forth in the following table.
| Fiscal Year |
| ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Total | ||||||||||||||||||
Earnings (loss) from continuing operations |
| $ 954.7 |
|
| $ 632.4 |
|
| $ (49.2 | ) |
| $ 718.6 |
|
| $ 603.8 |
|
| $2,860.3 |
| ||||||
Interest, net |
| 68.7 |
|
| 63.5 |
|
| 57.3 |
|
| 50.2 |
|
| 161.1 |
|
| 400.8 |
| ||||||
Income tax expense (benefit) |
| 138.8 |
|
| (55.9 | ) |
| (111.8 | ) |
| 63.7 |
|
| 1.9 |
|
| 36.7 |
| ||||||
Depreciation and amortization |
| 368.4 |
|
| 350.9 |
|
| 355.9 |
|
| 336.7 |
|
| 313.1 |
|
| 1,725.0 |
| ||||||
EBITDA |
| $1,530.6 |
|
| $ 990.9 |
|
| $252.2 |
|
| $1,169.2 |
|
| $1,079.9 |
|
| $5,022.8 |
| ||||||
Adjustments: | ||||||||||||||||||||||||
Goodwill impairment |
| — |
|
| — |
|
| 169.2 |
|
| — |
|
| — |
|
| 169.2 |
| ||||||
Trademark impairment |
| — |
|
| — |
|
| 145.0 |
|
| — |
|
| — |
|
| 145.0 |
| ||||||
Restaurant-level impairments |
| — |
|
| — |
|
| 47.0 |
|
| 14.6 |
|
| — |
|
| 61.6 |
| ||||||
Other asset impairments |
| — |
|
| — |
|
| 28.8 |
|
| — |
|
| — |
|
| 28.8 |
| ||||||
Pension settlement charge |
| — |
|
| — |
|
| 145.5 |
|
| — |
|
| — |
|
| 145.5 |
| ||||||
International entity liquidation |
| — |
|
| — |
|
| 6.2 |
|
| — |
|
| — |
|
| 6.2 |
| ||||||
Cheddar’s integration expenses |
| — |
|
| — |
|
| — |
|
| — |
|
| 19.4 |
|
| 19.4 |
| ||||||
Corporate restructuring |
| — |
|
| 47.8 |
|
| — |
|
| — |
|
| — |
|
| 47.8 |
| ||||||
Adjusted EBITDA |
| $1,530.6 |
|
| $1,038.7 |
|
| $793.9 |
|
| $1,183.8 |
|
| $1,099.3 |
|
| $5,646.3 |
|
President, Specialty Restaurant Group Special Award
On July 25, 2018, prior to becoming an executive officer, Mr. Martin was granted a special PSU award designed to reward management for achieving milestones with respect to opening new The Capital Burger restaurant locations. Under the terms of the award agreement, Mr. Martin is eligible to earn up to 10,423 PSUs, separated into two tranches of 50% of the total possible number, earned based on achieving Capital Burger new restaurant opening targets. These PSUs are earned and vested immediately upon achievement of the performance criteria. The special PSUs are forfeited if not earned prior to July 24, 2024.
2022 Proxy Statement 51
NEO Total Compensation Changes for Fiscal 20192023
In accordance with our annual review process, the Compensation Committee (and the Board with respect to the Chairman and CEO) reviews each actively employed NEO’s total direct compensation and evaluates each NEO’s individual performance, Company and business unit performance peer group benchmarkingand each officer’s target compensation opportunity relative to updated market data provided by Pearl Meyer. In March 2022, the Board with respect to the Executive Chairman and other relevant information. At the beginning of fiscal 2019,CEO, and in June 2022, the Compensation Committee with respect to the other NEO’s, approved increases to the base salary, annual incentive target bonus opportunity amount and/orand long-term incentive program Target Grant Amount of each of our NEOs effective for fiscal 20192023, which included increases to certain amounts to better align the total compensation of each of our NEOs with comparable positions within our peer group, reward individual performance, or to reflect tenure in position, retention priority for key positions and/or changes in responsibilities. Increases inChanges to Base Salary with respect to Mr. Lee and Mr. Cardenas were effective with the assumption of their new roles on May 30, 3022. The changes to base salary are reflected infor the Summary Compensation Table on p. 38, increases in annual incentive target bonus opportunity amounts are reflected in the table on p. 32 and increases in the long-term Target Grant Values are reflected in the table under the heading “
Named Executive Officer | Base Salary for fiscal 2023 | Target Annual Incentive Percentage for fiscal 2023 | Target Value of Long-term Incentive for fiscal 2023 | |||||||||
Eugene I. Lee, Jr. (1) |
| $650,000 |
|
| N/A |
|
| N/A |
| |||
Ricardo Cardenas |
| $1,000,000 |
|
| 150% |
|
| $5,000,000 |
| |||
Rajesh Vennam |
| $ 700,000 |
|
| 85% |
|
| $1,700,000 |
| |||
Todd A. Burrowes |
| $ 735,000 |
|
| 85% |
|
| $1,400,000 |
| |||
M. John Martin |
| $ 735,000 |
|
| 85% |
|
| $1,400,000 |
|
(1) | Mr. Lee retired as Chief Executive Officer effective May 29, 2022 and was appointed by the Board to serve as Executive Chairman effective May 30, 2022. Effective May 30, 2022, Mr. Cardenas assumed the role of President and Chief Executive Officer. Each of Messrs. Lee’s and Cardenas’ base salaries for fiscal year 2023 reflect the change in his position. On the date of the Company’s 2022 Annual Meeting of Shareholders, Mr. Lee is expected to retire from employment at the Company and continue to serve as Chairman of the Board in a non-executive capacity. |
Perquisites
We provide limited perquisites to our NEOs that we believe are appropriate to enable business continuity and minimize work distractions. During fiscal 2019,2022, these benefits included an allowance toward a company car, limited reimbursement for financial planning assistance, unsubsidized group liability insurance and an executive physical program.
Other Benefits
Our NEOs receive the same employee benefits provided to other salaried U.S. employees, but are not eligible to actively participate in Darden’s qualified savings plan (the Darden Savings Plan). Instead, we deferaward amounts under our FlexComp Plan for our NEOs in place of participation under the Darden Savings Plan. The FlexComp Plan also allows participants (approximately 1,100) to defer receipt of portions of their base salaries and annual incentive compensation. See the discussion under the heading “Non-Qualified“Non-Qualified Deferred Compensation” on page 45 for further details regarding the terms of participation under the FlexComp Plan.
52 Darden Restaurants, Inc.
Stock Ownership Guidelines
In keeping with our objective of aligning our executives’ interests with our shareholders’ interests, we require our executives to hold equity in the Company equal in value to a designated multiple of their salaries. Under the Company’s stock ownership policy, the Chief Executive OfficerCEO must hold 100 percent and any other officer must hold 50 percent of any net after tax shares issued to them until they achieve the required stock ownership level. The required ownership values for our actively employed NEOs vary based on the executive’s level of responsibility as follows:
Named Executive Officer | Required Ownership as a Multiple of Base Salary | |||
Eugene I. Lee, | 6x | |||
Ricardo Cardenas (1) | 6x | |||
Rajesh Vennam | 4x | |||
Todd A. Burrowes | 4x | |||
M. John Martin | 4x |
(1) | Mr. Cardenas’ required ownership percentage was increased from four times his base salary to six times his base salary effective upon his election to President and CEO, effective May 30, 2022. |
The Compensation Committee monitors compliance with the ownership guidelines. AllEach of the NEOs wereremained in compliance with the ownership guidelines as of May 26, 2019.
Policy on Granting Equity Awards
Our equity awards policy provides that incentive equity grants to employees, including stock option grants, are made once per year and are effective on the last Wednesday in fiscal July. The Company may also grant equity awards for special purposes such as retention, recognition or promotion and such special awards are made effective on any date determined by the Compensation Committee, the Board or authorized individual approving the award. The grant date for equity awards is never a date prior to approval. The exercise price of stock options may not be less than the fair market value of our common stock on the date of the grant as measured by the closing sales price of our common stock on the NYSE.
Recoupment and Forfeiture of Compensation
We have adopted a clawback policy which provides that an executive officer is required to repay performance-based rewardsawards to the Company if he or she knowingly participates in a fraud that requires the Company to restate its financial statements. Performance-based rewardsawards include annual incentive awards and PSU awards under our 2015 Plan.
Employment Agreements
We do not currently have employment agreements in place with any of our named executive officers.
Change in Control Agreements
All of our executive officersNEOs are parties to Change in Control Agreements that reflect current market practices and governance best practices. The Change in Control Agreements provide for severance benefits (between 1.5 and 2.0 times base salary and target bonus) in the event of a termination of employment within 24 months of a change in control of the Company. Please see the discussion under the heading “Potential Payments Upon Termination or Change in Control” on page 47 for further discussion of the Change in Control Agreements.
2022 Proxy Statement 53
Tax and Accounting Considerations
In designing our compensation programs, we take into account the various tax, accounting and disclosure rules. The Compensation Committee also reviews and considers the deductibility of executive compensation under sectionSection 162(m) of the Internal Revenue Code. The Tax Act repealed the performance-based exemption from Section 162(m)’s deduction limit for taxable years beginning after December 31, 2017, subject to certain transition rules that “grandfathered” certain awards and arrangements that were in effect prior to November 2, 2017, and expanded the population of executives to which the deduction limit applies. The Compensation Committee generally seekssought to preserve tax deductions for executive compensation where available. Nonetheless, the Compensation Committee has awarded compensation that is not fully tax deductible when it believes such grants are in the best interests of the Company and our shareholders and reserves the right to do so in the future. We anticipate that a significant portion of our incentive awards for fiscal 20192022 will not be deductible when paid due to the repeal of the performance-based compensation exemption. There is no guarantee that compensation payable pursuant to any of the Company’s compensation programs initially granted before fiscal 20192022 will ultimately be deductible by the Company.
At the 20182021 Annual Meeting of Shareholders, approximately 93.294.5 percent of the votes cast were in favor of the advisory vote to approve executive compensation. We believe that these vote results, together with feedback received during the Company’s ongoing shareholder engagement, reflect that shareholders are pleased with the structure of the Company’s compensation programs put into place by the Compensation Committee for fiscal 2019. The Compensation Committee is not recommending any material2022. For fiscal 2022, we reversed changes made during the COVID-19 pandemic and returned to the Company’s compensation programspre-pandemic incentive plan design for fiscal 20202022 as adiscussed above, including under “Summary of Compensation Actions for Fiscal 2022.” The changes were not the result of theseshareholder engagement or the 2021 vote results, however, the Compensation Committee continuously evaluates plan design and considers adjustments to the Company’s compensation programs based on market and other considerations.results. The Compensation Committee and Board are committed to serving Darden’s shareholders, and plan to continue regular dialogue with shareholders as we move forward.
The Compensation Committee of the Board of Directors reviewed and discussed the Compensation Discussion and Analysis with Darden’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended May 26, 2019.
Respectfully submitted,
The Compensation Committee
James P. Fogarty, Committee Chair
Cynthia T. Jamison
Nana Mensah
Charles M. Sonsteby
Timothy J. Wilmott
54 Darden Restaurants, Inc.
The Compensation Committee consists of Mr. Fogarty as the Chair and Ms. Jamison Mr.and Messrs. Mensah, Sonsteby and Mr. Wilmott as members. During fiscal 2019,2022, all members of the Compensation Committee were independent directors, and no member was an employee or former employee of the Company. In addition, none of the Company’s executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of another entity whose executive officer served on the Company’s Board of Directors or Compensation Committee.
We believe that our compensation programs for executives and other employees are designed with the appropriate balance of risk and reward in relation to the Company’s overall business strategy and do not incentincentivize executives or other employees to take unnecessary or excessive risks. Specifically, we believe that the following features of our compensation programs (discussed in more detail in the Compensation Discussion and Analysis section above) help manage or mitigate risk:
The Company has allocated compensation among base salary and short-term and long-term compensation target opportunities for executives in such a way as to not encourage excessive risk taking. Incentive compensation is not overly weighted toward short-term incentives. In addition, both short-term and long-term incentives are subject to maximum payment amounts;
The mix of equity award instruments used under our long-term incentive program (a) includes full value awards; and (b) rewards different performance measures (currently, total shareholder return forperformance-based awards including stock options and PSUs (which vest based on total shareholder return relative to publicly traded restaurant companies for PSUs)the S&P 500);
Our annual and long-term compensation plans are reviewed by the Compensation Committee and any risks embedded in those plans are discussed and evaluated for appropriateness. Our incentive opportunities are designed to drive strong, sustainable growth and shareholder return;
The multi-year vesting of our equity awards aligns incentive compensation with shareholders’ interests by rewarding long-term stock appreciation rather than short-term performance;
Our performance criteria and objectives balance performance and sustainability of performance by setting a variety of goals, including same-restaurant sales growth and earnings per share growth;
Our Stock Ownership Guidelines encourage a focus on long-term growth in shareholder value; and
Our policies regarding recoupment and forfeiture of compensation discourage excessive or inappropriate risk taking.risk-taking.
2022 Proxy Statement 55
The table below summarizes the total compensation paid or earned by each of the NEOs for the fiscal years ended May 26, 2019,29, 2022, May 27, 2018,30, 2021, and May 28, 2017.
Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) (4) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | |||||||||
Name and Principal Position | Year | ($)Total | |||||||||||||
Eugene I. Lee, Jr. | 2019 | 1,000,000 | — | 4,393,249 | 1,482,042 | 3,200,000 | — | 635,287 | 10,710,578 | ||||||
President and | 2018 | 1,000,000 | — | 11,192,404 | 1,122,487 | 2,025,000 | — | 430,260 | 15,770,151 | ||||||
Chief Executive Officer | 2017 | 1,000,000 | — | 2,391,994 | 1,124,576 | 1,525,000 | — | 320,206 | 6,361,776 | ||||||
Ricardo Cardenas | 2019 | 687,019 | — | 1,142,285 | 385,328 | 989,307 | — | 222,794 | 3,426,733 | ||||||
Senior Vice President and | 2018 | 613,750 | — | 923,122 | 280,618 | 745,707 | — | 219,200 | 2,782,397 | ||||||
Chief Financial Officer | 2017 | 560,000 | — | 896,981 | 421,712 | 546,560 | — | 132,592 | 2,557,845 | ||||||
David C. George | 2019 | 745,673 | — | 1,317,961 | 444,617 | 1,193,077 | — | 289,070 | 3,990,398 | ||||||
Executive Vice President and | 2018 | 695,673 | — | 923,122 | 280,618 | 950,289 | — | 256,700 | 3,106,402 | ||||||
Chief Operating Officer | 2017 | 625,000 | — | 1,897,014 | 421,712 | 727,500 | — | 188,821 | 3,860,047 | ||||||
Todd A. Burrowes | 2019 | 601,346 | — | 878,717 | 296,405 | 813,741 | — | 210,646 | 2,800,855 | ||||||
President, LongHorn Steakhouse | 2018 | 556,210 | — | 664,644 | 202,055 | 706,331 | — | 147,647 | 2,276,887 | ||||||
2017 | 535,833 | — | 478,402 | 224,912 | 447,528 | — | 102,107 | 1,788,782 | |||||||
Daniel J. Kiernan | 2019 | 541,346 | — | 615,035 | 207,481 | 743,810 | — | 172,797 | 2,280,469 | ||||||
President, Olive Garden | |||||||||||||||
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||||
Eugene I. Lee, Jr. Executive Chairman of the Board and our previous Chairman and Chief Executive Officer | 2022 | 1,248,077 | — | 4,615,649 | 1,367,033 | 3,744,231 | — | 916,852 | 11,891,841 | |||||||||||||||||||||||||||
2021 | 1,000,000 | — | 4,135,158 | 1,361,689 | 2,840,000 | — | 791,339 | 10,128,186 | ||||||||||||||||||||||||||||
2020 | 829,760 | 1,916,154 | 3,914,767 | 1,268,902 | — | — | 759,124 | 8,688,707 | ||||||||||||||||||||||||||||
Rajesh Vennam Senior Vice President, Chief Financial Officer and Treasurer | 2022 | 603,365 | — | 1,006,954 | 298,256 | 769,291 | — | 187,650 | 2,865,517 | |||||||||||||||||||||||||||
2021 | 405,385 | 11,077 | 248,134 | 81,705 | 362,138 | — | 95,852 | 1,204,291 | ||||||||||||||||||||||||||||
Ricardo Cardenas President and Chief Executive Officer, and our previous President and Chief Operating Officer | 2022 | 795,673 | — | 1,846,328 | 546,797 | 1,193,510 | — | 326,974 | 4,709,282 | |||||||||||||||||||||||||||
2021 | 745,192 | — | 1,240,596 | 408,505 | 1,058,173 | — | 304,487 | 3,756,954 | ||||||||||||||||||||||||||||
2020 | 685,817 | 690,538 | 1,174,393 | 380,675 | — | — | 272,942 | 3,204,365 | ||||||||||||||||||||||||||||
Todd A. Burrowes President, LongHorn Steakhouse | 2022 | 689,615 | — | 1,006,954 | 298,256 | 837,055 | — | 270,818 | 3,102,699 | |||||||||||||||||||||||||||
2021 | 640,000 | — | 826,982 | 272,330 | 772,480 | — | 181,977 | 2,693,769 | ||||||||||||||||||||||||||||
2020 | 604,038 | 723,863 | 782,929 | 253,776 | — | — | 355,021 | 2,719,627 | ||||||||||||||||||||||||||||
M. John Martin President, Specialty Restaurant Group | 2022 | 691,346 | — | 1,006,954 | 298,256 | 1,116,524 | — | 278,226 | 3,391,306 | |||||||||||||||||||||||||||
2021 | 645,673 | — | 1,062,680 | 245,095 | 771,647 | — | 162,238 | 2,887,332 | ||||||||||||||||||||||||||||
(1) | |
Amounts reflect the actual base salary earned by the NEO in fiscal |
(2) | |
The Company made |
(3) | |
Amounts in these columns represent the grant date fair value of awards computed in accordance with ASC Topic 718 for each of fiscal |
56 Darden Restaurants, Inc.
awards assuming achievement of maximum (150 percent) payout: Mr. Lee — $4,212,894; Mr. Vennam — $252,759; Mr. Cardenas — $1,263,918; Mr. Burrowes — $842,529; Mr. Martin — $758,275. For fiscal 2020, the following amounts represent the grant date fair value of PSU awards assuming achievement of maximum (150 percent) payout: Mr. Lee — |
(4) | |
Amounts reflect the |
(5) | |
Amounts deferred into the FlexComp Plan do not receive above market or preferential earnings, but rather receive notional rates of return that match the returns on the investment options available under the Darden Savings Plan as described under the subheading |
(6) | |
All Other Compensation for fiscal |
Perks and ($)(a) | Company ($)(b) | Insurance ($)(c) | Dividends ($)(d) | Totals ($) | ||||||||||||||||
Eugene I. Lee, Jr. | 20,505 | 539,169 | 14,129 | 343,049 | 916,852 | |||||||||||||||
Rajesh Vennam | 20,426 | 148,247 | 5,255 | 13,722 | 187,650 | |||||||||||||||
Ricardo Cardenas | 17,707 | 214,832 | 6,647 | 87,788 | 326,974 | |||||||||||||||
Todd A. Burrowes | 28,332 | 164,880 | 11,801 | 65,805 | 270,818 | |||||||||||||||
M. John Martin | 18,938 | 195,250 | 14,132 | 49,906 | 278,226 |
Perks and Other Personal Benefits ($)(a) | Company Contributions to Defined Contribution Plans ($)(b) | Insurance Premiums ($)(c) | Dividends or Earnings on Stock or Option Awards ($)(d) | Other ($) | Totals ($) | ||||||||
Eugene I. Lee, Jr. | 27,987 | 431,760 | 10,233 | 165,307 | — | 635,287 | |||||||
Ricardo Cardenas | 17,058 | 172,326 | 6,753 | 26,657 | — | 222,794 | |||||||
David C. George | 17,551 | 199,304 | 14,475 | 57,740 | — | 289,070 | |||||||
Todd A. Burrowes | 13,710 | 145,471 | 10,200 | 41,265 | — | 210,646 | |||||||
Daniel J. Kiernan | 10,251 | 132,114 | 10,233 | 20,199 | — | 172,797 |
(a) | Includes the aggregate incremental costs to the Company for personal use of a Company car or a limited car allowance, an executive physical program, a reimbursement for financial counseling services, a discount on the purchase of Company gift cards, |
(b) | Amounts in this column represent Company contributions made in August |
(c) | Represents the cost to the Company for providing life insurance and long-term disability insurance. |
(d) | Our NEOs do not receive dividends or dividend equivalents on unvested restricted stock, unvested restricted stock units or unvested PSUs, but rather accrue them for payment when the restricted stock, restricted stock units or PSUs are earned and vested and only on the number of shares of stock or units |
2022 Proxy Statement 57
The following table sets forth certain information with respect to equity and non-equity plan-based awards granted during fiscal 20192022 under the 2015 Plan and the Annual Incentive Plan to each of the NEOs.
All Other Stock Awards: Number of Shares of Stock or Units (#) (4) | All Other Option Awards: Number of Securities Underlying Options (#) (5) | Exercise or Base Price of Option Awards($/Sh) (6) | Grant Date Fair Value of Stock and Option Awards ($) (7) | ||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | ||||||||||||
Name | Grant Date | Approval Date (1) | Threshold($) | Target ($) | Maximum($) | Threshold(#) | Target (#) | Maximum(#) | |||||
Eugene I. Lee, Jr. | — | — | 2,000,000 | 4,000,000 | |||||||||
7/25/2018 | 6/20/2018 | 78,916 | 107.05 | 1,482,042 | |||||||||
7/25/2018 | 6/20/2018 | 13,029 | 1,394,754 | ||||||||||
7/25/2018 | 6/20/2018 | — | 26,058 | 39,087 | 2,998,494 | ||||||||
Ricardo Cardenas | — | — | 618,317 | 1,236,635 | |||||||||
7/25/2018 | 6/19/2018 | 20,518 | 107.05 | 385,328 | |||||||||
7/25/2018 | 6/19/2018 | 3,388 | 362,685 | ||||||||||
7/25/2018 | 6/19/2018 | — | 6,775 | 10,163 | 779,599 | ||||||||
David C. George | — | — | 745,673 | 1,491,346 | |||||||||
7/25/2018 | 6/19/2018 | 23,675 | 107.05 | 444,617 | |||||||||
7/25/2018 | 6/19/2018 | 3,909 | 418,458 | ||||||||||
7/25/2018 | 6/19/2018 | — | 7,817 | 11,726 | 899,502 | ||||||||
Todd A. Burrowes | — | — | 511,144 | 1,022,288 | |||||||||
7/25/2018 | 6/19/2018 | 15,783 | 107.05 | 296,405 | |||||||||
7/25/2018 | 6/19/2018 | 2,606 | 278,972 | ||||||||||
7/25/2018 | 6/19/2018 | — | 5,212 | 7,818 | 599,745 | ||||||||
Daniel J. Kiernan | — | — | 406,010 | 812,019 | |||||||||
7/25/2018 | 6/19/2018 | 11,048 | 107.05 | 207,481 | |||||||||
7/25/2018 | 6/19/2018 | 1,824 | 195,259 | ||||||||||
7/25/2018 | 6/19/2018 | — | 3,648 | 5,472 | 419,775 |
All Other (#)(4) | All Other (#)(5) | Exercise ($/Sh)(6) | Grant Date Fair Value of Stock and ($)(7) | |||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date(1) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||
Eugene I. Lee, Jr. | — | — | 2,496,154 | 4,992,308 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/23/2021 | 33,326 | 148.20 | 1,367,033 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/23/2021 | 9,365 | 1,387,893 | |||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/23/2021 | — | 18,729 | 37,458 | 3,227,756 | |||||||||||||||||||||||||||||||||||||||||||
Rajesh Vennam | — | — | 512,861 | 1,025,721 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 7,271 | 148.20 | 298,256 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 2,043 | 302,773 | |||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | — | 4,086 | 8,172 | 704,181 | |||||||||||||||||||||||||||||||||||||||||||
Ricardo Cardenas | — | — | 795,673 | 1,591,346 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 13,330 | 148.20 | 546,797 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 3,746 | 555,157 | |||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | — | 7,492 | 14,984 | 1,291,171 | |||||||||||||||||||||||||||||||||||||||||||
Todd A. Burrowes | — | — | 586,173 | 1,172,346 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 7,271 | 148.20 | 298,256 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 2,043 | 302,773 | |||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | — | 4,086 | 8,172 | 704,181 | |||||||||||||||||||||||||||||||||||||||||||
M John Martin | — | — | 587,644 | 1,175,288 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 7,271 | 148.20 | 298,256 | ||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | 2,043 | 302,773 | |||||||||||||||||||||||||||||||||||||||||||||
7/28/2021 | 6/22/2021 | — | 4,086 | 8,172 | 704,181 |
(1) | |
The column sets forth the date on which the Compensation Committee took action to grant the reported awards. The grants made to Mr. Lee were recommended by the Compensation Committee and approved by the independent members of the Board and the grants made to the other NEOs were approved by the Compensation Committee. |
(2) | |
The amounts in these columns represent the potential annual cash incentive that may be earned under the |
(3) | |
The NEOs received grants of PSUs under the 2015 Plan. The PSU awards granted to the NEOs are earned based on Relative TSR. After a three-year performance period, the PSUs granted in fiscal |
(4) | |
The NEOs received grants of restricted stock units under the 2015 Plan. |
(5) | |
The NEOs received grants of non-qualified stock options under the 2015 Plan. These non-qualified stock options vest 50 percent on each of the third and fourth anniversaries of the grant date. |
(6) | |
All stock options are granted with an exercise price equal to the fair market value of our common stock on the date of grant. Fair market value under the 2015 Plan has been determined by the Compensation Committee to be the closing price |
58 Darden Restaurants, Inc.
of the common stock on the NYSE as reported in the consolidated transaction reporting system on the grant date or, if such exchange is not open for trading on such date, on the most recent preceding date when such exchange is open for trading. |
(7) | |
Assumptions used in the calculation of these amounts are included in Note 1 to the Company’s audited financial statements included in the Company’s |
The following table summarizes the total outstanding equity awards as of May 26, 201929, 2022 for each of the NEOs.
Option Awards (1) | Stock Awards | ||||||||||||||||||||||||
Restricted Stock | PSU Awards | ||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock Held That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock Held That Have Not Vested ($)(2) | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||||||||
Eugene I. Lee, Jr. | |||||||||||||||||||||||||
7/29/2015 | 39,478 | 39,479 | 65.02 | 7/29/2025 | |||||||||||||||||||||
7/27/2016 | — | 123,852 | 59.68 | 7/27/2026 | |||||||||||||||||||||
7/26/2017 | — | 76,725 | 85.83 | 7/26/2027 | |||||||||||||||||||||
7/25/2018 | — | 78,916 | 107.05 | 7/25/2028 | 26,847 | 3,225,130 | 198,885 | 23,892,095 | |||||||||||||||||
Ricardo Cardenas | |||||||||||||||||||||||||
7/24/2013 | 14,128 | — | 42.99 | 7/24/2023 | |||||||||||||||||||||
7/23/2014 | 19,416 | — | 39.53 | 7/23/2024 | |||||||||||||||||||||
11/17/2014 | 55,608 | — | 49.25 | 11/17/2024 | |||||||||||||||||||||
7/29/2015 | 6,367 | 6,368 | 65.02 | 7/29/2025 | |||||||||||||||||||||
7/27/2016 | — | 46,444 | 59.68 | 7/27/2026 | |||||||||||||||||||||
7/26/2017 | — | 19,181 | 85.83 | 7/26/2027 | |||||||||||||||||||||
7/25/2018 | — | 20,518 | 107.05 | 7/25/2028 | 6,843 | 822,050 | 32,432 | 3,895,999 | |||||||||||||||||
David C. George | |||||||||||||||||||||||||
1/30/2013 | 11,515 | — | 41.40 | 1/30/2023 | |||||||||||||||||||||
7/23/2014 | 69,779 | — | 39.53 | 7/23/2024 | |||||||||||||||||||||
7/29/2015 | 12,735 | 12,735 | 65.02 | 7/29/2025 | |||||||||||||||||||||
7/27/2016 | — | 46,444 | 59.68 | 7/27/2026 | |||||||||||||||||||||
7/26/2017 | — | 19,181 | 85.83 | 7/26/2027 | |||||||||||||||||||||
7/25/2018 | — | 23,675 | 107.05 | 7/25/2028 | 22,301 | 2,679,019 | 37,918 | 4,555,089 | |||||||||||||||||
Todd A. Burrowes | |||||||||||||||||||||||||
7/29/2015 | 10,187 | 10,188 | 65.02 | 7/29/2025 | |||||||||||||||||||||
7/27/2016 | — | 24,770 | 59.68 | 7/27/2026 | |||||||||||||||||||||
7/26/2017 | — | 13,811 | 85.83 | 7/26/2027 | |||||||||||||||||||||
7/25/2018 | — | 15,783 | 107.05 | 7/25/2028 | 17,526 | 2,105,398 | 24,054 | 2,889,650 | |||||||||||||||||
Daniel J. Kiernan | |||||||||||||||||||||||||
7/25/2012 | 16,198 | — | 43.58 | 7/25/2022 | |||||||||||||||||||||
7/24/2013 | 18,790 | — | 42.99 | 7/24/2023 | |||||||||||||||||||||
7/23/2014 | 16,139 | — | 39.53 | 7/23/2024 | |||||||||||||||||||||
7/29/2015 | 2,229 | 4,457 | 65.02 | 7/29/2025 | |||||||||||||||||||||
7/27/2016 | — | 10,837 | 59.68 | 7/27/2026 | |||||||||||||||||||||
7/26/2017 | — | 5,371 | 85.83 | 7/26/2027 | |||||||||||||||||||||
7/25/2018 | — | 11,048 | 107.05 | 7/25/2028 | 5,028 | 604,014 | 11,961 | 1,436,875 |
Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||
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| Restricted Stock | PSU Awards | |||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock Held That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock Held That Have Not Vested ($)(2) | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | |||||||||||||||||||||||||||
Eugene I. Lee, Jr. | 7/25/2018 | 39,458 | 39,458 | 107.05 | 7/25/2028 | |||||||||||||||||||||||||||||||
7/24/2019 | — | 63,636 | 124.24 | 7/24/2029 | ||||||||||||||||||||||||||||||||
7/29/2020 | — | 67,847 | 78.84 | 7/29/2030 | ||||||||||||||||||||||||||||||||
7/28/2021 | — | 33,326 | 148.20 | 7/28/2031 | 36,685 | 4,623,777 | 87,179 | 10,988,008 | ||||||||||||||||||||||||||||
Rajesh Vennam | 7/27/2016 | 2,245 | — | 59.68 | 7/27/2026 | |||||||||||||||||||||||||||||||
7/26/2017 | 3,069 | — | 85.83 | 7/26/2027 | ||||||||||||||||||||||||||||||||
7/25/2018 | 1,578 | 1,579 | 107.05 | 7/25/2028 | ||||||||||||||||||||||||||||||||
7/24/2019 | — | 3,182 | 124.24 | 7/24/2029 | ||||||||||||||||||||||||||||||||
7/29/2020 | — | 4,071 | 78.84 | 7/29/2030 | ||||||||||||||||||||||||||||||||
7/28/2021 | — | 7,271 | 148.20 | 7/28/2031 | 3,578 | 450,971 | 7,706 | 971,297 | ||||||||||||||||||||||||||||
Ricardo Cardenas | 7/29/2015 | 12,735 | — | 65.02 | 7/29/2025 | |||||||||||||||||||||||||||||||
7/27/2016 | 46,444 | — | 59.68 | 7/27/2026 | ||||||||||||||||||||||||||||||||
7/26/2017 | 19,181 | — | 85.83 | 7/26/2027 | ||||||||||||||||||||||||||||||||
7/25/2018 | 10,259 | 10,259 | 107.05 | 7/25/2028 | ||||||||||||||||||||||||||||||||
7/24/2019 | — | 19,091 | 124.24 | 7/24/2029 | ||||||||||||||||||||||||||||||||
7/29/2020 | — | 20,354 | 78.84 | 7/29/2030 | ||||||||||||||||||||||||||||||||
7/28/2021 | — | 13,330 | 148.20 | 7/28/2031 | 11,942 | 1,505,170 | 27,475 | 3,462,984 | ||||||||||||||||||||||||||||
Todd A. Burrowes | 7/26/2017 | 13,811 | — | 85.83 | 7/26/2027 | |||||||||||||||||||||||||||||||
7/25/2018 | 7,891 | 7,892 | 107.05 | 7/25/2028 | ||||||||||||||||||||||||||||||||
7/24/2019 | — | 12,727 | 124.24 | 7/24/2029 | ||||||||||||||||||||||||||||||||
7/29/2020 | — | 13,569 | 78.84 | 7/29/2030 | ||||||||||||||||||||||||||||||||
7/28/2021 | — | 7,271 | 148.20 | 7/28/2031 | 7,507 | 946,182 | 17,775 | 2,240,406 | ||||||||||||||||||||||||||||
M. John Martin | 7/27/2016 | 9,933 | — | 59.68 | 7/27/2026 | |||||||||||||||||||||||||||||||
7/26/2017 | 7,673 | — | 85.83 | 7/26/2027 | ||||||||||||||||||||||||||||||||
7/25/2018 | 4,735 | 4,735 | 107.05 | 7/25/2028 | ||||||||||||||||||||||||||||||||
7/24/2019 | — | 10,182 | 124.24 | 7/24/2029 | ||||||||||||||||||||||||||||||||
7/29/2020 | — | 12,212 | 78.84 | 7/29/2030 | ||||||||||||||||||||||||||||||||
7/28/2021 | — | 7,271 | 148.20 | 7/28/2031 | 9,457 | 1,191,960 | 25,582 | 3,224,335 |
(1) | |
All option awards are non-qualified stock options that expire ten years from the date of grant. |
2022 Proxy Statement 59
(2) | |
The units reflected in this column represent awards of RSUs granted to the NEOs which fully vest on the third anniversary of the grant dates of each such |
(3) | |
All units reflected in this column represent PSU awards granted during fiscal |
Name | Type of PSU Award | Number of PSUs on Grant Date | Earned Percentage | Number of Earned PSUs | ||||||||||||
Eugene I. Lee, Jr. | FY20-22 TSR | 20,987 | 57 | % | 11,963 | |||||||||||
Rajesh Vennam | FY20-22 TSR | 1,049 | 57 | % | 598 | |||||||||||
Ricardo Cardenas | FY20-22 TSR | 6,296 | 57 | % | 3,588 | |||||||||||
Todd A. Burrowes | FY20-22 TSR | 4,197 | 57 | % | 2,392 | |||||||||||
M. John Martin | FY20-22 TSR | 3,358 | 57 | % | 1,914 |
Name | Type of PSU Award | Number of PSUs on Grant Date | Earned Percentage | Number of Earned PSUs | |||
Eugene I. Lee, Jr. | FY17-19 ROIC | 19,915 | 150 | % | 29,872 | ||
FY17-19 TSR | 19,915 | 150 | % | 29,872 | |||
Ricardo Cardenas | FY17-19 ROIC | 7,468 | 150 | % | 11,202 | ||
FY17-19 TSR | 7,468 | 150 | % | 11,202 | |||
David C. George | FY17-19 ROIC | 7,468 | 125 | % | 9,335 | ||
FY17-19 TSR | 7,468 | 150 | % | 11,202 | |||
Todd A. Burrowes | FY17-19 ROIC | 3,983 | 105 | % | 4,182 | ||
FY17-19 TSR | 3,983 | 150 | % | 5,974 | |||
Daniel J. Kiernan | FY17-19 ROIC | 1,743 | 125 | % | 2,178 | ||
FY17-19 TSR | 1,743 | 150 | % | 2,614 |
The following table summarizes the number of option awards exercised and restricted stock units and performance stock units that vested during fiscal 20192022 for each of the NEOs.
Option Awards | Stock Awards | |||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | ||||||||
Eugene I. Lee, Jr. | 194,813 | 14,015,867 | 25,168 | 2,687,428 | ||||||||
Ricardo Cardenas | 10,666 | 679,638 | 4,058 | 433,355 | ||||||||
David C. George | 154,964 | 9,896,445 | 8,791 | 938,675 | ||||||||
Todd A. Burrowes | — | — | 6,282 | 670,840 | ||||||||
Daniel J. Kiernan | 12,355 | 769,351 | 3,075 | 328,366 |
| Option Awards | Stock Awards | ||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | ||||||||||||
Eugene I. Lee, Jr. | 160,577 | 12,328,007 | 71,530 | 10,504,072 | ||||||||||||
Rajesh Vennam | — | — | 1,694 | 244,821 | ||||||||||||
Ricardo Cardenas | 42,608 | 4,289,401 | 10,864 | 1,570,051 | ||||||||||||
Todd A. Burrowes | 45,145 | 3,954,916 | 8,176 | 1,181,557 | ||||||||||||
M. John Martin | 6,160 | 559,636 | 7,183 | 1,042,926 |
(1) | |
The value realized equals the difference between the exercise price and the closing market price of our common stock on the NYSE on the date of exercise, multiplied by the number of shares acquired on exercise. |
(2) | |
The Number of Shares Acquired for each executive represents the number of |
(3) | |
The value realized equals the closing market price of our common stock on the NYSE on the vesting date multiplied by the number of shares acquired on vesting. |
60 Darden Restaurants, Inc.
We maintain the FlexComp Plan, a non-qualified deferred compensation plan, for our executive officers, other members of management and certain highly compensated employees who are not eligible to participate in the Darden Savings Plan.
The FlexComp Plan permits participating executive officers to defer receipt of up to 25 percent of their base salaries and up to 100 percent of their annual incentive compensation. Amounts deferred under the FlexComp Plan are payable in cash on the date or dates selected by the participant in accordance with the terms of the FlexComp Plan or on such other dates specified in the FlexComp Plan. Deferred amounts are credited with notional rates of return based on the performance of several investment alternatives (which mirror the returns on the investment alternatives available under the Darden Savings Plan, the Company’s qualified 401(k) savings plan), as selected by the participant.
We also make certain contributions to executive officers’ accounts under the FlexComp Plan whichthat are designed to provide benefits in lieu of qualified retirement plans. Company contributions are made annually. For all NEOs, the annual contribution is 4 percent of the executive’s eligible annual earnings. In addition, a second Company contribution ranges from 1.5 percent to 7.2 percent of the executive’s eligible annual earnings based on Company performance. The contributions are automatically deferred in accordance with the participants’ elections and the terms of the FlexComp Plan.
Both participant deferrals and Company contributions under the FlexComp Plan are credited with notional rates of return based on several investment alternatives, which mirror the returns on the investment alternatives under the Darden Savings Plan. Except for the Darden Company Stock Fund, investment selections may be changed daily. The FlexComp Plan does not have a guaranteed rate of return or guaranteed retirement benefit. The table below shows the funds available under the Darden Savings Plan and their notional rates of return for the twelve months ended May 26, 2019,30, 2022, the reportable fund performance period that most closely matched our fiscal year, as reported by the recordkeeper of the Darden Savings Plan.
Deferred amounts under the FlexComp Plan are generally paid following separation from employment unless the participant elected an earlier in-service distribution date at the time of the deferral. Participants may elect to be paid in the form of a single sum cash payment, or 5-year or 10-year annual installment payments. The form of payment depends upon the participant’s deferral election and the participant’s retirement eligibility at separation from employment.employment or the balance in their account by deferral election.
Name of Fund | Rate of Return | |||
Columbia Trust Stable Government 1-0 | 0.68 | % | ||
BlackRock Advantage Small Cap Core K Fund | (16.84 | )% | ||
Darden Company Stock Fund | (9.78 | )% | ||
John Hancock Bond R6 Fund | (8.50 | )% | ||
TS&W International Large Cap Equity CL | (8.86 | )% | ||
Vanguard Extended Market Index Inst | (20.12 | )% | ||
Vanguard Institutional Index Instl Plus | (0.32 | )% | ||
Vanguard Target Retirement Trst II 2015 Fd | (5.96 | )% | ||
Vanguard Target Retirement Trst II 2020 Fd | (6.48 | )% | ||
Vanguard Target Retirement Trst II 2025 Fd | (7.12 | )% | ||
Vanguard Target Retirement Trst II 2030 Fd | (7.29 | )% |
Name of Fund | Rate of Return | |||
Vanguard Target Retirement Trst II 2035 Fd | (7.22 | )% | ||
Vanguard Target Retirement Trst II 2040 Fd | (7.19 | )% | ||
Vanguard Target Retirement Trst II 2045 Fd | (7.13 | )% | ||
Vanguard Target Retirement Trst II 2050 Fd | (7.18 | )% | ||
Vanguard Target Retirement Trst II 2055 Fd | (7.17 | )% | ||
Vanguard Target Retirement Trst II 2060 Fd | (7.16 | )% | ||
Vanguard Target Retirement Trst II 2065 Fd | (7.18 | )% | ||
Vanguard Target Retirement Income Trst II Fd | (5.97 | )% | ||
Vanguard Total Bond Market Index I | (8.32 | )% | ||
Vanguard Total Intl Stock Index Inst | (11.97 | )% |
2022 Proxy Statement 61
Name of Fund | Rate of Return | Name of Fund | Rate of Return | |||||
Columbia Trust Stable Government 1-0 | 1.68 | % | Vanguard Instl Target Retirement 2035 Fd | 0.64 | % | |||
Darden Company Stock Fund | 36.31 | % | Vanguard Instl Target Retirement 2040 Fd | 0.03 | % | |||
DFA US Small Cap I | (11.45 | )% | Vanguard Instl Target Retirement 2045 Fd | (0.40 | )% | |||
TS&W International Large Cap Equity CL | (10.91 | )% | Vanguard Instl Target Retirement 2050 Fd | (0.41 | )% | |||
Vanguard Extended Market Index Inst | (3.63 | )% | Vanguard Instl Target Retirement 2055 Fd | (0.40 | )% | |||
Vanguard Institutional Index I | 3.76 | % | Vanguard Instl Target Retirement 2060 Fd | (0.40 | )% | |||
Vanguard Instl Target Retirement 2015 Fd | 3.16 | % | Vanguard Instl Target Retirement Inc Fd | 3.73 | % | |||
Vanguard Instl Target Retirement 2020 Fd | 2.35 | % | Vanguard Total Bond Market Index I | 6.67 | % | |||
Vanguard Instl Target Retirement 2025 Fd | 1.89 | % | Vanguard Total Intl Stock Index Admiral | (6.94 | )% | |||
Vanguard Instl Target Retirement 2030 Fd | 1.28 | % |
The following table provides additional information concerning the FlexComp Plan account for each NEO, including the contributions by Darden to the FlexComp Plan during fiscal 20192022 and the aggregate FlexComp balance as of May 26, 2019.
Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($) (2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at End of FY 2019 ($)(3) | |||||
Eugene I. Lee, Jr. | 506,250 | 288,283 | (37,615) | — | 3,259,825 | |||||
Ricardo Cardenas | — | 129,556 | 14,251 | — | 949,552 | |||||
David C. George | — | 156,860 | 121,384 | — | 2,341,887 | |||||
Todd A. Burrowes | 7,038 | 120,320 | (5,640) | — | 299,135 | |||||
Daniel J. Kiernan | 77,904 | 77,055 | (8,177) | — | 2,076,882 |
Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at End | |||||||||||||||
Eugene I. Lee, Jr. | — | 241,860 | (473,688 | ) | — | 4,863,050 | ||||||||||||||
Rajesh Vennam | — | 49,040 | (27,167 | ) | — | 252,932 | ||||||||||||||
Ricardo Cardenas | — | 113,584 | (119,716 | ) | — | 1,643,504 | ||||||||||||||
Todd A. Burrowes | — | 88,964 | (37,026 | ) | — | 842,075 | ||||||||||||||
M. John Martin | — | 89,269 | (396,469 | ) | 26,857 | 3,050,377 |
(1) | |
Reflects the deferred Salary or Bonus amounts for each of the NEOs during fiscal |
(2) | |
Reflects the Company’s annual contribution to the FlexComp Plan made in |
(3) | |
A portion of the |
No benefits have accrued under the Retirement Income Plan for Darden Restaurants, Inc. (RIP), Mr. Kiernan will receive estimated monthly aggregate benefits at normal retirement of $139. Benefits are fixed because since December 31, 2014. In April 2018, our Benefit Plans Committee approved the NEOs no longer participate in the plans. The Company terminatedtermination of the RIP effective as of September 30, 2018. In conjunction with the RIP termination process, all participants will have the opportunity to commence benefits effective November 1, 2019. If a participant declines to commence benefits as of this date, the Company will transfer his or her benefitsPursuant to an agreement entered into on November 19, 2019, the RIP’s remaining assets and liabilities were transferred to a third-party annuity provider for commencement at a later date.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||
Eugene I. Lee, Jr. | — | — | — | — | ||||
Ricardo Cardenas | — | — | — | — | ||||
David C. George | — | — | — | — | ||||
Todd A. Burrowes | — | — | — | — | ||||
Daniel J. Kiernan | Retirement Income Plan | 2.90 | 16,044 | — |
The Company has entered into Change in Control Agreements (CIC Agreements) with Messrs. Burrowes, Cardenas, George, Kiernan,Lee, Martin and Lee.Vennam. The Company’s typical practice is not to enter into employment agreements with the NEOs. The following summarizes the potential payments to be made to NEOs upon termination of their employment or a change in control of the Company.
Payments Made Upon Any Termination of Employment
. Regardless of the manner in which an NEO’s employment terminates, the NEO is entitled to receive amounts earned during the NEO’s term of employment. Such amounts include:Accrued but unpaid base salary through the date of termination;
Unreimbursed employment-related expenses and other benefits owed to the NEO under the Company’s employee benefit plans or policies;
Accrued but unpaid vacation;
The NEO, if eligible, will receive a Company contribution in a health reimbursement account to be used to reimburse eligible medical expenses, if applicable;
62 Darden Restaurants, Inc.
The NEO’s FlexComp account balance; and
The NEO’s Darden Savings Plan account, if applicable; andapplicable.
These payments made upon termination do not differ from payments made upon termination to all employees. In addition, the NEO will continue to be able to exercise any vested stock options for a period of three months following termination of employment, or for a longer period if the NEO is eligible for early or normal retirement or in certain other situations described below.
Payments Made Upon Early Retirement
. In the event of the early retirement of an NEO who has reached age 55 with ten or more years of service, in addition to the items identified under the heading “Payments Made Upon Any Termination of Employment”:The NEO will be entitled to receive prorated vesting of each option grant, and be allowed to exercise such option for the lesser of five years or the remainder of the original term;
The NEO will be entitled to receive prorated vesting of each outstanding RSU grant, based on the number of months of service completed out of the total number of months in the original RSU vesting period;
The NEO will continue to vest in a prorated share of grants of PSUs based on Company performance for the remainder of the applicable PSU performance period; and
The NEO will be entitled to receive a prorated bonus for the portion of the fiscal year served; andserved.
Payments Made Upon Normal Retirement
for Awards Granted Prior to July 29, 2020. In the event of the retirement of an NEO who has reached age 65 with five or more years of service, in addition to the items identified under the heading “Payments Made Upon Any Termination of Employment”:The NEO will vest in all outstanding stock options with continued exercisability for the remainder of the original term;
The NEO will vest in all outstanding RSUs; and
The NEO will continue to vest in grants of PSUs based on Company performance for the remainder of the original PSU performance period.
Payments Made Upon Normal Retirement for Awards Granted After July 28, 2020. In the event of the retirement of an NEO who has reached age 55 and also his or her age plus years of service equals or exceeds 75, in addition to the items identified under the heading “Payments Made Upon Any Termination of Employment”:
The NEO will vest in all outstanding stock options with continued exercisability for the remainder of the original term;
The NEO will vest in all outstanding RSUs;
The NEO will continue to vest in grants of PSUs based on Company performance for the remainder of the original PSU performance period; and
The NEO will be entitled to receive a prorated bonus for the portion of the fiscal year served;served.
Payments Made Upon Disability
. The Company pays for long-term disability coverage for the NEOs and the amount paid for the insurance is included in the “All Other Compensation” column in the Summary Compensation Table. In the event of disability, the NEO will receive the items identified under the heading “Payments Made Upon Any Termination of Employment” above. In addition, the NEO is entitled to the following benefits, which are also available to employees with disability coverage:The NEO will vest in all outstanding stock options and be allowed to exercise such stock options for the remainder of the original term;
2022 Proxy Statement 63
The NEO will vest in all outstanding RSUs;
The NEO will vest in all outstanding PSUs on a pro rata basis based on Company performance for the remainder of the original PSU performance period;
The NEO will be entitled to receive a prorated bonus for the portion of the fiscal year served;
Up to 90 days of salary continuation;
Up to two-thirds of eligible pay with a maximum annual benefit of $180,000 payable to age 65 starting on the 91st day of disability; and
Continued eligibility for group medical, life, and dependent life coverage for 52 weeks.
Payments Made Upon Death
. The Company pays for life insurance coverage for the NEOs and the amount paid for the insurance is included in the “All Other Compensation” column in the Summary Compensation Table. The life insurance benefit for the NEOs is equal to four times salary and bonus, with a maximum amount of coverage of $1,500,000. For accidental death, the benefit is twice the amount of the regular coverage with a maximum amount of coverage of $3,000,000. An additional $500,000 may be paid if death occurs while traveling on business. These benefits would be paid from term life insurance policies maintained by the Company. In the event of death, the beneficiary or estate of the NEO (as applicable) will receive the items identified under the heading above entitled “Payments Made Upon Any Termination of Employment,” except that the NEO would be fully vested in any employer contributions under the Darden Savings Plan uponStock options, restricted stock, restricted stock units and PSUs will vest in full and stock options will be exercisable for the remainder of the original term.
Payments Made Upon Involuntary Termination Without Cause
. In general, the Company may, but is not obligated to, provide separation pay and benefits to its employees in the event the employee is involuntarily terminated without cause. If provided, the separation pay and benefits available are generally contingent upon the Company receiving a general release of claims from the employee. In addition to the items identified under the heading above entitled “Payments Made Upon Any Termination of Employment,” such benefits to an executive officer may include severance payments of up to 12 months’ base salary and up to 12 times the monthly value of the Company’s contribution to health insurance benefits, among other benefits as the Company may determine to be appropriate under the specific circumstances.For awards granted prior to July 29, 2020, if the executive’s age plus his or her years of service equals or exceeds 70 and the executive is involuntarily terminated without cause, accelerated vesting will be applied to a pro rata portion of the outstanding stock options, RSUs, and PSUs. Stock options will be exercisable for the lesser of five years or the remainder of the original term.
For awards granted on or after July 29, 2020, if the executive is involuntarily terminated without cause, accelerated vesting will be applied to a pro rata portion of the outstanding stock options, RSUs, and PSUs. Stock options will be exercisable for the lesser of five years or the remainder of the original term.
Alternative Normal Retirement Treatment for Mr. Lee’s Equity Awards Granted Starting in Fiscal 2020. Beginning with equity awards granted to Mr. Lee for fiscal 2020, new forms of former CEO award agreements govern the terms of those awards. The terms and conditions of the former CEO award agreements relating to the alternative treatment of outstanding awards upon retirement are as follows:
“Normal Retirement” is defined in the former CEO award agreements as retirement after attaining age 60, completing ten years of service and providing at least six months advance notice of termination.
64 Darden Restaurants, Inc.
The former CEO Option Agreement provides that upon a Normal Retirement, unvested portions of the option award do not automatically vest, but continue to vest along the original vesting schedule so long as there is compliance with post-termination restrictive covenants.
Similarly, the former CEO RSU Agreement provides that upon a Normal Retirement, unvested portions of the restricted stock unit award do not automatically vest, but continue to vest along the original vesting schedule so long as there is compliance with post-termination restrictive covenants.
Payments Made Upon a Change in Control. The Company has entered into CIC Agreements with Messrs. Burrowes, Cardenas, George, Kiernan,Lee, Martin and Lee.Vennam. The CIC Agreements provide for, contingent upon the NEO executing a release of claims against the Company and complying with the non-competition, non-solicitation, confidentially and other restrictive covenants, severance payments equal to one and one half times the sum of the NEO’s base salary and target annual bonus for Messrs. Burrowes, Cardenas George(prior to his appointment as CEO effective May 30, 2022), Martin, and Kiernan,Vennam and equal to two times the sum of Mr. Lee’s base salary and target annual bonus in the case of Mr. Lee.Lee (and Mr. Cardenas upon his appointment as CEO effective May 30, 2022). In addition, the CIC Agreements provide for payments of an amount equal to 18 times the monthly COBRA charge in effect on the date of termination for the Company-provided group health plan coverage in effect on the date of termination for each of Messrs. Burrowes, Cardenas George(prior to his appointment as CEO effective May 30, 2022), Martin, and KienanVennam and 24 times the monthymonthly charge for Mr. Lee (and Mr. Cardenas upon his appointment as CEO effective May 30, 2022), less the monthly active employee
Under the CIC Agreement, “Change in Control” means:
Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30 percent or more of either (x) the then-outstanding shares of common stock of the Company (the Outstanding Company Common Stock) or (y) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities);
Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a Business Combination), in each case unless, following such Business Combination, (x) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50 percent of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (y) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30 percent or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (z) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
2022 Proxy Statement 65
through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (y) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30 percent or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (z) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or |
Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
Under the CIC Agreement, “Cause” means:
An act or acts of fraud or misappropriation on the NEO’s part which result in or are intended to result in the NEO’s personal enrichment at the expense of the Company and which constitute a criminal offense under State or Federal laws;
The NEO’s continued failure to substantially perform the NEO’s duties with the Company (other than any such failure resulting from the NEO’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the NEO;
The NEO’s willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise; or
The NEO’s conviction of, or entering into a plea of either guilty or nolo contendere to, any felony, including, but not limited to, a felony involving moral turpitude, embezzlement, theft or similar act that occurred during or in the course of the NEO’s employment with the Company.
Under the CIC Agreement, “Good Reason” means, without the express written consent of the NEO:
The assignment to the NEO of any duties inconsistent in any substantial respect with the NEO’s position, authority or responsibilities as in effect during the 90-day period immediately preceding the change in control or any other substantial adverse change in such position (including titles), authority or responsibilities;
A material reduction in the NEO’s base salary, target annual bonus opportunity, long-term incentive opportunity or aggregate employee benefits as in effect immediately prior to the change in control; or
Any failure by the Company to obtain the assumption and agreement to perform by a successor.
The table below reflects the amount of compensation payable to each of the NEOs, (i) under the CIC Agreement, as applicable to each individual NEO, in the event of such NEO’s involuntary not-for-cause termination of employment or resignation with good reason following a change in control and (ii) pursuant to the Company’s general practices, in the event of termination of such NEO’s employment upon voluntary termination, involuntary not-for-cause termination, involuntary for-cause termination and termination by death of the NEO. The amounts shown assume that such termination or change in control was effective as of May 26, 201929, 2022 and are estimates of the amounts that would be paid out to the NEO upon their termination. The actual amounts to be paid out can only be determined at the time of such NEO’s separation from the Company. Except for the fiscal 20192022 Annual Incentive and FlexComp Plan awards, the tables do not reflect earned amounts
66 Darden Restaurants, Inc.
identified under the heading “Payments Made Upon Any Termination of Employment.” Items such as the Darden Savings Plan or FlexComp Plan account balances are identified under the Non-Qualified Deferred Compensation Table.
Benefits and Payments Upon Termination | Voluntary Termination ($) | Involuntary Not For Cause Termination(1)($) | Involuntary For Cause Termination ($) | Involuntary Not For Cause Termination or Resignation For Good Reason (Change in Control)(2) ($) | Death ($) | Disability ($) | ||||||||||||||||||
Eugene I. Lee, Jr. | ||||||||||||||||||||||||
FY22 Annual Incentive(3) | 3,744,231 | 3,744,231 | 3,744,231 | 3,744,231 | 3,744,231 | 3,744,231 | ||||||||||||||||||
FY22 FlexComp (Retirement Contribution)(4) | 539,169 | 539,169 | 539,169 | 539,169 | 539,169 | 539,169 | ||||||||||||||||||
Cash Severance Benefit(5) | — | 1,300,000 | — | 7,800,000 | — | 973,986 | (6) | |||||||||||||||||
Accelerated Vesting of Stock-based Awards(7) | 24,833,027 | (8) | 24,833,027 | 4,582,064 | 24,938,557 | 24,938,557 | 24,864,248 | |||||||||||||||||
Miscellaneous Benefits(9) | 130,654 | 146,011 | 130,654 | 162,238 | 1,500,000 | (10) | 291,283 | |||||||||||||||||
Rajesh Vennam | ||||||||||||||||||||||||
FY22 Annual Incentive(3) | 769,291 | 769,291 | 769,291 | 769,291 | 769,291 | 769,291 | ||||||||||||||||||
FY22 FlexComp (Retirement Contribution)(4) | 148,247 | 148,247 | 148,247 | 148,247 | 148,247 | 148,247 | ||||||||||||||||||
Cash Severance Benefit(5) | — | 625,000 | — | 1,734,375 | — | 3,209,346 | (6) | |||||||||||||||||
Accelerated Vesting of Stock-based Awards(7) | — | 528,549 | — | 1,702,224 | 1,702,224 | 1,150,845 | ||||||||||||||||||
Miscellaneous Benefits(9) | 76,895 | 95,252 | 76,895 | 100,421 | 1,500,000 | (10) | 128,180 | |||||||||||||||||
Ricardo Cardenas | ||||||||||||||||||||||||
FY22 Annual Incentive(3) | 1,193,510 | 1,193,510 | 1,193,510 | 1,193,510 | 1,193,510 | 1,193,510 | ||||||||||||||||||
FY22 FlexComp (Retirement Contribution)(4) | 214,832 | 214,832 | 214,832 | 214,832 | 214,832 | 214,832 | ||||||||||||||||||
Cash Severance Benefit(5) | — | 800,000 | — | 2,400,000 | — | 2,077,425 | (6) | |||||||||||||||||
Accelerated Vesting of Stock-based Awards(7) | — | 3,756,625 | — | 6,369,155 | 6,369,155 | 4,850,129 | ||||||||||||||||||
Miscellaneous Benefits(9) | 111,826 | 127,182 | 111,826 | 135,500 | 1,500,000 | (10) | 182,876 | |||||||||||||||||
Todd A. Burrowes | ||||||||||||||||||||||||
FY22 Annual Incentive(3) | 837,055 | 837,055 | 837,055 | 837,055 | 837,055 | 837,055 | ||||||||||||||||||
FY22 FlexComp (Retirement Contribution)(4) | 164,880 | 164,880 | 164,880 | 164,880 | 164,880 | 164,880 | ||||||||||||||||||
Cash Severance Benefit(5) | — | 700,000 | — | 1,942,500 | — | 1,068,096 | (6) | |||||||||||||||||
Accelerated Vesting of Stock-based Awards(7) | 3,999,044 | (8) | 4,019,123 | — | 4,137,198 | 4,137,198 | 4,029,225 | |||||||||||||||||
Miscellaneous Benefits(9) | 17,267 | 22,320 | 17,267 | 25,047 | 1,500,000 | (10) | 80,424 | |||||||||||||||||
M. John Martin | ||||||||||||||||||||||||
FY22 Annual Incentive(3) | 1,116,524 | 1,116,524 | 1,116,524 | 1,116,524 | 1,116,524 | 1,116,524 | ||||||||||||||||||
FY22 FlexComp (Retirement Contribution)(4) | 195,250 | 195,250 | 195,250 | 195,250 | 195,250 | 195,250 | ||||||||||||||||||
Cash Severance Benefit(5) | — | 700,000 | — | 1,942,500 | — | 693,795 | (6) | |||||||||||||||||
Accelerated Vesting of Stock-based Awards(7) | 3,815,283 | (8) | 3,815,283 | — | 5,345,327 | 5,345,327 | 4,369,751 | |||||||||||||||||
Miscellaneous Benefits(9) | 24,203 | 39,559 | 24,203 | 47,876 | 1,500,000 | (10) | 100,183 |
2022 Proxy Statement 67
Voluntary Termination ($) | Involuntary Not For Cause Termination (1) ($) | Involuntary For Cause Termination ($) | Involuntary Not For Cause Termination or Resignation For Good Reason (Change in Control) (2) ($) | Death ($) | Disability ($) | |||||||||||||||
Benefits and Payments Upon Termination | ||||||||||||||||||||
Eugene I. Lee, Jr. | ||||||||||||||||||||
FY19 Annual Incentive (3) | 3,200,000 | 3,200,000 | 3,200,000 | 3,200,000 | 3,200,000 | 3,200,000 | ||||||||||||||
FY19 FlexComp (Retirement Contribution) (4) | 431,760 | 431,760 | 431,760 | 431,760 | 431,760 | 431,760 | ||||||||||||||
Cash Severance Benefit (5) | — | 1,000,000 | — | 6,000,000 | — | 1,440,959 | (6) | |||||||||||||
Accelerated Vesting of Stock-based Awards (7) | 21,171,755 | (8) | 25,921,199 | — | 41,739,654 | 41,739,654 | 31,140,838 | |||||||||||||
Miscellaneous Benefits (9) | 144,271 | 156,950 | 144,271 | 170,372 | 1,500,000 | (10) | 272,706 | |||||||||||||
Ricardo Cardenas | ||||||||||||||||||||
FY19 Annual Incentive (3) | 989,307 | 989,307 | 989,307 | 989,307 | 989,307 | 989,307 | ||||||||||||||
FY19 FlexComp (Retirement Contribution) (4) | 172,326 | 172,326 | 172,326 | 172,326 | 172,326 | 172,326 | ||||||||||||||
Cash Severance Benefit (5) | — | 700,000 | — | 1,995,000 | — | 2,594,397 | (6) | |||||||||||||
Accelerated Vesting of Stock-based Awards (7) | — | 6,160,195 | — | 9,019,211 | 9,019,211 | 7,638,924 | ||||||||||||||
Miscellaneous Benefits (9) | 106,319 | 118,998 | 106,319 | 125,862 | 1,500,000 | (10) | 164,766 | |||||||||||||
David C. George | ||||||||||||||||||||
FY19 Annual Incentive (3) | 1,193,077 | 1,193,077 | 1,193,077 | 1,193,077 | 1,193,077 | 1,193,077 | ||||||||||||||
FY19 FlexComp (Retirement Contribution) (4) | 199,304 | 199,304 | 199,304 | 199,304 | 199,304 | 199,304 | ||||||||||||||
Cash Severance Benefit (5) | — | 750,000 | — | 2,250,000 | — | 1,087,500 | (6) | |||||||||||||
Accelerated Vesting of Stock-based Awards (7) | 7,106,263 | (8) | 9,008,191 | — | 12,079,557 | 12,079,557 | 10,578,847 | |||||||||||||
Miscellaneous Benefits (9) | 15,192 | 24,701 | 15,192 | 29,802 | 1,500,000 | (10) | 89,940 | |||||||||||||
Todd A. Burrowes | ||||||||||||||||||||
FY19 Annual Incentive (3) | 813,741 | 813,741 | 813,741 | 813,741 | 813,741 | 813,741 | ||||||||||||||
FY19 FlexComp (Retirement Contribution) (4) | 145,471 | 145,471 | 145,471 | 145,471 | 145,471 | 145,471 | ||||||||||||||
Cash Severance Benefit (5) | — | 610,000 | — | 1,692,750 | — | 1,587,568 | (6) | |||||||||||||
Accelerated Vesting of Stock-based Awards (7) | 4,414,980 | (8) | 4,414,980 | — | 8,014,971 | 7,947,947 | 6,967,797 | |||||||||||||
Miscellaneous Benefits (9) | 7,673 | 11,884 | 7,673 | 14,173 | 1,500,000 | (10) | 60,708 | |||||||||||||
Daniel J. Kiernan | ||||||||||||||||||||
FY19 Annual Incentive (3) | 743,810 | 743,810 | 743,810 | 743,810 | 743,810 | 743,810 | ||||||||||||||
FY19 FlexComp (Retirement Contribution) (4) | 132,114 | 132,114 | 132,114 | 132,114 | 132,114 | 132,114 | ||||||||||||||
Cash Severance Benefit (5) | — | 550,000 | — | 1,443,750 | — | 1,292,459 | (6) | |||||||||||||
Accelerated Vesting of Stock-based Awards (7) | 2,132,504 | (8) | 2,132,504 | — | 3,356,813 | 3,356,813 | 2,813,633 | |||||||||||||
Miscellaneous Benefits (9) | 18,992 | 26,124 | 18,992 | 30,020 | 1,500,000 | (10) | 71,129 |
(1) | |
Involuntary not for cause termination includes termination of the NEO’s employment by the Company for any reason other than his or her violation of Company policy. |
(2) | |
Amounts shown are subject to reduction if payments of benefits would result in excise tax liabilities under IRC Section 4999, and would result in the NEO being better off on an after-tax basis. |
(3) | |
Reflects the executive’s actual earned annual cash incentive, which is also included in the Summary Compensation Table. |
(4) | |
Reflects the annual FlexComp Plan award for fiscal |
(5) | |
For Mr. Lee, the Change in Control scenario reflects two times the sum of his base salary plus target bonus. For Messrs. Burrowes, Cardenas, |
(6) | |
Severance benefits under the disability termination scenario reflect the estimated value of expected benefits payable by the Company through our short-term disability policy and by our third-party long-term insurance providers. Assumes continued payment by the Company of an NEO’s base salary for 90 days. After that initial period until reaching age 65, an NEO would be entitled to receive $180,000 of annual disability benefits through the Company’s insured long-term disability program. |
(7) | |
This value is calculated based on the closing market price of |
(8) | |
This amount represents the value of awards that would receive continued |
(9) | |
Miscellaneous benefits include the value of health and life insurance benefits, post-retiree medical benefits (if applicable), FlexComp Plan benefits, and miscellaneous perquisites such as discount on the purchase of their company car. |
(10) | |
The maximum life insurance benefit for normal death is $1,500,000; for accidental death, the maximum is $3,000,000; and an additional $500,000 may be paid if death is attributable to death while traveling on business. These benefits would be paid from term life insurance policies. |
The Company is party to trust agreements to provide for payments under our non-qualified deferred compensation plans, including our Compensation Plan for Non-Employee Directors, the 2015 Plan and the FlexComp Plan. Full funding is required upon a change in control of Darden. In addition, stock options, restricted stock, restricted stock units and PSUs issued under our stock plans are subject to accelerated vesting in the event of a termination not for cause or for good reason following a change in control, as defined in those plans or related award agreements.
The following table gives information about shares of our common stock issuable as of May 26, 201929, 2022 under the 2015 Plan, 2002 Plan, the RARE Hospitality International, Inc. Amended and Restated 2002 Long-Term Incentive Plan (the RARE Plan) and our Employee Stock Purchase Plan.
| (a) | (b) | (c) | |||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options (2) | Number of securities available for future under equity plans (excluding reflected in column | |||||||||
Equity compensation plans approved by security holders (3) | 2,484,791 | $89.97 | 5,592,416 | (4) | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 2,484,791 | $89.97 | 5,592,416 |
68 Darden Restaurants, Inc.
(a) | (b) | (c) | |||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options (2) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||
Equity compensation plans approved by security holders (3) | 3,467,767 | $62.61 | 6,230,724 | (4) | |||||
Equity compensation plans not approved by security holders (5) | 11,386 | $37.83 | 0 | ||||||
Total | 3,479,153 | $62.50 | 6,230,724 |
(1) | |
Includes stock options exercisable for common shares and deferred compensation obligations and unvested restricted stock units that may be paid out in common shares. |
(2) | |
Relates solely to stock options exercisable for common shares. |
(3) | |
Consists of the 2015 Plan, 2002 Plan and our Employee Stock Purchase Plan. The 2002 Plan has a “fungible share pool” approach to account for authorized shares. With respect to stock options and SARs, the number of shares available for awards is reduced by one share for each share covered by such award or to which the award relates. With respect to awards granted after September 15, 2006, other than stock options and SARs, the number of shares available for awards is reduced by two shares for each share covered by such award or to which such award relates. Awards that do not entitle the holder to receive or purchase shares and awards that are settled in cash are not counted against the aggregate number of shares available for awards under the 2002 Plan. |
(4) | |
Includes up to |
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median compensated employee and the annual total compensation of Mr. Lee, who served as our PresidentChairman and Chief Executive Officer.
For the fiscal year ending May 26, 2019,29, 2022, our last completed fiscal year:
The annual total compensation of the median compensated of all employees of the Company (other than our CEO) was $18,175.$21,931.
• | The annual total compensation of Mr. Lee for fiscal 2022, as reported in the Summary Compensation Table of this Proxy Statement, was $11,891,841. |
As a result, for fiscal 2019,2022, the ratio of the annual total compensation of Mr. Lee, who served as our CEO for all of fiscal 2022, to the annual total compensation of the median compensated of all employees was 589542 to 1. Neither the Compensation Committee nor management of the Company uses the pay ratio measure in making compensation decisions.
Due to the variable nature of part time restaurant team member schedules, work hours and tenures from one year to the next, we believe it is most appropriate to identify a new median employee for each fiscal year.
To identify the median compensated employee and to determine the annual total compensation of the median employee, we used the following methodology, which is substantially the same methodology we used in fiscal 2018:
We prepared a listing of all of the Company’s employees as of February 24, 2019,28, 2022, three months prior to our fiscal year end, resulting in a list of approximately 181,000172,000 employees after certain permitted exclusions. As permitted by the
We organized the resulting list by a consistently applied compensation measure (the Compensation Measure). The Compensation Measure that we used was comprised of all items of compensation, both cash and non-cash paid to our employees during the fiscal year, as represented in our corporate payroll system, excluding items such as Flex Comp awards, performance stock unit awards, restricted stock awards and certain other similar or related items that are not widely distributed to all employees. We annualized the compensation of employees who were hired during fiscal 2019.2022. We then determined the median amount from this list and the related employee is our “median employee.” The median employee determined for fiscal 2019 is a part time team member at one of our restaurants.
2022 Proxy Statement 69
“median employee.” The median employee determined for fiscal 2022 is a part time team member at one of our restaurants. |
After identifying the median employee, we calculated annual total compensation for this employee using the same methodology we use for calculating the total compensation of our named executive officers as set forth in the Summary Compensation Table.
70 Darden Restaurants, Inc.
The Audit Committee. Our Audit Committee consists of threefive directors, each of whom is an independent director under our Corporate Governance Guidelines and as required by the NYSE listing standards and SEC regulations for audit committee membership. The Audit Committee acts under a written charter adopted by the Board, which sets forth its responsibilities and duties, as well as requirements for the Audit Committee’s composition and meetings. The Audit Committee appoints our independent registered public accounting firm and, among other things, is primarily responsible for:
The integrity of our financial statements;
Our compliance with legal and regulatory requirements;
The qualifications and independence of our internal audit function and independent registered public accounting firm; and
The performance of our internal audit function and independent registered public accounting firm.
Management is responsible for our internal controls, for the financial reporting process, and for providing a report assessing the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and an independent audit of our internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.
Audit Committee Report.
The Audit Committee has reviewed and discussed the audited consolidated financial statements with our management and discussed with KPMG LLP, our independent registered public accounting firm, the matters required to be discussed by the statement on Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board.The Audit Committee has received the written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence.
Based upon the reviews and discussions with management and KPMG LLP described above, the Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended May 26, 201929, 2022 for filing with the SEC.
This report has been furnished by the members of the Audit Committee:
Cynthia T. Jamison, Chair
Margaret Shân Atkins
Juliana L. Chugg
William S. Simon
Charles M. Sonsteby
2022 Proxy Statement 71
Fiscal 2019 | Fiscal 2018 | |||||||
Audit Fees | $ | 2,185,500 | $ | 2,272,500 | ||||
Audit-Related Fees | 172,500 | 164,000 | ||||||
Tax Fees | 1,177,000 | 1,281,500 | ||||||
All Other Fees | 3,560 | 3,560 | ||||||
Total Fees | $ | 3,538,560 | $ | 3,721,560 |
Fees
| Fiscal 2022 | Fiscal 2021 | ||||||
Audit Fees |
| $2,108,000 |
|
| $2,037,500 |
| ||
Audit-Related Fees |
| — |
|
| 120,500 |
| ||
Tax Fees |
| 1,015,000 |
|
| 950,819 |
| ||
All Other Fees |
| 4,000 |
|
| 4,000 |
| ||
Total Fees |
| $3,127,000 |
|
| $3,112,819 |
|
Audit Fees consisted of fees paid to KPMG LLP for the audit of our annual consolidated financial statements included in the Annual Report on Form 10-K, review of our interim consolidated financial statements included in our Quarterly Reports on Form 10-Q, and services normally provided by our accountants in connection with statutory and regulatory filings or engagements. Fiscal 20192022 audit fees were lowerhigher than the prior year primarily due to the absence of debt comfortfiscal 2022 consent letter relatedissuances and increased integrated audit fees.
Audit-Related Fees
consisted of fees for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and are not reported under Audit Fees. The services provided consisted of audits ofTax Fees
consisted of fees for tax compliance services. FiscalAll Other Fee
Pre-Approval
Pursuant to our policy on Pre-Approval of Audit and Non-Audit Services, we discourage the retention of our independent registered public accounting firm for non-audit services. We will not retain our independent registered public accounting firm for non-audit work unless:
In the opinion of senior management, the independent registered public accounting firm possesses unique knowledge or technical expertise that is superior to that of other potential providers;
The approvals of the Chair of the Audit Committee and the CFO are obtained prior to the retention; and
The retention will not affect the status of the independent registered public accounting firm as “independent accountants” under the applicable rules of the SEC, Independence Standards BoardPCAOB and NYSE.
In addition, all non-audit services of more than $250,000 in a fiscal quarter must be pre-approved by the full Audit Committee.
72 Darden Restaurants, Inc.
The details regarding any engagement of the independent registered public accounting firm for non-audit services are provided promptly to the full Audit Committee. During fiscal 20192022 and fiscal 2018,2021, all of the services provided by KPMG LLP for the services described above related to
2022 Proxy Statement 73
the Meeting and Voting
Why did I receive a one-page Notice in the mail regarding the Availability of Proxy Materials instead of printed proxy materials?
In accordance with rules adopted by the SEC, instead of mailing a printed copy of our proxy materials to our shareholders, we have elected to furnish such materials to our shareholders by providing access to these documents over the Internet. Accordingly, on August 5, 2019,8, 2022, we sent a Notice of Availability of Proxy Materials to our shareholders of record and beneficial owners. You have the ability to access the proxy materials on a website referred to in such Notice or request to receive a printed set of the proxy materials free of charge.
Who is entitled to vote?
Record holders of our common shares at the close of business on July 24, 201927, 2022 are entitled to one vote for each common share they own. On July 24, 2019, 122,815,71727, 2022, 122,579,649 shares of common stock were outstanding and eligible to vote. There is no cumulative voting.
How do I vote?
Before the meeting, if you are a shareholder of record, you may vote your shares in one of the following three ways:
By Internet, by going to the website shown on your proxy card or Notice of Availability of Proxy Materials and following the instructions for Internet voting set forth on such proxy card or Notice; | ||
If you reside in the United States or Canada, by telephone at the number shown on your proxy card and following the instructions on such proxy card; or | ||
If you received or requested printed copies of the proxy materials by mail, by completing, signing, dating and returning the proxy card. |
Shareholders of record and beneficial owners will be able to vote their shares electronically during the website shown on your proxy card or Notice of Availability of Proxy Materials and following the instructions for Internet voting set forth on such proxy card or Notice;
Telephone and Internet voting facilities for shareholders of record will close at 11:59 p.m. E.T. on September 17, 2019.
Please use only one of the three ways to vote. Please follow the directions on your proxy card or Notice of Availability of Proxy Materials carefully. The Florida Business Corporation Act provides that a shareholder may appoint a proxy by electronic transmission, so we believe that the Internet or telephone voting procedures available to shareholders are valid and consistent with the requirements of applicable law.
If you return your signed proxy card or use Internet or telephone voting before the Annual Meeting, we will vote your shares as you direct. You have two choices for each director nominee —
FOR or WITHHOLD — and three choices for each other matter to be voted upon — FOR, AGAINST or ABSTAIN.74 Darden Restaurants, Inc.
If you are a shareholder of record and do not specify on your returned proxy card or through the Internet or telephone prompts how you want to vote your shares, we will vote them
FOR the election of each of theWhat is a “broker non-vote,” and will my shares held in street name be voted if I do not provide my proxy?
If your shares are held in a brokerage account in your bank or broker’s name (street name), the proxy materials or Notice of Availability of Proxy Materials were forwarded to you by your bank or broker, who is considered the shareholder of record for purposes of voting at the Annual Meeting. If you received a proxy card, those shares held in street name were not included in the total number of shares listed as owned by you on the proxy card. As a beneficial owner, you have the right to direct your bank or broker on how to vote the shares held in your account. You should follow the voting instructions provided by your bank or broker. You may complete and mail a voting instruction card to your bank or broker or, if your bank or broker allows, submit voting instructions by telephone or the Internet.
A “broker non-vote” generally occurs when you fail to provide your broker with voting instructions and the broker does not have the discretionary authority to vote your shares on a particular proposal because the proposal is not a routine matter under the NYSE rules applicable to its member brokers. Broker non-votes are not counted as votes cast on a proposal, but the shares represented at the meeting by an executed proxy to which such non-votes relate are counted as present for the limited purpose of determining a quorum at the Annual Meeting. The proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal 20202023 is considered a routine matter under current applicable rules, assuming that no shareholder contest arises as to this matter. As such, your brokerage firm will have the discretionary authority to vote shares on this matter for which you do not provide voting instructions. The election of directors and all other proposals to be voted on at the Annual Meeting are not considered to be routine matters.
Electronic voting will be distributedpossible during the meeting tofor anyone who wants to vote in person.during the meeting. If you hold your shares in street name, you must request a legal proxy from your bank or broker to vote in person atduring the meeting.
How do you recommend that I vote on these items?
The Board recommends that you vote FOR the election of each of the eightten director nominees set forth in this Proxy Statement, FOR advisory approval of our executive compensation and FOR the ratification of KPMG LLP as our independent registered public accounting firm for fiscal 2020.
What if I change my mind after I vote?
You may change your vote or revoke your proxy at any time before the polls close at the meeting by:
Signing another proxy card with a later date and returning it to us prior to the meeting;
Voting again by Internet or telephone prior to the meeting as described on the proxy card; or
Voting again in person atelectronically during the meeting.
2022 Proxy Statement 75
You also may revoke your proxy prior to the meeting without submitting a new vote by sending a written notice to our Corporate Secretary that you are withdrawing your vote.
What shares are included on my proxy card?
If you received a proxy card by mail, your proxy card includes shares held in your own name and shares held in any Darden plan, including the Employee Stock Purchase Plan. You may vote these shares by Internet, telephone or mail, all as described on the proxy card and Notice of Availability of Proxy Materials.
How do I vote if I participate in the Darden Savings Plan?
If you hold shares in the Darden Savings Plan, which includes shares held in the Darden Stock Fund in the 401(k) plan, the Employee Stock Ownership Plan and after-tax accounts, these shares have been added to your other holdings on your proxy card if you received a proxy card by mail. You may direct the trustee how to vote your Darden Savings Plan shares by submitting your proxy vote for those shares, along with the rest of your shares, by Internet, telephone or mail, as described on the proxy card or Notice of Availability of Proxy Materials. If you do not submit timely voting instructions to the trustee on how to vote your shares, your Darden Savings Plan shares will be voted by the trustee in the same proportion that it votes shares in other Darden Savings Plan accounts for which it did receive timely voting instructions.
What does it mean if I received more than one proxy card or Notice of Availability of Proxy Materials?
If you received more than one proxy card or Notice of Availability of Proxy Materials, it means you have multiple accounts with your brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker or our transfer agent to consolidate as many accounts as possible under the same name and address. You may contact our transfer agent, EQ Shareowner Services, toll free at (877) 602-7596.
Who may attendparticipate in the Annual Meeting?
The Annual Meeting is open to all holders of our common shares. To attend
How to participate in the Annual Meeting online: | 1. Visit www.virtualshareholdermeeting.com/DRI2022; and 2. Enter the 16-digit control number included on your Notice Regarding the Availability of Proxy Materials (“Notice”), on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials. You may begin to log into the meeting platform beginning at 9:45 a.m. Eastern Time on September 21, 2022. The meeting will begin promptly at 10:00 a.m. Eastern Time. | |
How to participate in the Annual Meeting without a 16-digit control number: | Visit www.virtualshareholdermeeting.com/DRI2022and register as a guest. You will not be able to vote your shares or ask questions. | |
For help with technical difficulties: | Call (800) 586-1548 (U.S.) or (303) 562-9288 (international) for assistance. | |
Additional questions: | Email Investor Relations at investor@darden.comor call |
76 Darden Restaurants, Inc.
Will the meeting, you will needCompany respond to register upon arrival. We will verify your name on our shareholders list and ask you to produce valid photo identification. If your shares are held in street name by your broker or bank, you must bring your most recent brokerage account statement or other evidence of your share ownership. If we cannot verify that you own Darden shares, it is possible that you may not be admitted to the meeting.
We currently anticipate taking questions from shareholders during the Annual Meeting through the virtual meeting website, although we may impose certain procedural requirements such as limiting repetitive or follow-up questions or requiring questions to be submitted in writing.
How many shares must be present to hold the Annual Meeting?
A majority of our outstanding common shares as of the record date must be present in personby participating through the internet or by proxy at the meeting. This is called a quorum. Your shares are counted as present at the meeting if you are presentparticipating as a shareholder and vote in person atelectronically during the meeting or if you have properly returned a proxy by Internet, telephone or mail. Abstentions and “broker non-votes” also will be counted for purposes of establishing a quorum, as explained above under the question “How do I vote?”.
How many votes are required to approve each proposal?
Proposal 1: In an uncontested election, the eightten director nominees shall be elected by a majority of the votes cast. This means that the number of votes cast “FOR” a director’s election exceeds the number of votes cast “WITHHOLD” relating to that director’s election as described under the caption “PROPOSAL 1 — ELECTION OF EIGHTTEN DIRECTORS FROM THE NAMED DIRECTOR NOMINEES.” Failing to vote for all or some of the director nominees will have no effect on the election of directors. Broker non-votes will also have no effect on this proposal. However, under our Bylaws, if a director nominee in an uncontested election does not receive at least a majority of the votes cast for the election of directors at any meeting at which a quorum is present, the director must promptly tender his or her resignation to the Board and remain a director until the Board appoints an individual to fill the office held by such director, as more particularly described under the heading “Corporate Governance and Board Administration — Director Election Governance Practices.”
Proposal 2:
This advisory vote as described under the caption “PROPOSAL 2 — ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION” is non-binding but the Board and the Compensation Committee will give careful consideration to the results of voting on this proposal. The approval of the advisory resolution on executive compensation requires, under Florida law, the majority of the votes cast to be voted “FOR” the proposal. Abstentions and broker non-votes will not be counted as votes “FOR” or “AGAINST” the proposal.Proposal 3:
The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending MayHow will voting on “any other business” be conducted?
We have not received proper notice of, and are not aware of, any business to be transacted at the Annual Meeting other than the proposals described in this Proxy Statement. If any other business is properly presented at the Annual Meeting, the proxies received will be voted on such matter in accordance with the discretion of the proxy holders.
Where do I find the voting results of the meeting?
We will include the voting results in a Current Report on Form 8-K, which we will file within four business days after the date our 20192022 Annual Meeting of Shareholders ends.
2022 Proxy Statement 77
How do I submit a shareholder proposal, nominate directors or recommend director nominees, or submit other business for next year’s annual meeting?
If you wish to submit a proposal for inclusion in our Proxy Statement for our 20202023 Annual Meeting, the proposal must comply with applicable requirements or conditions established by the SEC, including Rule 14a-8 under the Exchange Act, and must be received by our Corporate Secretary at our principal office no later than the close of business on Tuesday,Monday, April 7, 2020.10, 2023. Please address your proposal to: Matthew R. Broad, Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, Darden Restaurants, Inc., 1000 Darden Center Drive, Orlando, Florida 32837.
Under our Bylaws (which are subject to amendment at any time), if you wish to nominate a director at our 20202023 Annual Meeting and such nomination will not be included in the proxy statement for that meeting, or you wish to bring other business before the shareholders at our 20202023 Annual Meeting, you must:
Notify our Corporate Secretary in writing on or before Wednesday, May 23, 2020;24, 2023; and
Include in your notice the specific information required by our Bylaws and otherwise comply with the requirements of our Bylaws and applicable law.
Our Bylaws also provide a proxy access right to permit a shareholder, or a group of not more than 10 shareholders, owning continuously for at least 3 years shares of our Company representing an aggregate of at least 3 percent of the voting power entitled to vote in the election of directors, to nominate and include in our proxy materials director nominees constituting up to 25 percent of the number of the directors in office, provided that the shareholder(s) and the nominee(s) satisfy the requirements in our Bylaws. If you wish to exercise your proxy access right to nominate a director(s), you must:
Notify our Corporate Secretary in writing on or before Monday, April 23, 2020;25, 2023; and
Include in your notice the specific information required by our Bylaws and otherwise comply with the requirements of our Bylaws and applicable law.
If you would like a copy of our Bylaws, we will send you one without charge on request. A copy of our Bylaws also is available at
If you wish to recommend a nominee for director, you should comply with the procedures provided in our Director Nomination Protocol available at
www.darden.com as Appendix A to our Nominating and Governance Committee charter and discussed under the heading “Meetings of the Board of Directors and Its Committees — Board of Directors — Director Candidates Recommended by Shareholders” above.78 Darden Restaurants, Inc.
As of the date of this Proxy Statement, your Board knows of no other matters to be brought before the 20192022 Annual Meeting other than those discussed in this Proxy Statement. If any other matters requiring a vote of the shareholders are properly brought before the Annual Meeting, the persons appointed as proxyholders under the proxies solicited by the Board will vote such proxies in accordance with their best judgment, to the extent permitted under applicable law.
We pay the costs of proxy solicitation, including the costs for mailing the Notice of Availability of Proxy Materials and preparing this Proxy Statement. We have engaged Okapi Partners (Okapi) to assist us in soliciting proxies from our shareholders for a fee of approximately $12,500$13,500 plus reimbursement of out-of-pocket expenses. In addition to Okapi, our directors, officers and regular employees may, without additional compensation, solicit proxies personally or by telephone or other electronic communications. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs of sending the proxy materials to our beneficial owners.
SEC rules allow us to deliver a single copy of proxy statements, annual reports, prospectuses and information statements or Notice of Availability of Proxy Materials to any address shared by two or more of our shareholders. This method of delivery is called “householding” and can significantly reduce our printing and mailing costs and reduce the volume of mail you receive. Accordingly, we are delivering only one Notice of Availability of Proxy Materials or (if paper copies are requested) one Proxy Statement and 20192022 Annual Report on Form 10-K to multiple shareholders sharing an address, unless we received instructions to the contrary from one of more of the shareholders. If you would like to receive more than one copy of the Notice of Availability of Proxy Materials or Proxy Statement and our 20192022 Annual Report on Form 10-K, we will promptly send you additional copies upon written or oral request directed to Broadridge Financial Services at toll free (800) 579-1639, or at www.proxyvote.com.www.proxyvote.com. The same phone number and website address may be used to notify us that you prefer to receive your own copy of proxy and other materials in the future or to request future delivery of a single copy of proxy or other materials. If your shares are held in street name, you may request information about householding from your bank or broker.
2022 Proxy Statement 79
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10 percent of our common shares to file with the SEC and NYSE reports of ownership and changes in ownership of our common shares. Directors, executive officers and greater than 10 percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on a review of the copies of these reports furnished to us since the beginning of fiscal 20192022 and written representations that no other reports were required, all Section 16(a) filing requirements applicable to our directors and executive officers were timely satisfied during fiscal 2019.
SEC rules require us to provide an Annual Report to shareholders who receive this Proxy Statement. We will also provide copies of the Annual Report to brokers, dealers, banks, voting trustees and their nominees for the benefit of their beneficial owners of record. For fiscal 2019,2022, the Company is fulfilling this requirement by delivering the Company’s Annual Report on Form 10-K. You may obtain without charge the Company’s 20192022 Annual Report on Form 10-K or any other corporate governance documents referred to in this Proxy Statement by writing to the Corporate Secretary of the Company at 1000 Darden Center Drive, Orlando, Florida 32837. These also are available on the SEC’s website at www.sec.gov or on the Company’s website at www.darden.com.
The Annual Report on Form 10-K is not to be regarded as soliciting material, and our management does not intend to ask, suggest or solicit any action from the shareholders with respect to the Annual Report on Form 10-K.
The information provided on the Company’s website is referenced in this Proxy Statement for information purposes only. The information on the Company’s website shall not be deemed to be a part of or incorporated by reference into this Proxy Statement or any other filings we make with the SEC.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on September 18, 2019:
80 Darden Restaurants, Inc.
Your Vote is Important!info@okapipartners.com.
Please vote by telephone or the Internet or promptly mark, sign, date and return your proxy card if you received a proxy card by mail.
BY ORDER OF THE
BOARD OF DIRECTORS
Matthew R. Broad
Senior Vice President, General Counsel,
Chief Compliance Officer and Corporate Secretary
August 5, 20198, 2022
2022 Proxy Statement 81
• | 2002 Plan. The Darden Restaurants, Inc. 2002 Stock Incentive Plan, as amended, which provides for the grant of stock options, SARs, restricted stock, restricted stock units, performance awards and other stock and stock-based awards to employees, officers, consultants, advisors and non-employee directors. |
• | 2015 Plan. The Darden Restaurants, Inc. 2015 Omnibus Incentive Plan adopted by the Board in July 2015 and approved by shareholders at the 2015 Annual Meeting. |
• | Annual Meeting. The 2022 Annual Meeting of Shareholders to be held on September 21, 2022. |
• | CEO. Our Chief Executive Officer. |
• | CFO. Our Chief Financial Officer. |
• | COO. Our Chief Operating Officer. |
• | Compensation Committee or Committee (when used in the Compensation Discussion and Analysis or Executive Compensation sections). The Compensation Committee of your Board of Directors. |
• | Company. Darden Restaurants, Inc. |
• | Exchange Act. The Securities Exchange Act of 1934, as amended. |
• | Executive Officers. The most senior executives of the Company designated as our “executive officers” in our most recent Form 10-K and other securities filings. |
• | NEO. Named Executive Officer. Our officers who are named in the Summary Compensation Table, as required by SEC rules. |
• | NYSE. The New York Stock Exchange. |
• | PCAOB. Public Company Accounting Oversight Board. |
• | PSUs. Performance Stock Units granted under our 2002 Plan or 2015 Plan. |
• | RARE. RARE Hospitality International, Inc. |
• | S&P 500. A value weighted index of the prices of the common stock of 500 large companies, whose stock trades on either the NYSE or the NASDAQ. |
• | SARs. Stock appreciation rights. |
• | SEC. Securities and Exchange Commission. |
2022 Proxy Statement A-1
1000 DARDEN CENTER DRIVE
ORLANDO, FL 32837
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. EDT on September 20, 2022 for shares held directly and by 11:59 p.m. EDT on September 18, 2022 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/DRI2022
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. EDT on September 20, 2022 for shares held directly and by 11:59 p.m. EDT on September 18, 2022 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Darden Restaurants, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D89926-P79307 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
DARDEN RESTAURANTS, INC. | For All | Withhold All | For All Except | |||||||||
The Board of Directors recommends you vote “FOR ALL” on proposal 1. | ||||||||||||
1. | To elect a full Board of ten directors from the named director nominees to serve until the next annual meeting of shareholders and until their successors are elected and qualified. The ten director nominees are as follows: | ☐ | ☐ | ☐ | ||||||||
Nominees: | ||||||||||||
01) Margaret Shân Atkins | 06) Eugene I. Lee, Jr. | |||||||||||
02) Ricardo Cardenas | 07) Nana Mensah | |||||||||||
03) Juliana L. Chugg | 08) William S. Simon | |||||||||||
04) James P. Fogarty | 09) Charles M. Sonsteby | |||||||||||
05) Cynthia T. Jamison | 10) Timothy J. Wilmott | |||||||||||
The Board of Directors recommends you vote “FOR” proposals 2 and 3. | For | Against | Abstain | |||||||||
2. | To obtain advisory approval of the Company’s executive compensation. | ☐ | ☐ | ☐ | ||||||||
3. | To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending May 28, 2023. | ☐ | ☐ | ☐ |
To withhold authority to vote for any individual nominee(s), mark “For All Expt” and write the number(s) of the nominee(s) on the line below. | ||||||||||
NOTE: To transact such other business, if any, as may properly come before the meeting and any adjournment. | ||||||||||||||
This proxy is solicited on behalf of the Board of Directors of Darden Restaurants, Inc. If this signed card contains no specific voting instructions, the shares will be voted with the Board’s recommendations. |
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to be held on September 18, 2019.
The accompanying Proxy Statement and Analysis or Executive Compensation sections). The Compensation Committeeour 2022 Annual Report on Form 10-K are available at www.darden.com. In addition, you may access these materials at www.proxyvote.com.
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D89927-P79307
DARDEN RESTAURANTS, INC.
Annual Meeting of yourShareholders
September 21, 2022, 10:00 AM (EDT)
This proxy is solicited by the Board of Directors.
This proxy is solicited by the Board of Directors for use at the Annual Meeting on September 21, 2022.
The undersigned hereby appoints Matthew R. Broad, Anthony G. Morrow, and Jessica P. Lange, and each of them, as proxies, with full power of substitution, to vote all common shares which the undersigned has power to vote at the 2022 Annual Meeting of Shareholders of Darden Restaurants, Inc. via the Internet and at any adjournment thereof, in accordance with the instructions set forth herein and with the same effect as though the undersigned were present in person and voting such shares. The proxies are authorized, in their discretion, to vote upon such other business as may properly come before the meeting.
If no choice is specified, the proxy will be voted “FOR” proposals 1, 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE