| (2) | The amounts shown in this column represent the full grant date fair value of the deferred stock awards granted in 2023, excluding any retainer fees deferred in exchange for shares, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of Kraft Heinz shares on the grant date ($43.14 on May 5, 2022). The following table shows the aggregate number of stock options held by current and former directors as of December 31, 2022:
54|ir.kraftheinzcompany.com
| | Name | | | Grant Date | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | | Gregory E. Abel | | | | | 10/16/2013 | | | | | | 22,166 | | | | | | — | | | | | | 22.56 | | | | | | 7/1/2023 | | | | | Alexandre Behring | | | | | 10/16/2013 | | | | | | 44,333 | | | | | | — | | | | | | 22.56 | | | | | | 7/1/2023 | | | | | John T. Cahill | | | | | 8/16/2019 | | | | | | 500,000 | | | | | | — | | | | | | 25.41 | | | | | | 8/16/2029 | | | | | | | 2/26/2015 | | | | | | 176,423(a) | | | | | | — | | | | | | 52.70 | | | | | | 2/26/2025 | | | | | | | 2/27/2014 | | | | | | 43,191(a) | | | | | | — | | | | | | 45.59 | | | | | | 2/27/2024 | | | | | | | 2/25/2013 | | | | | | 203,915(a) | | | | | | — | | | | | | 38.63 | | | | | | 2/25/2023 | | |
(a)
Granted as an employee award during his prior employment with Kraft Foods Group, Inc., one of our predecessor companies.
(3)
Mr. Behring and Mr. Van Damme stepped down from the Board effective May 5, 2022. Mr. Castro-Neves stepped down from the Board effective July 15, 2022.
(4)
Ms. Knapp and Mr. Park were elected to the Board effective May 5, 2022. Ms. Gherson was appointed to the Board effective November 3, 2022.
(5)
Mr. Kenesey was appointed Chair of the Compensation Committee effective August 4, 2022. Mr. Pope was appointed Chair of the Governance Committee effective May 5, 2022.
The Kraft Heinz Company 2023 Proxy Statement|55
| | | | Beneficial Ownership of Kraft Heinz Stockcommon stock on the grant date ($40.84 on May 4, 2023). The following table summarizes the stock options held by current and former directors as of December 31, 2023: |
| Name | | Grant Date | | Number of Securities
Underlying Unexercised
Options Exercisable
(#) | | Number of Securities
Underlying Unexercised
Options Unexercisable
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | John T. Cahill | | 8/16/2019 | | 500,000 | | — | | 25.41 | | 8/16/2029 | | | | 2/26/2015 | | 176,423(a) | | — | | 52.70 | | 2/26/2025 | | | | 2/27/2014 | | 43,191(a) | | — | | 45.59 | | 2/27/2024 |
| (a) | Granted as an employee award during his prior employment with Kraft Foods Group, Inc., one of our predecessor companies. |
| (3) | Mr. Alfonso was elected to the Board effective May 4, 2023. |
| | 2024 Proxy Statement  | | | | | | | | | | | 54 |
Directors and Officers
BENEFICIAL OWNERSHIP OF STOCKDIRECTORS AND OFFICERSThe following table shows the number of shares of our common stock beneficially owned as of March 6, 20234, 2024 by each current director, director nominee, and NEO, of the Company, as well as the number of shares beneficially owned by all of our current directors and executive officers as a group. There were 1,226,998,9261,215,638,048 shares of our common stock issued and outstanding as of March 6, 2023.4, 2024. Unless otherwise indicated, each of the named individuals has, to Kraft Heinz’s knowledge, sole voting and investment power with respect to the shares shown.shares. | Name of Beneficial Owner | | Shares Owned | | Shares Acquirable
within 60 Days(1) | | Deferred
Stock(2) | | Total | | Percentage of
Common Stock | | Current Directors | | | | | | | | | | | | Gregory E. Abel | | 7,886 | | — | | 63,480 | | 71,366 | | * | | Carlos Abrams-Rivera | | 358,240 | | 87,576 | | — | | 445,816 | | * | | Humberto P. Alfonso | | — | | — | | 3,166 | | 3,166 | | * | | John T. Cahill | | 152,178(3) | | 719,614 | | 38,672 | | 910,464 | | * | | Lori Dickerson Fouché | | — | | — | | 11,356 | | 11,356 | | * | | Diane Gherson | | — | | — | | 3,166 | | 3,166 | | * | | Timothy Kenesey | | — | | — | | 25,742 | | 25,742 | | * | | Alicia Knapp | | — | | — | | 6,292 | | 6,292 | | * | | Elio Leoni Sceti | | 90,000(4) | | — | | 22,799 | | 112,799 | | * | | Susan Mulder | | — | | — | | 14,675 | | 14,675 | | * | | Miguel Patricio | | 1,333,630(5) | | — | | — | | 1,333,630 | | * | | James Park | | 596 | | — | | 5,959 | | 6,292 | | * | | John C. Pope | | 10,098 | | — | | 42,878 | | 52,976 | | * | | Named Executive Officers (NEOs) | | | | | | | | | | | | Miguel Patricio | | ------------------------------see above------------------------------ | | Andre Maciel | | 174,656 | | 87,576 | | — | | 262,828 | | * | | Carlos Abrams-Rivera | | ------------------------------see above------------------------------ | | Rashida La Lande | | 18,466 | | 55,830 | | — | | 74,296 | | * | | Rafael Oliveira | | 334,142 | | 85,588 | | — | | 419,730 | | * | | Current directors and executive officers(6) as of March 4, 2024 as a group (22 persons) | | 3,033,449 | | 1,198,898 | | 238,518 | | 4,470,865 | | * |
| * | Less than 1%. | | (1) | Includes shares issuable upon settlement of RSUs, including related DEUs accrued, that will vest within 60 days of March 4, 2024 and pursuant to stock options exercisable within 60 days of March 4, 2024. | | (2) | Includes related DEUs accrued. For a description of our deferred stock, see Director Compensation—Director Compensation Program. | | (3) | Includes 37,735 shares held indirectly in an irrevocable trust for the benefit of Mr. Cahill’s children, of which Mr. Cahill’s spouse serves as a trustee. | | (4) | Includes 90,000 shares owned directly by Elma Investments Ltd., which is wholly owned by Elma Trust. Mr. Leoni Sceti is a beneficiary of Elma Trust. | | (5) | Includes 992,049 shares held indirectly in a revocable trust, of which Mr. Patricio and his spouse are co-trustees and Mr. Patricio, his spouse, and his children are beneficiaries. | | (6) | Pursuant to Item 403 of Regulation S-K, includes Mr. Oliveira, who ceased to be an executive officer effective December 31, 2023, but who was an NEO for fiscal year/2023. |
| | | 2024 Proxy Statement | 55 |
| | Name of Beneficial Owner | | | Shares
Owned | | | Shares
Acquirable
within
60 Days(1) | | | Deferred
Stock(2) | | | Total | | | Percentage
of Common
Stock | | | | Current Directors | | | | Gregory E. Abel | | | | | — | | | | | | 22,166 | | | | | | 55,062 | | | | | | 77,228 | | | | | | * | | | | | John T. Cahill | | | | | 152,178 | | | | | | 719,614 | | | | | | 34,311 | | | | | | 906,103 | | | | | | * | | | | | Lori Dickerson Fouché | | | | | — | | | | | | — | | | | | | 7,837 | | | | | | 7,837 | | | | | | * | | | | | Diane Gherson | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | Timothy Kenesey | | | | | — | | | | | | — | | | | | | 18,620 | | | | | | 18,620 | | | | | | * | | | | | Alicia Knapp | | | | | — | | | | | | — | | | | | | 2,992 | | | | | | 2,992 | | | | | | * | | | | | Elio Leoni Sceti(3) | | | | | 90,000 | | | | | | — | | | | | | 16,120 | | | | | | 106,120 | | | | | | * | | | | | Susan Mulder | | | | | — | | | | | | — | | | | | | 11,012 | | | | | | 11,012 | | | | | | * | | | | | Miguel Patricio | | | | | 1,202,624 | | | | | | — | | | | | | — | | | | | | 1,202,624 | | | | | | * | | | | | James Park | | | | | 596 | | | | | | — | | | | | | 2,992 | | | | | | 3,588 | | | | | | * | | | | | John C. Pope | | | | | 10,098 | | | | | | — | | | | | | 37,749 | | | | | | 47,847 | | | | | | * | | | | | Director Nominees | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Humberto P. Alfonso | | | | | — | | | | | | — | | | | | | — | | | | | | — | | ��� | | | | — | | | | | Named Executive Officers (NEOs) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Miguel Patricio | | | see above | | | | Andre Maciel | | | | | 98,117 | | | | | | 85,607 | | | | | | — | | | | | | 183,724 | | | | | | | | | | | Paulo Basilio | | | | | 109,181 | | | | | | 176,058 | | | | | | — | | | | | | 285,239 | | | | | | * | | | | | Carlos Abrams-Rivera | | | | | 207,684 | | | | | | — | | | | | | — | | | | | | 207,684 | | | | | | * | | | | | Rashida La Lande | | | | | 45,777 | | | | | | 52,325 | | | | | | — | | | | | | 98,102 | | | | | | * | | | | | Rafael Oliveira | | | | | 269,833 | | | | | | 191,280 | | | | | | — | | | | | | 461,113 | | | | | | * | | | | | Current directors and executive officers(4) as of March 6, 2023 as a group (21 persons) | | | | | 2,420,422 | | | | | | 1,279,242 | | | | | | 186,695 | | | | | | 3,886,359 | | | | | | * | | |
*
Less than 1%.
(1)
Includes shares issuable upon settlement of RSUs, including related DEUs accrued, that will vest within 60 days of March 6, 2023 and pursuant to stock options exercisable within 60 days of March 6, 2023.
(2)
Includes related DEUs accrued. For a description of our deferred stock, see Director Compensation—Director Compensation Program beginning on page 53.
(3)
Includes 90,000 shares owned directly by Elma Investments Ltd., which is wholly owned by Elma Trust. Mr. Leoni Sceti is a beneficiary of Elma Trust.
(4)
Pursuant to Item 403 of Regulation S-K, includes Mr. Basilio, who ceased to be an executive officer effective March 2, 2022, but who was an NEO for fiscal year 2022.
56|ir.kraftheinzcompany.com
Beneficial Ownership of Kraft Heinz Stock
Principal Stockholders
PRINCIPAL STOCKHOLDERSThe following table displays information about persons we know were the beneficial owners of more than 5% of our issued and outstanding common stock as of March 6, 2023. 4, 2024. | Name and Address of Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percentage of
Common Stock(1) | | Berkshire Hathaway(2) | | | | | | 3555 Farnam Street | | | | | | Omaha, Nebraska 68131 | | 325,442,152 | | 26.8% | | BlackRock(3) | | | | | | 50 Hudson Yards | | | | | | New York, New York 10001 | | 90,645,567 | | 7.5% | | The Vanguard Group(4) | | | | | | 100 Vanguard Blvd. | | | | | | Malvern, Pennsylvania 19355 | | 70,388,203 | | 5.8% |
| (1) | Calculated based on 1,215,638,048 shares of our issued and outstanding common stock as of March 4, 2024. | | (2) | Based on the Schedule 13G/A filed on February 14, 2024 by Berkshire Hathaway, reporting beneficial ownership by Warren E. Buffett, Berkshire Hathaway, and Benjamin Moore & Co. Retirement Income Plan. Benjamin Moore & Co. is a subsidiary of Berkshire Hathaway, and Mr. Buffett may be deemed to control Berkshire Hathaway. Berkshire Hathaway and Mr. Buffett share dispositive power over 325,442,152 shares. Benjamin Moore & Co. Retirement Income Plan shares voting and dispositive power over 192,666 shares. | | (3) | Based on the Schedule 13G filed on January 26, 2024 by BlackRock, Inc. (“BlackRock”). BlackRock reports sole voting power with respect to 83,527,544 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 90,645,567 shares, and shared dispositive power with respect to 0 shares. | | (4) | Based on the Schedule 13G/A filed on February 13, 2024 by The Vanguard Group, Inc. (the “Vanguard Group”). The Vanguard Group reports sole voting power with respect to 0 shares, shared voting power with respect to 1,048,315 shares, sole dispositive power with respect to 66,797,202 shares, and shared dispositive power with respect to 3,591,001 shares. |
| | Name and Address of Beneficial Owner | | | Amount and Nature of
Beneficial Ownership | | | Percentage of
Common Stock(1) | | | | Berkshire Hathaway(2)
3555 Farnam Street
Omaha, Nebraska 68131 | | | | | 325,442,152 | | | | | | 26.5% | | | | | 3G Funds(3)
c/o 3G Capital, Inc.
600 Third Avenue, 37th Floor
New York, New York 10016 | | | | | 97,195,897 | | | | | | 7.9% | | | | | BlackRock(4)
55 East 52nd Street
New York, New York 10055 | | | | | 69,223,785 | | | | | | 5.6% | | | | | The Vanguard Group(5)
100 Vanguard Blvd.
Malvern, Pennsylvania 19355 | | | | | 67,873,151 | | | | | | 5.5% | | |
(1)
Calculated based on 1,226,998,926 shares of our issued and outstanding common stock as of March 6, 2023.
(2)
Based on the Schedule 13G/A filed on February 14, 2023 by Berkshire Hathaway, reporting beneficial ownership by Warren E. Buffett, Berkshire Hathaway, and Benjamin Moore & Co. Retirement Income Plan. Benjamin Moore & Co. is a subsidiary of Berkshire Hathaway, and Mr. Buffett may be deemed to control Berkshire Hathaway. Berkshire Hathaway and Mr. Buffett share dispositive power over 325,442,152 shares. Benjamin Moore & Co. Retirement Income Plan shares voting and dispositive power over 192,666 shares. As a result of the relationships described under Corporate Governance and Board Matters—Related Person Transactions—Shareholders’ Agreement beginning on page 35, Berkshire Hathaway and the 3G Funds may be deemed to be a group for purposes of Section 13(d) of the Exchange Act and therefore may be deemed to hold 422,638,049 shares of Kraft Heinz common stock.
(3)
Based on the Schedule 13G/A filed on February 14, 2023 by (i) 3G Global Food Holdings LP, a Cayman Islands limited partnership, (ii) 3G Global Food Holdings GP LP, a Cayman Islands limited partnership (“3G Global Food Holdings GP”), (iii) 3G Capital Partners II LP, a Cayman Islands limited partnership (“3G Capital Partners II”), (iv) 3G Capital Partners Ltd., a Cayman Islands exempted company (“3G Capital Partners Ltd”), and (v) 3G Capital Partners LP, a Cayman Islands limited partnership (“3G Capital Partners LP” and, together with 3G Global Food Holdings, 3G Global Food Holdings GP, 3G Capital Partners II and 3G Capital Partners LP, the “3G Funds”). The 3G Funds share dispositive power over 97,195,897 shares. As a result of the relationships described under Corporate Governance and Board Matters—Related Person Transactions—Shareholders’ Agreement beginning on page 35, Berkshire Hathaway and the 3G Funds may be deemed to be a group for purposes of Section 13(d) of the Exchange Act and therefore may be deemed to hold 422,638,049 shares of Kraft Heinz common stock.
(4)
Based on the Schedule 13G filed on February 13, 2023 by BlackRock, Inc. (“BlackRock”). BlackRock reports sole voting power with respect to 62,284,682 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 69,223,785 shares, and shared dispositive power with respect to 0 shares.
(5)
Based on the Schedule 13G filed on February 9, 2023 by The Vanguard Group, Inc. (the “Vanguard Group”). The Vanguard Group reports sole voting power with respect to 0 shares, shared voting power with respect to 1,082,335 shares, sole dispositive power with respect to 64,624,630 shares, and shared dispositive power with respect to 3,248,521 shares.
Delinquent Section 16(a) Reports
DELINQUENT SECTION 16(A) REPORTSSection 16(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) requires our executive officers and directors, and persons who beneficially own more than 10% of our common stock (collectively, the “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Based solely upon a review of Forms 3, 4, and 5 and amendments thereto filed electronically with the SEC by the Reporting Persons with respect to the fiscal year ended December 31, 2022,30, 2023, we believe that all filing requirements were complied with in a timely manner. | | | 2024 Proxy Statement | 56 |
The Kraft Heinz Company 2023 Proxy Statement|57
Back to Contents | | | | Proposal 2. Advisory Vote to Approve Executive Compensation
| | | | | | | | | | | | | |
As required by Section 14A of the Exchange Act, we are asking our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement. We currently conduct this non-binding vote to approve executive compensation annually, and, unless the Board modifies its policy on the frequency of holding the non-binding vote to approve executive compensation, the next non-binding vote to approve executive compensation will take place at the 2024 Annual Meeting of Stockholders.
EXECUTIVE COMPENSATIONAs described in detail in the Compensation Discussion and Analysis, our2023 COMPENSATION HIGHLIGHTS
Our executive compensation programs are designed to attract, engage, and incentivize highly skilled and performance-oriented talent, including our NEOs, who are critical to our success. We believe that our compensation program effectively aligns the interests of employees and stockholders and rewards superior financial and operational performance. Please read Compensation Discussionperformance, reflects a continued focus on variable, at-risk compensation paid over the long-term, and Analysis beginning on page 59 and Executive Compensation Tables beginning on page 84 for specific details aboutaligns the interests of our executive compensation programs.employees with those of stockholders. | | | ●MAJORITY OF NEO PAY PERFORMANCE-AND EQUITY-BASED. In 2023, approximately 75% of our NEOs’ compensation was performance-based and at-risk and approximately 66% was equity-based (including Matching RSUs granted through the Bonus Investment Plan). ●EQUITY AWARDS HEAVILY WEIGHTED TO PERFORMANCE. Effective in 2023, we enhanced the weighting of performance-based equity in our annual award mix to 70% PSUs and 30% RSUs, with vesting periods lengthened to 75% on the third anniversary and 25% on the fourth anniversary. ●PROGRAM GROUNDED IN BEST PRACTICES. Our compensation program features strong stock ownership guidelines for executives and directors, long-standing clawback terms, and no tax gross ups, enhanced benefit plans for executives, excessive risk taking, hedging, or pledging. | | ●ANNUAL CASH INCENTIVES REFLECT ACHIEVEMENT ON RIGOROUS PERFORMANCE TARGETS. In 2023, annual cash incentive payouts under our Performance Bonus Plan were based on achievement of ambitious financial performance goals, market share, or risk management excellence, and individual achievement of strategic, ESG, and employee engagement objectives. Payouts to our NEOs were 102% to 107% of targeted amounts. ●PSUs INCLUDE COMPANY-SPECIFIC MEASURES AND TSR, WITH CAP. For 2023, PSUs included performance metrics of three-year Organic Net Sales compound annual growth rate (CAGR) (30%), three-year cumulative Free Cash Flow (30%), and three-year average annual TSR (40%), aligned with our long-term growth targets, with TSR achievement capped at target in the event of a negative TSR result at the end of the performance period. ●ENHANCED STOCK OWNERSHIP GUIDELINES IN 2024. Increased requirements for our CEO to 6x base salary. |
| | | 2024 Proxy Statement | 57 |
PROPOSAL 2. ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATIONWe are asking stockholders to vote to approve, on an advisory basis, the compensation of our NEOs as reported in this Proxy Statement. Your vote is not intended to address any specific item of our compensation, program, but rather to address our overall approach to the compensation of our NEOs. Before voting, we recommend that you read the information regarding our compensation program, policies, and decisions for our NEOs discussed in the Compensation Discussion and Analysis and Executive Compensation Tables that follow. The Board and Compensation Committee believe that our pay-for-performance compensation philosophy has resulted in compensation for our NEOs that closely aligns to our financial results and the other performance factors described in thisthe Compensation Discussion and Analysis. In 2023, stockholders showed strong support of our executive compensation programs, with approximately 97% of votes cast in favor of our say-on-pay proposal at our 2023 Annual Meeting. As such, the Compensation Committee did not make any changes to the executive compensation program for 2023 as a result of the say-on-pay vote. In accordance with Section 14A of the Exchange Act and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at our 2024 Annual Meeting: RESOLVED, that the stockholders of The Kraft Heinz Company approve, on an advisory basis, the compensation paid to Kraft Heinz’s named executive officers, as disclosed in the Company’s Proxy Statement. Statement for the 2024 Annual Meeting of Stockholders, pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the Executive Compensation Tables, and related narrative disclosure. This vote on NEO compensation is advisory and therefore will not be binding on Kraft Heinz, our Compensation Committee, or our Board. However, our Board and Compensation Committee value our stockholders’ opinions and will evaluate the results of this vote. We currently conduct this non-binding vote to approve executive compensation annually, and, unless the Board modifies its policy on the frequency of holding the non -At our 2022binding vote to approve executive compensation, the next non-binding vote to approve executive compensation will take place at the 2025 Annual Meeting of Stockholders, the compensation of our NEOs was approved by approximately 71% of the votes cast. Based on input from and discussions with our stockholders, we believe our stockholders generally support our overall compensation strategy but desire greater transparency in the disclosure about our program and enhancements to certain features of the program. In response to stockholder feedback, effective for 2023, we made changes to our executive compensation program, including to increase the percentage of PSUs in our annual equity award mix and remove stock options, lengthen the vesting periods for our PSUs and RSUs in the annual equity award, add Company-specific financial metrics in addition to TSR to our PSUs, introduce a negative TSR cap to the TSR metric within our PSU awards, and align our CEO’s compensation structure with our other NEOs and improve relative position to peers. We received positive feedback on these changes during our fall 2022 stockholder engagement. We believe the enhancements to our 2023 program structure, including our performance-based compensation, address the concerns expressed with the lower-than-desired level of support received for our executive compensation last year. For additional information on these and other changes effective for 2023, see Stockholders.Corporate Governance and Board Matters—Stockholder Engagement—Actions Taken in Response to Stockholder Feedback—2023 Executive Compensation Changes beginning on page 48 and Compensation Discussion and Analysis—2023 Executive Compensation Changes beginning on page 79. We are asking our stockholders to indicate their support for the compensation of our NEOs as described in this Proxy Statement by voting in favor of the following resolution:
“RESOLVED, that Kraft Heinz’s stockholders approve, on an advisory basis, the compensation paid to Kraft Heinz’s Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders, pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the Executive Compensation Tables, and related narrative discussion.”
Recommendation
 |
| THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF OUR NEO COMPENSATION AS DISCLOSED IN THIS PROXY STATEMENT. |
| | | 2024 Proxy Statement | 58 |
| | | The Board recommends a voteFORthe approval of our NEO compensation as disclosed in this Proxy Statement.
| | |
58|ir.kraftheinzcompany.com
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis Contents
| |
2024 Proxy Statement | 59 |
The Kraft Heinz Company 2023 Proxy Statement|59
Compensation Discussion and Analysis
Our NEOs
Our executive compensation program is designed to complement our strategy and values, attract and engage qualified, world-class talent to lead our business, create sustainable growth, and drive long-term value for our stockholders. This CD&ACompensation Discussion and Analysis outlines our compensation philosophy and program and focuses on our NEOs for our 20222023 fiscal year:
Effective December 30, 2023, the last day of our 2023 fiscal year, Mr. Patricio stepped down as our CEO and became non-executive Chair of the Board and Mr. Oliveira stepped down as Executive Vice President and President, International Markets. Effective December 31, 2023, the first day of our 2024 fiscal year, Mr. Abrams-Rivera became our CEO.
For our 2023 fiscal year, our NEOs were:
* | | | | | | | | | | |
| | | | | |
| CarlosMr. Abrams-Rivera
| | | | Rashida La Lande
| | | | Rafael Oliveira
| |
| served as Executive Vice President and President, North America through August 7, 2023, and as President, Kraft Heinz from August 8, 2023 through December 30, 2023. He became our CEO effective December 31, 2023. For additional information on our 2023 CEO Transition, see Company Overview—Our Business—CEO Transition. For additional information on Mr. Abrams-Rivera’s 2024 CEO compensation, see below under —2024 Compensation Changes—CEO Compensation Changes. |
| ** | | | | Ms. La Lande’s title changed to Executive Vice President Global General Counsel, and Chief SustainabilityLegal and Corporate Affairs Officer effective December 31, 2023. |
| † | | | | Mr. Oliveira stepped down as Executive Vice President and President, International Markets effective December 30, 2023 and served as Advisor to the CEO from December 31, 2023 to March 8, 2024. |
| |
2024 Proxy Statement | | | | | 60 |
* Mr. Basilio stepped down as Global Chief Financial Officer and Andre Maciel became Executive Vice President and
Global Chief Financial Officer effective March 2, 2022.
2022 Company Performance
Financial Highlights
In 2022, we delivered strong results, driven by our ambition to better serve our customers and consumers and lead the future of food. We entered the final stage of our multi-year transformation, to accelerate profitable growth, and continued to choose greatness as we navigated a difficult environment of ongoing inflation and supply chain disruptions. For fiscal year 2022, we reported:
| SALES | | | | INCOME | | | | CASH FLOW | |
| NET SALES | | | | ORGANIC NET SALES* | | | | NET INCOME | | | | ADJUSTED
EBITDA* | | | | NET CASH
PROVIDED BY
OPERATING
ACTIVITIES | | | | FREE CASH
FLOW* | |
| $26.5B
| | | | $26.2B | | | | $2.4B | | | | $6.0B | | | | $2.5B | | | | $1.6B | |
| | | | 1.7% year-
over-year
increase | | | | | | | 9.8% year-
over-year
increase | | | | | | | 131.3% year-
over-year
increase | | | | | | | 5.8% year-
over-year
decrease | | | | | | | 54.0% year-
over-year
decrease | | | | | | | 65.2% year-
over-year
decrease | |
60|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
*
Non-GAAP financial measure. For more information, including reconciliations of our non-GAAP measures to the comparable GAAP measures, see Appendix A to this Proxy Statement.
Business Highlights
We are now several years into our transformation and continuing to advance our strategic plan, including modernizing our marketing and elevating our portfolio. We are striving to provide consumers with solutions that they value. And we continue to set our sights on unlocking efficiencies and reinvesting in the business, both of which make us stronger and help position us well for whatever challenges come our way. In 2022, we:
Company Overview | Voting
Roadmap | Stockholder
Engagement | Our
Board | IMPROVED OUR AGILITYGovernance | Director
Compensation | Beneficial
Ownership | ![[MISSING IMAGE: ic_tickhigh-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_tickhigh-pn.jpg) Rolled out 28 dedicated multi-disciplinary teams, which we call agile pods, to tackle our most important strategic initiatives Introduced ONE Innovation Engine to develop superior products, incorporating real-time feedback from consumers, and bring them to market more quickly than before | |
| Audit
Matters | Stockholder
Proposals | Other
Information | STRENGTHENED OUR ICONIC BRANDS | | | ![[MISSING IMAGE: ic_tickhigh-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_tickhigh-pn.gif) Leveraged our internal agency, The Kitchen, to strengthen relationships with consumers by generating individualized content at scale and driving earned media Renovated iconic brands such as Lunchables and Capri Sun, while furthering our nutrition agenda | |
| | | | OPTIMIZED PRODUCT PORTFOLIO | | | Closed acquisitions and investments aimed at building our global Taste Elevation platform Formed a joint venture with TheNotCompany, Inc. to develop and launch superior plant-based products leveraging their cutting-edge artificial intelligence technology and our brands and scale Executed a SKU rationalization program to create efficiencies and increase portfolio profitability | |
| | | | IMPROVED FINANCIAL FLEXIBILITY | | | Had Net Leverage* of 3.2x for the 12-months ended December 31, 2022, upgraded to investment grade credit status, and received an upgrade in our long-term debt credit rating by Fitch from BBB- to BBB Secured 100% fixed debt with approximately 14-year maturity, reducing exposure to volatile interest rates, as of December 31, 2022 Generated gross efficiencies of approximately $450M | |
The Kraft Heinz Company 2023 Proxy Statement|61
Compensation Discussion and Analysis
| | | | ADVANCED STRATEGIC TRANSFORMATION FOR THE LONG-TERM | | | Brought in talent to fill in the gap for critical skill sets and improved employee engagement versus 2021 Collaborated with retailers to help us co-develop better digital solutions such as demand planning and inventory management Laid foundations for a tech eco-system to create end-to-end capabilities with leading tech companies that accelerate solutions, capture efficiencies, and create a significant competitive advantage | |
* Non-GAAP financial measure. For more information, including reconciliations of our non-GAAP
measures to the comparable GAAP measures, see Appendix A to this Proxy Statement.
2022 Performance and NEO Compensation
2022 was a culmination of the initial phases of our transformation journey to reset our foundation and deploy our new operating model to accelerate profitable growth through operational performance and individual performance by our employees, including our NEOs. These collaborative and focused efforts have led to our strong financial results for 2022. In line with our pay-for-performance strategy and culture of ownership and meritocracy, the compensation delivered to our NEOs for 2022 reflects the design of our compensation package, the ambitious goal setting in our incentive plans, and the achieved performance for the year.
•
Performance Bonus Plan (cash bonus) payouts to our NEOs for our 2022 fiscal year averaged 85% of target.
•
The second tranche of the performance conditions for the PSUs granted on June 1, 2020 were certified in 2022 at 100% achievement.
Compensation Structure and Goals
Compensation Governance Best Practices
| WHAT WE DO | | | What We Do | | | | | | | | | What We DoWHAT WE DO NOT Do | DO |
 | SignificantProactive year-round engagement with stockholders on executive compensation
|  | No excessive risk taking that would threaten the reputation or sustainability of Kraft Heinz |
| | | |
| Strong alignment between pay and performance
| | No excise tax gross ups |
| | | |
| Base pay increases on merit and market alignment
| | No guaranteed salary increases or bonuses |
| | | |
| Rigorous stock ownership requirementsto align executives’ interests with stockholders
| | No single-trigger change in control provisions |
| | | |
| Maintain a robust clawback policy
| | No hedging transactions, short-selling, or transacting in puts, calls, or other derivatives on Kraft Heinz securities |
| | | |
| Use double-triggerdouble-trigger change in controlprovisions
| | No pledging or holding Kraft Heinz securities in a margin account as collateral for a loan |
| | | |
| Compensation Committee engages an independent compensation consultant,, who performs no other work for the Company, to advise on executive compensation matters
| | No non-qualified deferred compensation programs for executives |
| | | |
| Retain independent consultant to perform risk assessmentof executive and broad-based annual compensation programs
| | Proactive year-round No enhanced benefit programs engagement with stockholdersfor executives |
| | | |
| ESG-related KPIs on executive compensation
ESG-related KPIsfor more than 1,500nearly 800 executives and employees
| | |
| | | |
| No excessive risk taking that would threaten the reputation or sustainability of Kraft Heinz
No excise tax gross ups
No guaranteed salary increases or bonuses
No single-trigger change in control provisions
No hedging transactions, short-selling, or transacting in puts, calls, or other derivatives on Kraft Heinz securities
No pledging or holding Kraft Heinz securities in a margin account as collateral for a loan
No non-qualified deferred compensation programs for executives
No enhanced benefit programs for executives
|
| 2024 Proxy Statement | 61 |
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Compensation Discussion and Analysis
Total Rewards Philosophy and Core Principles
ObjectivesOur Total Rewards philosophy is designed to provide a meaningful and flexible spectrum of programs that support our diverse workforce and their families. We aim to grow the best people through meritocracy and pay for performance. Our plansrewards strategies (compensation, benefits, recognition, and wellbeing) aim to help our employees help themselves to LiveWell. Our global LiveWell program focuses on four wellbeing pillars-physical, emotional, financial, and social health and provides specific programs and resources to support our employees and their families within each of these areas. LiveWell represents our total rewards offerings that are designed to be market competitive and data-driven to preserve our high-performance and results oriented culture. The elements of our compensation programs in particular, complement our strategy and Values and enable us to attract and engage highly-skilledhighly skilled talent, meet individual and performance-oriented talent.
family needs, and inspire, celebrate, and engage our people and teams through enhanced interactions in moments that matter in an environment where employees feel productive, trusted and empowered. Our core principles are:
 | | | | PAY FOR
PERFORMANCE | |  | two-thirdsthree-quarters of our executive compensation is at-risk and performance-basedperformance-driven with metrics aligned to our long-term growth strategy. Kraft Heinz performance is evaluated by:1
|
| | (1) | Our performance, including results against short- andshort-and long-term growth targets,
2
as approved by the Compensation Committee |
| | (2) | Total return to our stockholders relative to our peers
| |
| | |  |  CEO 2023* 9% 30% 28% 13% CEO Base Salary PSUs Performance Bonus Plan at Target 20% Matching RSUs RSUs 78% Performance-Based and/or at Risk Other NEOs 2023** 10% 20% Performance Bonus Plan at Target 14% Matching RSUs 37% 71% 19% Base Salary PSUs RSUs Performance-Based and/or at Risk |
| | | Charts illustrate mix of performance-driven, at-risk compensation as a percent of target total direct compensation. We consider the Bonus Investment Plan Matching RSUs performance-driven because the match amount is determined based on achievement under the Performance Bonus Plan and at-risk because they remain subject to vesting and their value is subject to the long-term performance of our common stock. |
| | * | Reflects 2023 compensation for Mr. Patricio. For 2024, Mr. Abrams-Rivera’s compensation as CEO reflects a change in compensation philosophy by the Compensation Committee moving away from front-loaded multi-year equity grants. For additional information on Mr. Abrams-Rivera’s 2024 compensation as our CEO, see below under —2024 Compensation Changes—CEO Compensation Changes. |
| | ** | Equity award values for Mr. Abrams-Rivera reflect the pro-rata 2023 value of his sign-on new hire awards granted in March 2020 and annualized over four years. |
 | ALIGN WITH
STOCKHOLDER
INTERESTS | | | |
| | Approximately two-thirdsthree-quarters of our executive compensation is tied to Kraft Heinz performance. |
| | Our stock ownership guidelines strengthen alignment of our executive officers’ interests with those of our stockholders. | |
 | DRIVE LONG-
TERM
PROFITABLE
GROWTH | | | DRIVE LONG-TERM PROFITABLE GROWTH | | | |
| | We reward and invest in attracting, engaging, and retaining world-class talent with the highest potential to drive sustainable, long-term growth and profitability. | |
 | RECOGNIZE
INDIVIDUAL
PERFORMANCE | | | RECOGNIZE INDIVIDUAL PERFORMANCE | | | |
| | We recognize and reward demonstrated skills while supporting continued development. |
| | We see non-financial performance metrics, such as our ESG targets, as critical to the long-term success of our business and reflective of our external responsibility as global leaders, and we believe they add value for our stockholders and other stakeholders. |
| | | | | | |
| |
| 2024 Proxy Statement | 62 |
Program GoalsYear-Round Executive Compensation-Setting Process
We have a robust annual cycle to plan, review, and Pay for Performance
Ourexecute executive compensation, with changes generally effective on the first day of our fiscal year. Highlights from our 2023 agenda include:JANUARY TO MARCH
| ● | Evaluated and finalized previous year business performance and individual contributions |
| ● | Evaluated performance and future potential of executives in order to make individual compensation decisions |
| ● | Finalized performance measures and targets for performance cycles of 2023 PSU awards and Performance Bonus Plan, aligned with our annual operating plan and long-term strategy |
| ● | Reviewed stock ownership guidelines and NEO compliance |
APRIL TO JUNE
| ● | Annual Meeting of Stockholders |
JULY TO SEPTEMBER
| ● | Reviewed talent, leadership, and culture strategy, and progress against talent engagement goals |
| ● | Discussed stockholder engagement efforts and feedback |
| ● | Reviewed results of say-on-pay vote of stockholders |
OCTOBER TO DECEMBER
| ● | Completed risk assessment of compensation programs |
| ● | Evaluated and set compensation and performance peer groups for the following year |
| ● | Benchmarked compensation programs and pay opportunities versus the compensation and performance peer groups |
| ● | Reviewed and approved Committee advisor and independence assessment |
| ● | Reviewed Committee Charter |
| ● | Reviewed progress against talent, leadership, culture, and DEI&B strategy |
| ● | Reviewed performance measures for inclusion in compensation program design for 2024 |
| |
The Compensation Committee oversees our executive compensation program and plans to align them with our strategy, goals, and stockholder interests. In making 2023 compensation decisions, the Compensation Committee considered a number of factors, including:
 | |  | |  | |  | |  | |  |
| Compensation programs at peer companies | | Kraft Heinz’s performance over the last three years | | Our financial plan for 2020 to 2024, as part of our growth strategy and long-term outlook | | Realized pay from our historical compensation programs | | Methods of aligning executive compensation with stockholder returns | | Individual responsibilities and performance, leadership, years of experience, and long-term growth potential |
Role of Independent Consultant
Since 2022, the Compensation Committee has been designedengaged Meridian Compensation Partners LLC (“Meridian”) as its independent compensation consultant. Meridian is hired by and reports directly to accomplish the following overall goals:
![[MISSING IMAGE: fc_reward-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/fc_reward-pn.jpg)
TheCompensation Committee. Meridian attends meetings and executive sessions of the Committee at which compensation matters are considered and advises and provides guidance and analysis to the Compensation Committee on matters pertaining to executive and non-employee director compensation, including CEO and executive compensation plans and design, executive compensation-related regulatory matters and governance best practices, and competitive market studies. Meridian provides guidance and performs various analyses for the Compensation Committee, including peer group benchmarking and analyses regarding pay and performance alignment, incentive plan performance measures and TSR correlation, and the rigor of performance goals. Meridian does not provide any other services to Kraft Heinz Company 2023 Proxy Statement|63
Compensation Discussion and Analysis
We believe compensation for our executives should be tied to the success of Kraft Heinz to align executives’ interests with the long-term interestsor any of our stockholders. Accordingly, a majorityaffiliates and may not be engaged to provide any other services to us without the approval of our NEOthe Compensation Committee. | |
| 2024 Proxy Statement | 63 |
The Compensation Committee reviews Meridian’s performance periodically and reviews Meridian’s independence under SEC Nasdaq rules for compensation consultants. The Compensation Committee has concluded that Meridian is designedindependent and has no conflicts of interest relating to be “at risk” and dependent on achieving quantitative performance goals over both short- and long-term periods. The following charts showits engagement by the compensation mix for our Chief Executive Officer (“CEO”) and other NEOs, including base salary, annual incentive compensation under the Performance Bonus Plan, and the grant date fair value of equity awards, for 2022.
![[MISSING IMAGE: pc_ceootherneo-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/pc_ceootherneo-pn.jpg)
(1)
Equity award values for Mr. Patricio reflect the pro-rata 2022 value of his sign-on new hire awards granted in August 2019 and annualized over the vesting period of each award (three or four years).
(2)
Equity award values for Mr. Abrams-Rivera reflect the pro-rata 2022 value of his sign-on new hire awards granted in March 2020 and annualized over four years.
Committee.Role of Peer Groups
We continuously review and assess our compensation programs to create alignment with our strategies and philosophy. We believe it is important to understand the compensation programs and practices of companies with which we compete for talent, consumers, and investors. The Compensation Committee uses two peer groups: the compensation peer group is used to benchmark executive compensation and compensation design, and the performance peer group is used to measure our relative performance, including for calculating PSU payouts.
We review the selection criteria and companies in both peer groups regularly. For 2023, the Compensation Committee approved changes to the peer groups indicated below.
| | | | | | | | | | ADDITIONS EFFECTIVE FOR 2023 | | | | |
 | | | | | | | | | | | | | | |
| | Archer-Daniels-Midland Company
Colgate-Palmolive Company | | Kimberly-Clark Corporation The Procter & Gamble Company | | | | | The J. M. Smucker Company* | | | | |
 | | | | | | | | | | | | | |
| Campbell Soup Company
Conagra Brands, Inc. General Mills, Inc. Hormel Foods Corporation | | The J. M. Smucker Company* Kellanova** Mondelēz International, Inc. PepsiCo, Inc. | | The Coca-Cola Company
Tyson Foods, Inc. WK Kellogg Co** | | | Keurig Dr Pepper Inc. The Hershey Company
McCormick & Company, Incorporated | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| * | The J. M. Smucker Company was previously included in the performance peer group and was added to the compensation peer group in 2023. |
| ** | In 2023, Kellogg Company split into two publicly traded companies: Kellanova and WK Kellogg Co. Kellanova will remain in the peer group for 2024 and WK Kellogg Co will be removed. |
COMPENSATION PEER GROUP
The Compensation Committee, in consultation with the compensation consultant, reviews compensation data from the following compensation peer group of companies as a reference point in evaluatingto benchmark and evaluate the compensation forof our NEOs, including our CEO, and benchmarking compensation plan designs. In addition, the Compensation Committee considers individual responsibilities and performance, leadership, years of experience, Kraft Heinz performance, and long-term growth potential in making executive compensation decisions.
| •
Archer-Daniels-Midland Company
•
Campbell Soup Company
•
Colgate-Palmolive Company
•
Conagra Brands, Inc.
| | | •
General Mills, Inc.
•
Hormel Foods Corporation
•
Kellogg Company
•
Kimberly-Clark Corporation
•
Mondelēz International, Inc.
| | | •
PepsiCo, Inc.
•
The Coca-Cola Company
•
The Procter & Gamble Company
•
Tyson Foods, Inc.
| | | | Additions effective for 2023:
•
Keurig Dr Pepper Inc.
•
The Hershey Company
•
The J. M. Smucker Company
•
McCormick & Company, Incorporated
| |
The compensation peer group is based on publicly traded, U.S.-based organizations in the Consumer Staples Industry (under the Global Industry Classification Standard (GICS)) with revenue of approximately half to double Kraft Heinz’s net sales. We consider the organizations in this industry to be peers in competition for talent, consumers, and investors. We routinely review the selection criteria and companies in the compensation peer group. For 2022, the Compensation Committee confirmed all companies met the criteria for selection and did not make any changes to the compensation
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Compensation Discussion and Analysis
peer group. For 2023, the Compensation Committee approved changes to the compensation peer group to add Keurig Dr Pepper Inc, The Hershey Company, The J. M. Smucker Company, and McCormick & Company, Incorporated.
We established the following performance peer group in 2021 with the introduction of our total shareholder return (TSR)TSR performance metric to compare our long-term incentive compensation to the delivery of results relative to the followingperformance peers, which we consider our performance peer group.
| •
Campbell Soup Company
•
Conagra Brands, Inc.
•
General Mills, Inc.
•
Hormel Foods Corporation
| | | •
The J. M. Smucker Company
•
Kellogg Company
•
Mondelēz International, Inc.
•
PepsiCo, Inc.
| | | •
The Coca-Cola Company
•
Tyson Foods, Inc.
| | | | Additions effective for 2023:
•
Keurig Dr Pepper Inc.
•
The Hershey Company
•
McCormick & Company, Incorporated
| |
We selected a subset of 13 Fast-moving Consumer Goods (FMCG) and Consumer Goods (CG) peers from our compensation peer group for the performance peer group. We view these companies in particular,particularly to be impacted by similar external and market factors and to similar degrees as Kraft Heinz.us. We believe measuring our results relative to this performance peer group supports our pay-for-performance philosophy and aligns with stockholder interests. We will review the selection criteria and companies in the performance peer group regularly. For 2022, the
| |
| 2024 Proxy Statement | 64 |
Consideration of Say-On-Pay Vote
The Compensation Committee confirmed all companies metand full Board take the original criteria for selectionoutcome of stockholders’ annual advisory votes on compensation seriously and did not make any changesare focused on continuing to the performance peer group. solicit, understand, and respond to stockholders’ feedback through these annual votes and our stockholder engagement efforts.
Through our ongoing engagement with stockholders, we seek to elicit and consider a broad range of stockholder perspectives regarding our executive compensation program and structure.
For 2023, the Compensation Committee approvedreviewed stockholder feedback, identified key themes across the broad range of stockholder perspectives shared, and implemented changes designed to the performance peer grouprespond to add Keurig Dr Pepper Inc, The Hershey Company, and McCormick & Company, Incorporated.
Oversight and 2022 Compensation Decisions
The Compensation Committee overseeseach. At our 2023 Annual Meeting, stockholders showed strong support of our executive compensation programprograms, with approximately 97% of votes cast in favor of our say-on-pay proposal. During our spring and plansfall 2023 stockholder engagement meetings, stockholders provided positive feedback on the enhancements made. In response to align them with our strategy, goals, and stockholder interests. In making 2022 compensation decisions, the Compensation Committee considered a number of factors, including:
1 Compensationprograms at peercompanies 2 Kraft Heinz’sperformance overthe last threeyears 3 Our financial planfor 2020 to 2024,as part of ourgrowth strategyand long-termoutlook 4 Payouts from ourhistoricalcompensationprograms 5 Methods ofaligning executivecompensationwith stockholderreturns
Taking into account these factors,feedback, for 2023, we took the following actions for our 2022 fiscal year:key compensation actions:| ● | Appointed Ms. Gherson, who brings significant experience in compensation and people management, to the Board and Compensation Committee |
| ● | Engaged Meridian as an independent third-party compensation consultant |
| ● | Enhanced disclosures relating to the structure of our compensation program; our compensation metrics, peer groups, performance targets, and related achievement; and how equity awards are used within our compensation program to support our pay-for-performance philosophy |
| ● | Implemented the following changes to our executive compensation program: |
| WHAT WE HEARD | |  | WHAT WE DID |
| ● Evaluate the weight of performance-based equity in equity mix | |  Increased percentage of PSUs. Changed annual equity award mix to 70% PSUs and 30% RSUs, further enhancing the weight of performance-based equity in our award mix following increases made for 2021. |
| ● Lengthen vesting periods for annual equity awards | |  Lengthened vesting periods. Changed to 75% on the third anniversary and 25% on the fourth anniversary from 100% vesting on third anniversary for annual awards, further enhancing the vesting provisions of our annual equity awards following changes made for 2021. |
| ● Consider Company specific financial performance metric or metrics in addition to TSR for PSUs | | Added Company-specific financial metrics to PSUs. Added three-year Organic Net Sales compound annual growth rate (CAGR) (30%) and three-year cumulative Free Cash Flow (30%) as performance metrics in addition to three-year average annual TSR (40%), to align with our long-term growth targets, further enhancing the performance metrics for our PSUs following the introduction of TSR in 2021. |
| ● Consider negative TSR for PSU awards | | Introduced negative TSR cap. TSR achievement capped at target in the event the Company has a negative TSR result at the end of the performance period. |
| ● Consider aligning CEO pay structure with other NEOs | | Aligned CEO compensation structure. Aligned CEO compensation structure with our other NEOs, including awarding our CEO annual equity awards consistent with our other NEOs and offering the same bonus investment opportunity. CEO target total direct compensation is designed to be in the range of peer median. |
| |
| 2024 Proxy Statement | 65 |
•
reassessed annual Performance Bonus Plan (“PBP”) financial targets to provide an ambitious, yet achievable, plan that aligns with Kraft Heinz’s and stockholders’ interests
•
aligned performance targets for 2022 performance-based equity grants with Kraft Heinz’s total rewards philosophy, long-term strategy, and operating goals
The Kraft Heinz Company2023 Proxy Statement|65
Compensation Discussion and Analysis
2022 Executive Compensation Program
How Kraft Heinz Determines Compensation
We believe that our compensation programs should preserve our culture of pay for performance through ownership, ambition, and meritocracy.
We aim to grow the best people through meritocracy and pay for performance.Our compensation program has been designed to take into consideration fixed elements (base salary, benefits, and limited perquisites) and variable elements (short-term incentives (annual bonus) and long-term incentives (equity awards)), with a view toward linking a significant portion of each NEO’s compensation opportunity to Kraft Heinz’s performance and their individual performance and Kraft Heinz’s performance. Our compensation elements are designed to work together to recognize above medianachieved performance, continue to drive value creation, and align our employees’ interests with those of our stockholders.
When assessing our compensation program and determining the total compensation we offer to our NEOs, we take into consideration the overall rewards opportunity for each individual, including benefits and perquisites, against market position and expected / actual achieved performance relative to our peers. In line with our pay-for-performance philosophy, we generally do not offer enhanced benefits or significant perquisites to our NEOs. While our method of delivering total compensation may vary from our peers, our approach to determining target and actualassessing total compensation opportunity is in line with peer practice. Total cash and total direct compensation potential are designed to reflect above market median achievement only when strong relative performance is achieved, aligning with our performance-based pay philosophy.
Our Performance Bonus Plan (PBP) financial measure maximum opportunity is limited to 120% of target and our PSU maximum opportunity is limited to 150% of target. Our maximum payout opportunity is designed to be below market practice (which peer and broader market practice generally provides for payout up to 200% of target), and to take into consideration the ambitious targets set for the plans.
Our voluntary, annual bonus investment plan (“Bonus Investment Plan”), previously known as the Bonus Swap Program, plays an important role in aligning our employees’ goals with our stockholders, employee retention, and, through the equity match feature for re-invested compensation, tying short-term compensation with our long-term growth and strategy. It also operates as an employee retention tool since participants must hold their purchased shares for the three-year vesting period of the matching shares. Since the investment opportunity is tied to the level of PBP achievement, it alsoparticipation provides the opportunitypotential for top quartile total compensation when top quartile relative performance is achieved.
| |
| 2024 Proxy Statement | 66 |
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For 2022,2023, the primary elements and objectives of our compensation program for our executive officers, including our NEOs, are:
| | Element | | | | | | | Element | | | Performance Metric | | Description | Description | | | Strategy Alignment | |
 PERFORMANCE-BASED AND VARIABLE FIXED Long-Term Short-Term OTHER | FIXED | | | | SHORT-TERM | | | | Base Salary | | | — | | | | | | Ongoing base cash compensation based on the executive officer’s role and responsibilities, individual job performance, experience, and market.
| | | Recruitment and retention
Market competitive
| |
| Benefits and Perquisites | | | — | | | | | | Limited types of non-wage compensation provided in addition to base salary, short-term incentives, and long-term incentives. | | | Market competitive
| |
| VARIABLE | | | | Performance Bonus Plan (PBP) | | | PBP EBITDA
| | | | | | Annual cash incentive with actual cash payouts linked to achievement of key annual Kraft Heinz performance targets and individual performance targets, with equity investment opportunity under our Bonus Investment Plan. | | | Drive top-tier performance
Incentivize and reward performance
With Bonus Investment Plan, tie short-term compensation with our long-term strategy and stockholders’ interests
| |
| LONG-TERMBonus Investment Plan | | — | | PSUsRSUs awarded to match an employee’s investment of 35% of their PBP payout in Kraft Heinz stock in lieu of cash and vest based upon continued employment. Matching RSUs vest 100% on the third anniversary based upon continued employment. | | Recruitment and retention Drive top-tier performance Align with stockholders’ interests Long-term value creation |
| PSUs | | Three-year relative TSR (100%(40%), three-year Organic Net Sales compound annual growth rate (CAGR) (30%), and three-year cumulative Free Cash Flow (30%) | | | | | | Linked to achievement of long-term profitability goals, vest subject to continued employment and the achievement of the performance metric (relative TSR),metrics, and may be awarded through an annual award or performance award. | | | Recruitment and retention
Drive top-tier performance
Align with stockholders’ interests
Long-term value creation
Incentivize achievement of specific performance goals and long-term strategy
Drive long-term profitable growth
| |
| RSUs | | | — | | | | | | Vest 75% on the third anniversary and 25% on the fourth anniversary based upon continued employment and may be awarded through an annual award or performance award, or under our Bonus Investment Plan as Matching RSUs.award. | | | Recruitment and retention
Drive top-tier performance
Align with stockholders’ interests
Long-term value creation
| |
| Stock Options | | | We view stock options to be performance-based as their value is tied to Kraft Heinz performance and our stock price. | | | Generally vest in full after three years based on continued employment and may be awarded through an annual award ora performance award. | | | Recruitment and retention
Drive top-tier performance
Align with stockholders’ interests
Link realized value entirely to stock appreciation
Drive long-term profitable growth |
| Benefits and Perquisites | | — | | Limited types of non-wage compensation provided in addition to base salary, short-term incentives, and long-term incentives. | |  Market competitive |
| |
| 2024 Proxy Statement | 67 |
The2023 NEO Compensation Committee reviews the elements of our compensation program for our NEOs on an annual basis and generally makes changes effective January 1. As part of its review, the Compensation Committee considers market benchmark data, peer practice, scope and responsibility of the NEO’s role, and individual performance.Snapshots
| | | |
MIGUEL
PATRICIO CEO* AND CHAIR OF THE BOARD
As CEO, Mr. Patricio was responsible for managing execution of the Company’s long-term strategy, driving key new business opportunity developments and financial performance, and setting the tone for Company culture, ethics, and compliance. | TARGET |  9% 28% 13% Base Salary Performance Bonus Plan at Target 20% Matching RSUs RSUs 30% PSUs |
| | BASE
SALARY | PERFORMANCE
BONUS PLAN | ANNUAL EQUITY
AWARD |
| ACTUAL | $1,100,000 | $3,367,980 | $3,500,006 PSUs |
| | | | $1,500,019 RSUs |
| | | | | |
CHANGES IN 2023 In connection with the Compensation Committee’s annual review process, and in consultation with the compensation consultant, the Committee completed an analysis of Mr. Patricio’s total direct compensation package and approved an increase in his annual base salary from $1 million to $1.1 million, an annual equity award consistent with our other NEOs, and revised the Bonus Investment opportunity from 50% to 35%, which is the same as other eligible employees, effective January 1, 2023, the first day of our 2023 fiscal year. |
| * | Mr. Patricio stepped down as Chief Executive Officer effective December 30, 2023, the last day of our 2023 fiscal year, and became non-executive Chair of the Board. |
| |
| 2024 Proxy Statement | 68 |
| | | |
ANDRE MACIEL EVP AND GLOBAL CHIEF FINANCIAL OFFICER
Mr. Maciel has primary responsibility for management of our financial condition, capital allocation, system of internal controls, financial reporting, investor relations, acquisitions and divestitures, capital market transactions, and information technology. | TARGET |  11% 22% 16% Base Salary Performance Bonus Plan at Target 15% Matching RSUs RSUs 36% PSUs |
| | BASE
SALARY | PERFORMANCE
BONUS PLAN | ANNUAL EQUITY
AWARD |
| ACTUAL | $725,000 | $1,466,974 | $2,384,410 PSUs |
| | | | $1,021,939 RSUs |
| | | | | |
CHANGES IN 2023 In connection with the Compensation Committee’s annual review process, and in consultation with the compensation consultant and our CEO, the Committee approved an increase in Mr. Maciel’s annual base salary from $650,000 to $725,000 and target award opportunity for the annual cash bonus from 175% to 200%, effective February 19, 2023. In making its decision to increase Mr. Maciel’s base salary and PBP target award opportunity, the Compensation Committee assessed Mr. Maciel’s performance, knowledge, and skills and the breadth and impact his accountabilities and duties as Executive Vice President and Global Chief Financial Officer and considered related market data provided by the Compensation Consultant and management. |
| | | |
CARLOS
ABRAMS-RIVERA PRESIDENT, KRAFT HEINZ*
As President, Kraft Heinz, Mr. Abrams-Rivera was responsible for leading the Company’s U.S. and Canadian operations, driving business growth through consumer-first marketing, innovation, and people development, as well as oversight over all global business functions other than finance and legal. | TARGET |  7% 17% 24% Base Salary Performance Bonus Plan at Target 12% Matching RSUs RSUs 40% PSUs |
| | BASE
SALARY | PERFORMANCE
BONUS PLAN | ANNUAL EQUITY
AWARD |
| ACTUAL | $800,000 | $2,257,373 | $3,150,067 PSUs |
| | | | $1,350,029 RSUs |
| | | | | |
CHANGES IN 2023 In connection with Mr. Abrams-Rivera becoming President, Kraft Heinz in August 2023, Mr. Abrams-Rivera was entitled to receive a special bonus payable in March 2024, equal to 20% of his 2023 actual bonus. His compensation otherwise remained unchanged. |
| * | Mr. Abrams-Rivera, who was previously our Executive Vice President and President, North America, became President, Kraft Heinz effective August 8, 2023 and Chief Executive Officer effective December 31, 2023, the first day of our 2024 fiscal year. |
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| 2024 Proxy Statement | 69 |
| | | |
RASHIDA LA
LANDE EVP, GLOBAL GENERAL COUNSEL, AND CHIEF SUSTAINABILITY AND CORPORATE AFFAIRS OFFICER
Ms. La Lande leads the Company’s legal function, including corporate governance and securities, transactions, regulatory, intellectual property, litigation, labor and employment, sustainability and ESG oversight, government and corporate affairs. | TARGET |  13% 20% 16% Base Salary Performance Bonus Plan at Target 14% Matching RSUs RSUs 37% PSUs |
| | BASE
SALARY | PERFORMANCE
BONUS PLAN | ANNUAL EQUITY
AWARD |
| ACTUAL | $700,000 | $1,122,660 | $1,890,048 PSUs |
| | | | $810,010 RSUs |
| | | | | |
CHANGES IN 2023 No compensation changes for Ms. La Lande were made for 2023. |
| | |
RAFAEL OLIVEIRA EVP AND PRESIDENT, INTERNATIONAL MARKETS* As EVP and President, International Markets, Mr. Oliveira led the Company’s International operations, including growth, sustainability, and innovation. | TARGET |  10% 24% 15% Base Salary Performance Bonus Plan at Target 17% Matching RSUs RSUs 34% PSUs |
| BASE
SALARY | PERFORMANCE
BONUS PLAN | ANNUAL EQUITY
AWARD |
| ACTUAL | $721,250** | $1,667,099 | $2,344,742PSUs |
| | | $1,004,928 RSUs |
| | | | |
CHANGES IN 2023 No compensation changes for Mr. Oliveira were made for 2023. |
| * | Mr. Oliveira stepped down as Executive Vice President and President, International Markets effective December 30, 2023, the last day of our 2023 fiscal year, and served as Advisor to the CEO from December 31, 2023 to March 8, 2024. |
| ** | Mr. Oliveira is located in the U.K. and paid in British pounds (£). The amount shown is expressed in U.S. dollars using an exchange rate, which is the 12-month average exchange rate for the calendar year rounded to the nearest £0.01. The exchange rate used is $1 to £0.80 for 2023. |
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| 2024 Proxy Statement | 70 |
Notable Changes for 2023
We believe the strong link between pay and individual and Company performance is consistent with our strategy and culture of meritocracy and an important part of Kraft Heinz’s long-term success and driving value for our stockholders. Our long-term incentive plans reflect our commitment to our compensation program objectives and provide opportunities for our employees to build greater long-term wealth that can grow as our Company grows.
The Kraft Heinz Company 2023 Proxy Statement|67
Compensation Discussion and Analysis
At our 2022 Annual Meeting of Stockholders, the compensation of our NEOs was approved by approximately 71% of the votes cast. Based on input from and discussions with our stockholders, we believe our stockholders support our overall compensation strategy but desire greater transparency in the disclosure about our program and enhancements to certain features of the program.
In response to stockholder feedback, effective in 2023, the Compensation Committee approved changes to our compensation programs, taking into consideration feedback received through stockholder engagement, market practices, and alignment with our company culture and long-term strategy. These changes include:
![[MISSING IMAGE: fc_notable-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/fc_notable-4c.jpg)
Increasedpercentage of PSUs Changed annual equity award mix to 70% PSUsand 30% RSUs Added Company-specificfinancial metrics to PSUs Added three-year Organic Net Sales compoundannual growth rate (CAGR) (30%) and three-yearcumulative Free Cash Flow (30%) as performancemetrics, in addition to three-year average annualTSR (40%), to align with our long-term growth targets Lengthenedvesting periods Changed to 75% on the third anniversary and25% on the fourth anniversary from 100%vesting on third anniversary for annual awards Introduced negative TSR cap Capped TSR at target in the event the Companyhas a negative TSR at the end of the 3-yearperformance period Aligned CEO compensation Aligned CEO compensation structure with our other NEOs and improved relative position to peers,including awarding our CEO annual equity awards consistent with our other NEOs and offering the samebonus investment opportunity (35%, changed from 25% or 50% in prior years)
For additional information on these changes and our stockholder engagement program, see Corporate Governance and Board Matters—Stockholder Engagement beginning on page 43. For additional information on other changes to our compensation program for 2023, see Compensation Discussion and Analysis—2023 Executive Compensation Changes beginning on page 79.CEO Compensation
For 2022, there were no changes to Mr. Patricio’s compensation package from 2019. Mr. Patricio’s compensation remained heavily weighted toward performance-based elements, reflecting the Compensation Committee’s belief that the majority of Mr. Patricio’s compensation should be at risk and tied to his individual performance and Kraft Heinz’s performance. For 2022, Mr. Patricio’s base salary remained $1,000,000 and his bonus target award opportunity remained at 300% of his base salary with a maximum opportunity limited to 120% of target achievement of the financial measure.
In light of Mr. Patricio’s personal commitment and as an additional material inducement to his agreement to be employed by Kraft Heinz, in August 2019, Mr. Patricio received three one-time equity compensation awards. For additional information regarding Mr. Patricio’s personal commitment and these awards, see the Compensation Discussion and Analysis section of our 2019 proxy statement. Mr. Patricio was not eligible to receive additional equity awards until
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Compensation Discussion and Analysis
2023, other than matching RSUs that may be granted to Mr. Patricio through his participation in our Bonus Investment Plan. For additional information regarding our Bonus Investment Plan, see below under Bonus Investment Plan beginning on page 74.Effective in 2023, the Compensation Committee approved the changes for Mr. Patricio’s compensation package and structure as detailed under 2023 Executive Compensation Changes beginning on page 79.Base Salary
Base salary is the principal “fixed” element of our executive compensation. The Compensation Committee believes that it is important that each NEO receives a market-competitive base salary that provides an appropriate balance between fixed and “at risk” compensation. The initial base salary of each NEO is established in connection with their hiring. In establishing base salaries, we review and consider market-based survey and peer proxy data for informational purposes and generally target market median.
The annualized base salary for each NEO as of December 31 was:
| NEO | 2022 Base Salary
($) | 2023 Base Salary
($) | Change |
| Mr. Patricio | 1,000,000 | 1,100,000 | 10.00% |
| Mr. Maciel(a) | 650,000 | 725,000 | 11.60% |
| Mr. Abrams-Rivera | 800,000 | 800,000 | — |
| Ms. La Lande | 700,000 | 700,000 | — |
| Mr. Oliveira(b) | 678,824 | 721,250 | — |
| (a) | In making its decision to increase Mr. Maciel’s base salary, the Compensation Committee assessed Mr. Maciel’s performance, knowledge, and skills and the breadth and impact his accountabilities and his duties as Executive Vice President and Global Chief Financial Officer and considered related market data provided by the Compensation Consultant and management. |
| (b) | Mr. Oliveira is located in the U.K. and paid in British pounds (£). The amounts shown is expressed in U.S. dollars using an exchange rate, which is the 12-month average exchange rate for the calendar year rounded to the nearest £0.01. The exchange rates used are $1 to £0.85 for 2022 and $1 to £0.80 for 2023. Mr. Oliveira’s base salary was not changed for 2023. |
The Compensation Committee has sole responsibility for the review of Mr. Patricio’sour CEO’s compensation. Mr. PatricioOur CEO has primary responsibility for the review of the compensation of his direct reports, including the other NEOs, and provides salary recommendations to the Compensation Committee.
2022 BASE SALARY CHANGES
Effective March 1, 2022, Mr. Basilio stepped down as Global Chief Financial Officer and transitioned into a Strategic Advisor role through August 31, 2022, for which he received no additional compensation. On the same date, Mr. Maciel was promoted to Executive Vice President and Global Chief Financial Officer. In connection with his promotion, Mr. Maciel’s annual base salary was increased from $500,000 to $650,000.
In connection with the Compensation Committee’s annual compensation review process, in December 2021, the Committee approved an increase in Ms. La Lande’s annual base salary from $650,000 to $700,000 effective December 27, 2021, the first business day of our 2022 fiscal year. In making its decision to increase Ms. La Lande’s base salary, the Compensation Committee assessed Ms. La Lande’s performance and her duties as Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer and considered related market data. No other base salary changes for our NEOs were made for 2022.
The annualized base salary for each NEO as of December 31 was:
| | NEO | | | 2021 Base Salary
($) | | | 2022 Base Salary
($) | |
| | Mr. Patricio | | | | | 1,000,000 | | | | | | 1,000,000 | | |
| | Mr. Maciel | | | | | 500,000 | | | | | | 650,000 | | |
| | Mr. Basilio | | | | | 750,000 | | | | | | —(a) | | |
| | Mr. Abrams-Rivera | | | | | 800,000 | | | | | | 800,000 | | |
| | Ms. La Lande | | | | | 650,000 | | | | | | 700,000 | | |
| | Mr. Oliveira | | | | | 790,411(b) | | | | | | 678,824(b) | | |
(a)
Mr. Basilio stepped down as Chief Financial Officer effective March 2, 2022 and served as Strategic Advisor to the Company from March 2, 2022 to August 31, 2022. He did not receive compensation for this role.
(b)
Mr. Oliveira is located in the U.K. and paid in British pounds (£). The amount shown is expressed in U.S. dollars using an exchange rate, which is the 12-month average exchange rate for the calendar year rounded to the nearest £0.01. The exchange rates used are $1 to £0.73 for 2021 and $1 to £0.85 for 2022.
We believe that the base salary review process serves our pay-for-performance philosophy, because base pay increases are not provided to all NEOs on an annual basis. Increases are performance-based and dependent on the NEO’s success and achievement in their role or for market parity. For additional information regarding target annual incentive awards, see below under
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| 2024 Proxy Statement | 71 |
Annual Cash-Based Performance Bonus Plan (PBP)—Target Award Opportunity on page 70.
The Kraft Heinz Company 2023 Proxy Statement|69
Compensation Discussion and Analysis
Annual Cash-Based Performance Bonus Plan (PBP)
The PBP is designed to motivate and reward employees who contribute positively toward our near-term business strategy and achieve their annual individual performance objectives. The formula for determining a PBP participant’s annual bonus payout is:
BASE SALARY
FOR PBP PAYOUT X TARGET AWARD OPPORTUNITY X COMPANY FINANCIAL MULTIPLIER X INDIVIDUAL PERFORMANCE SCORE = PBP PAYOUT EARNEDBase Salary
For purposes of PBP payout, we calculate base salary by averaging an employee’s annual salary as of the 15th day of each month. For any new hires or changes in salary during the fiscal year, we prorate the base salary amount based upon the duration of the individual’s service or timing of changes. For additional information regarding our NEOs’ base salaries, see above under
Base Salary beginning on page 69. TARGET AWARD OPPORTUNITY
Target Award Opportunity
We establish a target award opportunity for each NEO prior to the beginning of each year, or upon their hire or establishment of increased responsibilities or changes in role, set as a percentage of the NEO’s annual base salary. When establishing the target award opportunity, we consider the overall design of the PBP plan compared to peers, including the ambitious nature of the performance targets set versus the strategic plan, and the maximum payout opportunity available under the plan, and the balance of the compensation components in the NEO’s total compensation.
2022 Target Award Opportunity Changes
In connection with Mr. Maciel’s promotiondirect compensation relative to Executive Vice President and Global Chief Financial Officer on March 2, 2022, his annual PBP target award opportunity was increased from 150% to 175%.
In connection with the Compensation Committee’s annual compensation review process, in December 2021, the Committee approved an increase in Mr. Abrams-Rivera’s PBP target award opportunity from 200% to 225%, effective December 27, 2021, the first business day of our 2022 fiscal year. In making its decision to increase Mr. Abrams-Rivera’s PBP target award opportunity, the Compensation Committee assessed Mr. Abrams-Rivera’s performance and his increase in duties as Executive Vice President and President, North America and considered related market data. No other PBP target award opportunities for our NEOs were made for 2022.
market.The target award opportunity for each of our NEOs as of December 31 was:
| | NEO | | | 2021
Target Award
Opportunity | | | 2022
Target Award
Opportunity | |
| | Mr. Patricio | | | | | 300% | | | | | | 300% | | |
| | Mr. Maciel | | | | | 150% | | | | | | 175% | | |
| | Mr. Basilio | | | | | 250% | | | | | | — (a) | | |
| | Mr. Abrams-Rivera | | | | | 200% | | | | | | 225% | | |
| | Ms. La Lande | | | | | 150% | | | | | | 150% | | |
| | Mr. Oliveira | | | | | 225% | | | | | | 225% | | |
(a)
Mr. Basilio stepped down| NEO | 2022 Target Award
Opportunity | 2023 Target Award
Opportunity | Change |
| Mr. Patricio | 300% | 300% | — |
| Mr. Maciel(a) | 175% | 200% | 14.30% |
| Mr. Abrams-Rivera | 225% | 225% | — |
| Ms. La Lande | 150% | 150% | — |
| Mr. Oliveira | 225% | 225% | — |
| (a) | In making its decision to increase Mr. Maciel’s PBP target award opportunity, the Compensation Committee assessed Mr. Maciel’s performance, knowledge, and skills and the breadth and impact his accountabilities and his duties as Executive Vice President and Global Chief Financial Officer and considered related market data provided by the Compensation Consultant and management. |
Company Financial Officer effective March 2, 2022 and served as Strategic Advisor to the Company from March 2, 2022 to August 31, 2022. He was not eligible for the 2022 PBP.
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Compensation Discussion and Analysis
COMPANY FINANCIAL MULTIPLIER
MultiplierThe financial multiplier is a percentage multiplier based upon achievement of the threshold, target, or maximum level of the applicable global, zone, or business unit financial performance metric for each executive, including our NEOs. For our 20222023 fiscal year, the Compensation Committee chose a single metric, PBP EBITDA, for our global financial performance as well as each zone and business unit. In establishing our 2022 Annual Operating Plan (“AOP”), the Compensation Committee considered uncertainties relating to supply chain constraints, economic indicators, and the COVID-19 pandemic and their potential positive and negative impacts on our industry and business. The financial performance multiplier ranges from 50% at threshold, to 100% at target, and 120% at maximum based on achievement against the established financial performance targets. Our maximum payout opportunity of 120% is designed to be below market practice (which market practice generally provides for payout up to 200% of target).
We believe that PBP EBITDA reflects key aspects of our performance, including revenue growth, expense control, and efficient use of capital, while maintaining simplicity in the design and execution of our annual cash-based performance bonus plan. The Compensation Committee believes PBP EBITDA appropriately reflects our focus on successful management of our core operations—growing our business and driving sustained increases in profit—in turn, aligning the interests of our NEOs with those of our stockholders. PBP EBITDA is defined below under
Financial Measure on page 72. | |
| 2024 Proxy Statement | 72 |
Global Performance: Patricio, Maciel, La LandeFor 2023, the Compensation Committee approved the financial multiplier for performance achieved as follows:
| | GLOBAL | | NORTH AMERICA ZONE | | INTERNATIONAL ZONE |
| | Patricio, Maciel, La Lande | | Abrams-Rivera | | Oliveira |
| | PBP EBITDA
($ millions) | Financial
Multiplier | | PBP EBITDA
($ millions) | Financial
Multiplier | | PBP EBITDA
($ millions) | Financial
Multiplier |
| | | (%) | | | (%) | | | (%) |
| Threshold | 5,610 | 50% | | 5,018 | 50% | | 938 | 50% |
| Target | 6,036 | 100% | | 5,378 | 100% | | 1,053 | 100% |
| Maximum | 6,221 | 120% | | 5,518 | 120% | | 1,098 | 120% |
| ACHIEVED | 6,289 | 120% | | 5,600 | 120% | | 1,077 | 110% |
For employees evaluated based upon our global performance, which includes Mr. Patricio, Mr. Maciel, and Ms. La Lande, the 20222023 financial multiplier was calculated based upon our global PBP EBITDA.
| | | | | Global PBP EBITDA
($ millions) | | | Financial Multiplier
(%) | |
| | Threshold | | | | | 5,468 | | | | | | 50 | | |
| | Target | | | | | 6,075 | | | | | | 100 | | |
| | Maximum | | | | | 6,209 | | | | | | 120 | | |
| | Achieved | | | | | 6,031 | | | | | | 96.4 | | |
Based on performance achieved against targets, the Compensation Committee approved a financial multiplier with respect to global performance of 96.4% for 2022.
North America Zone Performance: Abrams-Rivera
For employees evaluated based upon our North America Zone or International Zone performance, which includes Mr. Abrams-Rivera, the total 20222023 financial multiplier was calculated based upon a weighted average of 30% of the global PBP EBITDA financial multiplier (as provided above) and 70% of the North America Zoneapplicable zone PBP EBITDA financial multiplier.
| | | | | North America Zone PBP EBITDA
($ millions) | | | Financial Multiplier
(%) | |
| | Threshold | | | | | 4,876 | | | | | | 50 | | |
| | Target | | | | | 5,336 | | | | | | 100 | | |
| | Maximum | | | | | 5,431 | | | | | | 120 | | |
| | Achieved | | | | | 5,303 | | | | | | 96.4 | | |
Based on performance achieved against targets, the Compensation Committee approved athe financial multiplier with respect to global, North America Zone, performance of 96.4% for 2022, for a total weighted average financial multiplier of 96.4%.
International Zone Performance: Oliveira
For employees evaluated based upon ourand International Zone performance which includes Mr. Oliveira, the total 2022 financial multiplier was calculated based upon a weighted average of 30% of the global PBP EBITDA financial multiplier (as provided above) and 70% of the International Zone PBP EBITDA financial multiplier.
The Kraft Heinz Company 2023 Proxy Statement|71
Compensation Discussion and Analysis
| | | | | International Zone PBP EBITDA
(in $ millions) | | | Financial Multiplier
(%) | |
| | Threshold | | | | | 898 | | | | | | 50 | | |
| | Target | | | | | 1,045 | | | | | | 100 | | |
| | Maximum | | | | | 1,094 | | | | | | 120 | | |
| | Achieved | | | | | 1,034 | | | | | | 96.1 | | |
Based on performance achieved against targets, the Compensation Committee approved a financial multiplier with respect to International Zone performance of 96.0% for 2022, for a total weighted average financial multiplier of 96.1%.
FINANCIAL MEASURE
achieved.Financial Measure
PBP EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/
(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, we exclude, when they occur, the impacts of foreign currency fluctuations by maintaining the exchange rates established in our AOP,Annual Operating Plan (“AOP”), restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, equity award compensation expense (excluding restructuring activities), higher or lower incentive compensation compared with what we established in our AOP, the impacts of divestiture-related license income, (e.g., income related to the sale of licenses in connection with the sale of certain assets in our global cheese business),and certain non-ordinary course legal and regulatory matters, and, due to the highly inflationary environment, the impacts of our Venezuelan and Turkish subsidiaries.matters. We may adjust the threshold, target, and maximum metrics to incorporate the impact of acquisitions and divestitures. We did not adjust the threshold, target, and maximum for 2022. INDIVIDUAL PERFORMANCE SCORE
2023.Individual Performance Score
The foundation of each employee’s individual performance score is our Management by Objectives (“MBO”) process. At the beginning of each year, the Compensation Committee establishes a series of individual performance goals, or MBOs, that are based upon our corporate strategy, which are then cascaded throughout the organization. First, the Compensation Committee establishes MBOs for our CEO. Then, in consultation with the Compensation Committee, the CEO establishes corresponding MBOs for each of his direct reports, including the NEOs, which are further cascaded down throughout the organization. This cascading process enables us to drive initiatives by aligning individual employee goals throughout the organization.
Each NEO has an MBO comprised of multiple goals or objectives. For each goal, there are one or more Key Performance Indicators (“KPIs”)key performance indicators (KPIs), which are the quantitative or qualitative metrics used to track achievement of the goal. The individual performance multiplier ranges from 10% at threshold, to 100% at target, and 110% at maximum based on the level of achievement against the established individual performance targets.
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| 2024 Proxy Statement | 73 |
For 2022,2023, the MBO goals for each of the NEOs and the overall performance ascribed by the Compensation Committee for each NEO based on their performance were:
| | NEO | | | MBO Goals | | | Key Performance Indicators (“KPIs”) | | | Weight
(%) | | | Individual
Performance Score | |
| | Mr. Patricio | | | •
Deliver Kraft Heinz
Financial Results | | | o
Achievement in global Organic Net Sales | | | | | 25 | | | | 85% | |
| | o
Achievement in global market share | | | | | 15 | | |
| | •
Deliver New Projects to Improve the Business | | | o
Progress on digital revolution | | | | | 15 | | |
| | o
Progress on global portfolio transformation | | | | | 15 | | |
| | o
Progress on global ESG goals | | | | | 15 | | |
| | •
Attract and Retain Kraft Heinz Talent | | | o
Improvement in global engagement score and reduction in global turnover | | | | | 15 | | |
| |
| 2024 Proxy Statement | 74 |
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Compensation Discussion and Analysis
| | NEO | | | MBO Goals | | | Key Performance Indicators (“KPIs”) | | | Weight
(%) | | | Individual
Performance Score | |
| | Mr. Maciel | | | •
Deliver Kraft Heinz Financial Results | | | o
Achievement in global cash conversion | | | | | 20 | | | | 89% | |
| | o
Achievement in global PBP adjusted net income | | | | | 20 | | |
| | •
Increase Kraft Heinz’s Financial Efficiency | | | o
Progress on portfolio and capital structure objectives | | | | | 25 | | |
| | o
Progress on finance transformation | | | | | 10 | | |
| | o
Achievement of compliance and internal controls objectives | | | | | 10 | | |
| | •
Attract and Retain Kraft Heinz Talent | | | o
Improvement in global finance engagement score and reduction in global finance turnover | | | | | 15 | | |
| | Mr. Abrams-Rivera | | | •
Deliver Kraft Heinz North America (NA) Zone Financial Results | | | o
Achievement in North America Zone Organic Net Sales | | | | | 20 | | | | 88% | |
| | o
Achievement in North America Zone market share | | | | | 15 | | |
| | o
Achievement on service levels in case fill rate | | | | | 10 | | |
| | •
Deliver New Projects to Improve the Business | | | o
Progress on North America Zone digital revolution | | | | | 20 | | |
| | o
Progress on North America Zone portfolio transformation | | | | | 20 | | |
| | •
Attract and Retain Kraft Heinz Talent | | | o
Improvement in North America Zone engagement score and reduction in North America Zone turnover | | | | | 15 | | |
| | Ms. La Lande | | | •
Deliver Effective and Efficient Legal Services | | | o
Success on key legal matters | | | | | 25 | | | | 90% | |
| | •
Protect and Promote the Company and its Brands | | | o
Progress on global portfolio transformation | | | | | 25 | | |
| | o o
Progress on global ESG goals | | | | | 20 | | |
| | o
Achievement of ethics and compliance targets | | | | | 20 | | |
| | •
Attract and Retain Kraft Heinz Talent | | | o
Improvement in global legal engagement score and reduction in global legal turnover | | | | | 10 | | |
| | Mr. Oliveira | | | •
Deliver Kraft Heinz International Zone Financial Results | | | o
Achievement in International Zone Organic Net Sales | | | | | 25 | | | | 91% | |
| | o
Progress on annual operating plan for key emerging market countries | | | | | 25 | | |
| | o
Progress on portfolio transformation | | | | | 15 | | |
| | o
Achievement in market share | | | | | 10 | | |
| | •
Deliver New Projects to Improve the Business | | | o
Progress on International Zone ESG goals | | | | | 10 | | |
| | •
Attract and Retain Kraft Heinz Talent | | | o
Improvement in International Zone engagement score and reduction in International Zone turnover | | | | | 15 | | |
The Kraft Heinz Company 2023 Proxy Statement|73
Compensation Discussion and Analysis
Payout EarnedIn our 20222023 fiscal year, the Compensation Committee approved the following PBP payouts earned for each of our NEOs:
| | Base Salary for | Target Award | Financial | Individual | PBP Payout |
| | PBP Calculation | Opportunity | Multiplier | Performance Score | Earned(a) |
| Name | ($) | (%) | (%) | (%) | ($) |
| Mr. Patricio | 1,100,000 | 300 | 120 | 85 | 3,367,980 |
| Mr. Maciel(b) | 712,500 | 196.2 | 120 | 87 | 1,466,974 |
| Mr. Abrams-Rivera | 800,000 | 225 | 120 | 87 | 2,257,373 |
| Ms. La Lande | 700,000 | 150 | 120 | 89 | 1,122,660 |
| Mr. Oliveira(c) | 721,250 | 225 | 113.20 | 91 | 1,667,099 |
| (a) | Payout calculations are interpolated between minimum, target, and maximum. |
| (b) | Mr. Maciel’s base salary and target award opportunity for PBP calculation are prorated due to the timing of his compensation changes in February 2023. |
| (c) | Mr. Oliveira’s base salary and cash bonus are paid in British pounds (£). The figures in this table reflect the U.S. dollar equivalent of the base salary and PBP payout earned for Mr. Oliveira at the time PBP payout amounts are approved by the Compensation Committee in February 2024 using an exchange rate of $1 to £0.80. |
| | Name | | | Base Salary for
PBP
Calculation
($) | | | Target Award
Opportunity
(%) | | | Financial
Multiplier
(%) | | | Individual
Performance
Score
(%) | | | PBP Payout
Earned
($) | |
| | Mr. Patricio | | | | | 1,000,000 | | | | | | 300 | | | | | | 96.4 | | | | | | 85 | | | | | | 2,466,720 | | |
| | Mr. Maciel | | | | | 650,000 | | | | | | 175 | | | | | | 96.4 | | | | | | 89 | | | | | | 921,848 | | |
| | Mr. Basilio(a) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | Mr. Abrams-Rivera | | | | | 800,000 | | | | | | 225 | | | | | | 96.4 | | | | | | 88 | | | | | | 1,530,952 | | |
| | Ms. La Lande | | | | | 700,000 | | | | | | 150 | | | | | | 96.4 | | | | | | 90 | | | | | | 910,602 | | |
| | Mr. Oliveira(b) | | | | | 678,824 | | | | | | 225 | | | | | | 96.1 | | | | | | 91 | | | | | | 1,340,213 | | |
(a)
Mr. Basilio stepped down as Chief Financial Officer effective March 2, 2022 and served as Strategic Advisor to the Company from March 2, 2022 to August 31, 2022. He was not eligible for the 2022 PBP.
(b)
Mr. Oliveira’s base salary and cash bonus are paid in British pounds (£). The figures in this table reflect the U.S. dollar equivalent of the base salary and PBP payout earned for Mr. Oliveira at the time PBP payout amounts are approved by the Compensation Committee in January 2023 using an exchange rate of $1 to £0.85.
Bonus Investment Plan
As part of our commitment to fostering an ownership mentality and to align employees’ interests with stockholders’ interests and drive stockholder value, we offer certain employees, including our NEOs, the opportunity to participate in our voluntary, annual Bonus Investment Plan. Our Bonus Investment Plan previously known as the Bonus Swap Program, plays an important role in aligning our employees’ goals with our stockholders, employee retention and, through the equity match feature for re-invested compensation, tying short-term compensation with our long-term growth and strategy. It also operates as an employee retention tool since participants must hold their purchased shares for the three-year vesting period of the matching shares. Since the investment opportunity is tied to the level of PBP achievement, it alsoparticipation provides the opportunitypotential for top quartile total compensation when top quartile relative performance is achieved.
This unique program is designed to drive performance and aligns with our belief in meritocracy and commitment to offering competitive compensation. Under the plan, eligible employees can invest a portion of their earned annual PBP bonus toward the purchase of shares of Company stock (“Investment Shares”). The Company will then grant a matching contribution in the form of Restricted Stock Units (“Matching RSUs”) based on a contribution formula. The Matching RSUs will cliff vest three years from the grant date, subject to the employee’s continued employment with Kraft Heinz and the retention of the Investment Shares as described below.
To participate in the plan, eligible employees can elect to invest 35% of their calculated net bonus, which is the employee’s PBP payout earned less an amount based on a normalized tax rate (based on country of residence), to purchase Investment Shares. The Matching RSUs are calculated as a multiple based on a level of 35% of the gross PBP payout earned. In 2022, Mr. Patricio could elect an election percentage of 25% or 50%. Mr. Patricio’s investment options are grandfathered to historic investment levels based on his offer terms. Mr. Patricio’s participation in the plan increases his total investment in Kraft Heinz and reinforces Kraft Heinz’s compensation program objectives and philosophy, further aligning Mr. Patricio’s interests with those of our stockholders and driving long-term growth.
Effective in 2023, the Compensation Committee approved a change in Mr. Patricio’s bonus investment option to align it with that of other employees (35%), as detailed under 2023 Executive Compensation Changes beginning on page 79.74|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
The number of Investment Shares purchased is calculated as the product of the participant’s calculated net bonus and the participant’s election percentage, divided by the closing price of our stock on the plan effective date:
CALCULATED NET BONUS X 35% = NUMBER OF INVESTMENT SHARES CLOSING STOCK PRICE
| |
| 2024 Proxy Statement | 75 |
The number of Matching RSUs a participant receives is calculated as the product of the participant’s gross PBP payout earned, the participant’s election percentage, and a multiplier that is associated with the participant’s level in the organization, divided by the closing price of our stock on the plan effective date:
PBP PAYOUT EARNED X 35% X MULTIPLIER ASSOCIATED WITH LEVEL = NUMBER OF MATCHING RSUs CLOSING STOCK PRICE
Matching RSUs are eligible to receive dividends that are accrued at the dividend payment date in the form of DEUs. When dividends are paid on our common stock, we accrue the value of the dividend and issue a number of DEUs equal to the accrued dividend value. DEUs are subject to the same terms as the original grant of the underlying Matching RSUs.
If a participant sells or otherwise transfers Investment Shares before the related Matching RSUs are vested, he, she, or they will immediately forfeit:
•
if 50% or less of the Investment Shares are sold or transferred, an amount of Matching RSUs and accrued DEUs equal to two times the percentage of Investment Shares sold or transferred
•
if more than 50% of the Investment Shares are sold or transferred, 100% of the Matching RSUs and accrued DEUs
| ● | if 50% or less of the Investment Shares are sold or transferred, an amount of Matching RSUs and accrued DEUs equal to two times the percentage of Investment Shares sold or transferred |
| ● | if more than 50% of the Investment Shares are sold or transferred, 100% of the Matching RSUs and accrued DEUs |
In 2022,2023, our eligible NEOs participated in the Bonus Investment Plan as follows, based on 20212022 PBP payouts earned:
| | Name | | | Investment Amount
($) | | | Investment Shares
(#) | | | Matching RSUs
(#) | |
| | Mr. Patricio | | | | | 862,564 | | | | | | 22,300 | | | | | | 74,332 | | |
| | Mr. Maciel | | | | | 153,676 | | | | | | 3,973 | | | | | | 13,241 | | |
| | Mr. Abrams-Rivera | | | | | 275,634 | | | | | | 7,126 | | | | | | 23,750 | | |
| | Ms. La Lande | | | | | 218,813 | | | | | | 5,657 | | | | | | 18,855 | | |
| | Mr. Oliveira | | | | | 327,929 | | | | | | 8,478 | | | | | | 30,828 | | |
| | Investment Amount | Investment Shares | Matching RSUs |
| Name | ($) | (#) | (#) |
| Mr. Patricio | 518,011 | 13,490 | 44,966 |
| Mr. Maciel | 193,588 | 5,042 | 16,804 |
| Mr. Abrams-Rivera | 321,500 | 8,373 | 27,907 |
| Ms. La Lande | 191,226 | 4,980 | 16,599 |
| Mr. Oliveira | 264,698 | 6,894 | 25,066 |
The Compensation Committee believes that the Bonus Investment Plan as a whole, and the forfeitability of the Matching RSUs, in particular, fosters employee retention and strongly motivates eligible employees to hold Kraft Heinz common stock for the long-term, further emphasizing a long-term view in creating stockholder value.
| |
| 2024 Proxy Statement | 76 |
The Kraft Heinz Company 2023 Proxy Statement|75
Compensation Discussion and Analysis
Annual Equity Awards
Our long-term incentive programs, including annual equity awards and the Bonus Investment Plan, play an important role in our total reward and recognition strategy enabling our pay-for-performance philosophy and our ownership and meritocracy culture. The Compensation Committee believes that PSUs RSUs, and stock optionsRSUs incentivize long-term performance and provide additional alignment between the NEOs interests and those of our stockholders, while also providing a significant retention incentive, because the underlying value of the awards is tied to our stock price and the performance of the Company.
In March 2022,2023, in order to further retain, engage, and motivate top talent and align the interests of management with those of our stockholders, we issued PSUs RSUs, and stock optionsRSUs to employees at the Director level and above, including alleach of our NEOs except Mr. PatricioNEOs. The baseline equity award was granted using a mix of 70% PSUs and Mr. Basilio.
30% RSUs, which vest 75% on the third anniversary and 25% on the fourth anniversary of the grant date. To define the size of the individual annual equity award we take into consideration individual performance, market data, and the baseline equity award, which is determined by the NEOs job level and their annual base salary. We also take into consideration the Bonus Investment Plan Matching RSU opportunity, assuming that the NEO will elect to participate in the program.
In 2022,| | PSU | RSU | |
| | Award Target | Award Target | Total Annual Award Target |
| Name | ($) | ($) | ($) |
| Mr. Patricio | 3,500,000 | 1,500,000 | 5,000,000 |
| Mr. Maciel | 2,384,000 | 1,022,000 | 3,406,000 |
| Mr. Abrams-Rivera | 3,150,000 | 1,350,000 | 4,500,000 |
| Ms. La Lande | 1,890,000 | 810,000 | 2,700,000 |
| Mr. Oliveira | 2,345,000 | 1,005,000 | 3,350,000 |
| | | | |
PSUs
The number of PSUs that will vest will be based on a performance period from January 1, 2023, the baseline equity award was granted using a mixfirst day of 40% PSUs, 40% RSUs, and 20% stock options, and will cliff vest onour 2023 fiscal year, through December 27, 2025, the third anniversarylast day of our 2025 fiscal year, for achievement against the below metrics:
| Weight | Measure | Payout |
| 40% | 3-year average annual Company Total Shareholder Return (TSR)
performance relative to the performance peer group | Threshold: 25%
Target: 100%
Maximum: 150% |
| 30% | 3-year Organic Net Sales compound annual growth rate (CAGR) | Threshold: 25%
Target: 100%
Maximum: 150% |
| 30% | 3-year Cumulative Free Cash Flow | Threshold: 25%
Target: 100%
Maximum: 150% |
Our maximum performance opportunity of 150% is designed to be below market practice (which market practice generally provides for payout up to 200% of target) in recognition of the grant date.
notional values of the PSU award and the ambitious target set above market median. | |
| 2024 Proxy Statement | 77 |
The complementary element withinCompany will compare achieved TSR over that period versus the annual equity award,companies identified in the 2023 performance peer group described above using the following calculation. Achievement is calculated on a linear basis. We calculate TSR using average stock price and dividends paid in (i) the last three fiscal months at end of the assessed period and (ii) three fiscal months in the period immediately preceding the beginning of assessed period.
ENDING TSR PRICE - STARTING TSR PRICE + REINVESTED DIVIDENDS = TSR STARTING TSR PRICE
The achieved performance and the number of PSUs earned is based upon the Company’s relative rank among the peer companies at the end of the performance award, was granted using a mix of 60% PSUs and 40% RSUs. The PSUs and period.
| Relative Rank | 80th Percentile | 60th Percentile(a) | 25th Percentile | Below 25th Percentile |
| Percent of Granted PSUs Earned | 150% | 100% | 25% | 0% |
| (a) | TSR achievement capped at target in the event of a negative TSR result at the end of the performance period. |
RSUs will vest 75% on the third anniversary of the grant date and 25% on the fourth anniversary of the grant date.
In general, the cumulative mix of the annual equity award for our NEOs is 52% PSUs, 40% RSUs, and 8% stock options.
RSUs are eligible to receive dividends that are accrued at the dividend payment date in the form of DEUs. When dividends are paid on our common stock, we accrue the value of the dividend and issue a number of DEUs equal to the accrued dividend value. DEUs are subject to the same terms as the original grant of the underlying RSUs.
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| 2024 Proxy Statement | 78 |
The number of PSUs that will vest will be based on achievement of a relative TSR target over a three-year performance period from January 1, 2022 through December 31, 2024. The Company will compare achieved TSR over that period versus the 10 companies identified in the 2022 performance peer group using the below calculation. Beginning TSR price is the average closing stock price for the 30 calendar days from the start of the performance period. Ending TSR price is the average closing stock price for the last 30 calendar days ending on the measurement date.
![[MISSING IMAGE: tb_beginning-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/tb_beginning-pn.jpg)
The achieved performance and the number of PSUs earned is based upon the Company’s relative rank among the peer companies at the end of the performance period and is not subject to interpolation within or between quartiles. Based on achievement against the established performance target, recipients are eligible to receive 50% of the granted PSUs at threshold, 100% of the granted PSUs at target, and 150% of the granted PSUs at maximum. Our maximum performance opportunity of 150% is designed to be below market practice (which market practice generally provides for payout up to 200% of target) in recognition of the notional values of the PSU award and the ambitious target set above market median.
| | Relative Rank | | | Top
Quartile | | | Third
Quartile | | | Second
Quartile | | | Bottom
Quartile | |
| | Percent of Granted PSUs Earned | | | | | 150% | | | | | | 100% | | | | | | 50% | | | | | | 0% | | |
76|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
We established the following performance peer group in 2021 with the introduction of our TSR performance metric to compare our long-term incentive compensation to the delivery of results relative to the following peers, which we consider our performance peer group.| | Name | | | PSU
Award Target
($) | | | RSU
Award
($) | | | Stock Option
Award (notional)
($) | | | Total Annual
Award Target
($) | |
| | Mr. Patricio | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | Mr. Maciel | | | | | 1,400,000 | | | | | | 1,000,000 | | | | | | 100,000 | | | | | | 2,500,000 | | |
| | Mr. Basilio | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | Mr. Abrams-Rivera | | | | | 2,800,000 | | | | | | 2,000,000 | | | | | | 200,000 | | | | | | 5,000,000 | | |
| | Ms. La Lande | | | | | 1,780,000 | | | | | | 1,280,000 | | | | | | 140,000 | | | | | | 3,200,000 | | |
| | Mr. Oliveira | | | | | 1,892,000 | | | | | | 1,392,000 | | | | | | 196,000 | | | | | | 3,480.000 | | |
Additional information about the annual equity award is provided in Executive Compensation Tables—Grants of Plan-Based Awards on page 86 and Executive Compensation Tables—Outstanding Equity Awards at Fiscal Year End beginning on page 88.20202021 PSU Performance Conditions Certified
The second performance period for the PSUs granted on June 1, 2020 (the “2020 PSUs”) ended with achievement of 100% as follows:
| | Portion of
Award | | | Performance Period | | | Performance
Indicator | | | Target | | | Actual | | | Achievement Score | |
| | By Indicator | | | Total | |
| | 50% | | | July 2021 to June 2022 | | | 80% PBP EBITDA | | | $5.878 billion | | | $5.915 billion | | | 100% | | | 100% | |
| | July 2021 to June 2022 | | | 20% cash conversion | | | 70.0% | | | 73.8% | | | 100% | |
In December 2020, the Compensation Committee established a performance indicator of 80% PBP EBITDA and 20% cash conversion for the second performance period of July 2021 to June 2022 for 50% of the 2020 PSUs.
PERFORMANCE CONDITIONS CERTIFIEDAs described in our 2022 Proxy Statement, the Compensation Committee established threshold, target, and maximum achievement levels that accounted for variations in industry consumption year over year in the United States, Canada, and United Kingdom related to the COVID-19 pandemic and the impact of divestitures, including the sale of certain assets in our global nuts business and global cheese businesses in 2021. For the second performance period under the 2020 PSUs, the PBP EBITDA target of $5.878 billion reflects an adjustment for the impact of divestitures in our 2021 and 2022 fiscal years and an increase based upon industry consumption levels in our 2021 fiscal year.
In August 2022, the Compensation Committee certified that the performance conditions of the 2020 PSUs had been met at 100% for the second performance period. The 2020 PSUs earned from the second performance period vest 50% on June 1, 2023 and 50% on June 1, 2024, subject to continued service through the applicable dates.
The Kraft Heinz Company 2023 Proxy Statement|77
Compensation Discussion and Analysis
2021 and 2022 PSU Performance Status
As described under Compensation Discussion and Analysis—2022 Executive Compensation Program—Annual Equity Awards beginning on page 76,Statements, the number of PSUs earned under the grants made on March 1, 2021 and March 1, 2022 will be(the “2021 PSUs”) were based on achievement of a relative TSR target over a three-year performance period. The Company will comparecompared achieved TSR over the applicable performance period versus the 10 companies identified in the performance peer group. In March 2024, the Compensation Committee certified that the performance conditions the 2021 PSUs had been met as follows. The level2021 annual PSUs earned vested 100% on March 1, 2024, and the 2021 merit PSUs earned vested 75% on March 1, 2024, and will vest 25% on March 1, 2025, subject to continued service through such date.| Performance Indicator | Target | Achieved | PSUs Earned |
| TSR relative rank versus 2021 performance peer group | Third Quartile | Third Quartile | 100% |
2022 AND 2023 PSU PERFORMANCE STATUS
As described in our 2023 Proxy Statement, the number of PSUs earned under the grants made on March 1, 2022 (the “2022 PSUs”) will be based on achievement of a relative TSR target (100%) over a three-year performance period. The Company will compare achieved TSR over the performance period versus the 10 companies identified in the performance peer group.
As described above, the number of PSUs earned under the grants made on March 1, 2023 (the “2023 PSUs”) will be based on achievement of relative TSR (40%), Organic Net Sales CAGR (30%), and Cumulative Free Cash Flow (30%) targets over a three-year performance period. The Company will compare achieved TSR over the performance period versus the 13 companies identified in the performance peer group.
The levels of TSR performance for each award using the average stock price for the thirty daysawards, calculated based upon an ending date of December 30, 2023, were:
Relative Rank Percent PSUs earned Top Quartile 150% Third Quartile 100% Second Quartile 50% Bottom Quartile 0% 2022 PSUs Performance Period: January 2022 - December 2024 KHC Relative Rank Percent PSUs earned 80th Percentile 150% 60th Percentile 100% 25th Percentile 25% Below 25th Percentile 0% 2023 PSUs Performance Period: January 2023 - December 2025 KHC
The Kellogg Company has been a part of the beginning ofTSR performance peer group since 2021. In 2023, Kellogg Company split into two publicly traded companies: Kellanova and WK Kellogg Co. In connection with the applicable performance period and the average stock price for the thirty days ending on December, 31, 2022 was:
![[MISSING IMAGE: tb_performancestatus-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/tb_performancestatus-pn.jpg)
Relative RankPercent of Granted PSUs Earned TopQuartile150% ThirdQuartile100% SecondQuartile50% BottomQuartile0% 2021 PSUsPerformance Period:January 2021 – December 2023 2022 PSUsPerformance Period:January 2022 – December 2024 60th 50th
78|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
2023 Executive Compensation Changes
2023 Compensation Program Changes in Response to Stockholder Feedback
Effective for 2023,split, the Compensation Committee approved the following changestreatment for the current and any future TSR performance assessment related to our compensation program in response to stockholder feedback:
PSUs as follows:● | Feedback Received 2021, 2022, and 2023 awards: We will maintain the original start price calculation based on Kellogg Company and determine the end price based on a combined index of Kellanova and WK Kellogg Co stock, according to the terms of the split (4:1).![[MISSING IMAGE: ic_arrowright-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_arrowright-bw.jpg) Action Taken | |
● | Evaluate the weight of performance-based equity in equity mix ![[MISSING IMAGE: ic_arrowright-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_arrowright-bw.gif) Increased percentage of PSUsFuture awards: We plan to only include Kellanova. |
| |
2024 Proxy Statement | Changed annual equity award mix to 70% PSUs and 30% RSUs
o
Further enhancing the weight of performance-based equity in our award mix following increases made for 2021, which increased our award mix from 100% RSUs (for annual award) and 50% PSUs and 50% RSUs (for performance award)
| |
| Lengthen vesting periods for annual equity awards Lengthened vesting periods | |
| Changed to 75% on the third anniversary and 25% on the fourth anniversary from 100% vesting on third anniversary for annual awards
o
Further enhancing the vesting provisions of our annual equity awards following changes made for 2021, which lengthened vesting periods from 50% on the second anniversary and 50% on the third anniversary for annual awards
| |
| Consider Company-specific metric in addition to TSR Added Company-specific financial metrics to PSUs | |
| Added three-year Organic Net Sales compound annual growth rate (CAGR) (30%) and three-year cumulative Free Cash Flow (30%) as performance metrics, in addition to three-year average annual TSR (40%), to align with our long-term growth targets
o
Further enhancing the performance metrics for our PSUs following changes made for 2021, which replaced PBP EBITDA and cash conversion metrics with TSR
| |
| Consider negative TSR for PSU awards Introduced negative TSR cap | |
| Capped TSR at target in the event the Company has a negative TSR at the end of the 3-year performance period
o
Further enhancing the TSR metric added to PSU awards for 2021
| |
| Consider aligning CEO pay structure with other NEOs Aligned CEO compensation structure | |
| Aligned CEO compensation structure with our other NEOs and improved relative position to peers, including awarding our CEO annual equity awards consistent with our other NEOs and offering same bonus investment opportunity (35%, changed from 25% or 50% in prior years) | 79 |
2023 Compensation Changes for the CEO
The Compensation Committee, in consultation with the compensation consultant, completed an analysis of Mr. Patricio’s total direct compensation package and approved the following changes effective January 1, 2023, the first day of our 2023 fiscal year:
| | Element | | | 2022 | | | 2023 | |
| | Base Salary | | | $1,000,000 | | | $1,100,000 | |
| | PBP Target Award Opportunity | | | 300% | | | 300% | |
| | Bonus Investment Plan Match | | | 50% match
2x multiplier | | | 35% match
2x multiplier | |
| | Annual Equity Award Target | | | —(a) | | | $5,000,000 | |
| | Total Compensation(b) | | | | | | $11,710,000 | |
(a)
Mr. Patricio received new hire equity awards in 2019 and was not eligible to receive additional equity awards, including annual equity awards, until 2023, with the exception of matching RSUs that may be granted to him through his participation in our Bonus Investment Plan.
(b)
Total Compensation assumes Mr. Patricio participates in the Bonus Investment Plan.
The Kraft Heinz Company 2023 Proxy Statement|79
Compensation Discussion and Analysis
In making changes to our CEO compensation package, the Compensation Committee also approved a change in Mr. Patricio’s bonus investment option to better align his compensation package with other executives. Effective for the 2023 Bonus Investment Plan cycle, based on his fiscal year 2022 PBP payout earned, Mr. Patricio will have the same opportunity as other eligible employees to invest 35% of his calculated net bonus toward the purchase of Investment Shares. Matching RSUs for Mr. Patricio will be calculated using the same multiple as the other NEOs on 35% of the gross PBP payout earned.
2023 Compensation Changes for the Other NEOs
In connection with the Compensation Committee’s annual compensation review process, in February 2023, the Committee approved an increase in Mr. Maciel’s annual base salary from $650,000 to $725,000 and target award opportunity for the annual cash bonus from 175% to 200%, effective February 19, 2023. In making its decision to increase Mr. Maciel’s base salary and PBP target award opportunity, the Compensation Committee assessed Mr. Maciel’s performance and his duties as Executive Vice President and Global Chief Financial Officer and considered related market data provided by the Compensation Consultant and management.
No other compensation changes for our NEOs were made for 2023.
Additional 2023 Program Changes
The Compensation Committee also approved the following changes to our compensation programs taking into consideration market practices and alignment with our long-term strategy:
| | |
| Introduced two financial metrics to MBOs | |
| Introduced two Company-wide financial metrics to MBO goals for our NEOs and employees within the annual Performance Bonus Plan: market share performance and PBP adjusted gross profit margin (other than control functions)
o
Designed to simplify MBOs and allow for more collaboration, alignment, efficiency, and the ability to lean into agile ways of working to support the Company’s strategic plan and long-term growth.
| |
| Increased PSU TSR Target | |
| Increased PSU TSR target from 50th percentile to 60th percentile achievement to realize 100% of target payout
o
Further enhancing the TSR metric added to PSU awards for 2021
o
Further alignment with our ambitious goal setting and pay-for-performance philosophy
| |
| Added linear interpolation for PSU performance metrics | |
| Introduced linear interpolation for performance between threshold, target, and maximum achievement levels of the TSR, Organic Net Sales, and Free Cash Flow performance metrics in our PSUs
o
Designed to further align our PSU award with market and reduce risk within the plan by providing for a broader performance opportunity.
| |
| Added four companies to our compensation peer group | |
| Added Keurig Dr Pepper Inc., The Hershey Company, The J. M. Smucker Company, and McCormick & Company to our compensation peer group for 2023
o
Designed to better align compensation peer group size to market and include companies that meet the peer group selection criteria of revenue, talent, consumer, and investors.
| |
| Added three companies to our performance peer group | |
| Added Keurig Dr Pepper Inc., The Hershey Company, and McCormick & Company to our performance peer group for 2023
o
Designed to better represent our performance peer group with respect to the additional financial performance metrics added to the PSU award.
| |
| Updated Name to Bonus Investment Plan | |
| Updated the name of the Bonus Swap Program to Bonus Investment Plan
o
Designed to better reflect the intent and opportunity of the program.
| |
80|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
Benefits and Perquisites
In addition to base salary, our PBP, and long-term incentive equity grants, we provide certain benefit programs to our NEOs, including retirement plan contributions, health and welfare insurance benefits, and certain other limited perquisite benefits.
We maintain defined contribution retirement plans to allow employees to save for retirement in a tax-efficient manner. Our eligibility guidelines and contribution levels are the same for all employees, including the NEOs. For 2022,2023, none of our NEOs participated in any defined benefit pension plans, non-qualified deferred compensation plans, or supplemental retirement or executive savings plans.
We also provide health and welfare insurance benefits to employees, including our NEOs, which include life, disability, and health insurance benefit plans. The eligibility guidelines and rates for these plans, and our contribution levels, do not favor our NEOs or other members of senior management over our other employees. In general, we do not offer enhanced benefits or significant perquisites to our NEOs. However, from time to time, we provide limited perquisite benefits, which include, for example, limited tax advisory services, immigration benefits, and reimbursement of certain housing and relocation expenses for business reasons.
2024 Compensation Changes
CEO Compensation Changes
As described above, effective December 31, 2023, the first day of our 2024 fiscal year, Mr. Abrams-Rivera became our CEO. In structuring Mr. Abrams-Rivera’s CEO compensation, the Compensation Committee took into consideration feedback received from stockholders regarding Mr. Patricio’s CEO compensation when he joined the Company in 2019. Among other things, Mr. Abrams-Rivera did not receive any front-loaded equity awards, special enhanced equity grants, or other special incentives related to his elevation to CEO.
The Compensation Committee, in consultation with the compensation consultant, completed an analysis of Mr. Abrams-Rivera’s total direct compensation package and approved the following for 2024. Mr. Abrams-Rivera’s target total compensation is designed to be in the range of peer median:
| Element | 2024 |
| Base Salary | $1,100,000 |
| PBP Target Award Opportunity | 300% |
| Bonus Investment Plan Match | 35% match
2x multiplier |
| Target Equity Award Opportunity | $5,625,000 |
| TARGET TOTAL COMPENSATION(a) | $12,335,000 |
| (a) | Target Total Compensation assumes Mr. Abrams-Rivera participates in the Bonus Investment Plan. |
| |
| 2024 Proxy Statement | 80 |
For additional information regarding perquisite benefitsAdditional 2024 Program Changes
We continue to evolve our performance management and Performance Bonus Plan approach to drive profitable growth by creating a stronger link to enterprise value creation and emphasizing greater collaboration, including through the following changes effective for our NEOs, see 2024 fiscal year:
| ● | Define Company financial multiplier to better align with market practice and create enhanced transparency and real-time visibility to KPIs. |
| ● | Increase weight of total Company performance for Executive Leadership Team to drive progress against our long-term strategies and deliver enterprise value. |
| ● | Increase weight of total Company performance for individuals within our geographic zones to drive progress against our long-term strategies and reinforce collaboration. |
| ► | Weighted average of three measures: PBP Adjusted Operating Income (60%), PBP Organic Net Sales (30%), and PBP Free Cash Flow Conversion (10%). |
| ► | Global performance increased to 100% from 30%, with zone performance removed. |
| ► | Global performance increased to 40% from 30%, with zone performance decreased from 70% to 60%. |
ExecutiveOther Compensation Tables—Summary Compensation Table on page 84.Policies and Practices
Officer Stock Ownership Guidelines
To strengthen alignment of our NEOs’ interests with those of our stockholders, our stock ownership guidelines require our NEOs to hold shares of our common stock in an amount equal to a specified multiple of the NEO’s annual base salary, as follows:
 | Role
 | | | Minimum Ownership
| | | Compliance Period
|  |
| CEO | | Role | •Minimum Ownership | | Compliance Period |
| CEO | lllll ••••l | 6x BASE SALARY | | 5x Base Salary
| | | 5 years from appointment to a
|
| Other NEOs | lll | 3x BASE SALARY | position subject to the
| |
| Other NEOs | | | ••• | | | 3x Base Salary
| |
NEOs have five years from the date of their appointment to a position subject to the guidelines to meet the stock ownership requirement. All of our current NEOs have met their ownership requirements. RSUs, DEUs accrued on RSUs (including Matching RSUs), stock equivalents in savings plans or deferred compensation plans, and shares held in a trust for the benefit of immediate family members count toward satisfying this ownership requirement. Unearned PSUs and unexercised stock options do not count toward satisfying this ownership requirement. Our CEO stock ownership guidelines increased from five times base salary in 2023 to six times base salary beginning in 2024. For more details on the stock ownership of our NEOs, see
Beneficial Ownership of Kraft Heinz Stock—Directors and Officers beginning on page 56.
Change in Control Severance Plan Effective in 2023
Effective January 1, 2023, the Board approved the adoption of The Kraft Heinz Company Change in Control Severance Plan (the “CIC Plan”) to better align the Company’s benefits plans to be more consistent with peers and market practice.
Under the CIC Plan, executive officers, including the CEO, and certain other senior-level employees who experience a qualifying termination in connection with a change in control, as defined under the CIC Plan, in the three months prior to, or the 24 months following, a change in control will be eligible to receive severance payments and benefits as follows:
| ● | Severance pay equal to two times the sum of annual base salary and target PBP payout for the CEO and one-and-a-half times the sum of annual base salary and target PBP payout for the other executive officers and certain other senior-level employees; |
| ● | PBP payout for the current year at target and prorated for service; |
| |
| 2024 Proxy Statement | 81 |
Severance pay equal to two times the sum of annual base salary and target PBP payout for the CEO and one-and-a-half times the sum of annual base salary and target PBP payout for the other executive officers and certain other senior-level employees;
The Kraft Heinz Company 2023 Proxy Statement|81
| ● | Health and welfare benefits continued for 24 months following the qualifying termination for the CEO and 18 months following the qualifying termination for our other executive officers and certain other senior-level employees, as defined by the CIC Plan; |
| ● | Outplacement services to assist covered employees with their transition to new employment; and |
| ● | Vesting (including acceleration of vesting) of outstanding equity awards in accordance with the applicable award agreement and plan. |
Change in control is defined under the CIC Plan as (i) any change in beneficial ownership of more than 50% of the combined voting power of the Company’s outstanding stock is acquired by a person or company, directly or indirectly, (ii) as result of a merger or consolidation, (iii) a change in the majority of the Board over a defined period, or (iv) sale or transfer of substantially all assets, or complete liquidation of the company.
In order to receive severance payments and benefits under the CIC Plan, recipients must agree to a non-revocable release of claims and continued compliance with restrictive covenants including non-competition and non-solicitation covenantsobligations that run for a number of months following termination of employment equal to the number of months used in the calculation of severance pay.
Clawback Anti-Hedging, and Anti-Pledging Policies
PolicyWe maintain a clawback policy that applies to our employees (including our NEOs and other executive officers). UnderEffective October 2, 2023, the clawback policy was updated to include mandatory recoupment of excess incentive-based compensation received by a covered executive (including the NEOs) on or after October 2, 2023 in the event of a restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement under federal securities laws, as required by Nasdaq listing standards implementing Exchange Act Rule 10D-1. In addition, under the policy, in certain circumstances, including misconduct, stock options, PSUs, RSUs (including Matching RSUs), payments under the PBP and similar short-term incentive bonus plans, and any proceeds or other benefits an NEO may receive may be subject to forfeiture and/or repayment to us at the discretion of the Compensation Committee or to the extent required by applicable laws or rules. Further, if an NEO receives any amount in excess of what he, she, or they should have received under the terms of any award for any reason (including without limitation by reason of a financial restatement, mistake in calculations, or administrative error), all as determined by the Compensation Committee, then such NEO may be required to promptly repay any such excess amount to us, at the discretion of the Compensation Committee. The Compensation Committee is in the process of evaluating our clawback policy in light of the final clawback rules adopted by the SEC in 2022 and will timely implement appropriate changes to the policy once Nasdaq promulgates its final rules.
Our Insider Trading Policy also limits the timing and types of transactions in Kraft Heinz securities by our employees (including our NEOs and other executive officers). Among other restrictions, the policy prohibits holding Kraft Heinz securities in a margin account or pledging Kraft Heinz securities as collateral for a loan, as well as short-selling Kraft Heinz securities, transacting in puts, calls, or other derivatives on Kraft Heinz securities, or hedging transactions on Kraft Heinz securities.
Impact of Tax and Accounting Policies
When determining total direct compensation packages, the Compensation Committee considers all factors that may have an impact on our financial performance, including tax and accounting rules and regulations under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Tax Code”). Section 162(m) of the Tax Code generally limits our ability to deduct compensation paid to “covered employees” (as(as defined in the Tax Code) to the extent such compensation exceeds $1 million to such employee in any fiscal year.
year
Role of Independent Consultant
The Compensation Committee has engaged Meridian Compensation Partners LLC (Meridian) as its independent external compensation consultant. When making compensation decisions, the Compensation Committee considers the guidance and analysis from Meridian. For additional information, see Board Committees and Membership—Human Capital and Compensation Committee—Compensation Consultant to the Committee beginning on page 51.82|ir.kraftheinzcompany.com
Compensation Discussion and Analysis
Human Capital and Compensation Committee Report
The Human Capital and Compensation Committee (“Compensation Committee”) oversees our compensation programs on behalf of the Board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. In reliance on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in our Proxy Statement to be filed with the SEC in connection with our Annual Meeting and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2022,30, 2023, which was filed with the SEC on February 16, 2023.
| HUMAN CAPITAL AND COMPENSATION COMMITTEE | | |
| |  |  |  |  |  |
| | Timothy Kenesey
Chair | Diane Gherson | Elio Leoni Sceti | James Park | John C. Pope |
| |
| 2024 Proxy Statement | 82 |
HUMAN CAPITAL AND
COMPENSATION COMMITTEE
Timothy Kenesey, Chair
Diane Gherson
Elio Leoni Sceti
James Park
John C. Pope
The Kraft Heinz Company 2023 Proxy Statement|83
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
| | Name and Principal Position | | | Year | | | Salary
($) | | | Bonus
($) | | | Stock
Awards(1)
($) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation(2)
($) | | | Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($) | | | All Other
Compensation(3)
($) | | | Total
Compensation
($) | |
| | Miguel Patricio
Chief Executive Officer | | | | | 2022 | | | | | | 1,000,000 | | | | | | — | | | | | | 2,875,162 | | | | | | — | | | | | | 2,466,720 | | | | | | — | | | | | | 756,364 | | | | | | 7,098,246 | | |
| | | | 2021 | | | | | | 1,000,000 | | | | | | — | | | | | �� | 3,743,976 | | | | | | — | | | | | | 2,875,193 | | | | | | — | | | | | | 986,430 | | | | | | 8,605,599 | | |
| | | | 2020 | | | | | | 1,000,000 | | | | | | — | | | | | | 360,783 | | | | | | — | | | | | | 3,744,000 | | | | | | — | | | | | | 1,035,348 | | | | | | 6,140,131 | | |
| | Andre Maciel
Executive Vice President and
Global Chief Financial Officer | | | | | 2022 | | | | | | 621,124 | | | | | | — | | | | | | 3,325,720 | | | | | | 16,714 | | | | | | 921,848 | | | | | | — | | | | | | 345,449 | | | | | | 5,230,855 | | |
| | Paulo Basilio(4)
Former Executive Vice President and Global Chief Financial Officer | | | | | 2022 | | | | | | 132,692 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 290,936 | | | | | | 423,628 | | |
| | | | 2021 | | | | | | 750,000 | | | | | | — | | | | | | 2,778,450 | | | | | | 33,673 | | | | | | 1,582,917 | | | | | | — | | | | | | 583,944 | | | | | | 5,728,984 | | |
| | | | 2020 | | | | | | 750,000 | | | | | | 750,000 | | | | | | 2,107,510 | | | | | | — | | | | | | 2,165,625 | | | | | | — | | | | | | 622,817 | | | | | | 6,395,952 | | |
| | Carlos Abrams-Rivera
Executive Vice President and
President, North America | | | | | 2022 | | | | | | 800,000 | | | | | | — | | | | | | 6,545,766 | | | | | | 33,422 | | | | | | 1,530,952 | | | | | | — | | | | | | 677,209 | | | | | | 9,587,349 | | |
| | | | 2021 | | | | | | 800,000 | | | | | | — | | | | | | 5,600,717 | | | | | | 35,917 | | | | | | 1,312,407 | | | | | | — | | | | | | 616,217 | | | | | | 8,365,258 | | |
| | | | 2020 | | | | | | 723,077 | | | | | | 1,000,000 | | | | | | 10,326,872 | | | | | | 382,151 | | | | | | 2,165,680 | | | | | | — | | | | | | 427,331 | | | | | | 15,025,111 | | |
| | Rashida La Lande
Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer | | | | | 2022 | | | | | | 700,000 | | | | | | — | | | | | | 4,316,584 | | | | | | 23,398 | | | | | | 910,602 | | | | | | — | | | | | | 406,234 | | | | | | 6,356,818 | | |
| | | | 2021 | | | | | | 650,000 | | | | | | — | | | | | | 1,876,533 | | | | | | 23,343 | | | | | | 1,041,920 | | | | | | — | | | | | | 396,782 | | | | | | 3,988,578 | | |
| | | | 2020 | | | | | | 650,000 | | | | | | 650,000 | | | | | | 2,612,592 | | | | | | — | | | | | | 1,146,600 | | | | | | — | | | | | | 444,630 | | | | | | 5,503,822 | | |
| | Rafael Oliveira
Executive Vice President and
President, International
Markets(4) | | | | | 2022 | | | | | | 678,824 | | | | | | — | | | | | | 3,772,982 | | | | | | 32,757 | | | | | | 1,340,213 | | | | | | — | | | | | | 624,477 | | | | | | 6,449,253 | | |
| | | | 2021 | | | | | | 790,411 | | | | | | — | | | | | | 3,722,360 | | | | | | 34,239 | | | | | | 1,742,725 | | | | | | — | | | | | | 665,752 | | | | | | 6,955,487 | | |
| | | | 2020 | | | | | | 734,572 | | | | | | 587,516 | | | | | | 3,473,873 | | | | | | — | | | | | | 1,989,892 | | | | | | — | | | | | | 556,372 | | | | | | 7,342,225 | | |
Name and
Principal Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards(1)(2)
($) | | Option
Awards(1)
($) | | Non-Equity
Incentive Plan
Compensation(3)
($) | | Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($) | | All Other
Compensation(5)
($) | | Total
Compensation
($) |
Miguel Patricio
Chief Executive Officer | | 2023 | | 1,100,000 | | — | | 6,264,792 | | — | | 3,367,980 | | — | | 626,478 | | 11,359,250 |
| | 2022 | | 1,000,000 | | — | | 2,875,162 | | — | | 2,466,720 | | — | | 756,364 | | 7,098,246 |
| | 2021 | | 1,000,000 | | — | | 3,743,976 | | — | | 2,875,193 | | — | | 986,430 | | 8,605,599 |
Andre Maciel
Executive Vice President and Global Chief Financial Officer | | 2023 | | 713,462 | | — | | 3,736,930 | | — | | 1,466,974 | | — | | 363,103 | | 6,280,469 |
| | 2022 | | 621,124 | | — | | 3,325,720 | | 16,714 | | 921,848 | | — | | 345,449 | | 5,230,855 |
| | | | | | | | | | | | | | | | | | |
Carlos Abrams-Rivera
President, Kraft Heinz | | 2023 | | 800,000 | | — | | 5,155,982 | | — | | 2,257,373(4) | | — | | 488,026 | | 8,701,381 |
| | 2022 | | 800,000 | | — | | 6,545,766 | | 33,422 | | 1,530,952 | | — | | 677,209 | | 9,587,349 |
| | 2021 | | 800,000 | | — | | 5,600,717 | | 35,917 | | 1,312,407 | | — | | 616,217 | | 8,365,258 |
Rashida La Lande
Executive Vice President,
Global General Counsel, and Chief Sustainability and Corporate Affairs Officer | | 2023 | | 700,000 | | — | | 3,088,012 | | — | | 1,122,660 | | — | | 268,596 | | 5,179,268 |
| | 2022 | | 700,000 | | — | | 4,316,584 | | 23,398 | | 910,602 | | — | | 406,234 | | 6,356,818 |
| | 2021 | | 650,000 | | — | | 1,876,533 | | 23,343 | | 1,041,920 | | — | | 396,782 | | 3,988,578 |
Rafael Oliveira
Executive Vice President and President, International Markets(6) | | 2023 | | 721,250 | | — | | 4,002,748 | | — | | 1,667,099 | | — | | 511,098 | | 6,902,195 |
| | 2022 | | 678,824 | | — | | 3,772,982 | | 32,757 | | 1,340,213 | | — | | 624,477 | | 6,449,253 |
| | 2021 | | 790,411 | | — | | 3,722,360 | | 34,239 | | 1,742,725 | | — | | 665,752 | | 6,955,487 |
| (1) | The amounts shown in this column include the aggregate grant date fair value, computed in accordance with ASC Topic 718, of Matching RSUs, PSUs, RSUs (all Stock Awards), and stock options (Option Awards), as applicable. For a discussion of the assumptions made in the valuation of these awards, see Note 10, Employees’ Stock Incentive Plans, under Item 8, Notes to Consolidated Financial Statements in our 2023 Annual Report. For a discussion of the terms applicable to the Matching RSUs, PSUs, RSUs, and stock options, as well as vesting, forfeiture, and other terms, see above under—Compensation Discussion and Analysis—2023 Executive Compensation Program. |
| (2) | The amounts reported for stock awards represent the aggregate grant date fair value of stock awards in accordance with the accounting guidance on share-based payments. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of these awards, see see Note 10, Employees’ Stock Incentive Plans, under Item 8, Notes to Consolidated Financial Statements in our 2023 Annual Report. For 2023, the amounts reported in this column represent the grant date fair value of PSU awards. The maximum grant recipients may earn is up to 150% of the target number of PSUs granted. The maximum for Mr. Patricio is 4,557,118; for Mr. Maciel is 3,104,576; for Mr. Abrams-Rivera 4,101,486; for Ms. La Lande is 2,460,902; for Mr. Oliveira is 3,052,928. |
| (3) | The 2023 amounts shown in this column reflect compensation earned for 2023 performance under our PBP. The bonuses were paid to each NEO in the first quarter of 2024 in cash or shares of stock pursuant to our Bonus Investment Plan. |
| (4) | In connection with Mr. Abrams-Rivera’s elevation to President, Kraft Heinz in August 2023, the Compensation Committee approved a special bonus equal to 20% of Mr. Abrams-Rivera’s 2023 actual bonus, which was paid to him in March 2024. |
| (5) | The following table sets forth a detailed breakdown of the items that compromise “All Other Compensation” for 2023: |
| |
| 2024 Proxy Statement | 83 |
| Name | | Matching
Contribution to
Kraft Heinz 401(k)
($) | | DEUs Accrued
on All Dividend
Eligible RSUs
($) | | Insurance
Coverage(a)
($) | | Relocation
Expenses
($) | | Housing
Stipend and
Expenses
($) | | Commuting
Expenses
($) | | Tax Support
and
Payments
($) | | Total
($) |
| |
| |
| |
| Mr. Patricio | | 23,100 | | 581,170 | | 1,631 | | — | | — | | 20,577 | | — | | 626,478 |
| Mr. Maciel | | 23,100 | | 239,068 | | 1,168 | | — | | — | | — | | 99,767 | | 363,103 |
| Mr. Abrams-Rivera | | 11,650 | | 465,485 | | 1,631 | | 9,261(b) | | — | | — | | — | | 488,026 |
| Ms. La Lande | | 13,200 | | 227,657 | | 1,128 | | — | | — | | 26,612 | | — | | 268,596 |
| Mr. Oliveira | | 50,488(c) | | 420,841 | | 14,735 | | — | | — | | — | | 25,034 | | 511,098 |
| (a) | Reflects basic life and accidental death and dismemberment insurance coverages. |
| (b) | Reflects taxable and non-taxable reimbursement of costs associated with relocation expenses. |
| (c) | Reflects a matching contribution to the U.K. contribution scheme, paid in British pounds (£) and converted to U.S. dollars ($) as described below. |
| (6) | Mr. Oliveira’s base salary, bonus, contributions to the U.K. contribution scheme, and life insurance coverage are paid in British pounds (£). The amounts shown are calculated using an exchange rate of $1 to £0.80, which is the 12-month average exchange rate for the 2023 calendar year rounded to the nearest £0.01. |
| |
| 2024 Proxy Statement | 84 |
The amounts shown in this column include the aggregate grant date fair value, computed in accordance with ASC Topic 718, of Matching RSUs, PSUs, RSUs, and stock options. For a discussion of the assumptions made in the valuation of these awards, see Note 10, Employees’ Stock Incentive Plans, of the Notes to Consolidated Financial Statements in Item 8 to our 2022 Annual Report. For a discussion of the terms applicable to the Matching RSUs, PSUs, and RSUs as well as vesting, forfeiture, and other terms, see Compensation Discussion and Analysis—2022 Executive Compensation Program beginning on page 66.
(2)
The 2022 amounts shown in this column reflect compensation earned for 2022 performance under our PBP. The bonuses were paid to each NEO after the end of 2022 in cash or shares of stock pursuant to our Bonus Investment Plan.
(3)
The following table sets forth a detailed breakdown of the items which compromise “All Other Compensation” for 2022:
| | Name | | | Matching
Contribution to
Kraft Heinz
401(k)
($) | | | DEUs
Accrued on
All Dividend
Eligible
RSUs
($) | | | Insurance
Coverage(a)
($) | | | Relocation
Expenses
($) | | | Housing
Stipend and
Expenses
($) | | | Commuting
Expenses
($) | | | Tax
Support
and
Payments
($) | | | Total
($) | |
| | Mr. Patricio | | | | | 11,269 | | | | | | 722,099 | | | | | | 1,596 | | | | | | — | | | | | | — | | | | | | 21,400 | | | | | | — | | | | | | 756,364 | | |
| | Mr. Maciel | | | | | 12,200 | | | | | | 290,011 | | | | | | 1,037 | | | | | | — | | | | | | — | | | | | | — | | | | | | 42,201 | | | | | | 345,449 | | |
| | Mr. Basilio | | | | | 12,200 | | | | | | 277,938 | | | | | | 798 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 290,936 | | |
| | Mr. Abrams-Rivera | | | | | 12,200 | | | | | | 470,540 | | | | | | 1,277 | | | | | | 163,020(b) | | | | | | — | | | | | | 30,172 | | | | | | — | | | | | | 677,209 | | |
| | Ms. La Lande | | | | | 5,385 | | | | | | 264,677 | | | | | | 1,117 | | | | | | — | | | | | | 108,628(c) | | | | | | 26,427 | | | | | | — | | | | | | 406,234 | | |
| | Mr. Oliveira | | | | | 81,459(d) | | | | | | 521,066 | | | | | | 14,179 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,772 | | | | | | 624,477 | | |
(a)
Reflects basic life and accidental death and dismemberment insurance coverages.
(b)
Reflects taxable and non-taxable reimbursement of costs associated with relocation expenses.
(c)
Reflects taxable reimbursement of costs associated with a housing stipend.
(d)
Reflects a matching contribution to the U.K. contribution scheme, paid in British pounds (£).
84|ir.kraftheinzcompany.com
Grants of Plan-Based Awards
The following table sets forth information regarding the grant of plan-based awards for each of the NEOs in our 20222023 fiscal year.
| | | | | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | | All Other
Option Awards:
Number of
Securities
Underlying
Options
(#) | | | Exercise
Price of
Option
Awards
($/Share) | | | Grant Date
Fair Value
of Stock
and Option
Awards
($) | |
| | Name | | | Grant Date | | | Grant Type | | | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
($) | | | Target
($) | | | Maximum
($) | |
| | Mr. Patricio | | | | | | PBP(1) | | | | | 150,000 | | | | | | 3,000,000 | | | | | | 3,960,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Matching
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 74,332 | | | | | | | | | | | | | | | | | | 2,875,162 | | |
| | Mr. Maciel | | | | | | PBP(1) | | | | | 56,875 | | | | | | 1,137,500 | | | | | | 1,501,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Matching
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,241 | | | | | | | | | | | | | | | | | | 512,162 | | |
| | 3/1/2022 | | | PSUs(4)
(annual) | | | | | | | | | | | | | | | | | | | | | | | 2,586 | | | | | | 5,171 | | | | | | 7,757 | | | | | | | | | | | | | | | | | | | | | | | | 179,330 | | |
| | 3/1/2022 | | | PSUs(4)
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | 15,512 | | | | | | 31,024 | | | | | | 46,536 | | | | | | | | | | | | | | | | | | | | | | | | 1,029,687 | | |
| | 3/1/2022 | | | Options
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,586 | | | | | | 38.68 | | | | | | 16,714 | | |
| | 3/1/2022 | | | RSUs
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,171 | | | | | | | | | | | | | | | | | | 200,014 | | |
| | 3/1/2022 | | | RSUs
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,683 | | | | | | | | | | | | | | | | | | 800,018 | | |
| | Mr. Basilio(5) | | | — | | | — | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | Mr. Abrams-Rivera | | | | | | PBP(2) | | | | | 27,000 | | | | | | 1,800,000 | | | | | | 2,376,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Matching
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,750 | | | | | | | | | | | | | | | | | | 918,650 | | |
| | 3/1/2022 | | | PSUs(4)
(annual) | | | | | | | | | | | | | | | | | | | | | | | 5,171 | | | | | | 10,342 | | | | | | 15,513 | | | | | | | | | | | | | | | | | | | | | | | | 358,661 | | |
| | 3/1/2022 | | | PSUs(4)
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | 31,024 | | | | | | 62,048 | | | | | | 93,072 | | | | | | | | | | | | | | | | | | | | | | | | 2,059,373 | | |
| | 3/1/2022 | | | Options
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,171 | | | | | | 38.68 | | | | | | 33,422 | | |
| | 3/1/2022 | | | RSUs
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,342 | | | | | | | | | | | | | | | | | | 400,029 | | |
| | 3/1/2022 | | | RSUs
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 41,366 | | | | | | | | | | | | | | | | | | 1,600,037 | | |
| | Ms. La Lande | | | | | | PBP(1) | | | | | 52,500 | | | | | | 1,050,000 | | | | | | 1,386,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Matching
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,855 | | | | | | | | | | | | | | | | | | 729,311 | | |
| | 3/1/2022 | | | PSUs(4)
(annual) | | | | | | | | | | | | | | | | | | | | | | | 3,620 | | | | | | 7,239 | | | | | | 10,859 | | | | | | | | | | | | | | | | | | | | | | | | 251,049 | | |
| | 3/1/2022 | | | PSUs(4)
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | 19,390 | | | | | | 38,780 | | | | | | 58,170 | | | | | | | | | | | | | | | | | | | | | | | | 1,287,108 | | |
| | 3/1/2022 | | | Options
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,620 | | | | | | 38.68 | | | | | | 23,398 | | |
| | 3/1/2022 | | | RSUs
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,239 | | | | | | | | | | | | | | | | | | 280,005 | | |
| | 3/1/2022 | | | RSUs
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,854 | | | | | | | | | | | | | | | | | | 1,000,033 | | |
| | Mr. Oliveira | | | | | | PBP(3) | | | | | 22,910 | | | | | | 1,527,353 | | | | | | 2,016,106 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Matching
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30,828 | | | | | | | | | | | | | | | | | | 1,192,427 | | |
| | 3/1/2022 | | | PSUs(4)
(annual) | | | | | | | | | | | | | | | | | | | | | | | 5,068 | | | | | | 10,135 | | | | | | 15,203 | | | | | | | | | | | | | | | | | | | | | | | | 351,482 | | |
| | 3/1/2022 | | | PSUs(4)
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | 19,390 | | | | | | 38,780 | | | | | | 58,170 | | | | | | | | | | | | | | | | | | | | | | | | 1,287,108 | | |
| | 3/1/2022 | | | Options
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,068 | | | | | | 38.68 | | | | | | 32,757 | | |
| | 3/1/2022 | | | RSUs
(annual) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,135 | | | | | | | | | | | | | | | | | | 392,022 | | |
| | 3/1/2022 | | | RSUs
(performance
award) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,854 | | | | | | | | | | | | | | | | | | 1,000,033 | | |
| Name | | Grant
Date | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) | | All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#) | | Exercise
Price of
Option
Awards
($/Share) | | Grant
Date Fair
Value of
Stock and
Option
Awards
($) |
| | | Grant
Type | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
($) | | Target
($) | | Maximum
($) | | | | |
| Mr. Patricio | | | | PBP(1) | | 165,000 | | 3,300,000 | | 4,356,000 | | | | | | | | | | | | | | |
| | | 3/01/2023 | | Matching RSUs | | | | | | | | | | | | | | 44,966 | | | | | | 1,726,694 |
| | | 3/01/2023 | | PSUs(4) | | | | | | | | 22,787 | | 91,146 | | 136,719 | | | | | | | | 3,038,078 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | | | | | 39,063 | | | | | | 1,500,019 |
| Mr. Maciel | | | | PBP(1) | | 72,500 | | 1,450,000 | | 1,914,000 | | | | | | | | | | | | | | |
| | | 3/01/2023 | | Matching RSUs | | | | | | | | | | | | | | 16,804 | | | | | | 645,274 |
| | | 3/01/2023 | | PSUs(4) | | | | | | | | 15,524 | | 62,094 | | 93,141 | | | | | | | | 2,069,717 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | | | | | 26,613 | | | | | | 1,021,939 |
| Mr. Abrams-Rivera | | | | PBP(2) | | 27,000 | | 1,800,000 | | 2,376,000 | | | | | | | | | | | | | | |
| | 3/01/2023 | | Matching RSUs | | | | | | | | | | | | | | | | | | | | |
| | 3/01/2023 | | PSUs(4) | | | | | | | | | | | | | | 27,907 | | | | | | 1,071,629 |
| | | 3/01/2023 | | RSUs | | | | | | | | 20,508 | | 82,033 | | 123,050 | | | | | | | | 2,734,324 |
| | | | | | | | | | | | | | | | | | | 35,157 | | | | | | 1,350,029 |
| Ms. La Lande | | | | PBP(1) | | 52,500 | | 1,050,000 | | 1,386,000 | | | | | | | | | | | | | | |
| | | 3/01/2023 | | Matching RSUs | | | | | | | | | | | | | | | | | | | | |
| | | 3/01/2023 | | PSUs(4) | | | | | | | | | | | | | | 16,599 | | | | | | 637,402 |
| | | 3/01/2023 | | RSUs | | | | | | | | 12,305 | | 49,220 | | 73,830 | | | | | | | | 1,640,601 |
| | | | | | | | | | | | | | | | | | | 21,094 | | | | | | 810,010 |
| Mr. Oliveira | | | | PBP(3) | | 24,342 | | 1,622,813 | | 2,142,113 | | | | | | | | | | | | | | |
| | | 3/01/2023 | | Matching RSUs | | | | | | | | | | | | | | | | | | | | |
| | | 3/01/2023 | | PSUs(4) | | | | | | | | | | | | | | 25,066 | | | | | | 962,534 |
| | | 3/01/2023 | | RSUs | | | | | | | | 15,265 | | 61,061 | | 91,592 | | | | | | | | 2,035,285 |
| | | | | | | | | | | | | | | | | | | 26,170 | | | | | | 1,004,928 |
| (1) | Payments are based on achievement of individual and financial performance goals. For Mr. Patricio, Mr. Maciel, and Ms. La Lande, the financial multiplier was calculated based upon Global PBP EBITDA, which has a Threshold payout level of 50%, and Maximum payout level of 120%. Threshold amounts also reflect a minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2023 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table. |
| (2) | Payment is based on achievement of individual and financial performance goals and will receive a weighted average on financial performance of 70% of the North America Zone metrics plus 30% of the global metrics as described above. For Mr. Abrams-Rivera, the North America Zone PBP financial performance goal is based on North America Zone PBP EBITDA, which has a Threshold payout level of 50% and Maximum payout level of 120%. Threshold amounts reflect a minimum financial multiplier of 15% and minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2023 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table. |
| (3) | Payment is based on achievement of individual and financial performance goals and will receive a weighted average on financial performance of 70% of the International Zone metrics plus 30% of the global metrics as described above. For Mr. Oliveira, the International Zone PBP financial performance goal is based on International Zone PBP EBITDA, which has a Threshold payout level of 50% and Maximum payout level of 120%. Threshold amounts reflect a minimum financial multiplier of 15% and minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2023 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table. |
| (4) | Granted under the 2020 Omnibus Incentive Plan. The performance metric was approved by the Compensation Committee on February 9, 2023. The Target number of shares shown in the table reflects the number of shares of common stock that will be earned if each of the performance metrics are achieved at target levels by December 27, 2025. Actual shares awarded will vest 75% on the third anniversary of the grant date and the final 25% will vest on the fourth anniversary of the grant date. The performance target is three-year average TSR performance relative to the performance peer group. Dividends are not earned on the PSUs. |
| |
| 2024 Proxy Statement | 85 |
86|ir.kraftheinzcompany.com
TABLE OF CONTENTSExecutive Compensation Tables
(1)
Payments are based on achievement of individual and financial performance goals. For Mr. Patricio, Mr. Maciel, and Ms. La Lande, the financial multiplier was calculated based upon Global PBP EBITDA, which has a Threshold payout level of 50%, and Maximum payout level of 120%. Threshold amounts also reflect a minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2022 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table on page 84.
(2)
Payment is based on achievement of individual and financial performance goals and will receive a weighted average on financial performance of 70% of the North America Zone metrics plus 30% of the global metrics as described above. For Mr. Abrams-Rivera, the North America Zone PBP financial performance goal is based on North America Zone PBP EBITDA, which has a Threshold payout level of 50% and Maximum payout level of 120%. Threshold amounts reflect a minimum financial multiplier of 15% and minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2022 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table on page 84.
(3)
Payment is based on achievement of individual and financial performance goals and will receive a weighted average on financial performance of 70% of the International Zone metrics plus 30% of the global metrics as described above. For Mr. Oliveira, the International Zone PBP financial performance goal is based on International Zone PBP EBITDA, which has a Threshold payout level of 50% and Maximum payout level of 120%. Threshold amounts reflect a minimum financial multiplier of 15% and minimum individual performance score of 10%, while Target amounts reflect an individual performance score of 100%, and Maximum amounts reflect an individual performance score of 110%. Annual incentive award payments were made in cash to each NEO after the end of 2022 based on actual results achieved. Actual amounts earned are reflected in the Summary Compensation Table on page 84.
(4)
Granted under the 2020 Omnibus Incentive Plan. The performance metric was approved by the Compensation Committee on January 24, 2022. The Target number of shares shown in the table reflects the number of shares of common stock that will be earned if each of the performance metrics are achieved at target levels by December 31, 2024. Actual shares awarded will vest 100% on the third anniversary of the grant date. The performance target is three-year average TSR performance relative to the performance peer group. Dividends are not earned on the PSUs.
(5)
Mr. Basilio did not receive equity awards in 2022 and was not eligible to receive a PBP payout for 2022.
The Kraft Heinz Company 2023 Proxy Statement|87
Executive Compensation Tables
| Voting
Roadmap | Stockholder
Engagement | Our
Board | Governance | Director
Compensation | Beneficial
Ownership | Executive
Compensation | | Audit
Matters | Stockholder
Proposals | Other
Information | Appendix A.
Non-GAAP |
Outstanding Equity Awards at Fiscal Year End
The following table sets forth each NEO’s outstanding equity awards as of the end of our 20222023 fiscal year.
| | | | | | | | | | | Option Awards | | | Stock Awards | |
| | Name | | | Grant Date | | | Grant Type | | | 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
That Have Not
Vested
(#) | | | Market Value
of Shares or
Units of
Stock That
Have Not
Vested(1)
($) | | | Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
(#) | | | Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(1)
($) | |
| | Mr. Patricio | | | 3/1/2022 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 77,519(2) | | | | | | 3,155,798 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 109,772(2) | | | | | | 4,468,818 | | | | | | | | | | | | | | |
| | 3/2/2020 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,888(2) | | | | | | 646,800 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 196,773(3) | | | | | | 8,010,629 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 173,934(4) | | | | | | 7,080,853 | | | | | | | | | | | | | | |
| | Mr. Maciel | | | 3/1/2022 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,808(2) | | | | | | 562,124 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,171(5) | | | | | | 210,511 | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 31,024(6) | | | | | | 1,262,987 | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,392(7) | | | | | | 219,508 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21,570(8) | | | | | | 878,115 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Stock Options | | | | | | | | | | | 2,586(9) | | | | | | 38.68 | | | | | | 3/1/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,149(2) | | | | | | 738,846 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,123(10) | | | | | | 208,557 | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,177(11) | | | | | | 658,566 | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,571(12) | | | | | | 226,795 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,729(13) | | | | | | 477,488 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Stock Options | | | | | | | | | | | 2,562(14) | | | | | | 37.09 | | | | | | 3/1/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/2/2020 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,033(2) | | | | | | 978,383 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,437(15) | | | | | | 669,150 | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,705(16) | | | | | | 354,381 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,395(17) | | | | | | 748,860 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,742(3) | | | | | | 640,857 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,827(4) | | | | | | 1,132,837 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | Stock Options | | | | | | | | | | | 39,355 | | | | | | 25.41 | | | | | | 8/16/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2018 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 13,455(18) | | | | | | 547,743 | | | | | | | | | | | | | | |
| | 3/1/2016 | | | Stock Options | | | | | | | | | | | 19,315 | | | | | | 77.66 | | | | | | 3/1/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 8/20/2015 | | | Stock Options | | | | | | | | | | | 26,937 | | | | | | 74,25 | | | | | | 8/20/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mr. Basilio | | | 2/12/2015 | | | Stock Options | | | | | 41,377(19) | | | | | | | | | | | | 30.46 | | | | | | 8/31/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 8/20/2015 | | | Stock Options | | | | | 134,681 | | | | | | | | | | | | 74.25 | | | | | | 8/31/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mr. Abrams-Rivera | | | 3/1/2022 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,768(2) | | | | | | 1,008,305 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,342(5) | | | | | | 421,023 | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 62,048(6) | | | | | | 2,525,974 | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,785(7) | | | | | | 439,057 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43,140(8) | | | | | | 1,756,229 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Stock Options | | | | | | | | | | | 5,171(9) | | | | | | 38.68 | | | | | | 3/1/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,446(2) | | | | | | 1,809,397 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,785(10) | | | | | | 439,057 | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,443(11) | | | | | | 1,646,435 | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,729(12) | | | | | | 477,488 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,319(13) | | | | | | 1,193,576 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Stock Options | | | | | | | | | | | 5,393(14) | | | | | | 37.09 | | | | | | 3/1/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/2/2020 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 110,101(20) | | | | | | 4,482,212 | | | | | | | | | | | | | | |
| | 3/2/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 95,896(21) | | | | | | 3,903,926 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,325(16) | | | | | | 746,011 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | Stock Options | | | | | | | | | | | 82,183(22) | | | | | | 30.42 | | | | | | 6/1/2030 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Grant Type | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(1)
($) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(1)
($) |
| Mr. Patricio | | 3/01/2023 | | Matching RSUs | | | | | | | | | | 46,992(2) | | 1,737,764 | | | | |
| | | 3/01/2023 | | PSUs | | | | | | | | | | | | | | 91,146(3) | | 3,370,579 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | 40,824(4) | | 1,509,672 | | | | |
| | | 3/01/2022 | | Matching RSUs | | | | | | | | | | 81,012(2) | | 2,995,824 | | | | |
| | | 3/01/2021 | | Matching RSUs | | | | | | | | | | 114,719(2) | | 4,242,309 | | | | |
| Mr. Maciel | | 3/01/2023 | | Matching RSUs | | | | | | | | | | 17,561(2) | | 649,406 | | | | |
| | | 3/01/2023 | | PSUs | | | | | | | | | | | | | | 62,094(3) | | 2,296,236 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | 27,812(4) | | 1,028,488 | | | | |
| | | 3/01/2022 | | Matching RSUs | | | | | | | | | | 14,430(2) | | 533,621 | | | | |
| | | 3/01/2022 | | PSUs (annual) | | | | | | | | | | | | | | 5,171(5) | | 191,224 |
| | | 3/01/2022 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 31,024(6) | | 1,147,268 |
| | | 3/01/2022 | | RSUs (annual) | | | | | | | | | | 5,635(7) | | 208,382 | | | | |
| | | 3/01/2022 | | RSUs (merit/ retention) | | | | | | | | | | 22,542(8) | | 833,603 | | | | |
| | | 3/01/2022 | | Stock Options (annual) | | | | 2,586(9) | | 38.68 | | 3/01/2032 | | | | | | | | |
| | | 3/01/2021 | | Matching RSUs | | | | | | | | | | 18,967(2) | | 701,400 | | | | |
| | | 3/01/2021 | | PSUs (annual) | | | | | | | | | | | | | | 5,123(10) | | 189,449 |
| | | 3/01/2021 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 16,177(11) | | 598,225 |
| | | 3/01/2021 | | RSUs (annual) | | | | | | | | | | 5,822(12) | | 215,298 | | | | |
| | | 3/01/2021 | | RSUs (merit/ retention) | | | | | | | | | | 12,257(13) | | 453,264 | | | | |
| | | 3/01/2021 | | Stock Options (annual) | | | | 2,562(14) | | 37.09 | | 3/01/2031 | | | | | | | | |
| | | 6/01/2020 | | PSUs (merit/ retention) | | | | | | | | | | 8,218(15) | | 303,902 | | | | |
| | | 6/01/2020 | | RSUs (merit/ retention) | | | | | | | | | | 9,615(16) | | 355,563 | | | | |
| | | 8/16/2019 | | Stock Options | | 39,355 | | | | 25.41 | | 8/16/2029 | | | | | | | | |
| | | 3/01/2016 | | Stock Options | | 19,315 | | | | 77.66 | | 3/01/2026 | | | | | | | | |
| | | 8/20/2015 | | Stock Options | | 26,937 | | | | 74.25 | | 8/20/2025 | | | | | | | | |
| |
| 2024 Proxy Statement | 86 |
| | | | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Grant Type | | 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 That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(1)
($) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(1)
($) |
| Mr. Abrams-Rivera | | 3/01/2023 | | Matching RSUs | | | | | | | | | | 29,165(2) | | 1,078,522 | | | | |
| | 3/01/2023 | | PSUs | | | | | | | | | | | | | | 82,033(3) | | 3,033,580 |
| | 3/01/2023 | | RSUs | | | | | | | | | | 36,741(4) | | 1,358,682 | | | | |
| | | 3/01/2022 | | Matching RSUs | | | | | | | | | | 25,884(2) | | 957,190 | | | | |
| | | 3/01/2022 | | PSUs (annual) | | | | | | | | | | | | | | 10,342(5) | | 382,447 |
| | | 3/01/2022 | | PSUs (merit/retention) | | | | | | | | | | | | | | 62,048(6) | | 2,294,535 |
| | | 3/01/2022 | | RSUs (annual) | | | | | | | | | | 11,272(7) | | 416,839 | | | | |
| | | 3/01/2022 | | RSUs (merit/ retention) | | | | | | | | | | 45,083(8) | | 1,667,169 | | | | |
| | | 3/01/2022 | | Stock Options (annual) | | | | 5,171(9) | | 38.68 | | 3/01/2032 | | | | | | | | |
| | | 3/01/2021 | | Matching RSUs | | | | | | | | | | 46,449(2) | | 1,717,684 | | | | |
| | | 3/01/2021 | | PSUs (annual) | | | | | | | | | | | | | | 10,785(10) | | 398,829 |
| | | 3/01/2021 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 40,443(11) | | 1,495,582 |
| | | 3/01/2021 | | RSUs (annual) | | | | | | | | | | 12,257(12) | | 453,264 | | | | |
| | | 3/01/2021 | | RSUs (merit/ retention) | | | | | | | | | | 30,640(13) | | 1,133,067 | | | | |
| | | 3/01/2021 | | Options (annual) | | | | 5,393(14) | | 37.09 | | 3/01/2031 | | | | | | | | |
| | | 3/02/2020 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 47,948(17) | | 1,773,117 |
| | | 3/02/2020 | | RSUs (merit/ retention) | | | | | | | | | | 56,893(18) | | 2,103,903 | | | | |
| | | 6/01/2020 | | Stock Options | | 82,183 | | | | 30.42 | | 6/01/2030 | | | | | | | | |
| Ms. La Lande | | 3/01/2023 | | Matching RSUs | | | | | | | | | | 17,348(2) | | 641,529 | | | | |
| | | 3/01/2023 | | PSUs | | | | | | | | | | | | | | 49,220(3) | | 1,820,156 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | 22,044(4) | | 815,187 | | | | |
| | | 3/01/2022 | | Matching RSUs | | | | | | | | | | 20,549(2) | | 759,902 | | | | |
| | | 3/01/2022 | | PSUs (annual) | | | | | | | | | | | | | | 7,239(5) | | 267,698 |
| | | 3/01/2022 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 38,780(6) | | 1,434,084 |
| | | 3/01/2022 | | RSUs (annual) | | | | | | | | | | 7,889(7) | | 291,735 | | | | |
| | | 3/01/2022 | | RSUs (merit/ retention) | | | | | | | | | | 28,178(8) | | 1,042,022 | | | | |
| | | 3/01/2022 | | Stock Options (annual) | | | | 3,620(9) | | 38.68 | | 3/01/2032 | | | | | | | | |
| | | 3/01/2021 | | PSUs (annual) | | | | | | | | | | | | | | 7,010(10) | | 259,230 |
| | | 3/01/2021 | | PSUs (merit/ retention) | | | | | | | | | | | | | | 16,177(11) | | 598,225 |
| | | 3/01/2021 | | RSUs (annual) | | | | | | | | | | 7,966(12) | | 294,583 | | | | |
| | | 3/01/2021 | | RSUs (merit/ retention) | | | | | | | | | | 12,257(13) | | 453,264 | | | | |
| | | 3/01/2021 | | Stock Options (annual) | | | | 3,505(14) | | 37.09 | | 3/01/2031 | | | | | | | | |
| | | 6/01/2020 | | PSUs (merit/ retention) | | | | | | | | | | 8,218(15) | | 303,902 | | | | |
| | | 6/01/2020 | | RSUs (merit/ retention) | | | | | | | | | | 9,615(16) | | 355,563 | | | | |
| | | 3/01/2018 | | Stock Options | | 52,325 | | | | 66.89 | | 3/01/2028 | | | | | | | | |
| |
| 2024 Proxy Statement | 87 |
88|ir.kraftheinzcompany.com
| | | | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Grant Type | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(1)
($) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(1)
($) |
| Mr. Oliveira | | 3/01/2023 | | Matching RSUs | | | | | | | | | | 26,195(2) | | 968,691 | | | | |
| | | 3/01/2023 | | PSUs | | | | | | | | | | | | | | 61,061(3) | | 2,258,036 |
| | | 3/01/2023 | | RSUs | | | | | | | | | | 27,350(4) | | 1,011,403 | | | | |
| | | 3/01/2022 | | Matching RSUs | | | | | | | | | | 33,600(2) | | 1,242,528 | | | | |
| | | 3/01/2022 | | PSUs (annual) | | | | | | | | | | | | | | 10,135(5) | | 374,792 |
| | | 3/01/2022 | | PSUs (merit/retention) | | | | | | | | | | | | | | 38,780(6) | | 1,434,084 |
| | | 3/01/2022 | | RSUs (annual) | | | | | | | | | | 11,044(7) | | 408,407 | | | | |
| | | 3/01/2022 | | RSUs (merit/retention) | | | | | | | | | | 28,178(8) | | 1,042,022 | | | | |
| | | 3/01/2022 | | Stock Options (annual) | | | | 5,068(9) | | 38.68 | | 3/01/2032 | | | | | | | | |
| | | 3/01/2021 | | Matching RSUs | | | | | | | | | | 47,535(2) | | 1,757,844 | | | | |
| | | 3/01/2021 | | PSUs (annual) | | | | | | | | | | | | | | 10,282(10) | | 380,228 |
| | | 3/01/2021 | | PSUs (merit/retention) | | | | | | | | | | | | | | 16,177(11) | | 598,225 |
| | | 3/01/2021 | | RSUs (annual) | | | | | | | | | | 11,685(12) | | 432,111 | | | | |
| | | 3/01/2021 | | RSUs (merit/retention) | | | | | | | | | | 12,257(13) | | 453,264 | | | | |
| | | 3/01/2021 | | Stock Options (annual) | | | | 5,141(14) | | 37.09 | | 3/01/2031 | | | | | | | | |
| | | 6/01/2020 | | PSUs (merit/retention) | | | | | | | | | | 8,218(15) | | 303,902 | | | | |
| | | 6/01/2020 | | RSUs (merit/retention) | | | | | | | | | | 9,615(16) | | 355,563 | | | | |
| | | 8/16/2019 | | Matching RSUs | | | | | | | | | | 32,252(2) | | 1,192,679 | | | | |
| | | 3/01/2017 | | Stock Options | | 27,344 | | | | 91.43 | | 3/01/2027 | | | | | | | | |
| | | 3/01/2016 | | Stock Options | | 32,192 | | | | 77.66 | | 3/01/2026 | | | | | | | | |
| | | 2/12/2015 | | Matching Options | | 16,419(19) | | | | 30.46 | | 2/12/2025 | | | | | | | | |
| | | 2/12/2015 | | Stock Options | | 4,492(19) | | | | 30.46 | | 2/12/2025 | | | | | | | | |
| | | 5/21/2014 | | Stock Options | | 110,833(19) | | | | 22.56 | | 5/21/2024 | | | | | | | | |
| (1) | The market value of the shares that have not vested is based on the closing price of $36.98 for Kraft Heinz common stock on December 29, 2023, the last trading day of our fiscal year. |
| (2) | Total includes DEUs that are subject to the same terms as the original grant. The Matching RSUs vested or are scheduled to vest on: March 1, 2024 for awards granted on August 16, 2019; March 1, 2024 for awards granted on March 1, 2021; March 1, 2025 for awards granted on March 1, 2022; and March 1, 2026 for awards granted on March 1, 2023. |
| (3) | These awards are scheduled to vest 75% on March 1, 2026 and 25% on March 1, 2027 based upon achievement of performance conditions for the 2023 PSUs. |
| (4) | Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 75% on March 1, 2026 and 25% on March 1, 2027. |
| (5) | These awards are scheduled to vest on March 1, 2025 with a performance metric based on a three-year average TSR performance relative to the performance peer group. |
| (6) | These awards are scheduled to vest 75% on March 1, 2025 and 25% on March 1, 2026 based upon achievement of performance conditions for the 2022 PSUs. |
| (7) | Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 100% on March 1, 2025. |
| (8) | Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 75% on March 1, 2025 and 25% on March 1, 2026. |
| (9) | These awards are scheduled to vest 100% on March 1, 2025. |
| (10) | These awards are scheduled to vest on March 1, 2024 with a performance metric based on a three-year average TSR performance relative to the performance peer group. |
| (11) | These awards are scheduled to vest 75% on March 1, 2024 and 25% on March 1, 2025 with a performance metric based on a three-year average TSR performance relative to the performance peer group. |
| |
| 2024 Proxy Statement | 88 |
| (12) | Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 100% on March 1, 2024. |
| (13) | Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 75% on March 1, 2024 and 25% on March 1, 2025. |
| (14) | These awards are scheduled to vest 100% on March 1, 2024. |
| (15) | The Compensation Committee has certified that achievement of the performance conditions for these awards has been met. The outstanding portion of these awards is scheduled to vest on June 1, 2024. |
| (16) | Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest on June 1, 2024. |
| (17) | The Compensation Committee has certified that the achievement of the performance conditions for these awards has been met. The outstanding portion of these awards is scheduled to vest on March 2, 2024. |
| (18) | Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest on March 2, 2024. |
| (19) | Total and exercise price reflect conversion in connection with the Kraft Heinz Merger. |
| |
| 2024 Proxy Statement | 89 |
Executive Compensation Tables| | | | | | | | | | | Option Awards | | | Stock Awards | |
| | Name | | | Grant Date | | | Grant Type | | | 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
That Have Not
Vested
(#) | | | Market Value
of Shares or
Units of
Stock That
Have Not
Vested(1)
($) | | | Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
(#) | | | Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested(1)
($) | |
| | Ms. La Lande | | | 3/1/2022 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,663(2) | | | | | | 800,481 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,239(5) | | | | | | 294,700 | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 38,780(6) | | | | | | 1,578,734 | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,549(7) | | | | | | 307,320 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,962(8) | | | | | | 1,097,623 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Stock Options | | | | | | | | | | | 3,620(9) | | | | | | 38.68 | | | | | | 3/1/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,010(10) | | | | | | 285,377 | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,177(11) | | | | | | 658,566 | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,622(12) | | | | | | 310,292 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,729(13) | | | | | | 477,488 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Stock Options | | | | | | | | | | | 3,505(14) | | | | | | 37.09 | | | | | | 3/1/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 6/1/2020 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,437(15) | | | | | | 669,150 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,911(16) | | | | | | 484,897 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,395(17) | | | | | | 748,860 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 28,986(3) | | | | | | 1,180,020 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,597(4) | | | | | | 1,001,344 | | | | | | | | | | | | | | |
| | 3/1/2018 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,163(18) | | | | | | 1,065,096 | | | | | | | | | | | | | | |
| | 3/1/2018 | | | Stock Options | | | | | | | | | | | 52,325(23) | | | | | | 66.89 | | | | | | 3/1/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Mr. Oliveira | | | 3/1/2022 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,150(2) | | | | | | 1,308,827 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,135(5) | | | | | | 412,596 | | |
| | 3/1/2022 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 38,780(6) | | | | | | 1,578,734 | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,569(7) | | | | | | 430,264 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,962(8) | | | | | | 1,097,623 | | | | | | | | | | | | | | |
| | 3/1/2022 | | | Stock Options | | | | | | | | | | | 5,068(9) | | | | | | 38.68 | | | | | | 3/1/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 45,485(2) | | | | | | 1,851,694 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,282(10) | | | | | | 418,580 | | |
| | 3/1/2021 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,177(11) | | | | | | 658,566 | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,181(12) | | | | | | 455,179 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,729(13) | | | | | | 477,488 | | | | | | | | | | | | | | |
| | 3/1/2021 | | | Stock Options | | | | | | | | | | | 5,141(14) | | | | | | 37.09 | | | | | | 3/1/2031 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/2/2020 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,909(2) | | | | | | 1,054,755 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,437(15) | | | | | | 669,150 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,914(16) | | | | | | 688,569 | | | | | | | | | | | | | | |
| | 6/1/2020 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,395(17) | | | | | | 748,860 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30,862(2) | | | | | | 1,256,392 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | PSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 39,355(3) | ��� | | | | | 1,602,142 | | | | | | | | | | | | | | |
| | 8/16/2019 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 46,380(4) | | | | | | 1,888,130 | | | | | | | | | | | | | | |
| | 3/1/2018 | | | Matching RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,365(2) | | | | | | 340,539 | | | | | | | | | | | | | | |
| | 3/1/2018 | | | RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,850(18) | | | | | | 1,825,844 | | | | | | | | | | | | | | |
| | 3/1/2017 | | | Stock Options | | | | | | | | | | | 27,344 | | | | | | 91.43 | | | | | | 3/1/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 3/1/2016 | | | Stock Options | | | | | 32,192 | | | | | | | | | | | | 77.66 | | | | | | 3/1/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2/12/2015 | | | Matching Options | | | | | 4,492(19) | | | | | | | | | | | | 30.46 | | | | | | 2/12/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2/12/2015 | | | Stock Options | | | | | 16,419(19) | | | | | | | | | | | | 30.46 | | | | | | 2/12/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 5/21/2014 | | | Stock Options | | | | | 110,833(19) | | | | | | | | | | | | 22.56 | | | | | | 5/21/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
The market value of the shares that have not vested is based on the closing price of $40.71 for Kraft Heinz common stock on December 30, 2022, the last trading day of our fiscal year.
(2)
Total includes DEUs that are subject to the same terms as the original grant. The Matching RSUs are scheduled to vest on: March 1, 2023 for awards granted on March 1, 2018; March 1, 2024 for awards granted on August 16, 2019; March 2, 2023 for awards granted on March 2, 2020; March 1, 2024 for awards granted on March 1, 2021; and March 1, 2025 for awards granted on March 1, 2022.
(3)
In August 2021, the Compensation Committee certified that the performance conditions of these awards had been met for both performance periods. The outstanding portion of these awards is scheduled to vest 50% on August 16, 2023.
(4)
Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest 50% on August 16, 2023.
The Kraft Heinz Company 2023 Proxy Statement|89
TABLE OF CONTENTSExecutive Compensation Tables
(5)
These awards are scheduled to vest on March 1, 2025 with a performance metric based on a three-year average TSR performance relative to the performance peer group.
(6)
These awards are scheduled to vest 75% on March 1, 2025 and 25% on March 1, 2026 with a performance metric based on a three-year average TSR performance relative to the performance peer group.
(7)
Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 100% on March 1, 2025.
(8)
Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 75% on March 1, 2025 and 25% on March 1, 2026.
(9)
These awards are scheduled to vest 100% on March 1, 2025.
(10)
These awards are scheduled to vest on March 1, 2024 with a performance metric based on a three-year average TSR performance relative to the performance peer group.
(11)
These awards are scheduled to vest 75% on March 1, 2024 and 25% on March 1, 2025 with a performance metric based on a three-year average TSR performance relative to the performance peer group.
(12)
Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 100% on March 1, 2024.
(13)
Total includes DEUs that are subject to the same terms as the original grant. These awards are scheduled to vest 75% on March 1, 2024 and 25% on March 1, 2025.
(14)
These awards are scheduled to vest 100% on March 1, 2024.
(15)
In August 2022, the Compensation Committee certified that the achievement of performance conditions for the second performance period (ending June 25, 2022) have been met. The outstanding portion of these awards is scheduled to vest 25% on June 1, 2023, and 25% on June 1, 2024 with a performance metric based on (i) 50% on PBP EBITDA and cash conversion for fiscal year 2021 and (ii) 50% on PBP EBITDA and cash conversion from July 2021 to June 2022.
(16)
Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest 50% on June 1, 2023.
(17)
Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest 50% on June 1, 2022, 25% on June 1, 2023, and 25% on June 1, 2024.
(18)
This award is scheduled to vest 100% on March 1, 2023.
(19)
Total and exercise price reflect conversion in connection with the Kraft Heinz Merger.
(20)
In August 2021, the Compensation Committee certified that the performance conditions of these awards had been met for both performance periods. The outstanding portion of these awards is scheduled to vest 25% on March 2, 2023, and 25% on March 2, 2024.
(21)
Total includes DEUs that are subject to the same terms as the original grant. The outstanding portion of these awards is scheduled to vest 25% on March 2, 2023, and 25% on March 2, 2024.
(22)
This award is scheduled to vest 100% on June 1, 2023.
(23)
This award is scheduled to vest 100% on March 1, 2023.
90|ir.kraftheinzcompany.com
Executive Compensation Tables
| Voting
Roadmap | Stockholder
Engagement | Our
Board | Governance | Director
Compensation | Beneficial
Ownership | Executive
Compensation | | Audit
Matters | Stockholder
Proposals | Other
Information | Appendix A.
Non-GAAP |
Option Exercises and Stock Vested
The following table sets forth option exercises and stock vested for each of our NEOs as of the end of our 20222023 fiscal year.
| | | | | Option Awards | | | Stock Awards(1) | |
| | Name | | | Number of Shares
Acquired on
Exercise
(#) | | | Value Realized
on Exercise
($) | | | Number of Shares
Acquired on
Vesting
(#) | | | Value Realized
on Vesting
($) | |
| | Mr. Patricio | | | | | — | | | | | | — | | | | | | 367,009 | | | | | | 14,250,959 | | |
| | Mr. Maciel | | | | | — | | | | | | — | | | | | | 101,559 | | | | | | 3,876,378 | | |
| | Mr. Basilio | | | | | 570,225 | | | | | | 9,121,045 | | | | | | 185,674 | | | | | | 7,180,080 | | |
| | Mr. Abrams-Rivera | | | | | — | | | | | | — | | | | | | 219,414 | | | | | | 8,539,852 | | |
| | Ms. La Lande | | | | | — | | | | | | — | | | | | | 112,395 | | | | | | 4,293,713 | | |
| | Mr. Oliveira | | | | | — | | | | | | — | | | | | | 155,683 | | | | | | 5,966,230 | | |
| | | Option Awards | | Stock Awards(1) |
| Name | | Number of Shares
Acquired on Exercise
(#) | | Value Realized on
Exercise
($) | | Number of Shares Acquired
on Vesting
(#) | | Value Realized on
Vesting
($) |
| Mr. Patricio | | — | | — | | 390,374 | | 13,181,980 |
| Mr. Maciel | | — | | — | | 107,966 | | 3,932,817 |
| Mr. Abrams-Rivera | | — | | — | | 122,124 | | 4,712,612 |
| Ms. La Lande | | — | | — | | 109,919 | | 3,952,295 |
| Mr. Oliveira | | — | | — | | 200,465 | | 7,277,491 |
| (1) | The following table provides details of the stock awards that vested and value realized: |
| Name | | Grant
Date | | Vesting Date | | Number of
Shares | | Stock Price
on Vesting
Date
($)(2) | | Value
Realized
on Vesting
($) | |
Description |
| Mr. Patricio | | 8/16/2019 | | 8/16/2023 | | 196,773 | | 33.56 | | 6,603,702 | | Shares underlying an award of PSUs, the remaining 25% vested |
| | | 8/16/2019 | | 8/16/2023 | | 177,713 | | 33.56 | | 5,964,048 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 25% vested |
| | | 3/02/2020 | | 3/02/2023 | | 15,888 | | 38.66 | | 614,230 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| Mr. Maciel | | 3/02/2020 | | 3/02/2023 | | 24,033 | | 38.66 | | 929,116 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 8,219 | | 38.19 | | 313,884 | | Shares underlying an award of PSUs, an additional 25% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 8,795 | | 38.19 | | 335,881 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 50% vested |
| | | 6/01/2020 | | 6/01/2023 | | 9,290 | | 38.19 | | 354,785 | | Shares underlying an award of RSUs, including DEUs accrued, an additional 25% of which vested |
| | | 8/16/2019 | | 8/16/2023 | | 15,742 | | 33.56 | | 528,302 | | Shares underlying an award of PSUs, the remaining 25% vested |
| | | 8/16/2019 | | 8/16/2023 | | 28,432 | | 33.56 | | 954,178 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 25% vested |
| | | 3/01/2018 | | 3/01/2023 | | 13,455 | | 38.40 | | 516,672 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
Mr. Abrams-
Rivera | | 3/02/2020 | | 3/02/2023 | | 47,948 | | 38.66 | | 1,853,670 | | Shares underlying an award of PSUs, an additional 25% of which vested |
| | 3/02/2020 | | 3/02/2023 | | 55,661 | | 38.66 | | 2,151,854 | | Shares underlying an award of RSUs, including DEUs accrued, an additional 25% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 18,515 | | 38.19 | | 707,088 | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested |
| Ms. La Lande | | 6/01/2020 | | 6/01/2023 | | 8,219 | | 38.19 | | 313,884 | | Shares underlying an award of PSUs, an additional 25% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 12,034 | | 38.19 | | 459,578 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 50% vested |
| | | 6/01/2020 | | 6/01/2023 | | 9,290 | | 38.19 | | 354,785 | | Shares underlying an award of RSUs, including DEUs accrued, an additional 25% of which vested |
| | | 8/16/2019 | | 8/16/2023 | | 24,597 | | 33.56 | | 825,475 | | Shares underlying an award of PSUs, the remaining 25% vested |
| | | 8/16/2019 | | 8/16/2023 | | 29,616 | | 33.56 | | 993,913 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 25% vested |
| | | 3/01/2018 | | 3/01/2023 | | 26,163 | | 38.40 | | 1,004,659 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| Mr. Oliveira | | 3/02/2020 | | 3/02/2023 | | 25,909 | | 38.66 | | 1,001,642 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 8,219 | | 38.19 | | 313,884 | | Shares underlying an award of PSUs, an additional 25% of which vested |
| | | 6/01/2020 | | 6/01/2023 | | 17,089 | | 38.19 | | 652,629 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 50% vested |
| | | 6/01/2020 | | 6/01/2023 | | 9,290 | | 38.19 | | 354,785 | | Shares underlying an award of RSUs, including DEUs accrued, an additional 25% of which vested |
| | | 8/16/2019 | | 8/16/2023 | | 39,355 | | 33.56 | | 1,320,754 | | Shares underlying an award of PSUs, the remaining 25% vested |
| | | 8/16/2019 | | 8/16/2023 | | 47,388 | | 33.56 | | 1,590,341 | | Shares underlying an award of RSUs, including DEUs accrued, the remaining 25% vested |
| | | 3/01/2018 | | 3/01/2023 | | 8,365 | | 38.40 | | 321,216 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| | | 3/01/2018 | | 3/01/2023 | | 44,850 | | 38.40 | | 1,722,240 | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested |
| (2) | Represents the closing price of Kraft Heinz common stock on the applicable vesting date. |
| |
| 2024 Proxy Statement | 90 |
The following table provides details of the stock awards that vested and value realized:
| | Name | | | Grant Date | | | Vesting Date | | | Number of
Shares | | | Stock Price on
Vesting Date
($)(2) | | | Value Realized
on Vesting
($) | | | Description | |
| | Mr. Patricio | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 196,773 | | | | | | 38.83 | | | | | | 7,640,696 | | | | Shares underlying an award of PSUs, 75% of which vested | |
| | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 170,236 | | | | | | 38.83 | | | | | | 6,610,264 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | |
| | Mr. Maciel | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 15,138 | | | | | | 37.25 | | | | | | 563,891 | | | | Shares underlying an award of PSUs, 50% of which vested | |
| | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 17,873 | | | | | | 37.25 | | | | | | 665,769 | | | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested | |
| | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 8,522 | | | | | | 37.25 | | | | | | 317,445 | | | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested | |
| | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 15,742 | | | | | | 38.83 | | | | | | 611,262 | | | | Shares underlying an award of PSUs, 75% of which vested | |
| | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 27,237 | | | | | | 38.83 | | | | | | 1,057,613 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | |
| | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 6,807 | | | | | | 38.83 | | | | | | 264,316 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | |
| | | | 3/1/2017 | | | | | | 3/1/2022 | | | | | | 10,240 | | | | | | 38.68 | | | | | | 396,083 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | |
| | | | | | | | | |
The Kraft Heinz Company 2023 Proxy Statement|91
TABLE OF CONTENTSExecutive Compensation Tables
| | Name | | | Grant Date | | | Vesting Date | | | Number of
Shares | | | Stock Price on
Vesting Date
($)(2) | | | Value Realized
on Vesting
($) | | | Description | | | | Mr. Basilio | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 16,819 | | | | | | 37.25 | | | | | | 626,508 | | | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 59,032 | | | | | | 38.83 | | | | | | 2,292,213 | | | | Shares underlying an award of PSUs, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 68,094 | | | | | | 38.83 | | | | | | 2,644,090 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 21,277 | | | | | | 38.83 | | | | | | 826,186 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | | | | | | 3/1/2017 | | | | | | 3/1/2022 | | | | | | 20,452 | | | | | | 38.68 | | | | | | 791,083 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | | | | Ms. La Lande | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 15,138 | | | | | | 37.25 | | | | | | 563,891 | | | | Shares underlying an award of PSUs, 50% of which vested | | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 17,873 | | | | | | 37.25 | | | | | | 665,769 | | | | Shares underlying an award of PSUs, 50% of which vested | | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 11,663 | | | | | | 37.25 | | | | | | 434,447 | | | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 24,597 | | | | | | 38.83 | | | | | | 955,102 | | | | Shares underlying an award of PSUs, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 28,372 | | | | | | 38.83 | | | | | | 1,101,685 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 14,752 | | | | | | 38.83 | | | | | | 572,820 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | | | | Mr. Oliveira | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 15,138 | | | | | | 37.25 | | | | | | 563,891 | | | | Shares underlying an award of PSUs, 50% of which vested | | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 17,873 | | | | | | 37.25 | | | | | | 665,769 | | | | Shares underlying an award of PSUs, 50% of which vested | | | | | | 6/1/2020 | | | | | | 6/1/2022 | | | | | | 16,559 | | | | | | 37.25 | | | | | | 616,823 | | | | Shares underlying an award of RSUs, including DEUs accrued, 50% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 39,355 | | | | | | 38.83 | | | | | | 1,528,155 | | | | Shares underlying an award of PSUs, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 45,398 | | | | | | 38.83 | | | | | | 1,762,804 | | | | Shares underlying an award of RSUs, including DEUs accrued, 75% of which vested | | | | | | 8/16/2019 | | | | | | 8/16/2022 | | | | | | 17,225 | | | | | | 38.83 | | | | | | 668,847 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | | | | | | 3/1/2017 | | | | | | 3/1/2022 | | | | | | 4,135 | | | | | | 38.68 | | | | | | 159,942 | | | | Shares underlying an award of RSUs, including DEUs accrued, 100% of which vested | |
(2)
Represents the closing price of Kraft Heinz common stock on the applicable vesting date.
92|ir.kraftheinzcompany.com
Executive Compensation Tables
| Voting
Roadmap | Stockholder
Engagement | Our
Board | Governance | Director
Compensation | Beneficial
Ownership | Executive
Compensation | | Audit
Matters | Stockholder
Proposals | Other
Information | Appendix A.
Non-GAAP |
Pension Benefits
None of our NEOs participate in any defined benefit pension arrangements.
Nonqualified Deferred Compensation
None of our NEOs participate in any nonqualified deferred compensation arrangements.
| |
| 2024 Proxy Statement | 91 |
The Kraft Heinz Company 2023 Proxy Statement|93
Potential Payments Upon Termination or Change in Control
The table, footnotes, and narratives below reflect the assumption that a hypothetical termination of employment and/or change in control occurred on the last business day of our 20222023 fiscal year.
| | Name | | | Element | | | Involuntary Termination without
Cause(1) or Termination
Upon Change in Control
($) | | | Termination
due to Death
or Disability(2)
($) | | | Termination
due to
Retirement(3)
($) | |
| | Mr. Patricio | | | Salary | | | | | 1,000,000 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | 2,466,720 | | | | | | 2,466,720 | | |
| | Intrinsic Value of Accelerated Equity | | | | | — | | | | | | 23,362,899 | | | | | | — | | |
| | Health and Wellness Benefits(4) | | | | | 16,878 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | 4,000 | | | | | | — | | | | | | — | | |
| | Total | | | | | 1,020,878 | | | | | | 25,829,619 | | | | | | 2,466,720 | | |
| | Mr. Maciel | | | Salary | | | | | 650,000 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | 921,848 | | | | | | 921,848 | | |
| | Intrinsic Value of Accelerated Equity | | | | | — | | | | | | 8,791,753 | | | | | | 6,649,269 | | |
| | Health and Wellness Benefits(4) | | | | | 16,878 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | 4,000 | | | | | | — | | | | | | — | | |
| | Total | | | | | 670,878 | | | | | | 9,713,601 | | | | | | 7,571,116 | | |
| | Mr. Basilio(5) | | | Salary | | | | | 132,692 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | — | | | | | | — | | |
| | Intrinsic Value of Accelerated Equity | | | | | — | | | | | | — | | | | | | — | | |
| | Health and Wellness Benefits(4) | | | | | 11,252 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | — | | | | | | — | | | | | | — | | |
| | Total | | | | | 143,944 | | | | | | — | | | | | | — | | |
| | Mr. Abrams-Rivera | | | Salary | | | | | 800,000 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | 1,530,952 | | | | | | 1,530,952 | | |
| | Intrinsic Value of Accelerated Equity | | | | | — | | | | | | 16,691,884 | | | | | | 12,284,219 | | |
| | Health and Wellness Benefits(4) | | | | | 16,878 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | 4,000 | | | | | | — | | | | | | — | | |
| | Total | | | | | 820,878 | | | | | | 18,222,836 | | | | | | 13,815,171 | | |
| | Ms. La Lande | | | Salary | | | | | 700,000 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | 910,602 | | | | | | 910,602 | | |
| | Intrinsic Value of Accelerated Equity | | | | | — | | | | | | 8,162,607 | | | | | | 5,472,347 | | |
| | Health and Wellness Benefits(4) | | | | | 16,878 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | 4,000 | | | | | | — | | | | | | — | | |
| | Total | | | | | 720,878 | | | | | | 9,073,209 | | | | | | 6,382,949 | | |
| | Mr. Oliveira | | | Salary | | | | | 678,824 | | | | | | — | | | | | | — | | |
| | Bonus | | | | | — | | | | | | 1,340,213 | | | | | | 1,340,213 | | |
| | Intrinsic Value of Accelerated Equity | | | | | 5,495,944 | | | | | | 17,950,311 | | | | | | 14,625,822 | | |
| | Health and Wellness Benefits(4) | | | | | 1,470 | | | | | | — | | | | | | — | | |
| | Outplacement Assistance | | | | | 4,588 | | | | | | — | | | | | | — | | |
| | Total | | | | | 6,180,826 | | | | | | 19,290,524 | | | | | | 15,966,035 | | |
| Name | | Element | | Involuntary Termination
without Cause(1)
($) | | Termination upon
Change in Control(2)
($) | | Termination due to
Death or Disability(3)
($) | | Termination due to
Retirement(4)
($) |
| Mr. Patricio | | Salary | | 2,200,000 | | 2,200,000 | | — | | — |
| | | Bonus | | — | | 6,600,000 | | 3,367,980 | | 3,367,980 |
| | | Intrinsic Value of
Accelerated Equity | | 3,826,855 | | 3,826,855 | | 13,856,147 | | 7,238,132 |
| | | Health and Wellness
Benefits(5) | | 37,356 | | 37,356 | | — | | — |
| | | Outplacement
Assistance | | 3,200 | | 3,200 | | — | | — |
| | | TOTAL | | 6,067,411 | | 12,667,411 | | 17,224,127 | | 10,606,112 |
| Mr. Maciel | | Salary | | 1,087,500 | | 1,087,500 | | — | | — |
| | | Bonus | | — | | 2,175,000 | | 1,466,974 | | 1,466,974 |
| | | Intrinsic Value of
Accelerated Equity | | 2,174,260 | | 2,174,260 | | 10,160,664 | | 4,848,044 |
| | | Health and Wellness
Benefits(5) | | 28,017 | | 28,017 | | — | | — |
| | | Outplacement
Assistance | | 3,200 | | 3,200 | | — | | — |
| | | TOTAL | | 3,292,977 | | 5,467,977 | | 11,627,638 | | 6,315,017 |
| Mr. Abrams-Rivera | | Salary | | 1,200,000 | | 1,200,000 | | — | | — |
| | | Bonus | | — | | 2,700,000 | | 2,257,373 | | 2,257,373 |
| | | Intrinsic Value of
Accelerated Equity | | 4,441,472 | | 4,441,472 | | 20,803,532 | | 12,655,765 |
| | | Health and Wellness
Benefits(5) | | 28,017 | | 28,017 | | — | | — |
| | | Outplacement
Assistance | | 3,200 | | 3,200 | | — | | — |
| | | TOTAL | | 5,672,689 | | 8,372,689 | | 23,060,905 | | 14,913,138 |
| Ms. La Lande | | Salary | | 1,050,000 | | 1,050,000 | | — | | — |
| | | Bonus | | — | | 1,575,000 | | 1,122,660 | | 1,122,660 |
| | | Intrinsic Value of
Accelerated Equity | | 1,505,988 | | 1,505,988 | | 9,337,080 | | 4,358,426 |
| | | Health and Wellness
Benefits(5) | | 28,017 | | 28,017 | | — | | — |
| | | Outplacement
Assistance | | 3,200 | | 3,200 | | — | | — |
| | | TOTAL | | 2,587,205 | | 4,162,205 | | 10,459,740 | | 5,481,086 |
| Mr. Oliveira(5) | | Salary | | 1,081,875 | | 1,081,875 | | — | | — |
| | | Bonus | | — | | 2,434,219 | | 1,667,099 | | 1,667,099 |
| | | Intrinsic Value of
Accelerated Equity | | 5,738,743 | | 5,738,743 | | 15,948,332 | | 9,901,326 |
| | | Health and Wellness
Benefits(5) | | 1,835 | | 1,835 | | — | | — |
| | | Outplacement
Assistance | | 7,350 | | 7,350 | | — | | — |
| | | TOTAL | | 6,829,804 | | 9,264,022 | | 17,615,431 | | 11,568,425 |
| (1) | As of the last day of our 2023 fiscal year, in the event of a termination by the Company other than for cause (as defined in the Severance Plan, which is described below), our Severance Plan generally provides for vesting (including acceleration of vesting) of outstanding equity awards or eligible equity awards in accordance with the applicable award agreement and plan, 24 months of base salary for the CEO and 18 months of base salary for senior executives, payable in a lump sum as soon as possible after termination, and Company-paid COBRA for U.S.-based employees for the severance period and outplacement services, for senior executives with a signed and not revoked release of claims who comply with any applicable post-employment obligations. |
| – | 2019 Matching RSUs vest 80%; 2021 Matching RSUs vest 66.66%; 2022 Matching RSUs vest 33.33% ; and 2021 RSUs vest 66.66%, 2022 RSUs vest 33.33%; and 2021 merit RSUs vest 50%; and 2022 merit RSUs vest 25%; 2021 PSUs vest 66.66%; and 2021 merit PSUs vest 50%; 2021 stock options vest 66.66%; 2022 stock options vest 33.33%; and |
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| 2024 Proxy Statement | 92 |
As of December 31, 2022, no enhanced severance was provided on a termination in connection with a change in control. For 2022, Kraft Heinz did not have a specified Change in Control Plan for executives, and treatment was determined by the plan agreements and local regulations applicable to each employee. | – | 2020 merit RSUs, merit PSUs forfeit 25%; and 2023 RSUs (including Matching RSUs); 2022, 2023 PSUs and merit PSUs are forfeited. |
| Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $38.96, the closing price of Kraft Heinz common stock on December 29, 2023 (the last trading day of our fiscal year), and the exercise price of the options. |
| (2) | As of the last day of our 2023 fiscal year, in the event of a qualifying termination during the change in control period (as defined in the CIC Plan), our CIC Plan generally provides for vesting (including acceleration of vesting) of outstanding equity awards in accordance with the applicable award agreement and plan and a payment equal to (i) 1.5 times the sum (for NEOs other than the CEO) and 2 times the sum (for the CEO) of annual rate of regular pay and target PBP bonus, payable in a lump sum as soon as possible after the change in control, (ii) a pro-rated PBP bonus for the year of termination at target level of achievement, payable at the same time as other performance bonuses are paid, and (iii) Company-paid COBRA for U.S.-based employees for the severance period and outplacement services, for NEOs (including the CEO) with a signed and not revoked release and restrictive covenant agreement. |
| – | 2019 Matching RSUs vest 80%; 2021 Matching RSUs vest 66.66%; 2022 Matching RSUs vest 33.33% ; and 2021 RSUs vest 66.66%, 2022 RSUs vest 33.33%; and 2021 merit RSUs vest 50%; and 2022 merit RSUs vest 25%; 2021 PSUs vest 66.66%; and 2021 merit PSUs vest 50%; 2021 stock options vest 66.66%; 2022 stock options vest 33.33%; and |
| – | 2020 merit RSUs, merit PSUs forfeit 25%; and 2023 RSUs (including Matching RSUs); 2022, 2023 PSUs and merit PSUs are forfeited. |
| Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $38.96, the closing price of Kraft Heinz common stock on December 29, 2023 (the last trading day of our fiscal year), and the exercise price of the options. |
| (3) | As of the last day of our 2023 fiscal year, in the event of a death or disability |
| – | 2019 Matching RSUs; and 2020, 2021, 2022 RSUs and merit RSUs (including Matching RSUs); and 2020, 2021, 2022 PSUs and merit PSUs; and 2023 RSUs (including Matching RSUs); and 2023 PSUs; 2021, 2022 stock options fully vest. |
| Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $38.96, the closing price of Kraft Heinz common stock on December 29, 2023 (the last trading day of our fiscal year), and the exercise price of the options. |
| (4) | As of the last day of our 2023 fiscal year, in the event of a termination due to retirement: |
| – | 2019 Matching RSUs, 2020 merit RSUs, 2021, 2022 RSUs and merit RSUs (including Matching RSUs); and 2020, 2021 merit PSUs; and 2021 PSUs; and 2021, 2022 stock options fully vest; and |
| – | 2022 PSUs and merit PSUs; and 2023 RSUs (including Matching RSUs); and 2023 PSUs are forfeited. |
| Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $36.98, the closing price of Kraft Heinz common stock on December 29, 2023 (the last trading day of our fiscal year), and the exercise price of the options. |
| (5) | Amount reflects 12 months of medical and dental benefit coverage continuation under COBRA, less the executive premium contribution. |
| (6) | As disclosed in our Current Report on Form 8-K filed on November 1, 2023, Mr. Oliveira stepped down as President, International Markets effective December 30, 2023, the last day of our 2023 fiscal year. Mr. Oliveira served as an Advisor to the CEO from December 31, 2023 to March 8, 2024. |
Severance Pay Plan (as defined below) generally provided for 12 months of base salary with a signed release of claims. The 2022 Severance Pay Plan would also include Company-paid COBRA for U.S.-based employees for the severance period and outplacement services.
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Executive Compensation Tables
(2)
As of the last day of our 2022 fiscal year, in the event of a death or disability:
•
2018 and 2019 Matching RSUs and stock options; and 2019, 2020, 2021, and 2022 RSUs (including Matching RSUs) and stock options fully vest; 2018 RSUs vest 60%; and
•
2019, 2020, 2021, and 2022 PSUs are forfeited.
Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $40.71, the closing price of Kraft Heinz common stock on December 30, 2022 (the last trading day of our fiscal year), and the exercise price of the options.
(3)
As of the last day of our 2022 fiscal year, in the event of a termination due to retirement:
•
2018 RSUs (including Matching RSUs) and stock options; 2019, 2020 RSUs (including Matching RSUs) and stock options; and 2021 Matching RSUs and stock options fully vest; and
•
2019 PSUs; 2020 PSUs; 2021 PSUs and RSUs (excluding Matching RSUs); and 2022 PSUs, RSUs (including Matching RSUs), and stock options are forfeited.
Amounts reflect the intrinsic value of shares underlying options that would vest, calculated as the difference between $40.71, the closing price of Kraft Heinz common stock on December 30, 2022 (the last trading day of our fiscal year), and the exercise price of the options.
(4)
Amount reflects 12 months of medical and dental benefit coverage continuation under COBRA, less the executive premium contribution.
(5)
As disclosed in our Current Report on Form 8-K filed on January 21, 2022, Mr. Basilio’s role as Executive Vice President and Chief Financial Officer ended, and Mr. Basilio ceased to be an executive officer of the Company, on March 2, 2022. Mr. Basilio served as Special Advisor to the Company until August 31, 2022, at which point he ceased being an employee of the Company and received no further compensation or benefits. Mr. Basilio’s outstanding long-term incentive awards were treated in accordance with the terms established for resignation.
Severance Pay Plan
2022 Severance Pay Plan
For 2022, generally, we provided for severance benefits to our U.S.-based salaried employees, including our U.S.-based NEOs, pursuant to the terms of the Kraft Heinz Foods Company Severance Pay Plan for Salaried Employees. The severance benefits for non-U.S.-based salaried employees were made pursuant to the local laws and regulations governing the jurisdiction in which the employee works, subject to adjustment at our discretion for employees at certain organizational levels (such benefits, together with the Kraft Heinz Foods Company Severance Pay Plan for Salaried Employees, our “2022 Severance Pay Plan”).
NEOs were eligible for severance benefits under the 2022 Severance Pay Plan upon an involuntary termination of employment, such as job elimination, location closing, or reduction in workforce. NEOs must be willing to provide satisfactory transitional assistance in order to be eligible for severance benefits.
Pursuant to the 2022 Severance Pay Plan, Mr. Patricio, Mr. Maciel, Mr. Abrams-Rivera, and Ms. La Lande would have generally been eligible to receive a severance payment equal to 12 months of base salary upon the execution of a release of claims against Kraft Heinz. In addition, the Compensation Committee may, in its sole discretion, have authorized payment of additional severance in respect of an employee’s annual bonus opportunity. Although Mr. Oliveira is not based in the U.S. and not otherwise covered by the 2022 Severance Pay Plan, the Company determined that he was eligible to receive the same benefits as our U.S.-based NEOs. Severance payments would generally be made in a cash lump sum, but may have occasionally been made in periodic payments at Kraft Heinz’s discretion, as soon as administratively feasible after the termination of employment and after the former NEO’s executed release had become irrevocable.
2023 Severance Pay Plan
Effective January 1, 2023, the Board approved The Kraft Heinz Company Amended & Restated Severance Pay Plan for Salaried Employees (the “2023 Severance“Severance Plan”). Under the 2023 Severance Plan, salaried employees, including the CEO and the other NEOs, who experience a qualifying termination will be eligible to receive severance payments and benefits as follows:
•
Severance pay equal to 24 months of base salary for the CEO and 18 months of base salary for senior executives, as defined in the plan;
•
Health and welfare benefits continued for 24 months following the qualifying termination for the CEO and 18 months following the qualifying termination for senior executives, as defined in the plan;
The Kraft Heinz Company 2023 Proxy Statement|95
Executive Compensation Tables
•
Outplacement services to assist covered employees with their transition to new employment; and
•
Vesting (including acceleration of vesting) of outstanding equity awards in accordance with the terms of the applicable award agreement and plan.
| ● | Severance pay equal to 24 months of base salary for the CEO and 18 months of base salary for senior executives, as defined in the plan; |
| ● | Health and welfare benefits continued for 24 months following the qualifying termination for the CEO and 18 months following the qualifying termination for senior executives, as defined in the Severance Plan; |
| ● | Outplacement services to assist covered employees with their transition to new employment; and |
| ● | Vesting (including acceleration of vesting) of outstanding equity awards in accordance with the terms of the applicable award agreement and plan. |
In order to receive severance payments and benefits under the 2023 Severance Plan, recipients must agree to a non-revocable release of claims and continued compliance with restrictive covenants, including non-competition and non-solicitation covenants that run for a number of months following termination of employment equal toobligations.
Change in Control Severance Plan
For more information regarding the number of months usedCIC Plan, see above under —Compensation Discussion and Analysis—Other Compensation Policies and Practices—Change in the calculation of severance pay.
Control Severance Plan.Equity Awards
The Compensation Committee approved the terms of award agreements for equity awards (options, PSUs, Matching RSUs, and RSUs) granted under the 2020 Omnibus Incentive Plan. For all awards issued under these agreements, the award recipient’s termination due to death or disability would result in such awards being fully vested and exercisable, in the case of PSUs to the extent the performance conditions had been satisfied.
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| 2024 Proxy Statement | 93 |
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PAY RATIO DISCLOSURE
In accordance with SEC rules, we disclose the annual total compensation of Mr. Patricio, our Chief Executive Officer,CEO for our 2023 fiscal year, and our median employee, as well as the ratio of the annual total compensation of Mr. Patricio relative to the annual total compensation of our median employee. For our 20222023 fiscal year:
| | | | Annual Total Compensation
| | | Pay Ratio
| |
| Mr. Patricio, our Chief Executive OfficerCEO for our 2023 fiscal year | | 11,359,250 | | | 7,098,246 | | | | | | 164:151:1 | | |
| Our median employee | | 75,128 | | | 43,160 | | |
Under SEC rules, we select a methodology for identifying our median employee most appropriate based on our size, organizational structure, and compensation plans, policies, and procedures using our best judgment. As permitted under SEC rules, we determined that there have not been any changes to our employee population and compensation arrangements from fiscal year 2020 that we believe would result in a significant change to our pay ratio disclosure. As a result, for 2022, we used the same median employee that was identified for fiscal year 2020.
Our median employee as of December 1, 20202023 was a full-time hourly non-U.S.U.S. factory employee. To identify our median employee, we examined 20202023 base salaries plus target incentive bonuses for our employee population, excluding our Chief Executive Officer, as of December 1, 2020.2023. We believe the use of base salaries plus target incentive bonus for all employees is a consistently applied compensation measure, because we do not widely distribute annual equity awards to employees and because we believe that this measure reasonably reflects the total annual compensation of our employees. In accordance with SEC rules, we includedinclude all full-time, part-time, temporary, and seasonal employees worldwide. We excludedexclude independent contractors, student interns, and individuals who became employees as the result of acquisitions for the fiscal year in which the transaction became effective. In 2021,2023, we did not have any employees omitted employees related to acquisitions included approximately 400 employees related to the acquisition of Assan Gıda Sanayi ve Ticaret A.Ş. and approximately 100 employees related to the acquisition of BR Spices Indústria e Comércio de Alimentos Ltda. In 2022, omitted employees related to acquisitions include approximately 750 employees related to the acquisition of Companhia Hemmer Indústria e Comércio and approximately 175 employees related to the acquisition of Just Spices GmbH.
acquisitions. We calculated annual total compensation in accordance with the disclosure rules and requirements for our NEOs under the
Summary Compensation Table on page 84. As SEC rules allow companies to adopt a variety of methodologies for identifying a median employee and calculating the pay ratio, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their individual employee populations and compensation practices, the pay ratio reported by other companies, including companies in our compensation peer group, may not be comparable to our pay ratio.
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| 2024 Proxy Statement | 94 |
The Kraft Heinz Company 2023 Proxy Statement|97
PAY VERSUS PERFORMANCE DISCLOSURE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (“CAP”) and certain financial performance of the Company. Unless the context requires otherwise, references to years below mean our fiscal years.
Pay Versus Performance Table
| | | | | Summary
Compensation
Table (SCT)
Total for CEO(1)
($) | | | | | | | | | | | | | | | | | | | | | Value of Initial Fixed
$100 Investment Based On: | | | | | | | | | | | | | |
| | Year | | | Compensation
Actually Paid
(“CAP”) to CEO(2)
($) | | | Average SCT
Total for Non-
CEO NEOs(3)
($) | | | Average CAP
to Non-CEO
NEOs(4)
($) | | | Total
Shareholder
Return (TSR)(5)
($) | | | Peer Group
TSR(6)
($) | | | Net Income(7)
($ in millions) | | | PBP EBITDA(8)
($ in millions) | |
| | 2022 | | | | | 7,098,246 | | | | | | 11,036,341 | | | | | | 5,609,580 | | | | | | 9,451,924 | | | | | | 148.13 | | | | | | 132.06 | | | | | | 2,368 | | | | | | 6,031 | | |
| | 2021 | | | | | 8,605,599 | | | | | | 6,901,200 | | | | | | 6,259,577 | | | | | | 7,248,556 | | | | | | 123.00 | | | | | | 119.73 | | | | | | 1,024 | | | | | | 6,277 | | |
| | 2020 | | | | | 6,140,131 | | | | | | 13,126,331 | | | | | | 9,160,325 | | | | | | 15,041,961 | | | | | | 117.05 | | | | | | 105.30 | | | | | | 361 | | | | | | 6,797 | | |
| | | | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | |
| Year | | Summary
Compensation Table
(SCT) Total for
CEO(1)
($) | | Compensation
Actually Paid
(CAP) to CEO(2)
($) | | Average SCT
Total for
Non-CEO NEOs(3)
($) | | Average CAP to
Non-CEO NEOs(4)
($) | | Total
Shareholder
Return (TSR)(5)
($) | | Peer Group
TSR(6)
($) | | Net Income(7)
($ in millions) | | PBP EBITDA(8)
($ in millions) |
| 2023 | | 11,359,250 | | 8,155,888 | | 6,765,828 | | 5,379,052 | | 140.65 | | 126.06 | | 2,846 | | 6,298 |
| 2022 | | 7,098,246 | | 11,036,341 | | 5,609,580 | | 9,451,924 | | 148.13 | | 132.48 | | 2,368 | | 6,031 |
| 2021 | | 8,605,599 | | 6,901,200 | | 6,259,577 | | 7,248,556 | | 123.00 | | 119.88 | | 1,024 | | 6,277 |
| 2020 | | 6,140,131 | | 13,126,331 | | 9,160,325 | | 15,041,961 | | 117.05 | | 105.53 | | 361 | | 6,797 |
| (1) | The dollar amounts reported are the amounts of Total Compensation reported in the Summary Compensation Table for each corresponding fiscal year. |
| (2) | The dollar amounts reported represent the amount of CAP calculated in accordance with SEC rules. The amounts do not reflect the actual amount of compensation earned by, or paid during, the applicable year. To calculate CAP, the following amounts were deducted from and added to Total Compensation reflected in the Summary Compensation Table: |
| (3) | The dollar amounts reported represent the average of the amounts reported for the Company’s NEOs as a group (excluding our CEO) under Total Compensation column of the Summary Compensation Table in each applicable year. Our non-CEO NEOs included for purposes of calculating the average amounts in each applicable year: 2023: Mr. Maciel, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; 2022: Mr. Basilio, Mr. Maciel, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; 2021: Mr. Basilio, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; and 2020: Mr. Basilio, Mr. Abrams-Rivera, Mr. Oliveira, and Flavio Torres. |
| Mr. Oliveira’s compensation is paid in British pounds (£) and Mr. Torres’ compensation was paid in Brazilian real (R$). The amounts used for the NEO Average SCT Total Compensation for Other NEOs are based on the 12-month average exchange rate for the calendar year as reported in the Summary Compensation Table for the applicable year. For Mr. Oliveira, the applicable exchange rates were $1 to £0.80 for 2023, $1 to £0.85 for 2022, $1 to £0.73 for 2021, and $1 to £0.777 for 2020. For Mr. Torres, the applicable exchange rate was $1 to R$5.4 for 2020. |
| (4) | The dollar amounts reported represent the average amount of CAP to the NEOs as a group (excluding our CEO), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our CEO) during the applicable fiscal year. In accordance with the SEC rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding our CEO) for each year to determine the CAP, using the same methodology described above in Note 2. To calculate the CAP, the following amounts were deducted from and added to the Summary Compensation Table total compensation: |
| (5) | Based on an initial fixed investment of $100 on December 26, 2020, the last day of our 2020 fiscal year. |
| (6) | Represents the S&P Consumer Staples Food and Soft Drink Products, which we consider to be our peer group under Regulation S-K Item 201(e), as presented in our 2023 Annual Report. Based on an initial fixed investment of $100 on December 26, 2020, the last day of our 2020 fiscal year. TSR is weighted according to each peer company’s stock market capitalization at the beginning of each period for which a return is indicated. |
| (7) | The dollar amounts reported represent the amount of net income reflected in the Company’s financial statements for the applicable year. |
| (8) | PBP EBITDA is defined above under —Compensation Discussion and Analysis —2023 Executive Compensation Program—Annual Cash-Based Performance Bonus Plan (PBP)—Financial Measure. |
| (1) | The dollar amounts reported are the amounts of Total Compensation reported in the Summary Compensation Table for each corresponding fiscal year. |
| (2) | The dollar amounts reported represent the amount of CAP calculated in accordance with SEC rules. The amounts do not reflect the actual amount of compensation earned by, or paid during, the applicable year. To calculate CAP, the following amounts were deducted from and added to Total Compensation reflected in the Summary Compensation Table: |
| |
| 2024 Proxy Statement | 95 |
The dollar amounts reported are the amounts of Total Compensation reported in the Summary Compensation Table on page Reconciliation of SCT Total for CEO to Compensation Actually PaidCAP to CEO:
| | Compensation Actually Paid to CEO | | | 2022 | | | 2021 | | | 2020 | |
| | Summary Compensation Table (SCT) Total(i) | | | | | 7,098,246 | | | | | | 8,605,599 | | | | | | 6,140,131 | | |
| | Less, value of Stock Awards and Option Awards reported in SCT(ii) | | | | | 2,875,162 | | | | | | 3,743,976 | | | | | | 360,783 | | |
| | Plus, year-end fair value of outstanding and unvested equity awards granted in the year(iii) | | | | | 3,026,056 | | | | | | 3,558,241 | | | | | | 484,088 | | |
| | Plus, fair value as of vesting date of equity awards granted and vested in the year(iv) | | | | | — | | | | | | — | | | | | | — | | |
| | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years(iii) | | | | | 2,843,969 | | | | | | (4,612,721) | | | | | | 6,862,895 | | |
| | Plus (less), year over year change in fair value of equity awards granted
in prior years that vested in the year(iii) | | | | | 1,654,310 | | | | | | 3,094,057 | | | | | | — | | |
| | Less, prior year-end fair value for any equity awards forfeited in the year(iii) | | | | | (711,078) | | | | | | — | | | | | | — | | |
| | Compensation Actually Paid to CEO(a)(b)(c) | | | | | 11,036,341 | | | | | | 6,901,200 | | | | | | 13,126,331 | | |
| CAP to CEO | | 2023 | | 2022 | | 2021 | | 2020 |
| Summary Compensation Table (SCT) Total(i) | | 11,359,250 | | 7,098,246 | | 8,605,599 | | 6,140,131 |
| Less, value of Stock Awards and Option Awards reported in SCT(ii) | | 6,264,792 | | 2,875,162 | | 3,743,976 | | 360,783 |
| Plus, year-end fair value of outstanding and unvested equity awards granted in the year(iii) | | 6,295,041 | | 3,026,056 | | 3,558,241 | | 484,088 |
| Plus, fair value as of vesting date of equity awards granted and vested in the year(iv) | | — | | — | | — | | — |
| Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years(iii) | | (730,077) | | 2,843,969 | | (4,612,721) | | 6,862,895 |
| Plus (less), change in fair value from the prior year-end through the vesting date of equity awards granted in prior years that vested in the year(iii) | | (2,503,534) | | 1,654,310 | | 3,094,057 | | — |
| Less, prior year-end fair value for any equity awards forfeited in the year(iii) | | — | | (711,078) | | — | | — |
| CAP to CEO(a)(b)(c) | | 8,155,888 | | 11,036,341 | | 6,901,200 | | 13,126,331 |
| (i) | In 2020, 2021, 2022 and 2023, Mr. Patricio did not receive a cash bonus other than his PBP payout reflected in Non-Equity Incentive Compensation. |
| (ii) | Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table for each applicable fiscal year. |
| (iii) | Additions include the aggregate sum of: increase by fair value of awards granted during the applicable year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior year awards that remain unvested at the applicable fiscal year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal awards that vested during the applicable year as of the vesting date as compared to the fair value as of the prior fiscal year end; deduction of fair value of the prior year awards as of the prior fiscal year end that were forfeited during the applicable year; increase by the amount of dividends paid on unvested awards during the applicable year prior to the vesting date; increase by incremental fair value of stock options modified during the applicable year. |
| (iv) | In 2020, 2021, 2022, and 2023 we did not grant any awards that vested in the same year they were granted. |
| (v) | In 2019, Mr. Patricio was granted new hire awards of PSUs and RSUs in the aggregate amount of $35 million, conditioned on his investment of $20 million to purchase shares of the Company stock, with a four-year holding requirement. He was not eligible to receive additional equity awards in 2020, 2021, and 2022, other than matching RSUs that may be granted to Mr. Patricio through his participation in our Bonus Investment Plan. |
| (vi) | Mr. Patricio was also granted a new hire award of PSUs based on the achievement of certain Company stock price targets. As of fiscal year-end 2022 the target had not been met. |
| (vii) | In 2023, Mr. Patricio became eligible to receive equity awards. |
| (i) | In 2020, 2021, 2022 and 2023, Mr. Patricio did not receive a cash bonus other than his PBP payout reflected in Non-Equity Incentive Compensation. |
| (ii) | Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table for each applicable fiscal year. |
| (iii) | Additions include the aggregate sum of: increase by fair value of awards granted during the applicable year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior year awards that remain unvested at the applicable fiscal year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal awards that vested during the applicable year as of the vesting date as compared to the fair value as of the prior fiscal year end; deduction of fair value of the prior year awards as of the prior fiscal year end that were forfeited during the applicable year; increase by the amount of dividends paid on unvested awards during the applicable year prior to the vesting date; increase by incremental fair value of stock options modified during the applicable year. |
| (iv) | In 2020, 2021, 2022, and 2023 we did not grant any awards that vested in the same year they were granted. |
| (v) | In 2019, Mr. Patricio was granted new hire awards of PSUs and RSUs in the aggregate amount of $35 million, conditioned on his investment of $20 million to purchase shares of the Company stock, with a four-year holding requirement. He was not eligible to receive additional equity awards in 2020, 2021, and 2022, other than matching RSUs that may be granted to Mr. Patricio through his participation in our Bonus Investment Plan. |
| (vi) | Mr. Patricio was also granted a new hire award of PSUs based on the achievement of certain Company stock price targets. As of fiscal year-end 2022 the target had not been met. |
| (vii) | In 2023, Mr. Patricio became eligible to receive equity awards. |
| (3) | The dollar amounts reported represent the average of the amounts reported for the Company’s NEOs as a group (excluding our CEO) under Total Compensation column of the Summary Compensation Table in each applicable year. Our non-CEO NEOs included for purposes of calculating the average amounts in each applicable year: |
| – | 2023: Mr. Maciel, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; |
| – | 2022: Mr. Basilio, Mr. Maciel, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; |
| – | 2021: Mr. Basilio, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; and |
| – | 2020: Mr. Basilio, Mr. Abrams-Rivera, Mr. Oliveira, and Flavio Torres. |
| Mr. Oliveira’s compensation is paid in British pounds (£) and Mr. Torres’ compensation was paid in Brazilian real (R$). The amounts used for the NEO Average SCT Total Compensation for Other NEOs are based on the 12-month average exchange rate for the calendar year as reported in the Summary Compensation Table for the applicable year. For Mr. Oliveira, the applicable exchange rates were $1 to £0.80 for 2023, $1 to £0.85 for 2022, $1 to £0.73 for 2021, and $1 to £0.777 for 2020. For Mr. Torres, the applicable exchange rate was $1 to R$5.4 for 2020. |
| (4) | The dollar amounts reported represent the average amount of CAP to the NEOs as a group (excluding our CEO), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our CEO) during the applicable fiscal year. In accordance with the SEC rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding our CEO) for each year to determine the CAP, using the same methodology described above in Note 2. To calculate the CAP, the following amounts were deducted from and added to the Summary Compensation Table total compensation: |
| |
| 2024 Proxy Statement | 96 |
In 2020, 2021, and 2022, Mr. Patricio did not receive a cash bonus other than his PBP payout reflected in Non-Equity Incentive Compensation.
(ii)
Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table on page 84 for each applicable fiscal year.
(iii)
Additions include the aggregate sum of: increase by fair value of awards granted during the applicable year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior year awards that remain unvested at the applicable fiscal year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal awards that vested during the applicable year as of the vesting date as compared to the fair value as of the
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prior fiscal year end; deduction of fair value of the prior year awards as of the prior fiscal year end that were forfeited during the applicable year; increase by the amount of dividends paid on unvested awards during the applicable year prior to the vesting date; increase by incremental fair value of stock options modified during the applicable year.
(iv)
In 2020, 2021, and 2022 we did not grant any awards that vested in the same year they were granted.
(v)
In 2019, Mr. Patricio was granted new hire awards of PSUs and RSUs in the aggregate amount of $35 million, conditioned on his investment of $20 million to purchase shares of the Company stock, with a four-year holding requirement. He was not eligible to receive additional equity awards in 2020, 2021, and 2022, other than matching RSUs that may be granted to Mr. Patricio through his participation in our Bonus Investment Plan.
(vi)
Mr. Patricio was also granted a new hire award of PSUs based on the achievement of certain Company stock price targets. As of fiscal year-end 2022 the target has not been met.
(3)
The dollar amounts reported represent the average of the amounts reported for the Company’s NEOs as a group (excluding our CEO) under Total Compensation column of the Summary Compensation Table on page 84 in each applicable year. Our non-CEO NEOs included for purposes of calculating the average amounts in each applicable year:
•
2022: Mr. Basilio, Mr. Maciel, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira;
•
2021: Mr. Basilio, Mr. Abrams-Rivera, Ms. La Lande, and Mr. Oliveira; and
•
2020: Mr. Basilio, Mr. Abrams-Rivera, Mr. Oliveira, and Flavio Torres.
Mr. Oliveira’s compensation is paid in British pounds (£) and Mr. Torres’ compensation was paid in Brazilian real (R$). The amounts used for the NEO Average SCT Total Compensation for Other NEOs are based on the 12-month average exchange rate for the calendar year as reported in the Summary Compensation Table on page 84 for the applicable year. For Mr. Oliveira, the applicable exchange rates were $1 to £0.85 for 2022, $1 to £0.73 for 2021, and $1 to £0.777 for 2020. For Mr. Torres, the applicable exchange rate was $1 to R$5.4 for 2020.(4)
The dollar amounts reported represent the average amount of Compensation Actually Paid to the NEOs as a group (excluding our CEO), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our CEO) during the applicable fiscal year. In accordance with the SEC rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding our CEO) for each year to determine the Compensation Actually Paid, using the same methodology described above in Note 2. To calculate the Compensation Actually Paid, the following amounts were deducted from and added to the Summary Compensation Table total compensation:
Company Overview | Voting
Roadmap | Stockholder
Engagement | Our
Board | Governance | Director
Compensation | Beneficial
Ownership | Executive
Compensation | | Audit
Matters | Stockholder
Proposals | Other
Information | Appendix A.
Non-GAAP |
Reconciliation of Average SCT for Non-CEO NEOs to Average Compensation Actually PaidCAP to Non-CEO NEOs:
| | Compensation Actually Paid to Non-CEO NEOs | | | 2022 | | | 2021 | | | 2020 | |
| | Summary Compensation Table (SCT) Total(i)(ii) | | | | | 5,609,580 | | | | | | 6,259,577 | | | | | | 9,160,325 | | |
| | Less, value of Stock Awards and Option Awards reported in SCT(iii) | | | | | 2,479,584 | | | | | | 1,902,553 | | | | | | 10,181,443 | | |
| | Plus, year-end fair value of outstanding and unvested equity awards granted in the year(iv) | | | | | 2,666,378 | | | | | | 1,616,112 | | | | | | 13,273,785 | | |
| | Plus, fair value as of vesting date of equity awards granted and vested in the year(v) | | | | | — | | | | | | — | | | | | | — | | |
| | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years(iv) | | | | | 3,238,765 | | | | | | 712,113 | | | | | | 2,789,294 | | |
| | Plus (less), year over year change in fair value of equity awards granted in
prior years that vested in the year(iv) | | | | | 416,784 | | | | | | 619,857 | | | | | | — | | |
| | Less, prior year-end fair value for any equity awards forfeited in the year(iv) | | | | | — | | | | | | (56,550) | | | | | | — | | |
| | Compensation Actually Paid to Non-CEO NEOs(a)(b)(c) | | | | | 9,451,924 | | | | | | 7,248,556 | | | | | | 15,041,961 | | |
| CAP to Non-CEO NEOs | | 2023 | | 2022 | | 2021 | | 2020 |
| Summary Compensation Table (SCT) Total(i)(ii) | | 6,765,828 | | 5,609,580 | | 6,259,577 | | 9,160,325 |
| Less, value of Stock Awards and Option Awards reported in SCT(iii) | | 3,057,950 | | 2,479,584 | | 1,902,553 | | 10,181,443 |
| Plus, year-end fair value of outstanding and unvested equity awards granted in the year(iv) | | 3,127,635 | | 2,666,378 | | 1,616,112 | | 13,273,785 |
| Plus, fair value as of vesting date of equity awards granted and vested in the year(v) | | — | | — | | — | | — |
| Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years(iv) | | (681,776) | | 3,238,765 | | 712,113 | | 2,789,294 |
| Plus (less) change in fair value from the prior year-end through the vesting date of equity awards granted in prior years that vested in the year(iv) | | (774,685) | | 416,784 | | 619,857 | | — |
| Less, prior year-end fair value for any equity awards forfeited in the year(iv) | | — | | — | | (56,550) | | — |
| CAP to Non-CEO NEOs(a)(b)(c) | | 5,379,052 | | 9,451,924 | | 7,248,556 | | 15,041,961 |
| (i.) | In 2020, the summary compensation table average is impacted by new hire bonuses and new hire awards. |
| (ii.) | In 2021, 2022, and 2023, no non-CEO NEOs received a cash bonus other than their PBP payout reflected in Non-Equity Incentive Compensation. |
| (iii.) | Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table for each applicable year. |
| (iv.) | Additions include the aggregate sum of: increase by fair value of awards granted during the applicable fiscal year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior fiscal year awards that remain unvested at the applicable fiscal year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal year awards that vested during the applicable fiscal as of the vesting date as compared to the fair value as of the prior fiscal year end; deduction of fair value of the prior fiscal year awards as of the prior fiscal year end that were forfeited during the applicable fiscal year; increase by the amount of dividends paid on unvested awards during the applicable fiscal year prior to the vesting date; increase by incremental fair value of Options modified during the applicable fiscal year. |
| (v.) | In 2020, 2021, 2022, and 2023 we did not grant any awards that vested in the same year they were granted. |
| (a) | For the valuation of stock options, we used the Hull-White I lattice model, under which vested options are expected to be exercised once the stock-to-strike ratio has been achieved, based on a settlement assumption that was derived from the grant-date valuation of the options. All other assumptions were estimated using the same methodology as used to determine the grant date fair value of the options, as disclosed in our 2023 Annual Report. |
| (b) | The estimated fair values of the Company’s unvested relative TSR PSU awards were valued using a Monte Carlo simulation as of each relevant measurement date for fiscal years 2021 to 2023. |
| (c) | The Non-dividend Protected PSU fair value was estimated by discounting the fair value of the PSUs based on the dividend yield. Dividend yield was estimated using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded. The grant date fair value of PSUs is amortized to expense on a straight-line basis over the requisite service period for each separately vesting portion of the awards. We adjust the expense based on the likelihood of future achievement of performance metrics. |
| (i) | In 2020, the summary compensation table average is impacted by new hire bonuses and new hire awards. |
| (ii) | In 2021, 2022, and 2023, no non-CEO NEOs received a cash bonus other than their PBP payout reflected in Non-Equity Incentive Compensation. |
| (iii) | Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table for each applicable year. |
| (iv) | Additions include the aggregate sum of: increase by fair value of awards granted during the applicable fiscal year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior fiscal year awards that remain unvested at the applicable fiscal year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal year awards that vested during the applicable fiscal as of the vesting date as compared to the fair value as of the prior fiscal year end; deduction of fair value of the prior fiscal year awards as of the prior fiscal year end that were forfeited during the applicable fiscal year; increase by the amount of dividends paid on unvested awards during the applicable fiscal year prior to the vesting date; increase by incremental fair value of Options modified during the applicable fiscal year. |
| (v) | In 2020, 2021, 2022, and 2023 we did not grant any awards that vested in the same year they were granted. |
| (a) | For the valuation of stock options, we used the Hull-White I lattice model, under which vested options are expected to be exercised once the stock-to-strike ratio has been achieved, based on a settlement assumption that was derived from the grant-date valuation of the options. All other assumptions were estimated using the same methodology as used to determine the grant date fair value of the options, as disclosed in our 2023 Annual Report. |
| (b) | The estimated fair values of the Company’s unvested relative TSR PSU awards were valued using a Monte Carlo simulation as of each relevant measurement date for fiscal years 2021 to 2023. |
| (c) | The Non-dividend Protected PSU fair value was estimated by discounting the fair value of the PSUs based on the dividend yield. Dividend yield was estimated using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded. The grant date fair value of PSUs is amortized to expense on a straight-line basis over the requisite service period for each separately vesting portion of the awards. We adjust the expense based on the likelihood of future achievement of performance metrics. |
| (5) | Based on an initial fixed investment of $100 on December 26, 2020, the last day of our 2020 fiscal year. |
| (6) | Represents the S&P Consumer Staples Food and Soft Drink Products, which we consider to be our peer group under Regulation S-K Item 201(e), as presented in our 2023 Annual Report. Based on an initial fixed investment of $100 on December 26, 2020, the last day of our 2020 fiscal year. TSR is weighted according to each peer company’s stock market capitalization at the beginning of each period for which a return is indicated. |
| (7) | The dollar amounts reported represent the amount of net income reflected in the Company’s financial statements for the applicable year. |
| (8) | PBP EBITDA is defined above under —Compensation Discussion and Analysis —2023 Executive Compensation Program—Annual Cash-Based Performance Bonus Plan (PBP)—Financial Measure. |
| |
| 2024 Proxy Statement | 97 |
In 2020, the summary compensation table average is impacted by new hire bonuses and new hire awards.
(ii)
In 2021 and 2022, no non-CEO NEOs received a cash bonus other than their PBP payout reflected in Non-Equity Incentive Compensation.
(iii)
Deductions include the total grant date fair value of awards as reported in the Summary Compensation Table on page 84 for each applicable year.
(iv)
Additions include the aggregate sum of: increase by fair value of awards granted during the applicable fiscal year that remain unvested as of the applicable fiscal year end, determined at the applicable fiscal year end; increase or decrease by change in fair value of outstanding unvested prior fiscal year awards that remain unvested at the applicable fiscal
The Kraft Heinz Company 2023 Proxy Statement|99
Pay Versus Performance Disclosure
year end as compared to the fair value as of the prior fiscal year end; increase or decrease by the change in fair value of prior fiscal yar awards that vested during the applicable fiscal as of the vesting date as compared to the fair value as of the prior fiscal year end; deduction of fair value of the prior fiscal year awards as of the prior fiscal year end that were forfeited during the applicable fiscal year; increase by the amount of dividends paid on unvested awards during the applicable fiscal year prior to the vesting date; increase by incremental fair value of Options modified during the applicable fiscal year.
(v)
In 2020, 2021, and 2022 we did not grant any awards that vested in the same year they were granted.
(a)
For the valuation of stock options, we used the Hull-White I lattice model, under which vested options are expected to be exercised once the stock-to-strike ratio has been achieved, based on a settlement assumption that was derived from the grant-date valuation of the options. All other assumptions were estimated using the same methodology as used to determine the grant date fair value of the options, as disclosed in our 2022 Annual Report.
(b)
The estimated fair values of the Company’s unvested relative TSR PSU awards were valued using a Monte Carlo simulation as of each relevant measurement date for fiscal years 2021 to 2022. To calculate total PSU fair value as of each measurement date for each NEO, the TSR fair values were multiplied by the number of target units unvested and outstanding under each tranche. The total compensation expense for a given award would be equal to the sum of all tranches. The following describe the fundamental characteristics of the modeling process.
•
The model assumes that the stock prices of Kraft Heinz and the peer firms follow a correlated geometric Brownian motion. This is a standard assumption used in Monte Carlo multivariate pricing models.
•
The daily stock prices for Kraft Heinz and the peer firms are simulated over the remaining performance period using volatilities and correlations calculated from daily stock returns over a term-matched lookback term from the measurement date.
•
The valuation is done under a risk-neutral framework using the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the measurement date.
•
The dividend yield is calculated as Kraft Heinz’s quarterly dividend payment as of the measurement date divided by Kraft Heinz’s average three-month stock price as of the measurement date, annualized and compounded.
•
The awards granted do not receive DEUs over the vesting period, therefore a discount was applied to account for Kraft Heinz dividends.
•
TSRs are calculated for Kraft Heinz and the peer firms at the end of the performance period, then ranked in descending order. The percentile ranking of Kraft Heinz is then checked against the payout schedule to determine the value of the award. This value is then discounted back to the measurement date using the risk-free interest rate.
•
The simulation is repeated numerous times (100,000 in this case), and the mean of the discounted values is the measurement-date fair value of the award.
(c)
The Non-dividend Protected PSU fair value was estimated by discounting the fair value of the PSUs based on the dividend yield. Dividend yield was estimated using the quarterly dividend divided by the three-month average stock price, annualized and continuously compounded. The grant date fair value of PSUs is amortized to expense on a straight-line basis over the requisite service period for each separately vesting portion of the awards. We adjust the expense based on the likelihood of future achievement of performance metrics.
(5)
Based on an initial fixed investment of $100 on December 27, 2019, the last day of our 2019 fiscal year.
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Pay Versus Performance Disclosure
(6)
Represents the S&P Consumer Staples Food and Soft Drink Products, which we consider to be our peer group under Regulation S-K Item 201(e), as presented in our 2022 Annual Report. Based on an initial fixed investment of $100 on December 27, 2019, the last day of our 2019 fiscal year. TSR is weighted according to each peer company’s stock market capitalization at the beginning of each period for which a return is indicated.
(7)
The dollar amounts reported represent the amount of net income reflected in the Company’s financial statements for the applicable year.
(8)
PBP EBITDA is defined under Compensation Discussion and Analysis—2022 Executive Compensation Program—Annual Cash-Based Performance Bonus Plan (PBP)—Financial Measure on page 72.
Company Overview | Voting
Roadmap | Stockholder
Engagement | Our
Board | Governance | Director
Compensation | Beneficial
Ownership | Executive
Compensation | | Audit
Matters | Stockholder
Proposals | Other
Information | Appendix A.
Non-GAAP |
List of Financial Performance Measures
The following represent the most important metrics we used to determine Compensation Actually PaidCAP for 2022,2023, as further detailed in the
Compensation Discussion and Analysis beginning on page 59:•
Organic Net Sales
•
Cash conversion
•
Market share performance
•
PBP adjusted gross profit margin
Our executive compensation program reflects a variable pay-for-performance philosophy. The metrics we use for our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase value for our stockholders.
in this Proxy Statement:| ● | PBP EBITDA |
| ● | Organic Net Sales |
| ● | Cash conversion |
| ● | Market share |
| ● | PBP Adjusted Gross Profit Margin |
Cumulative TSR
The TSR peer group includes S&P Consumer Staples Good and Soft Drink Products companies, as also disclosed in our 20222023 Annual Report. Companies included in the S&P Consumer Staples Food and Soft Drink Products index change periodically and are presented on the basis of the index as it is comprised on December 31, 2022.30, 2023. The peer group used for this pay versus performance disclosure differ from the peer groups we use for compensation and the TSR performance measure in our PSU awards. For additional information on our compensation and performance peer groups, see
above under —Compensation Discussion and Analysis—Compensation Structure and Goals—Year-Round Executive Compensation-Setting Process—Role of Peer Groups beginning on page 64.TheTSR Comparison
December 27, 2019 December 24, 2020 December 23, 2021 December 30, 2022 December 30, 2023 Kraft Heinz Company
2023 Proxy Statement|101
Pay Versus Performance Disclosure
TSR Comparison
The following graph compares the cumulative total return on our common stock with the cumulative total return ofS&P Consumer Staples Packaged Food & Soft Drinks $0 $20 $40 $60 $80 $100 $120 $140 $160We consider the S&P Consumer Staples Food and Soft Drink Products which we consider our peer group under Regulation S-K Item 201(e), as presented in our 20222023 Annual Report. As shown below, the Company’s three-year cumulative TSR steadily increased and remained above our TSR peer group for the three-year period.
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| 2024 Proxy Statement | 98 |
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Compensation Actually Paid
CAP versus Company Cumulative TSR
Compensation Actually Paid andCAP versus Company Cumulative TSR
As shown below, the Compensation Actually Paid (CAP) $ in millions Total Shareholder Return (TSR) Value of Initial Fixed $100 Investment CAP to CEO Average CAP to Non-CEO Company TSR $140.65 $8.16 $0 $2 $4 $6 $8 $10 $12 $14 $16 $0 $25 $50 $75 $100 $125 $150 $175 $200 2020 2021 2022 2023 $117.05 $123.00 $15.04 $13.13 $6.90 $7.25 $11.04 $9.45 $148.13 $5.38CAP to our CEO and other NEOs is aligned with the Company’s TSR. This is due primarily to the Company’s compensation philosophy of meritocracy and the significance of equity-based compensation in our compensation program, which aligns equity to the Company’s financial performance. Additionally, for 2020:
•
theCAP versus Net Income
CAP versus Net Income Compensation Actually Paid to our CEO was higher primarily due to new hire equity awards granted(CAP) $ in 2019; and
•
the Average Compensation Actually Paid to our other NEOs was higher primarily due to new hire equity awards and cash bonuses paid to two non-CEO NEOs and one-time cash retention bonuses paid to our other non-CEO NEOs.
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Pay Versus Performance Disclosure
Compensation Actually Paid andmillions Net Income
As shown below, the Company’s net $ in millions CAP to CEO Average CAP to Non-CEO Net Income $8.16 $0 $2 $4 $6 $8 $10 $12 $14 $16 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 2020 2021 2022 2023 $15.04 $13.13 $6.90 $7.25 $11.04 $9.45 $5.38 $361 $1,024 $2,368 $2,846Net income has steadily increased while the CEO and other NEOs’ Compensation Actually PaidCAP has fluctuated each year. This is due primarily to the fact that we do not use net income to determine compensation levels or incentive plan payouts. Additionally, for 2020:
•
theCAP versus Four-Year Cumulative PBP EBITDA
CAP versus Four-Year Cumulative PBP EBITDA Compensation Actually Paid (CAP) $ in millions 4-Year Cumulative PBP $ in millions CAP to our CEO was higher primarily dueAverage CAP to new hire equity awards granted in 2019; and
•
the Average Compensation Actually Paid to our other NEOs was higher primarily due to new hire equity awards and cash bonuses paid to two non-CEO NEOs and one-time cash retention bonuses paid to our other non-CEO NEOs.
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Pay Versus Performance Disclosure
Compensation Actually Paid andNon-CEO 4-Year Cumulative PBP EBITDA
As shown below, there$8.16 $0 $2 $4 $6 $8 $10 $12 $14 $16 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2020 2021 2022 2023 $15.04 $13.13 $6.90 $7.25 $9.45 $5.38 $6,277 $6,031 $6,797 $6,289 $11.04There is a positive correlation between the Compensation Actually PaidCAP to our CEO and other NEOs and PBP EBITDA, our Company-selected financial measure. This ismeasure, primarily due primarily to the fact that we use PBP EBITDA to determine incentive plan payouts. The reduction inof PBP EBITDA over the three-year period from 2020 to 2022 is primarily due to the impact of divestitures in 2021 and 2022, including the sale of certain assets in our global nuts business and global cheese businesses, and higher COVID-19-related at home consumption during 2020. Additionally, for 2020:
| |
| 2024 Proxy Statement | 99 |
•
the Compensation Actually Paid to our CEO was higher primarily due to new hire equity awards granted in 2019; and
•
the Average Compensation Actually Paid to our other NEOs was higher primarily due to new hire equity awards and cash bonuses paid to two non-CEO NEOs and one-time cash retention bonuses paid to our other non-CEO NEOs.
Proceeds from the divestitures were used primarily to repay debt. In 2022, the Company’s long-term debt rating was returned to investment grade.
The Kraft Heinz Company 2023 Proxy Statement|105
Back to Contents | | | | Proposal 3. Ratification of the Selection of Independent Auditors
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AUDIT MATTERS
PROPOSAL 3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Audit Committee and the Board are requesting, as a matter of good corporate governance, that stockholders ratify the selection of PwC as our independent auditors for our fiscal year ended December 30, 2023.28, 2024. PwC has served as our independent auditors since 2015 and served as independent auditors to Heinz and its predecessors prior to the Kraft Heinz Merger since 1979. The
Following its review, the Audit Committee and the Board of Directors believe that the continued retention of PwC to serve as the Company’s independent auditors is in the best interests of Kraft Heinz and its stockholders.
stockholders for the following reasons:| Experience and Effectiveness | | Strong Independence Controls |
| Valuable Expertise and Experience. PwC’s experience with the Company has given PwC valuable knowledge of our business and operations, accounting policies and practices, and internal control over financial reporting that has enhanced the audit quality. | | Robust Pre-Approval Policies and Limits on Non-Audit Services. The Audit Committee must pre-approve all audit and non-audit services performed by PwC, including the types of services to be provided and the estimated fees relating to those services. |
| Audit Effectiveness and Fee Efficiency. PwC’s knowledge of our business and control framework enables it to design effective audit plans that cover key risk areas while capturing cost efficiencies in audit scope and internal control testing. | | Thorough Audit Committee Oversight. The Audit Committee believes that its oversight, which includes ongoing engagement with PwC and a comprehensive annual review process, mitigates any concerns with PwC’s tenure. |
| Maintaining Continuity Avoids Disruption. Bringing on a new auditor, without reasonable cause, would require extensive education and a significant period of time for the new auditor to reach a comparable level of knowledge and familiarity with our business and control framework. | | PwC’s Strong Internal Independence Procedures and Regulatory Framework. PwC conducts periodic internal quality reviews of its audit work and rotates lead partners every five years. PwC is also subject to PCAOB inspections, peer reviews, and PCAOB and SEC oversight. |
The Audit Committee has the sole authority to appoint our independent auditors, and the Audit Committee and the Board are not required to take any action as a result of the outcome of the vote on this proposal. However, if our stockholders do not ratify the selection, the Audit Committee may investigate the reasons for our stockholders’ rejection and consider whether to retain PwC or appoint another independent auditor. Furthermore, even if the selection is ratified, the Audit Committee may appoint a different independent auditor if, in its discretion, it determines that such a change would be in our and our stockholders’ best interests.
We expect that representatives of PwC will be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions from stockholders. For additional information about our independent auditors, including our pre-approval policies and PwC’s aggregate fees for 2023 and 2022, and 2021, see Selection of Independent Auditors, Independent Auditors’ Fees and Services, and Pre-Approval Policy below.
THE BOARD AND AUDIT COMMMITTEE RECOMMEND A VOTE FORPre-Approval PolicyTHE RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS KRAFT HEINZ’S INDEPENDENT AUDITORS FOR 2024. on page 107.
Recommendation
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| 2024 Proxy Statement | 100 |
| | The Board and Audit Committee recommend a vote FOR the ratification of the selection of PricewaterhouseCoopers LLP as Kraft Heinz’s independent auditors for 2023.
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Proposal 3. Ratification of the Selection of Independent Auditors
Selection of Independent Auditors
INDEPENDENT AUDITORSThe Audit Committee is responsible for the appointment, compensation, oversight, retention, and termination of our independent auditors. Pursuant to its charter, the Audit Committee has authority to approve all audit engagement fees to be paid to the independent auditors. The Audit Committee selected PwC, a registered public accounting firm, as our independent auditors for 2023.
2024.
Independent Auditors’ Fees and Services
INDEPENDENT AUDITORS’ FEES AND SERVICESAggregate fees for professional services rendered by our independent auditors, PwC, for fiscal years 20222023 and 20212022 are set forth in the table below. All fees include out-of-pocket expenses.
| | | Fiscal Year Ended |
| | | December 30, 2023 | | December 31, 2022 |
| PwC Fees | | ($ thousands) |
| Audit fees(1) | | 11,619 | | 12,434 |
| Audit-related fees(2) | | 117 | | 210 |
| Tax fees(3) | | 2,745 | | 1,903 |
| All other fees(4) | | 2 | | 460 |
| TOTAL | | 14,483 | | 15,007 |
| (1) | Audit fees include (a) the audit of our consolidated financial statements, including statutory audits of the financial statements of certain of our affiliates, (b) the reviews of our unaudited condensed consolidated interim financial statements (quarterly financial statements), and (c) the reimbursement of legal fees related to litigation subpoenas. |
| (2) | Audit-related fees include professional services in connection with accounting consultations and procedures related to various other audit and special reports. |
| (3) | Tax fees include professional services in connection with tax compliance and advice. |
| (4) | All other fees consist principally of cost benchmarking consulting, software license fees related to research and reporting tools, and services to support regulatory requirements. |
| | | | | Fiscal Year Ended | |
| | | | | December 31, 2022 | | | December 25, 2021 | |
| | PwC Fees | | | ($ thousands) | |
| | Audit fees(1) | | | | | 12,434 | | | | | | 11,269 | | |
| | Audit-related fees(2) | | | | | 210 | | | | | | 4,107 | | |
| | Tax fees(3) | | | | | 1,903 | | | | | | 2,462 | | |
| | All other fees(4) | | | | | 460 | | | | | | 41 | | |
| | Total | | | | | 15,007 | | | | | | 17,879 | | |
(1)
Audit fees include (a) the audit of our consolidated financial statements, including statutory audits of the financial statements of certain of our affiliates, (b) the reviews of our unaudited condensed consolidated interim financial statements (quarterly financial statements), and (c) the reimbursement of legal fees related to litigation subpoenas.
(2)
Audit-related fees include professional services in connection with divestiture activity, accounting consultations, and procedures related to various other audit and special reports. The decrease from 2021 to 2022 was primarily driven by prior year divestiture activity.
(3)
Tax fees include professional services in connection with tax compliance and advice.
(4)
All other fees consist principally of cost benchmarking consulting, software license fees related to research, and services to support regulatory requirements.
Pre-Approval Policy
PRE-APPROVAL POLICYThe Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other permissible non-audit services. The pre-approval authority details the particular service or category of service that the independent auditors will perform. The Audit Committee’s policy also requires management to report at Audit Committee meetings throughout the year on the actual fees charged by the independent auditors for each category of service. The Audit Committee reviews this policy annually.
During the year, circumstances may arise when it may be necessary to engage the independent auditors for additional services not contemplated in the original pre-approval authority. In those instances, the Audit Committee approves the services before we engage the independent auditors. If pre-approval is needed before a scheduled Audit Committee meeting, the Audit Committee delegated pre-approval authority to its Chair. The Chair must report on such pre-approval decisions at the Committee’s next regular meeting.
During our 20222023 fiscal year, the Audit Committee pre-approved all audit and non-audit services provided by the independent auditors.
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The Kraft Heinz Company 2023 Proxy Statement|107
Proposal 3. Ratification of the Selection of Independent Auditors
Audit Committee Report for the Fiscal Year Ended December 31, 2022
AUDIT COMMITTEE REPORT FOR THE FISCAL YEAR ENDED DECEMBER 30, 2023To our Stockholders:
Management has primary responsibility for Kraft Heinz’s financial statements and the reporting process, including the systems of internal control over financial reporting. The role of the Audit Committee of the Kraft Heinz Board of Directors is to oversee Kraft Heinz’s accounting and financial reporting processes and audits of its financial statements. In addition, we assist the Board in its oversight of:
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The integrity of Kraft Heinz’s financial statements and Kraft Heinz’s accounting and financial reporting processes and systems of internal control over financial reporting and safeguarding the Company’s assets;
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Kraft Heinz’s compliance with applicable legal and regulatory requirements;
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Kraft Heinz’s independent auditors’ qualifications, independence, and performance;
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The performance of Kraft Heinz’s internal auditors and the internal audit function;
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Kraft Heinz’s financial matters and financial strategy; and
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Kraft Heinz’s guidelines and policies with respect to risk assessment and risk management.
| ● | The integrity of Kraft Heinz’s financial statements and Kraft Heinz’s accounting and financial reporting processes and systems of internal control over financial reporting and safeguarding the Company’s assets; |
| ● | Kraft Heinz’s compliance with applicable legal and regulatory requirements; |
| ● | Kraft Heinz’s independent auditors’ qualifications, independence, and performance; |
| ● | The performance of Kraft Heinz’s internal auditors and the internal audit function; |
| ● | Kraft Heinz’s financial matters and financial strategy; and |
| ● | Kraft Heinz’s guidelines and policies with respect to risk assessment and risk management. |
Our duties include overseeing Kraft Heinz’s management, the internal audit department, and the independent auditors in their performance of the following functions, for which they are responsible:
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Preparing Kraft Heinz’s consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”);
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Establishing and assessing effective financial reporting systems and internal controls and procedures; and
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Reporting on the effectiveness of Kraft Heinz’s internal control over financial reporting.
| ● | Preparing Kraft Heinz’s consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”); |
| ● | Establishing and assessing effective financial reporting systems and internal controls and procedures; and |
| ● | Reporting on the effectiveness of Kraft Heinz’s internal control over financial reporting. |
INTERNAL AUDIT DEPARTMENT
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Independently assessing management’s system of internal controls and procedures; and
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Reporting on the effectiveness of that system.
| ● | Independently assessing management’s system of internal controls and procedures; and |
| ● | Reporting on the effectiveness of that system. |
INDEPENDENT AUDITORS
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Auditing Kraft Heinz’s financial statements;
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Issuing an opinion about whether the financial statements conform with GAAP; and
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Auditing the effectiveness of Kraft Heinz’s internal control over financial reporting.
| ● | Auditing Kraft Heinz’s financial statements; |
| ● | Issuing an opinion about whether the financial statements conform with GAAP; and |
| ● | Auditing the effectiveness of Kraft Heinz’s internal control over financial reporting. |
Periodically, we meet, both independently and collectively, with management, the internal auditors, and the independent auditors, among other things, to:
| ● | Discuss the quality of Kraft Heinz’s accounting and financial reporting processes and the adequacy and effectiveness of its internal controls and procedures; |
| ● | Review significant audit findings prepared by each of the independent auditors and internal audit department, together with management’s responses; and |
| ● | Review the overall scope and plans for the current audits by the internal audit department and the independent auditors. |
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Discuss the quality of Kraft Heinz’s accounting and financial reporting processes and the adequacy and effectiveness of its internal controls and procedures;
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Review significant audit findings prepared by each of the independent auditors and internal audit department, together with management’s responses; and
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Review the overall scope and plans for the current audits by the internal audit department and the independent auditors.
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Prior to Kraft Heinz’s filing of its Annual Report on Form 10-K for the year ended December 31, 202230, 2023 with the SEC, we also:
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Reviewed and discussed the audited financial statements with management;
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Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC;
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Discussed with the independent auditors their evaluation of the accounting principles, practices, and judgments applied by management;
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Discussed all other items the independent auditors are required to communicate to the Audit Committee in accordance with applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence;
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Received from the independent auditors the written disclosures and the letter required by the PCAOB describing any relationships with Kraft Heinz that may bear on the independent auditors’ independence; and
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Discussed with the independent auditors their independence from Kraft Heinz, including reviewing non-audit services and fees to assure compliance with (i) regulations prohibiting the independent auditors from performing specified services that could impair their independence and (ii) Kraft Heinz’s and the Audit Committee’s policies.
| ● | Reviewed and discussed the audited financial statements with management; |
| ● | Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC; |
| ● | Discussed with the independent auditors their evaluation of the accounting principles, practices, and judgments applied by management; |
| ● | Discussed all other items the independent auditors are required to communicate to the Audit Committee in accordance with applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence; |
| ● | Received from the independent auditors the written disclosures and the letter required by the PCAOB describing any relationships with Kraft Heinz that may bear on the independent auditors’ independence; and |
| ● | Discussed with the independent auditors their independence from Kraft Heinz, including reviewing non-audit services and fees to assure compliance with (i) regulations prohibiting the independent auditors from performing specified services that could impair their independence and (ii) Kraft Heinz’s and the Audit Committee’s policies. |
Based upon the reports and discussions described in this report and without other independent verification, and subject to the limitations of our role and responsibilities outlined in this report and in our written charter, we recommended to the Board, and the Board approved, that the audited consolidated financial statements be included in Kraft Heinz’s Annual Report on Form 10-K for the year ended December 31, 2022,30, 2023, which was filed with the SEC on February 16, 2023.
| AUDIT COMMITTEE | | | | |
|  |  |  |  | |
| John C. Pope
Chair | Humberto P.
Alfonso | John T. Cahill | Lori Dickerson
Fouché | |
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| 2024 Proxy Statement | 103 |
AUDIT COMMITTEE
John C. Pope, Chair
John T. Cahill
Lori Dickerson Fouché
Susan Mulder
The Kraft Heinz Company 2023 Proxy Statement|109
Back to Contents | | | | Proposal 4. Stockholder Proposal – Simple Majority Vote
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John Chevedden, on behalf of Kenneth Steiner, 14 Stoner Avenue, 2M, Great Neck, NY 11021, the owner of at least 250 shares of Kraft Heinz stock, has submitted and intends to present the following proposal for consideration at the Annual Meeting. We are not responsible for the accuracy or content of the proposal or supporting statement, which are presented as received from the proponent in accordance with SEC rules.
If properly presented at the Annual Meeting by or on behalfSTOCKHOLDER PROPOSALSPROPOSAL 4. STOCKHOLDER PROPOSAL –REPORT ON RECYCLABILITY CLAIMS
Janet Jensen Dell of the proponents, the Board recommends that you vote AGAINST this proposal for the reasons set forth in Kraft Heinz’s Statement in Opposition, which directly follows the proposal.
Stockholder Proposal
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| RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. | |
| Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management. | |
| This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 99%-support at the 2019 Fortive annual meeting. | |
| Currently a 1%-minority can frustrate the will of our 66%-shareholder majority in an election with 67% of shares casting ballots. In other words a 1%-minority could have the power to prevent shareholders from improving the governance of our company. | |
| Adoption of this proposal will make Kraft Heinz more competitive in its corporate governance. The timing is right because our stock has dropped from $92 in 2017. Hopefully management will not revert to holding the annual shareholder meeting in the law office of Reed Smith, a $1 Billion law firm, as management did before Covid. This sends the wrong message to shareholders. | |
| This proposal was voted on at the 2020 Kraft Heinz annual shareholder meeting. It is believed that it received overwhelming shareholder approval. However due to a technicality the Kraft Heinz Board did not report the 2020 voting result. | |
| The Kraft Heinz Board was so opposed to letting this proposal be voted on again in 2021 that it hired the $2 Billion law firm of Gibson Dunn for a 5-figure price to prevent Kraft Heinz shareholders from voting on this important proposal. In response to this 2023 proposal and to advance the discussion on this important topic the Board could belatedly report the result of our 2020 vote on this proposal topic. | |
| The Kraft Heinz Board had the reasonable option (and thereby make up for its past resistance to this reasonable proposal) of making this proposal a management proposal on the Kraft Heinz 2023 annual meeting ballot. | |
| Please vote yes: | |
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Proposal 4. Stockholder Proposal – Simple Majority Vote
Kraft Heinz’s Statement in Opposition to Proposal 4
The proposal asks that the Company take action to replace each voting requirement in the Company’s Certificate of Incorporation and By-Laws that calls for a greater than simple majority vote with a simple majority vote requirement. While the inclusion of supermajority provisions in charters and bylaws are seen by many investors as designed to entrench management, the Board believes that the limited higher voting thresholds in our Charter and By-Laws described below are protective of stockholders and appropriate given the significant ownership positions of Berkshire Hathaway and 3G Capital. Accordingly, the Board recommends that stockholders vote against this proposal.
The Company has Limited Higher Voting Thresholds, Narrowly Tailored to Protect Stockholders
Almost all matters that are voted upon by the Company’s stockholders are already determined by a simple majority vote of stockholders, including the election of directors in uncontested elections. A majority vote of the outstanding shares entitled to vote is required for stockholders to amend the By-Laws, and the Certificate of Incorporation provides that a 662∕3% “supermajority” vote of stockholders is required only for one fundamental stockholder action—to remove directors from the Board without cause. Notably, if the removal is recommended by at least 662∕3% of the Board, then the supermajority requirement falls away and only the affirmative vote of the holders of a majority of Kraft Heinz outstanding stock entitled to vote in an election of directors is needed to remove directors in question. As such, these limited higher voting thresholds are narrowly and appropriately tailored to promote stability and protect stockholders by restricting actions by other stockholders unless those actions enjoy broad support among our stockholders or the then-current Board that has been elected by our stockholders.
The Existing Provisions Benefit our Stockholders
Delaware law permits companies to adopt supermajority voting requirements, and a number of publicly traded companies have adopted these provisions, to preserve and maximize long-term value for all stockholders. Supermajority voting requirements on fundamental corporate matters help to protect stockholders against self-interested and potentially abusive actions proposed by one or a few large stockholders, who may seek to advance their interests over the interests of the majority of the Company’s stockholders. In this regard, the supermajority provisions help to maximize long-term value to all stockholders.
The Company has two significant stockholders, Berkshire Hathaway and 3G Capital, that together beneficially own approximately 34.4% of Kraft Heinz common stock. The Board believes that, rather than serving the rights of stockholders, eliminating the limited higher voting thresholds described above could allow Berkshire Hathaway and 3G Capital to have greater influence on the Company’s corporate structure and governance matters.
Our Current Governance Structure Promotes Effective Board Oversight
The Company’s Board is committed to effective corporate governance and has adopted a wide range of practices and procedures that promote effective Board oversight. These include:
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Directors are elected annually, by a majority of the votes cast in uncontested elections, and if an incumbent director is not elected by a majority of votes cast, the director must tender their resignation to the Governance Committee for its consideration
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The Board has an independent Lead Director with robust responsibilities and holds regular executive sessions of independent directors
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92% of our director nominees are independent, with 75% unaffiliated with Berkshire Hathaway or 3G Capital, and only independent directors serve on each of the Board’s three committees: the Audit Committee, Compensation Committee, and Governance Committee
The Kraft Heinz Company 2023 Proxy Statement|111
Proposal 4. Stockholder Proposal – Simple Majority Vote
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The Governance Committee develops and oversees an annual evaluation process for the Board
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Our By-Laws allow stockholders of record of at least 20% of the voting power of our outstanding stock to call a special meeting of stockholders
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Our Certificate of Incorporation and By-Laws allow stockholder action by written consent if such consent is signed by stockholders holding not less than the minimum number of shares necessary to authorize such action at a meeting at which all shares of capital stock entitled to vote thereon were present and voted
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We conduct proactive year-round engagement with stockholders, providing them the opportunity to raise important matters outside the annual meeting process
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As mentioned above, stockholders have the right to remove directors with or without cause, and there is no poison pill
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The Board includes a range of tenures to balance fresh perspectives with in-depth experience and knowledge about the Company, with an average tenure of our director nominees of 3.1 years.
Consistent with its current practice, the Board will continue to evaluate the future implementation of appropriate corporate governance changes. However, for the reasons described above, the Board does not believe it is in the best interests of stockholders or the Company to implement the stockholder proponent’s request.
Recommendation
| | | | | The Board recommends a vote AGAINST the stockholder proposal.
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| | | | Proposal 5. Stockholder Proposal – Water Risk
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Mercy Investment Services, Inc., 2039 North Geyer Road, St. Louis, MO 63131-3332,Last Beach Cleanup, 24551 Del Prado, #4201, Dana Point, CA 92629, the owner of at least $2,000 of Kraft Heinz stock, has submitted and intends to present the following proposal for consideration at the Annual Meeting. We are not responsible for the accuracy or content of the proposal or supporting statement, which are presented as received from the proponent in accordance with SEC rules.
If properly presented at the Annual Meeting by or on behalf of the proponent, the Board recommends that you vote
AGAINSTthis proposal for the reasons set forth in Kraft Heinz’s Statement in Opposition, which directly follows the proposal.Stockholder Proposal
| Whereas:
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| AccordingStockholder ProposalWHEREAS: The California State Attorney General and public lawsuits are challenging the legitimacy of product companies’ recycling labels and claims on plastic packaging. Comprehensive reports established that only some types of plastic bottles and jugs are recyclable in the U.S. Kraft is currently employing three types of recyclable labels on other types of plastic packaging that are being legally challenged: “Store Dropoff,” “Check Locally,” and “Remove Label.” Other major brands have announced they will stop using such labels on their products. Store Dropoff: In 2022, the CA State AG announced an investigation into the use of recyclable labels on plastic bags in California, warning bag manufacturers with multimillion dollar fines. This has direct impact on Kraft since the company uses the same type of “Store Dropoff” recycle symbol label on plastic film packaging. Three lawsuits were also filed in California alleging the use of the recycle symbol with the words “Store Dropoff” on plastic bags and films is not legal. CA State AG and lawsuits cited the CA Recycling Commission’s 2021 letter stating California’s existing laws should be enforced and the “recyclable” word and symbol should be removed from plastic bags and films. The Commission’s motivation was to stop consumer confusion that causes high disposal of plastic bags and films in curbside recycling bins, causing hazards to workers and contamination of valuable paper bales. Check Locally: 2022 detailed assessments of plastic recycling by Greenpeace established that, other than some types of plastic bottles/jugs, most plastic packaging has very low acceptance rates for recycling (0 to 6% of U.S. population). It is deceptive to consumers and harmful to recycling systems to label such unwanted, worthless plastics as recyclable. Kraft should be truthful with consumers and not mislabel products that could contribute to plastic contamination in curbside recycling systems and incur potential legal liability due to deceptive advertising. Ultimately, instead of using unrecyclable plastic packaging, Kraft should redesign product packaging to be truly recyclable or compostable through existing curbside programs and local processing that are easily accessed by all consumers. BE IT RESOLVED: Shareholders request the board of directors issue a report by December 2024 providing the factual basis for legitimacy of all recyclable claims made on plastic packaging. Report should include substantiation required by California law (Cal. Bus. & Prof. Code §17580) that must be made available to the 2021 IPCCpublic on request, including that plastic packaging labeled as recyclable meets all of the criteria for statewide recyclability pursuant to subdivision (d) of Section 42355.51 of the Public Resources Code. The report climate change is intensifyingshould be prepared by independent legal and technical experts who have no financial conflicts caused by working for the water cycle, resulting in more intense droughts globally 1. Climate change related water scarcity poses material risk to our company, including lowered production capacityplastics or plastics recycling industry.SUPPORTING STATEMENT: Proponents note the report should be prepared at reasonable cost, omitting confidential information, and disruptioninclude an assessment of supply chains. | |
| For companies in the food sectors, the vast majority of their water footprint comes from agricultural supply chains.23 While Kraft Heinz has conducted water risk assessments on its annual water withdrawals for its manufacturing operations, it neglects to provide the same disclosure for water use in its agricultural related ingredient production—the most water intensive function of its business.
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| It is likely that some portion of Kraft Heinz source ingredients are supplied by growers in water vulnerable locations. Given the Company has acknowledged 19 elevated water stress areas out of 79 within their own operations, these risks are likely to be extended within the supply chain. Because Kraft Heinz either does not assess supply chain water risk, or does not disclose such risk to investors, the company’s water related risk remains in question. | |
| To identify water riskreputational, financial, and reduce costs, many peer companies—including Conagra Brands, Unilever, General Mills and Campbells have conducted water risk assessments for both operations and supply chains. By doing so, these companies have laid a foundation to mitigate future businessoperational risks associated with watercontinuing to use recyclable labels on plastic products that are not actually recycled. |
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PROPOSAL 4 Kraft Heinz’s Statement in Opposition At Kraft Heinz, we are committed to recycling and to providing consumers with clear information to help increase recycling rates as much as possible. While we aim to encourage recycling among consumers, we also recognize that the recycling landscape is dynamic and rapidly evolving, and we strive to continue to evolve with it. We believe our current efforts are designed to meet the objectives of the proposal and to have a significant impact on improving and reducing our packaging while reducing risk for the Company. We have stringent internal measures in place designed to provide that on-pack claims are not misleading to consumers. Our on-pack recycling labels are reviewed by our Recyclable, Reusable, and Compostable Committee. Represented by internal experts from R&D, legal and labeling, this cross-functional committee works to substantiate packaging claims or statements across various dimensions of recyclability including relevant laws, collections/access rates, sortation capabilities, end market value and consumer communication. The committee references the Federal Trade Commission’s Green Guides and reviews packages against industry protocols, like the Association of Plastic Recyclers APR Design® Guide to validate technical performance. We also carefully monitor updates in legislation, including California’s environmental marketing claims law, and take the proper steps designed to future goal setting. | |
| Kraft Heinz acknowledgescomply with laws that “having access to sufficient amounts of quality fresh water…is criticalare applicable to our business.” With water being We aim to continue to innovate and advance the recyclability landscape at large while aligning with applicable regulatory requirements. In 2023, we became a “vital component”founding member of the Circular Action Alliance (“CAA”), a 501(c)(3) nonprofit Producer Responsibility Organization (a “PRO”) dedicated to growingimproving recycling by implementing extended producer responsibility laws. CAA has been selected as the responsible PRO in California and Colorado and is expected to play a critical role in advancing the recycling landscape.Our Ambitious Sustainable Packaging StrategyOur comprehensive approach to packaging seeks to meet extensive packaging regulations, cut waste, conserve natural resources, ensure food safety and quality, and satisfy consumers of our beloved brands. Our team of experts collaborates with suppliers and external packaging specialists to design better packaging that incorporates more recycled and recyclable materials. We partner with a variety of leading organizations and coalitions to explore technical, end-of-life, and infrastructure solutions. We have also partnered with environmental consultancy group Lorax EPI to better understand how much of our packaging is recyclable, reusable, and compostable. The majority of our packaging is paper-based, glass, or metal materials that are recyclable. The remaining portion of our packaging is largely made up of flexible plastic films or rigid plastic containers that are challenging to recycle in the existing recycling infrastructure. We are also strengthening our packaging efforts by continuing to transition our portfolio toward reducing our packaging and introducing more sustainable packaging alternatives. In 2023, we also announced our aim to reduce our use of virgin plastic by 20% by 2030 (versus 2021). While we are proud of our accomplishments, we are also cognizant of the road ahead to convert the remaining part of our portfolio to be recyclable, reusable, and/or compostable. At this time, the portion of our portfolio that is not yet widely recyclable is made up of films and flexible materials, which are critical for consumer convenience, cost, food safety, and prevention of food waste. We are evaluating this part of the portfolio for alignment with “design for recycling” guidelines and working closely with industry groups to collectively improve recycling infrastructure and explore alternatives. We are also evaluating and will remove label statements that are not supported or may be problematic under state laws governing recycling information on product labels. |  |
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| 2024 Proxy Statement | 105 |
We are Collaborating to Help Create a More Circular EconomyWe play an active and leadership role within various industry packaging associations aimed at improving key aspects of sustainable packaging and the circular economy around the globe, including: ● The Association of Plastic Recyclers (“APR”), an international trade association representing the plastics recycling industry, as a direct ingredientmember of the APR film reclamation and PET technical committees. ● The Sustainable Packaging Coalition, a membership-based collaborative in many products, conductingthe U.S. that believes in the power of industry to make packaging more sustainable. ● The Recycling Partnership, a water risk assessmentU.S. organization focused on improving recycling and driving measurable sustainability, as a member of the film and flexibles recycling coalition steering committee and the PET recycling coalition. ● The U.S. Plastics Pact, which aims to create a circular economy for plastics in the U.S., as a member of the post-consumer recycling, design for recyclability, and film and flexibles workstreams and the Advisory Council. A more extensive list of our packaging industry partnerships is imperativelisted in our 2023 ESG Report. We are Investing in Consumer EducationWe believe in investing in education to mitigating future water concerns.help provide consumers with the information they need to do their part in creating a more sustainable world. We have been a member of the How2Recycle label program since 2016, using its standardized on-pack recycling guide to inform consumers on packaging recycling. We believe How2Recycle’s labeling program is the best available recycling standard, as it is based on nationally harmonized data and provides consistent and transparent on-package disposal instructions for consumers in the US and Canada. Given our current practices and our ongoing efforts with respect to improving and reducing plastic packaging, the Board believes the Company is addressing the concerns raised in the proposal and the requested report would not provide stockholders with any more meaningful information, particularly in light of the cost of such report. We believe the report requested by the proponent would divert time and expenses from our current efforts and reporting without adding value for stockholders or other stakeholders. |
THE BOARD RECOMMENDS A VOTEAGAINSTTHE STOCKHOLDER PROPOSAL.
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2024 Proxy Statement | Without a full value chain water risk assessment, and disclosure of quantitative performance metrics and best practices for water management in areas of water stress, investors cannot gauge whether Kraft Heinz adequately manages its water risk. | 106 |
| Resolved: Considering the growing pressure on water supplies posed by climate change, shareholders request that Kraft Heinz conduct and report to shareholders, using quantitative indicators where appropriate, an assessment to identify the water risk exposure of its supply chain, and its responsive policies and practices to reduce this risk and prepare for water supply uncertainties associated with climate change.
| |
PROPOSAL 5. STOCKHOLDER PROPOSAL –REPORT ON GROUP-HOUSED PORK
The Accountability Board, Inc., 401 Edgewater Place, #600, Wakefield, MA 01880, the owner of at least $25,000 of Kraft Heinz Company 2023 Proxy Statement|113
Proposal 5. Stockholder Proposal – Water Risk
| Supporting Statement:
| |
| Proponents request the report disclose, at management’s discretion: | |
| | | | •
Identification of water assessment tools used by Kraft Heinz or its suppliers to assess supply chain water related risk
•
Results of water risk assessments across its agricultural supply chain, including identifying the regions of at-risk ingredient production and supply chains
•
Any additional monitoring of supply chain water resources
•
Water scarcity planning and responsive actions
•
A description of how water management is integrated into governance mechanisms
•
A description of water-related engagement with value chain partners
| |
| 1
https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/
2
https://www.ceres.org/resources/reports/global-assessment-private-sector-impacts-water
3
https://www.ceres.org/resources/reports/global-investor-engagement-meat-sourcing-2022
| |
stock, has submitted and intends to present the following proposal for consideration at the Annual Meeting. We are not responsible for the accuracy or content of the proposal or supporting statement, which are presented as received from the proponent in accordance with SEC rules. If properly presented at the Annual Meeting by or on behalf of the proponent, the Board recommends that you vote AGAINST this proposal for the reasons set forth in Kraft Heinz’s Statement in Opposition, to Proposal 5
We regularly report on our goals and progress with respect to water risk, as well as our other sustainability efforts. In light of our current reporting, we do not believe that producingwhich directly follows the additional report requested by the proponents would add value for our stockholders, particularly given the significant amount of management time, effort, and expense such additional report would require. Accordingly, we do not believe the report requested by this proposal would add meaningfully to our ongoing efforts or be in the best interests of our stockholders.
As underscored by the proponents, as a food and beverage company, we view having access to sufficient amounts of quality fresh water as critical to our business. Making high-quality products requires that we begin with high-quality ingredients of which fresh quality water is a key input, including as a direct ingredient in many of our products and a key resource in our manufacturing, cleaning, and sanitation processes, as well as for the agricultural ingredients we use in our products.
We believe our current and planned policies and practices are designed to address the proponents’ concerns by reducing the most critical water-related risks in our business and promoting transparency for our stockholders. We have undertaken a wide range of initiatives to bolster water stewardship throughout our value chain, including related to our agricultural practices and the farmers from which we source. Each of our core ESG Steering Group’s subcommittees, including in Sustainable Manufacturing, Responsible Sourcing, Sustainable Agriculture, Animal Welfare, Sustainable Packaging, Product Health, and Corporate and Government Affairs, is involved in designing initiatives relating to our water stewardship.
We Regularly Report on Our Sustainability Goals, Efforts, and Progress
We report on our sustainability efforts, including our goals and progress with respect to water risk and the impacts of climate change annually in our ESG Report. Our ESG Report is prepared utilizing the GRI Sustainability Standard and aligned to the general principles of the SASB industry standards for food and beverage companies and the TCFD recommendations, all of which have water components addressed in the information we make publicly available. For more information, see Corporate Governance and Board Matters—Environmental Social Governance beginning on page 39.In addition, in 2020, we became a signatory to the CEO Water Mandate, which mobilizes business leaders to address global water challenges through corporate water stewardship, in partnership with the United Nations, governments,
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Proposal 5. Stockholder Proposal – Water Risk
civil society organizations, and other stakeholders. As a signatory, we have committed to taking action across six key commitment areas and reporting annually on our progress. As part of this commitment, we expect to identify and reduce critical water risks to our business, seize water-related opportunities, and contribute to water security and the United Nations Sustainable Development Goals. We also report our water management and performance efforts, including supply chain risk impacts, to CDP, formerly the Carbon Disclosure Project, a non-profit that operates an international disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts, through CDP’s annual water questionnaire. Our most recent score in CDP Water Security 2021 was a B -.
We are Making Progress on Reducing Water Risk within Our Direct Operations
In 2020, we updated our water risk assessment of our global manufacturing operations with Antea Group, a leading third-party global sustainability consulting firm and provider of water resource expertise to the food and beverage sector, which is certified by CDP. As disclosed in our 2021 ESG Report, following the 2020 assessment, we developed a plan that focuses on 19 high-risk water areas to drive improvements and mitigate risks, and to provide updates into our risk evaluation on an ongoing basis.
We also continue to make progress against our previously disclosed 2025 goals to reduce water use intensity by 20 percent per metric ton of product made in high-risk watershed areas and by 15 percent per metric ton of product made across our manufacturing facilities, each measured against a 2019 baseline. As reported in our 2022 ESG Report, we achieved approximately 12.2 percent reduction in high-risk watershed areas and approximately 4.4 percent reduction across our manufacturing facilities as of the end of 2021, on track to meet our goals. Moreover, as discussed in our 2022 ESG Report, through relationships with companies such as Suez Water Technologies & Solutions, a third-party provider of solutions to water, wastewater, and process challenges, and Ecolab Inc., a third-party provider of services, technology, and systems that specialize in water treatment, purification, cleaning, and hygiene, we continue to identify and implement several projects each year across our global manufacturing sites, accounting for combined annual water savings anticipated to be into the hundreds of million gallons and total annual cost reduction estimated to be millions of dollars.
We are Targeting Water Risk Across Our Value Chain
While we see good water stewardship within our direct operations as a critical area for direct and more immediate impact, our approach to water stewardship spans throughout our value chain.
We have incorporated water stewardship as a key tenet in our Sustainable Agriculture Practices Manual and our Supplier Guiding Principles, which include specific requirements and expectations around good water stewardship and disclosure. Our Sustainable Agriculture Practices Manual has been audited by SureHarvest, a third-party agricultural consulting, information technology, and certification firm, against the Sustainable Agricultural Initiative’s Farm Sustainability Assessment. In addition, in 2021, we launched a due diligence and audit program with our suppliers, which includes environmental performance reporting and monitoring related to water use.
Our cross-functional and collaborative approach to sustainability takes into consideration water risk reduction in other areas of our efforts, including human rights, sustainable sourcing, and carbon emissions. For example:
•
In 2019, we conducted a global human rights risk assessment with Elevate Limited, a third-party provider of data-driven sustainability and supply chain assessment, which included wastewater management and other water-related environmental policies and practices.
•
In 2020, we continued to make progress toward our goal to source tomatoes for Heinz tomato ketchup 100 percent sustainably, which will also increase water efficiency. In 2021, we launched programs under this initiative in California and Spain, key growing regions for our tomatoes. We expect to further expand these programs to other regions globally in the months and years to come.
•
In 2021, we reaffirmed our aim to set a Science Based Target for greenhouse gas emissions, aligned with the Science Based Targets initiative’s (SBTi) 1.5-degree Celsius target and new Net-Zero Standard. We also
The Kraft Heinz Company 2023 Proxy Statement|115
Proposal 5. Stockholder Proposal – Water Risk
announced a goal to be carbon neutral by 2050. We expect these efforts to help mitigate potential negative water impacts throughout our value chain that would otherwise be exacerbated by climate change.
Finally, we plan to release a global water policy to provide a holistic picture of our governance and water stewardship targets and initiatives, which are underway.
Given our current policies and practices and our ongoing efforts with respect to water conservation and stewardship, the Board of Directors believes the Company is addressing the concerns raised in the proposal and a report would not provide stockholders with any more meaningful information, particularly in light of the cost of such report.
Recommendation
proposal.Stockholder Proposal
Dear fellow shareholders, The 2023 “Transparency Trends” report from FMI (an industry trade group with a Kraft Heinz officer on its Board) found it’s “extremely important” to the vast majority of shoppers “that brands or manufacturers…are transparent,” with 74% saying that specifically means providing “values-based information such as [about] animal welfare.” This proposal seeks such transparency. As background: In 2012, Kraft Foods announced Oscar Mayer would move away from gestation stalls by 2022. These cages lock pregnant pigs into solitary confinement, keeping them from even turning around, whereas alternatives use group housing. Then, a shareholder proposal praising that commitment won 80% of the vote. Since then, Kraft Heinz (KHC) has been promoting its own pledge. ● Its 2017 ESG report and 2018 proxy statement touted the “elimination of gestation stalls globally by 2025” and a 2018 “Post-Integration Update” referenced “100% gestation stall-free housing” by 2025. ● Elsewhere, from 2017 to 2021, KHC claimed it was working with suppliers in North America, giving preference to those that could help achieve its goal. ● And its 2023 ESG Report assures shareholders it’s “phasing out the purchase of pork from suppliers who use gestation stalls.” Doing so would make sense, since (in addition to the substantial ethical implications) animal welfare poses material risks that can jeopardize the delivery of durable financial returns. Since 2016, KHC’s even been doing animal welfare “risk assessments.” Its 2021 proxy statement called animal welfare one of the ESG “issues that matter most” to its business and stockholders. And “animal welfare” appears 30 times in its 2017 ESG report, nearly 50 in the 2020 report, almost 70 in the 2021 report, and nearly 100 in the 2022 and 2023 reports. |
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| 2024 Proxy Statement | 107 |
| | The Board recommends a vote AGAINST the stockholder proposal.
| | |
But when examining KHC’s progress reporting, concerns arise. ● From 2017 to 2021, KHC touted: “In Europe, our supply has already met [our group housing] goal.” And its 2023 ESG Report boasts 98% compliance in Europe and 24% globally. ● What KHC doesn’t mention is that since 2013, E.U. law has mandatedgroup housing; it also doesn’t disclose what portion of its global 24% is from the E.U. ● Further, no measurable progress whatsoever is disclosed for any othergeographic operating region—including North America (despite KHC’s yearslong purchasing preference there). This raises questions about KHC’s actual progress. In particular, how much (if any) group-housed pork is it using outside of where group housing is legally required? RESOLVED: Shareholders ask KHC to disclose its percent of group-housed pork in each main geographic region and establish measurable targets for “phasing out the purchase of pork from suppliers who use gestation stalls.” Since it’s fair to infer that knowing the globalpercentage (which KHC reports) would require knowing the requested data, this strikes us as exceedingly straightforward. And given a decade of promises from Kraft/KHC, reestablishing targets seems reasonable. Thank you. Contact: KHC@TABholdings.org 
|
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| 2024 Proxy Statement | 108 |
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PROPOSAL 5 Kraft Heinz’s Statement in Opposition At Kraft Heinz, we believe that animals deserve a good quality of life and to be treated fairly. Although we neither own nor manage farms, we are committed to the care of animals in our supply chain and require our suppliers to treat animals with care, understanding, and respect. We believe that good animal welfare, environmental sustainability, and healthy people form an interconnected system and well-managed farms reduce waste and provide a safe, nutritious food supply. Knowing this, we integrate science and societal ethics in our animal welfare decisions. Our Global Animal Welfare Policy and Supplier Implementation Guide, which set forth our policies and expectations for our suppliers with respect to the treatment of animals, among other things, are available on our Supplier Hub at www.kraftheinzcompany.com/supplier-hub. We Focus our ESG Efforts on Areas of Greatest Impact while Maintaining an Accessible Product PortfolioAs one of the largest food and beverage companies in the world, we believe that it is our responsibility to be good stewards of the planet and care for our people, including consumers. As such, we strive to balance our ESG priorities, while recognizing the financial impact of ESG efforts on consumers. In doing so, we believe we can reduce our impact on the planet and drive the industry forward while still creating value for consumers. As a global company with a broad and diverse footprint, Kraft Heinz’s ESG strategy is designed to prioritize the issues that matter most to the Company’s business and stakeholders. Our strategy includes three key pillars: Healthy Living & Community Support, Environmental Stewardship, and Responsible Sourcing. Our ESG strategy is underpinned by our ESG materiality assessment that drives our critical areas of focus including health and nutrition, product safety and quality, climate change, and sustainable agriculture. We Continue Evaluating the Purchase of Pork from Suppliers Who Use Gestation Stalls, Minding Availability and CostsAs we mature in our ESG journey, we believe it is critical that we make challenging decisions on our ESG priorities based on our ability to create the greatest impact possible. These considerations and decisions are multi-faceted and challenging. We continue to strive to balance them and to be transparent with our stakeholders. We do not own farms, produce, or supply pork and purchase a limited amount. In 2022, we purchased approximately 1% of U.S.-produced pork and a significantly smaller proportion of globally-produced pork. As such, while animal welfare is not identified as a critical area within our ESG materiality assessment, we continue to drive progress alongside our suppliers. When it comes to open pen gestation, we continue to evaluate the purchase of pork from suppliers who use gestation stalls where possible, taking into consideration supplier availability and costs, including the cost to consumers and our business, as well as the impact on stockholder value. In 2022, approximately 24% of our global and approximately 98% of our European pork supply came from sows housed in group pen gestation. | |
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2024 Proxy Statement | 109 |
We Work Closely with Our Suppliers to Uphold a Zero-Tolerance Policy for Animal WelfareWe require our suppliers to have a zero-tolerance policy for animal abuse and neglect and to train all individuals working with or around live animals accordingly. We request suppliers of animal and animal-derived products to complete an annual animal welfare risk self-assessment. We publish the results of this assessment in our annual ESG Report. The assessment was developed by a cross-functional internal panel of animal welfare, procurement, and quality team members and reviewed by an external team of animal welfare scientists. The assessments review suppliers’ strengths and weaknesses on animal welfare policies, personnel training, transportation, stunning methods, and auditing. Kraft Heinz’s animal welfare team works with lower-performing suppliers, which make up a small percentage of our total supply chain, to create action plans to develop policies and procedures that improve animal welfare. Low-performing suppliers that are unwilling or unable to improve animal welfare may jeopardize their status as Kraft Heinz suppliers. When we find evidence of non-compliance, we take appropriate action, which may include suspending the supplier until corrective actions have been implemented or termination of our relationship. We Aim for Transparency and to Comply with Regulatory RequirementsKraft Heinz products are designed to comply with applicable laws in the country of manufacture and marketing. For example, in compliance with new regulations in California and Massachusetts, we are shipping products to those markets from pigs housed in open pens as required. In addition, we monitor and evaluate suppliers’ compliance with our policies and local laws through our due diligence processes and audits, which are embedded in our supplier selection and contracting procedures. We expect suppliers to raise animals in accordance with the laws and ordinances where they do business. Finally, we are committed to being transparent about group-housed pork purchases in our ESG Reports and other disclosures. Given our current ESG efforts, including the policies and practices established with respect to animal welfare and the progress the Company is making on the ESG topics the Company has determined are most significant for Kraft Heinz, as well as the transparency of our annual reporting, the Board believes that the adoption of the stockholder’s proposal would divert management’s time and Kraft Heinz resources without providing meaningful benefit to the Company or our stockholders. |
THE BOARD RECOMMENDS A VOTEAGAINSTTHE STOCKHOLDER PROPOSAL.
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2024 Proxy Statement | | | | | | | | 110 |
PROPOSAL 6. STOCKHOLDER PROPOSAL –REPORT ON GREENHOUSE GAS GOALS
The National Center for Public Policy Research, 2005 Massachusetts Avenue NW, Washington, DC 20036, the owner of at least $2,000 of Kraft Heinz stock, has submitted and intends to present the following proposal for consideration at the Annual Meeting. We are not responsible for the accuracy or content of the proposal or supporting statement, which are presented as received from the proponent in accordance with SEC rules.
If properly presented at the Annual Meeting by or on behalf of the proponent, the Board recommends that you vote
AGAINSTthis proposal for the reasons set forth in Kraft Heinz’s Statement in Opposition, which directly follows the proposal.Stockholder ProposalWHEREAS: Shareholders must protect our assets against potentially unfulfillable Company ESG promises, including the extent to which the Company can reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. The Securities and Exchange Commission (SEC) has taken enforcement actions related to Environmental, Social, Governance (ESG) issues or statements by companies who misrepresent or engage in fraud related to ESG efforts.1 In 2021, the SEC created the Climate and ESG Task Force in its Division of Enforcement.2 The focus of the Task Force is “to identify any material gaps or misstatements” in disclosure of climate risks and analyze “compliance issues relating to investment advisers’ and funds’ ESG strategies.”3 The Task Force has taken numerous enforcement actions including charging Goldman Sachs for policies and procedures failures related to ESG investments, resulting in a $4 million penalty,4 and charging DWS Investment Management Americas Inc. in part for misstatements regarding its ESG investment process that resulted in an overall $25 million in penalties.5 The SEC has proposed to require companies to disclose information about their Scope 1 and 2 emissions, and to require them to disclose Scope 3 emissions “if material or if the registrant has set a GHG emissions target or goal that includes Scope 3 emissions.”6 The Environmental Protection Agency defines Scope 3 emissions as, “the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in Its value chain.”7 Put differently, “Scope 3 emissions for one organization are the scope 1 and 2 emissions of another organization.” 8 This means that Scope 3 emissions are already counted as another entity’s emissions, and are external to the reporting company, such as product use and how employees commute.9 Voluntary carbon-reduction commitments create risk of SEC enforcement without providing clear benefit to the climate or other values. In August 2023, the Global Climate Intelligence Group asserted, “There is no climate emergency.”10 The declaration includes 1,609 signatories and “oppose[s] the harmful and unrealistic net-zero CO2 policy proposed for 2050.”11 A June 2023 study by the Energy Policy Research Foundation found that net zero advocates have misconstrued the International Energy Agency’s position on new oil and gas investment and that it has made questionable assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, economic growth, and technology maturity.12 |
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| 2024 Proxy Statement | 111 |
SUPPORTING STATEMENT: Kraft Heinz has voluntarily committed to halving GHG emissions by 2030 and being a net-zero company by 2050.13 This promise includes commensurate reductions in Scope 3 emissions, despite the fact the Company has no real control over Scope 3 emissions and has failed to report on its evaluation of the technological or financial feasibility of such commitments. Given the SEC’s climate and ESG enforcement actions, the Company must exercise caution and provide transparency about such commitments.
RESOLVED: Shareholders request the Company produce a report analyzing the risks arising from voluntary carbon-reduction commitments.
| 1 | https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues |
2 | https://www.sec.gov/news/press-release/2021-42 |
| 3 | https://www.sec.gov/news/press-release/2021-42; https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues |
| 4 | https://www.sec.gov/news/press-release/2022-209 |
| 5 | https://www.sec.gov/news/press-release/2023-194 |
| 6 | https://www.sec.gov/news/press-release/2022-46 |
| 7 | https://www.epa.gov/climateleadership/scope-3-inventory-guidance |
| 8 | https://www.epa.gov/climateleadership/scope-3-inventory-guidance |
| 9 | https://www.epa.gov/climateleadership/scope-3-inventory-guidance |
| 10 | https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf |
| 11 | https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf |
| 12 | https://assets.realclear.com/files/2023/06/2205_a_critical_assessment_of_the_ieas_net_zero_scenario_esg_and_the_cessation_of_ investment_in_new_oil_and_gas_fields.pdf |
| 13 | https://news.kraftheinzcompany.com/press-releases-details/2021/Kraft-Heinz-Cements-Climate-Ambition-Commits-to-Carbon-Neutrality-by -2050/default.aspx |
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| 2024 Proxy Statement | 112 |
PROPOSAL 6 Kraft Heinz’s Statement in Opposition As one of the world’s largest food and beverage companies, we take seriously our responsibility to reduce our environmental impact in the face of climate change. We believe that corporations have a significant role to play in curbing global GHG emissions, whether it be through our direct operations or within our value chain. Food production is extremely vulnerable to the threat of unexpected climate variances, and it is critical that the industry prioritize both climate mitigation and adapt initiatives to help provide a stable and affordable food supply for the global community. Prioritizing Climate Change and Science Based TargetsAs a global company with a broad and diverse footprint, our Kraft Heinz Company (“ESG strategy is designed to prioritize the Company”) requestissues that matter most to the Company’s business, our stockholders, and stakeholders, focusing on areas that have the greatest potential for impact. Our strategy includes three key pillars: Healthy Living & Community Support, Environmental Stewardship, and Responsible Sourcing. We have a variety of goals within each pillar that help guide us toward improving our environmental and social footprint. Climate change and topics directly related to climate change such as sustainable agriculture and sustainable packaging are some of our most critical ESG material topics. We prioritize our efforts and resources on these areas in an effort to drive lasting impact. Furthermore, we have engaged with many stockholders who share this priority. Given the importance of climate change in our ESG materiality assessment, we have pledged to achieve net zero GHG emissions across our operational footprint (Scope 1 and Scope 2) and global value chain (Scope 3) by 2050 and will also set interim 2030 targets, establishing our major commitment to contribute to global efforts to reduce the ongoing threat of climate change. We are currently in the process of verifying these targets with the Science Based Targets initiative and plan to disclose our Net Zero roadmaps in future ESG reporting. Accounting for and Managing Greenhouse Gases in our Value ChainWe conduct an annual assessment of our total value chain emissions, including verifying all three scope emissions by an independent third-party. We strive to be as transparent as possible in our GHG reporting and deploy internal and external resources to better understand our GHG footprint and improve data quality each year based on the best science available. Our current accounting is in line with the GHG Protocol, the leading international standard for corporate accounting and reporting emissions. We also seek to align our climate reporting with leading global frameworks such as the Global Reporting Initiative (GRI), the Taskforce for Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). Our Scope 3 emissions account for approximately 95% of Directors commission an audit analyzing the impactsour total emissions, and thus will be a primary focus of the Company’s Diversity, Equity & Inclusion policies on civil rights, non-discrimination and returns to merit, andreduction efforts. Managing emissions beyond our organizational boundary is challenging however, we believe that cooperation across value chain actors is essential in driving the impacts of those issues on the Company’s business. The audit may, in the Board’s discretion,industry forward towards more climate friendly practices whether it be conducted by an independent and unbiased third party with input from civil rights organizations, public- interest litigation groups, employees and shareholders of a wide spectrum of viewpoints and perspectives. A report on the audit, prepared at reasonable cost and omitting confidentialthrough co-funding innovative pilots or proprietary information, should be publicly disclosed on the Company’s website.demand pressure for more sustainable alternatives. | |
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2024 Proxy Statement | Supporting Statement:113 |
| UnderKey focus areas of our net zero program include: ● Reducing the guiseimpact of livestock emissions by partnering to scale methane inhibitors and anaerobic digesters for meat and dairy ingredients. ● Revising sourcing specifications for key commodities including regenerative agriculture, deforestation and conversion-free commitments and localization of sourcing. ● Transitioning to more circular and lower carbon packaging. The stockholder requests that we produce a report analyzing the risks arising from voluntary carbon-reduction commitments. We believe that clearer information on our GHG footprint can help us make climate smart business decisions which in turn helps manage climate risk and can bring value for stockholders. Furthermore, the stockholder’s request appears to directly contradict with impending climate legislation such as the EU Corporate Sustainability Reporting Directive (EU CSR-D) that requires organizations to disclose impacts, risks and opportunities related to climate change and other material ESG corporations have allocated significant resourcesissues. Given our current ESG efforts and attention towards implementing social justice into workplace practices and hiring. Acrossfocus on climate, our Board believes that the political spectrum, all agree that employee success should be fostered and that no employees should face discrimination, but there is much disagreement about what non-discrimination means. | |
| Many companies—including Bankadoption of America, American Express, Verizon, Pfizer, CVSthe stockholder’s proposal would divert management’s time and Kraft Heinz itself1—have adopted “Diversity, Equity & Inclusion” (DEI) programs, trainings and officers that seekresources without providing meaningful benefit to establish racial and social “equity.” But in practice, what “equity” really means is the distribution of pay and authority on the basis of race, sex, orientation and ethnicity rather than by merit.2
Company or our stockholders. |
THE BOARD RECOMMENDS A VOTEAGAINSTTHE STOCKHOLDER PROPOSAL.
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2024 Proxy Statement | Where adopted, such programs have raised significant objections, including the concern that the programs and practices themselves are deeply racist, sexist, otherwise discriminatory and potentially in violation of the Civil Rights Act of 1964.3 And that by devaluing merit, corporations have sacrificed employee competence, moral and productivity to the altar of “diversity.”
| 114 |
| These practices create massive reputational, legal and financial risk. If the Company is, in the name of so-called “equity,” committing illegal or unconscionable discrimination against employees deemed “non-diverse,” then the Company will suffer in myriad ways—all of them both unforgivable and avoidable. | |
| In developing the audit and report, the Company should consult civil-rights and public-interest law groups, but it must not compound error with bias by relying only on left-leaning organizations. It must consult groups across the spectrum of viewpoints, including right-leaning civil-rights groups representing people of color—such as the Woodson Center4 or Project 215—and groups that defend the rights and liberties of all Americans.
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The Kraft Heinz Company 2023 Proxy Statement|117
Proposal 6. Stockholder Proposal – Civil Rights
Back to Contents | | Similarly, when including employees in the audit, the Company must allow employees to speak freely and confidentially without fear of reprisal or disfavor. Too many employers have established company stances that silence employees who disagree with the company’s asserted positions, and then pretended that those who have been empowered by the companies’ partisan positioning represents the true and only voice of all employees.
OTHER INFORMATION
INFORMATION REGARDING THE ANNUAL MEETING
| 1 | WHEN AND WHERE IS THE ANNUAL MEETING? |
 WHEN | |  WHERE | |  ONLINE ACCESS |
| This creates a deeply hostile workplace for some employees, and is both immoral and likely illegal. | |
| 1
https://www.www.city-journal.org/bank-of-america-racial-reeducation-program; https://www.city-journal.org/verizon-critical-race-theory-training; https://nypost.com/2021/08/11/american-express-tells-its-workers-captialism-is-racist/; https://foxbusiness.com/politics/cvs-inclusion-training-critical-race-theory; https://msn.com/en-us/money/other/pfizer-sets-race-based-hiring-goals-in-the-name-of-fighting-systemic-racism-gender-equity-challenges/ar-AAOiSwJ; https:www.kraftheinzcompany.com/diversity-inclusion.html
2
https://www.sec.gov/Archives/edgar/data/1048911/000120677421002182/fdx3894361-def14a.htm#StockholderProposals88; https:www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/asyousownike051421-14a8-incoming.pdf; https:www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/nyscrfamazon012521-14a8-incoming.pdf; https://www.sec.gov/Archives/edgar/data/1666700/000119312521079533/d108785ddef14a.htm#rom108785_58
3
https://www.americanexperiment.org/survey-says-americans-oppose-critical-race-theory/; https://www.newsweek.com/coca-cola-facing-backlash-says-less-white-learning-plan-was-about-workplace-inclusion-1570875; https://www.city-journal.org/verizon-critical-race-theory-training
4
https://woodsoncenter.org/
5
https://nationalcenter.org/project-21/
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Kraft Heinz’s Statement in Opposition to Proposal 6
We believe the audit and report requested by the proponent would not be an effective use of our Company’s resources or in the best interests of our Company or our stockholders. The Company currently completes analyses covering our programs, and discloses appropriate data, on a regular basis. We do not believe the audit requested would enhance our existing commitment to diversity, equity, inclusion, and belonging in a meaningful way, illuminate any practices that are counter to our commitment to create an equitable work environment for employees from all backgrounds, or provide a meaningful measure of our commitment or progress.
We Pursue Diversity, Equity, Inclusion, and Belonging While Maintaining Our Culture of Meritocracy
At Kraft Heinz, we choose to welcome everyone at our table by valuing and respecting all voices. Our people are our most important asset. We believe our focus on diversity, equity, inclusion, and belonging helps us connect with consumers, attract and grow employees who are eager to leverage multiple perspectives to solve complex challenges, and innovate in an ever-changing industry. Driven by our Values, we strive to create a work environment based on meritocracy, dignity, and respect, free of harassment and discrimination. We believe our diversity, equity, inclusion, and belonging initiatives are consistent with this commitment. Further, we believe that each of us should have a fair chance to share in Kraft Heinz’s success and that our initiatives promote our culture of meritocracy.
We will continue to hold ourselves accountable and strive to create a shared experience to bring our communities together. As we aspire to increase representation of historically underrepresented groups at Kraft Heinz, we choose to commit to inclusion as a practice and belonging as an outcome. We have set diversity aspirations that we have communicated internally and externally, and we hold ourselves accountable to being creative and forward thinking about initiatives and interventions that address diversity and inclusion for our Kraft Heinz community.
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Proposal 6. Stockholder Proposal – Civil Rights
Our Efforts and Commitments are for the Benefit of All Employees
Our commitment to diversity, equity, inclusion, and belonging is for the benefit of all Kraft Heinz employees, not just those from underrepresented backgrounds. Our approach to diversity takes into account the spectrum of the many populations we serve and the variety of ways our business impacts people and society at large. We believe the true power of diversity and inclusion is bringing together different perspectives and ways of thinking to tackle complex business challenges. We believe it is important to consider levels of representation of all dimensions of diversity as those dimensions are powerful influences on a person’s perspective. Our goal is to unlock the power behind different lived experiences, to assemble teams that think differently from each other, and to choose to create an inclusive workplace, where all voices can be heard, and all employees can derive a sense of belonging at Kraft Heinz.
For example, many of our employees participate in the business resource groups (BRGs) that we sponsor. All employees, regardless of their identities or backgrounds, are invited to join and contribute to our BRGs. Our BRGs, which focus on topics ranging from race and ethnicity to mental health, have provided invaluable contributions through conversations with senior leaders to share their experiences and provide feedback, insight, and guidance. In addition, our BRGs are committed to increasing engagement with employees across the Company by providing educational information, topical webinars, and other content-sharing opportunities.
Additionally, our Code of Conduct applicable to our employees and contingent and contract workers prohibits any discriminatory action based on an individual’s protected status in any employment decisions, including hiring, training, promotion, and compensation. These policies protect associates of all races, genders, and ethnicities regardless of whether the individual is a member of a minority, plurality, or majority. Employees have access to a variety of resources to confidentially report concerns or grievances, and we strictly forbid retaliation against any employee who reports a concern in good faith.
We Believe in Strong Governance and Oversight
The Kraft Heinz Global Inclusion Council creates strategic accountability for results, and provides governance, oversight, and reporting on diversity efforts and initiatives. The Council is a critical driver in fostering organizational change, establishing priorities, managing integrated and cross-functional initiatives, and thoughtfully considering when we will need to exceed mere compliance with legal requirements to fully live our Company Values. The Council provides platforms for overseeing and assessing the effectiveness of relevant initiatives and introducing reform when needed.
The Council is committed to being solution focused. Exhibiting cultural humility, we continually educate each other and the organization about issues and concerns from across all populations, and focus on creating, executing, and measuring solutions and aspirations that allow us to focus on our Company Purpose for employees, consumers, customers, suppliers, and stakeholders from all backgrounds and lived experiences.
The Kraft Heinz Company Global Inclusion Council comprises representatives from our Board of Directors and leaders of key functions throughout the organization:
•
Miguel Patricio, Chief Executive Officer and Chair of the Board; Council Chair
•
Carlos Abrams-Rivera, Executive Vice President and President, North America
•
Pamay Bassey, Chief Learning and Diversity Officer
•
Tim Kenesey, Member, Board of Directors
•
Alicia Knapp, Member, Board of Directors
•
Rashida La Lande, Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer
•
Elio Leoni Sceti, Member, Board of Directors
•
Rafael Oliveira, Executive Vice President and President, International Markets
•
Melissa Werneck, Executive Vice President and Global Chief People Officer
The Kraft Heinz Company 2023 Proxy Statement|119
Proposal 6. Stockholder Proposal – Civil Rights
We Value Transparency
We believe in measuring and publicly disclosing the diversity of our employees, management, and Board and demonstrating the progress on our commitments. With quarterly oversight from the Council, we aim to continue enhancing our disclosures regarding our diversity and inclusion efforts, including providing additional data on our employees and management.
We publicly disclose information regarding the diversity of our employees, including our Executive Leadership Team and individuals in management roles, as well as our diversity, equity, inclusion, and belonging initiatives and milestones in our ESG Report, which is available on our website at www.kraftheinzcompany.com/esg, and information regarding the diversity of our Board in this Proxy Statement. Additional information about our diversity, equity, inclusion, and belonging efforts, as well as our EEO-1 Reports, can also be found on our website at www.kraftheinzcompany.com/diversity-inclusion. We invite you to view these reports to see all that Kraft Heinz has done—and plans to continue to do—to champion our diversity, equity, inclusion, and belonging efforts throughout our Company and the communities in which we work and live.
Recommendation
| | | | | The Board recommends a vote AGAINST the stockholder proposal.
| | |
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| | | | Other Information | |
| | |
| | | | | | | | |
Information Regarding the Annual Meeting
1
When and where is the Annual Meeting?
| ![[MISSING IMAGE: ic_date-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_date-pn.jpg) When | | | | ![[MISSING IMAGE: ic_where-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_where-pn.jpg) Where | | | | ![[MISSING IMAGE: ic_accessred-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_accessred-pn.jpg) Online Access | |
| Thursday, May 4, 20232, 2024
11:00 a.m. Eastern Time | | | | Live via webcast at
www.virtualshareholdermeeting.com/KHC2023KHC2024 | | | | Online access will open
15 minutes prior to the start of the
Annual Meeting. | Meeting |
We will hold the Annual Meeting on Thursday, May 4, 2023 at 11:00 a.m. Eastern Time via live webcast at www.virtualshareholdermeeting.com/KHC2023. To attend, vote electronically, and submit questions during the meeting, visit
www.virtualshareholdermeeting.com/KHC2023the website referenced above and enter the control number included on your Notice, proxy card, or the instructions that accompaniedaccompany your proxy materials. To locate your control number: | Registered holder | | | the control number included on your Notice or proxy card | |
| Beneficial holder whose Notice or voting instruction form indicates that you may vote those shares at www.proxyvote.com | | | the control number indicatedincluded on your Notice or instruction form | |
| Other beneficial holder | | | contact your bank, broker, or other nominee (ideally no less than five days before the Annual Meeting) to obtain a legal proxy |
| 2 | WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? |
Online access will open 15 minutes prior to the start of the Annual Meeting. For additional information about attending the virtual meeting, see Question 17 on page 127.2
Who is entitled to vote at the Annual Meeting?
The Board established March 6, 20234, 2024 as the Record Daterecord date for the Annual Meeting.Meeting (the “Record Date”). Stockholders holding shares of our common stock at the close of business on the Record Date are entitled to:
•
receive Notice
•
attend the Annual Meeting
•
vote on all matters that properly come before the Annual Meeting
| ● | receive Notice |
| ● | attend the Annual Meeting |
| ● | vote on all matters that properly come before the Annual Meeting |
As of the close of business on the Record Date, there were 1,226,998,9261,215,638,048 shares of our common stock outstanding and entitled to vote. Each share is entitled to one vote on each matter to be voted upon at the Annual Meeting.
| |
| 2024 Proxy Statement | 115 |
The Kraft Heinz Company 2023 Proxy Statement|121
3
What are the proposals to be voted on at the Annual Meeting, and how does the Board recommend I vote?
| 3 | WHAT ARE THE PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING, AND HOW DOES THE BOARD RECOMMEND I VOTE? |
| 4 | HOW DO I VOTE MY SHARES? |
4
How do I vote my shares?
Your vote is important.Even if you plan to attend the live webcast of the Annual Meeting, we encourage you to vote as soon as possible using one of the following methods. Make sure to have your Notice, proxy card, or voting instruction form available and follow the instructions. For additional information on the difference between registered holders and beneficial holders, see Question 6 on page 123. 6. | |  Internet | | 
Telephone | Internet
|  Mail | | Telephone
| | | Mail
| | |  During the Virtual Meeting | |
| | | | | 11:59 p.m.
Eastern Time on
May 3, 20231, 2024 | | | 11:59 p.m.
Eastern Time on
May 3, 20231, 2024 | | | | | | Before the polls close at
Thursday, May 4, 20232, 2024 | |
| Registered Holders | | | | www.proxyvote.com | | | Within the United States and Canada, 1-800-690-6903
1-800-690-6903 (toll-free) | | | Return a properly executed proxy card received before the polls close at the Annual Meeting on Thursday, May 4, 20232, 2024 | | | Attend the Annual Meeting at www.virtualshareholdermeeting.com/KHC2024www.virtualshareholdermeeting.com/KHC2023 as provided in Question 17, on page 127, and follow the instructions provided during the Annual Meeting | |
| Beneficial Holders
(holders | | www.proxyvote.com | | www.proxyvote.com | | | Within the United States and Canada, 1-800-454-8683
1-800-454-8683 (toll-free) | | | Return a properly executed voting instruction form by mail, depending upon the method(s) your broker, bank, or other nominee makes available | | | Attend the Annual Meeting at www.virtualshareholdermeeting.com/KHC2024www.virtualshareholdermeeting.com/KHC2023 as provided in Question 17, on page 127, and follow the instructions provided during the Annual Meeting |
| * | The availability of Internet and telephone voting may depend on the voting procedures of the organization that holds your shares. |
| |
| 2024 Proxy Statement | 116 |
The availability of Internet and telephone voting may depend on the voting
procedures of the organization that holds your shares.
5
Why am I receiving these proxy materials?
���
| 5 | WHY AM I RECEIVING THESE PROXY MATERIALS? |
You have received the proxy materials because, as of the Record Date, you directly held, and had the right to vote, shares of Kraft Heinz common stock. In connection with our Board’s solicitation of proxies to be voted at the Annual Meeting, we are providing stockholders entitled to vote at the Annual Meeting with this Proxy Statement, our 20222023 Annual Report, and a voting ballot (in the form of a proxy card, voting instruction form, or a unique control number that allows you to vote via the Internet or by phone). We refer to these materials collectively as the “proxy
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materials.” The proxy materials provide important information about Kraft Heinz and describe the voting procedures and the matters to be voted on at the Annual Meeting.
| | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 4, 20232, 2024 | | | The Proxy Statement and 20222023 Annual Report are available at ir.kraftheinzcompany.com/proxy | | |
6
What is the difference between registered holders and beneficial holders?
6 | WHAT IS THE DIFFERENCE BETWEEN REGISTERED HOLDERS AND BENEFICIAL HOLDERS? |
| | | | How You Hold Your Shares | | | How You Receive
the Proxy Materials | | | How Your Vote Works | |
| Registered Holders | | | | Shares held directly with our transfer agent, Equiniti Trust Company.Company, LLC. | | From Broadridge Financial Solutions, Inc. | From our transfer agent. | | | Instructs the proxies how to vote your shares. | |
| Beneficial Holders
(holders (holders in street name) | | | | Shares held indirectly through an account with an institutional or nominee holder of our stock such as a broker or bank who is the record holder of the stock. | | | From your broker, bank, or other nominee. | | | Instructs your nominee how to vote your shares, and that nominee in turn instructs the proxies how to vote your shares. If you hold your shares in an employee benefit plan, see Question 7 below. | 7. |
7
I am a current or former Kraft or Kraft Heinz employee and have investments in certain retirement plan accounts related to Kraft or Kraft Heinz. Can I vote? If so, how do I vote?
| 7 | I AM A CURRENT OR FORMER KRAFT OR KRAFT HEINZ EMPLOYEE AND HAVE INVESTMENTS IN CERTAIN RETIREMENT PLAN ACCOUNTS RELATED TO KRAFT OR KRAFT HEINZ. CAN I VOTE? IF SO, HOW DO I VOTE? |
If you are a current or former Kraft or Kraft Heinz employee and have investments in the Kraft Heinz Stock Fund(s) of the Kraft Heinz Savings/Kraft Heinz Union Savings Plans and/or the Kraft Heinz Canada ULC Retirement Savings Plan or you are a participant in the Altria Deferred Profit-Sharing Plan for Hourly Employees, the Altria Deferred Profit-Sharing Plan for Salaried Employees, the Philip Morris International Deferred Profit-Sharing Plan or the Molson Coors LLC Employees’ Retirement & Savings Plan, you are entitled to vote. Your vote directs the plan(s) trustee(s) how to vote the shares allocated to your account(s). Your proxy card, or control number for voting electronically, includes all shares allocated to these account(s).
In order to direct the trustee(s) how to vote the shares held in your account(s),
you must vote these plan shares (whether by Internet, telephone, or mailed proxy card) by 11:59 p.m. Eastern Time on May 1, 2023April 29, 2024. If your voting instructions or proxy card are not received by that time, the trustee(s) will vote the shares allocated to your account(s) in the same proportion as the respective plan shares for which voting instructions have been timely received, unless contrary to the Employee Retirement Income Security Act of 1974 (ERISA). Please follow the instructions for registered holders described in Question 4 on page 122to cast your vote. Note, however, that although you may listen to the Annual Meeting via the live webcast, you may not vote any shares you hold in these retirement plan account(s) during the Annual Meeting.8
How is Kraft Heinz distributing proxy materials?
| 8 | HOW IS KRAFT HEINZ DISTRIBUTING PROXY MATERIALS? |
We are furnishing proxy materials to our stockholders primarily via “Notice and Access” delivery. On or about March 24, 2023,22, 2024, we mailed to our stockholders (other than those who previously requested email or paper delivery) a Notice containing instructions on how to access the proxy materials via the Internet.
If you receive a Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice instructs you on how to access the proxy materials and vote via a secure website.
If you received a Notice by mail and would like to receive paper copies of our proxy materials in the mail on a one-timeone-time or ongoing basis, free of charge, you may follow the instructions in the Notice for making this request.The Kraft Heinz Company 2023 Proxy Statement|123
![[MISSING IMAGE: aw_choosesupport-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/aw_choosesupport-4c.jpg)
On or about March 24, 2023,22, 2024, we also emailed and mailed printed copies of our proxy materials to those of our stockholders who previously requested email and paper delivery, respectively. | |
| 2024 Proxy Statement | 117 |
What is the quorum requirement?
| 9 | WHAT IS THE QUORUM REQUIREMENT? |
A quorum will be present if a majority of the outstanding shares of our common stock entitled to vote as of the Record Date is represented at the Annual Meeting, either in person or by proxy. Shares of common stock represented in person or by proxy, including abstentions and broker non-votes, will be counted as present for purposes of establishing a quorum. As of the close of business on the Record Date, there were 1,226,998,9261,215,638,048 shares of our common stock outstanding and entitled to vote.
10
What vote is needed to approve each of the proposals?
10 | Proposal | | | Vote RequirementWHAT VOTE IS NEEDED TO APPROVE EACH OF THE PROPOSALS?★
| | | Abstentions | | | Broker Non-Votes+
| |
| |
| Proposal | | Vote Requirement* | | Abstentions | | Broker Non-Votes+ |
1
| Election of Directors
| | Majority | Majority♦
| | | No effect | | | No effect | |
2 | 2
Advisory Vote to Approve Executive Compensation
| | Majority | Majority | | | No effect | | | No effect | |
3 | 3
Ratification of the Selection of PricewaterhouseCoopers LLP as Our Independent Auditors for 2023
2024 | | Majority | Majority | | | No effect | | | None | |
4 | 4
Stockholder Proposal – Simple Majority Vote
Report on Recyclability Claims | | Majority | Majority | | | No effect | | | No effect | |
5 | 5
Stockholder Proposal – Water Risk
Report on Group-Housed Pork | | Majority | Majority | | | No effect | | | No effect | |
6 | 6
Stockholder Proposal – Civil Rights
Report on Greenhouse Gas Goals | | Majority | Majority | | | No effect | | | No effect | |
★
Of votes cast by stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting.
+
Broker Non-Votes. As described in Question 6 on page 123, if you are a beneficial holder (hold your shares in street name), your vote instructs your broker, bank, or other nominee, as the holder of record, how to vote your shares. If you do not
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provide voting instructions to your broker, bank, or other nominee, your nominee will have discretion to vote your shares on routine matters; however, your shares will not be voted on the other (non-routine) matters on the Annual Meeting agenda, resulting in “broker non-votes” with respect to those other (non-routine) matters. Proposal 3. Ratification of the Selection of PricewaterhouseCoopers LLP as our Independent Auditors for 2023 is expected to be the only item on the agenda for the Annual Meeting that is considered routine. These shares will be counted for purposes of establishing a quorum at the Annual Meeting. Whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. Even with respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your broker, bank, or other nominee how to vote your shares on all proposals to ensure that your vote is counted.
♦
Director Elections. Our By-Laws provide that, to be elected at this Annual Meeting, a director nominee must receive more votes FOR than votes AGAINST. Abstentions and broker non-votes are not considered as votes FOR or votes AGAINST the nominees and will have no effect on the election of directors.
| * | Of votes cast by stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting. |
| + | Broker Non-Votes. As described in Question 6, if you are a beneficial holder (hold your shares in street name), your vote instructs your broker, bank, or other nominee, as the holder of record, how to vote your shares. If you do not provide voting instructions to your broker, bank, or other nominee, your nominee will have discretion to vote your shares on routine matters; however, your shares will not be voted on the other (non-routine) matters on the Annual Meeting agenda, resulting in “broker non-votes” with respect to those other (non-routine) matters. Proposal 3. Ratification of the Selection of PricewaterhouseCoopers LLP as our Independent Auditors for 2024 is expected to be the only item on the agenda for the Annual Meeting that is considered routine. These shares will be counted for purposes of establishing a quorum at the Annual Meeting. Whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. Even with respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your broker, bank, or other nominee how to vote your shares on all proposals to ensure that your vote is counted. |
| Director Elections. Our By-Laws provide that, to be elected at this Annual Meeting, a director nominee must receive more votes FOR than votes AGAINST. Abstentions and broker non-votes are not considered as votes FOR or votes AGAINST the nominees and will have no effect on the election of directors. |
In an uncontested election, our Corporate Governance Guidelines provide if an incumbent director nominated for re-election receives a greater number of votes AGAINST election than votes FOR election, the director must tender their resignation offer to the Governance Committee for its consideration. The Governance Committee then recommends to the Board whether to accept the resignation offer. The director will continue to serve until the Board decides whether to accept the resignation offer but will not participate in the Governance Committee’s recommendation or the Board’s action regarding whether to accept the resignation offer. The Board will publicly disclose its decision and rationale within 90 days after certification of the election results.
In contested elections, the voting standard is a plurality of votes cast.
If any director nominee becomes unable or unwilling to serve as a director between the date of this Proxy Statement and the Annual Meeting, which we do not anticipate, the Board may designate a new nominee, and the persons named as proxy holders may vote for the substitute nominee. Alternatively, the Board may reduce the size of the Board.
| |
| 2024 Proxy Statement | 118 |
11
May I change or revoke my vote?
| 11 | MAY I CHANGE OR REVOKE MY VOTE? |
| Registered Holders | | | | Any subsequent vote you cast will replace your earlier vote. This applies whether you vote by Internet, telephone, mailing a proxy card, or voting electronically during the Annual Meeting. | | | Alternatively, you may revoke your proxy by submitting a written revocation to: | |
|  | | | The Kraft Heinz Company
Attention: Corporate Secretary
200 East Randolph Street
Suite 7600
Chicago, Illinois 60601 | |
|
| | |
Beneficial Holders
(holders in street name) | | | | You must contact your broker, bank, or other nominee for specific instructions on how to change or revoke your vote. | |
12
Who bears the cost of soliciting votes for the Annual Meeting?
| 12 | WHO BEARS THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING? |
This solicitation is made by the Board on behalf of Kraft Heinz. Kraft Heinz bears the cost of soliciting your vote. Our directors, officers, or employees may solicit proxies or votes in person, by telephone, or by electronic communication. They will not receive any additional compensation for these solicitation activities. We have hired Morrow Sodali LLC, 333 Ludlow Street, 5th Floor, South Tower, Stamford, Connecticut 06902, to distribute and solicit proxies. We will pay Morrow Sodali LLC a fee of $15,000, plus reasonable expenses, for these services. We may also enlist the help of banks, brokers, and other nominee holders in soliciting proxies for the Annual Meeting from their customers (i.e., beneficial holders) and reimburse those firms for related out-of-pocket expenses.
13
What is “householding”?
| 13 | WHAT IS “HOUSEHOLDING”? |
Unless you advised otherwise, if you are a beneficial holder and other residents at your mailing address share the same last name and also own shares of Kraft Heinz common stock in an account at the same broker, bank, or other nominee, your nominee delivered a single Notice or set of proxy materials to your address. This method of delivery is known as householding. Householding reduces the number of mailings you receive, saves on printing
The Kraft Heinz Company 2023 Proxy Statement|125
and postage costs, and helps the environment. Stockholders who participate in householding continue to receive separate voting instruction cards and control numbers for voting electronically.
If you wish to receive a separate copy of the Notice or proxy materials, now or in the future, you should submit a request as follows and the materials will be delivered promptly:
| | | | | | | | | | | | | | | | | |
| | | | | Broadridge Financial Solutions, Inc.
Householding Department
51 Mercedes Way
Edgewood, New York 11717 | | | | | |  | 1-866-540-7095 | | | | | |
| | | | | | | | | | | | | | | | | |
Beneficial holders sharing an address who are receiving multiple copies of the proxy materials and wish to receive a single copy of these materials in the future should contact their broker, bank, or other nominee to make this request.
14
Are my votes confidential?
| 14 | ARE MY VOTES CONFIDENTIAL? |
Yes. Your votes will not be disclosed to our directors, officers, or employees, except:
•
as necessary to meet applicable legal requirements and to assert or defend claims for or against us;
•
in the case of a contested proxy solicitation;
•
if you provide a comment with your proxy or otherwise communicate your vote to us outside of the normal procedures; or
•
as necessary to allow the inspector of election to certify the results.
15
Who counts the votes?
| ● | as necessary to meet applicable legal requirements and to assert or defend claims for or against us; |
| ● | in the case of a contested proxy solicitation; |
| ● | if you provide a comment with your proxy or otherwise communicate your vote to us outside of the normal procedures; or |
| ● | as necessary to allow the inspector of election to certify the results. |
Broadridge Financial Solutions, Inc. will receive and tabulate the proxies, and a representative of Broadridge Financial Solutions, Inc. will act as the inspector of election and certify the results.
| |
| 2024 Proxy Statement | 119 |
How do I find out the voting results?
| 16 | HOW DO I FIND OUT THE VOTING RESULTS? |
We will disclose the final voting results in a Current Report on Form 8-K to be filed with the SEC on or before May 10, 2023.8, 2024. It will be available on our website at ir.kraftheinzcompany.com/sec-filings ir.kraftheinzcompany.com/sec-filingsand on the SEC’s website at www.sec.govwww.sec.gov.
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17
How can I attend the Annual Meeting?
17 | HOW CAN I ATTEND THE ANNUAL MEETING? |
 | | | To Attend the Annual Meeting | | | Visit the meeting login page at www.virtualshareholdermeeting.com/KHC2024.www.virtualshareholdermeeting.com/● KHC2023.
•
Enter the control number included on your Notice, proxy card, or voting instruction form, or otherwise provide provided by your bank, broker, or other nominee as described below.
Registered Holders : Use the control number included on the Notice or proxy card.Beneficial Holders (hold your shares in street name): o
– If your Notice or voting instruction form indicates that you may vote your shares at www.proxyvote.comwww.proxyvote.com, you will use the control number indicated on your Notice or instruction form.
o
– Otherwise, you should contact your bank, broker, or other nominee (ideally no less than five days before the Annual Meeting) to obtain a legal proxy.
If you have any questions about your control number or how to obtain one, please contact your bank, broker, or other nominee. Online access will open 15 minutes prior to the start of the Annual Meeting. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. | |
 | | | | To Listen to the Annual Meeting(without a control number or legal proxy) | | | ● Visit www.virtualshareholdermeeting.com/KHC2024 www.virtualshareholdermeeting.com/KHC2023and register as a guest. You will not be able to vote or ask questions during the Annual Meeting. | |
 | | | | For Help with Difficulties Accessing the Annual Meeting | | | ● Call 1-844-986-0822 (United States) or 1-303-562-9302 (International) for assistance. The technical support phone lines will be available beginning approximately 15 minutes before the Annual Meeting. | |
18
How can I submit questions?
18 | HOW CAN I SUBMIT QUESTIONS? |
 | | | During the Annual Meeting | | | Visit www.virtualshareholdermeeting.com/KHC2024.www.virtualshareholdermeeting.com/KHC2023● .
•
Enter the control number included on your Notice, proxy card, or voting instruction form, or otherwise provided by your bank, broker, or other nominee (as described in Question 17 above)17).
Type your question into the “Ask a Question” field and click “Submit.”
| |
Only stockholders with a valid control number will be allowed to ask questions. We will try to answer as many stockholder questions as time permits. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to Annual Meeting matters or Company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition.
| |
| 2024 Proxy Statement | 120 |
The Kraft Heinz Company 2023 Proxy Statement|127
STOCKHOLDER PROPOSALSWe presently anticipate that the 20242025 Annual Meeting of Stockholders will be held on or about May 2, 2024.
8, 2025.Stockholder
Proposals | | Stockholder
ProposalsDescription | | | Description | | | Deadline
Date and time by which Kraft Heinz must receive
the nomination or proposal
| | | Additional
Requirements | |
| To include a proposal in our 20242025 Proxy Statement | | | Under SEC Rule 14a-8, a stockholder may submit a proposal for possible inclusion in the proxy statement for our 20242025 Annual Meeting of Stockholders by delivering written notice to Kraft Heinz at the address below | | | By the close of business on November 25, 202322, 2024 | | | The information required by Rule 14a-8 | |
| To nominate a candidate for election as a director or submit a proposal for consideration at our 20242025 Annual Meeting of Stockholders | | | Under our By-Laws, a stockholder may nominate a candidate for election as a director or propose business for consideration at our 20242025 Annual Meeting of Stockholders by delivering written notice to Kraft Heinz at the address below | | | Between the close of business on December 6, 20233, 2024 and the close of business on January 5, 2024 2, 2025 We generally must receive written notice no later than 120 days, and no earlier than 150 days, before the first anniversary of the preceding year’s annual meeting. If we change the date of an annual meeting by more than 30 days before or more than 60 days after the date of the previous year’s annual meeting, then we must receive this written notice no later than 120 days, and no earlier than 150 days, before the date of that annual meeting or, if the first public announcement of the date of an annual meeting is less than 120 days prior to the date of such annual meeting, then we must receive this written notice no later than the 10th day following the day on which public announcement of the date of such annual meeting is first made by us. | | | The information required by our By-Laws, Article II, Section 6(c) and Rule 14a-19 (for nominees to be included on our proxy card) | |
| | Mail to: | | MAIL TO: |
 | | | | | The Kraft Heinz Company
Attention: Corporate Secretary
200 East Randolph Street
Suite 7600
Chicago, Illinois 60601 | | |
Our By-Laws are available on our website as provided under
CorporateGovernance—Other Governance Policies and Board Matters—CorporatePractices—Governance Documents —Corporate Governance Materials Available on Our Website on page 28. You may also obtain a copy of our By-Laws from our Corporate Secretary by written request to the above address. | |
| 2024 Proxy Statement | 121 |
128|ir.kraftheinzcompany.com
DIVERSITY QUICK SUMMARYWe provide the following information about our directors and officers for purposes of our compliance with Nasdaq rules and participation in various third-party surveys and raters. We ask our directors, director nominees, and employees to indicate their self-identification with respect to race/ethnicity, gender, gender identity, and sexual orientation, subject to applicable laws.
| Directors | As of Fiscal Year End
(December 30, 2023) | | As of the Record Date*
(March 4, 2024) |
| Number of directors | 12 | | 11 |
| Directors that identify as women | 4 (31%) | | 3 (27%)† |
| Directors that identify as people of color | 4 (31%) | | 5 (45%) |
| * | Reflects director nominees standing for election at the Annual Meeting. Does not include current directors that are not standing for re-election at the Annual Meeting, if any. |
| † | Reflects Ms. Mulder’s retirement from the Board, effective as of the 2024 Annual Meeting. Since November 2022, our Board has included 4 women, or 31% to 33% of the Board. The Board is committed to maintaining gender diversity at or above 30% by the 2025 Annual Meeting. |
| Officers | As of Fiscal Year End
(December 30, 2023) | | For the Fiscal Year*
(2023) |
| Number of Executive Leadership Team (“ELT”) members | 9 | | 9 |
| ELT members that identify as women | 3 (33%) | | 3 (33%) |
| ELT members that identify as people of color | 7 (78%) | | 7 (78%) |
| * | We define this as individuals who were members of the ELT as of fiscal year end, as provided above, plus any individuals who were members of the ELT for 9 months or more of the fiscal year. |
| | Directors | | | As of Fiscal Year End
(December 31, 2022) | | | As of the Record Date*
(March 6, 2023) | |
| | Number of directors | | | 11 | | | 12 | |
| | Directors that identify as women | | | 4 (36%) | | | 4 (33%) | |
| | Directors that identify as people of color | | | 3 (27%) | | | 4 (33%) | |
*
Reflects director nominees standing for election at the Annual Meeting. Does not include current directors that are not standing for re-election at the Annual Meeting, if any.
| | Officers | | | As of Fiscal Year End
(December 31, 2022) | | | For the Fiscal Year*
(2022) | |
| | Number of Executive Leadership Team (“ELT”) members | | | 10 | | | 10 | |
| | ELT members that identify as women | | | 4 (40%) | | | 4 (40%) | |
| | ELT members that identify as people of color | | | 8 (80%) | | | 8 (80%) | |
*
We define this as individuals who were members of the ELT as of fiscal year end, as provided above, plus any individuals who were members of the ELT for 9 months or more of the fiscal year.
| | Nasdaq Board Diversity Matrix
(as of March 6, 2023) | |
| | Total Number of Directors* | | | 12 | |
| | | | | Female | | | Male | | | Non-Binary | | | Gender
Undisclosed | |
| | Gender | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Directors | | | | | 4 | | | | | | 8 | | | | | | – | | | | | | – | | |
| | Self-Identified Demographic Background | | | | | | | | | | | | | | | | | | | | | | | | | |
| | African American or Black | | | | | 2 | | | | | | – | | | | | | – | | | | | | – | | |
| | Alaskan Native or American Indian | | | | | – | | | | | | – | | | | | | – | | | | | | – | | |
| | Asian | | | | | – | | | | | | 1 | | | | | | – | | | | | | – | | |
| | Hispanic or Latinx | | | | | – | | | | | | 1 | | | | | | – | | | | | | – | | |
| | Native Hawaiian or Pacific Islander | | | | | – | | | | | | – | | | | | | – | | | | | | – | | |
| | White | | | | | 2 | | | | | | 6 | | | | | | – | | | | | | – | | |
| | Two or More Races or Ethnicities | | | | | – | | | | | | – | | | | | | – | | | | | | – | | |
| | LGBTQ+ | | | | | – | | | | | | – | | | | | | – | | | | | | – | | |
| | Undisclosed | | | | | – | | | | | | – | | | | | | – | | | | | | – | | |
*
Reflects director nominees standing for election at the Annual Meeting. Does not include current directors that are not standing for re-election at the Annual Meeting, if any.
The Kraft Heinz Company 2023 Proxy Statement|129
Other Matters
OTHER MATTERSWe do not know of any matters, other than those described in this Proxy Statement, that may be presented for action at the Annual Meeting. If any other matters properly come before the Annual Meeting, your proxy gives authority to the persons designated as proxies to vote in accordance with their best judgment. The Chair of the Annual Meeting may refuse to allow the presentation of a proposal or a nomination for the Board at the Annual Meeting if it is not properly submitted.
| |
| 2024 Proxy Statement | 122 |
130|ir.kraftheinzcompany.com
APPENDIX A. NON-GAAP FINANCIAL MEASURES
We report our financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In addition, management uses certain non-GAAP financial measures to assist in comparing the Company’s performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s underlying operations.
The non-GAAP financial measures provided in this Proxy Statement should be viewed in addition to, and not as an alternative for, results prepared in accordance with GAAP. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable GAAP financial measures.
The following information for Organic Net Sales, Adjusted EBITDA, Adjusted Gross Profit Margin, Free Cash Flow, and Net Leverage is provided to reconcile these non-GAAP financial measures, which are disclosed in this Proxy Statement, to their most comparable GAAP measures. The Company believes:
•
Organic Net Sales, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Profit Margin provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and
•
Free Cash Flow and Net Leverage provide measures of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and are factors used in determining the Company’s borrowing capacity and the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes.
| ● | Organic Net Sales, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Profit Margin provide important comparability of underlying operating results, allowing investors and management to assess the Company’s operating performance on a consistent basis; and |
| ● | Free Cash Flow and Net Leverage provide measures of the Company’s core operating performance, the cash-generating capabilities of the Company’s business operations, and are factors used in determining the Company’s borrowing capacity and the amount of cash available for debt repayments, dividends, acquisitions, share repurchases, and other corporate purposes. |
Management believes that presenting the Company’s non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting the Company’s business than could be obtained absent these disclosures.
Organic Net Sales
ORGANIC NET SALES
Organic Net Sales is defined as net sales excluding, when they occur, the impact of currency, acquisitions and divestitures, and a 53rd week of shipments. The Company calculates the impact of currency on net sales by holding exchange rates constant at the previous year’s exchange rate, with the exception of highly inflationary subsidiaries, for which the Company calculates the previous year’s results using the current year’s exchange rate.
Reconciliation of Net Sales to Organic Net Sales for the Year Ended
(dollars in millions)
(Unaudited) |
| |
| | | NET SALES | | Currency | | Acquisitions and
Divestitures | | 53rd Week | | ORGANIC NET SALES |
| December 30, 2023 | | $26,640 | | $(168) | | $34 | | — | | $26,774 |
| December 31, 2022 | | $26,485 | | $82 | | $60 | | $454 | | $25,889 |
| Year-over-year change | | 0.6% | | | | | | | | 3.4% |
| |
| 2024 Proxy Statement | 123 |
Reconciliation of Net Sales to Organic Net Sales for the Year Ended
(dollars in millions)
(Unaudited)| | | | | Net Sales | | | Currency | | | Acquisitions
and
Divestitures | | | 53rd Week | | | Organic
Net Sales | |
| | December 31, 2022 | | | | $ | 26,485 | | | | | $ | (497) | | | | | $ | 279 | | | | | $ | 454 | | | | | $ | 26,249 | | |
| | December 25, 2021 | | | | $ | 26,042 | | | | | $ | 26 | | | | | $ | 2,099 | | | | | $ | — | | | | | $ | 23,917 | | |
| | Year-over-year change | | | | | 1.7% | | | | | | | | | | | | | | | | | | | | | | 9.8% | |
The Kraft Heinz Company 2023 Proxy Statement|A-1
Appendix A. Non-GAAP Financial Measures
Adjusted EBITDA is defined as net income/(loss) from continuing operations before interest expense, other expense/
(income), provision for/(benefit from) income taxes, and depreciation and amortization (excluding restructuring activities); in addition to these adjustments, the Company excludes, when they occur, the impacts of divestiture-related license income, (e.g., income related to the sale of licenses in connection with the Cheese Transaction), restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, and equity award compensation expense (excluding restructuring activities). Reconciliation of Net Income/(Loss) to Adjusted EBITDA for the Year Ended
(dollars in millions)
(Unaudited) |
| |
| | | December 30,
2023 | | December 31,
2022 | | Year-over-year
change |
| NET INCOME/(LOSS) | | $2,846 | | $2,368 | | 20.2% |
| Interest expense | | 912 | | 921 | | |
| Other expense/(income) | | 27 | | (253) | | |
| Provision for/(benefit from) income taxes | | 787 | | 598 | | |
| Operating income/(loss) | | 4,572 | | 3,634 | | |
| Depreciation and amortization (excluding restructuring activities) | | 923 | | 922 | | |
| Divestiture-related license income | | (54) | | (56) | | |
| Restructuring activities | | 60 | | 74 | | |
| Deal costs | | — | | 9 | | |
| Unrealized losses/(gains) on commodity hedges | | 1 | | 63 | | |
| Impairment losses | | 662 | | 999 | | |
| Certain non-ordinary course legal and regulatory matters | | 2 | | 210 | | |
| Equity award compensation expense | | 141 | | 148 | | |
| ADJUSTED EBITDA | | $6,307 | | $6,003 | | 5.1% |
| | | | | | | |
| SEGMENT ADJUSTED EBITDA: | | | | | | |
| North America | | $5,603 | | $5,284 | | |
| International | | 1,094 | | 1,017 | | |
| General corporate expenses | | (390) | | (298) | | |
| ADJUSTED EBITDA | | $6,307 | | $6,003 | | |
| |
| 2024 Proxy Statement | 124 |
Reconciliation of Net Income/(Loss) to Adjusted EBITDA for the Year Ended
(dollars in millions)
(Unaudited)| | | | | December 31,
2022 | | | December 25,
2021 | | | | | | Year-over-year
change | |
| | Net income/(loss) | | | | $ | 2,368 | | | | | $ | 1,024 | | | | | | | | | 131.3% | | |
| | Interest expense | | | | | 921 | | | | | | 2,047 | | | | | | | | | | | |
| | Other expense/(income) | | | | | (253) | | | | | | (295) | | | | | | | | | | | |
| | Provision for/(benefit from) income taxes | | | | | 598 | | | | | | 684 | | | | | | | | | | | |
| | Operating income/(loss) | | | | | 3,634 | | | | | | 3,460 | | | | | | | | | | | |
| | Depreciation and amortization (excluding restructuring activities) | | | | | 922 | | | | | | 910 | | | | | | | | | | | |
| | Divestiture-related license income | | | | | (56) | | | | | | (4) | | | | | | | | | | | |
| | Restructuring activities | | | | | 74 | | | | | | 84 | | | | | | | | | | | |
| | Deal costs | | | | | 9 | | | | | | 11 | | | | | | | | | | | |
| | Unrealized losses/(gains) on commodity hedges | | | | | 63 | | | | | | 17 | | | | | | | | | | | |
| | Impairment losses | | | | | 999 | | | | | | 1,634 | | | | | | | | | | | |
| | Certain non-ordinary course legal and regulatory matters | | | | | 210 | | | | | | 62 | | | | | | | | | | | |
| | Equity award compensation expense | | | | | 148 | | | | | | 197 | | | | | | | | | | | |
| | Adjusted EBITDA | | | | $ | 6,003 | | | | | $ | 6,371 | | | | | | | | | 5.8% | | |
| | Segment Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | |
| | North America | | | | $ | 5,284 | | | | | $ | 5,576 | | | | | | | | | | | |
| | International | | | | | 1,017 | | | | | | 1,066 | | | | | | | | | | | |
| | General corporate expenses | | | | | (298) | | | | | | (271) | | | | | | | | | | | |
| | Adjusted EBITDA | | | | $ | 6,003 | | | | | $ | 6,371 | | | | | | | | | | | |
A-2|ir.kraftheinzcompany.com
ADJUSTED GROSS PROFIT MARGIN
Adjusted Gross Profit is defined as gross profit excluding, when they occur, the impacts of restructuring activities, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, certain non-ordinary course legal and regulatory matters, losses/(gains) on the sale of a business, other losses/(gains) related to acquisitions and divestitures (e.g., tax and hedging impacts), nonmonetary currency devaluation (e.g., remeasurement gains and losses), debt prepayment and extinguishment (benefit)/costs, and certain significant discrete income tax items (e.g., U.S. and non-U.S. tax reform), and including when they occur, adjustments to reflect preferred stock dividend payments on an accrual basis.
Reconciliation of Gross Profit to Adjusted Gross Profit for the Year Ended December 31, 2022
(dollars in millions)
(Unaudited)
| | Gross profit | | | | $ | 8,122 | | |
| | Items Affecting Comparability | | | | | | | |
| | Restructuring activities | | | | | 27 | | |
| | Deal Costs | | | | | — | | |
| | Unrealized losses/(gains) on commodity hedges | | | | | 63 | | |
| | Impairment losses | | | | | 86 | | |
| | Certain non-ordinary course legal and regulatory matters | | | | | — | | |
| | Losses/(gains) on sale of business | | | | | — | | |
| | Other losses/(gains) related to acquisitions and divestitures | | | | | — | | |
| | Nonmonetary currency devaluation | | | | | — | | |
| | Debt prepayment and extinguishment (benefit)/costs | | | | | — | | |
| | Adjusted Gross Profit | | | | $ | 8,298 | | |
Adjusted Gross Profit Margin for the Year Ended December 31, 2022
(in millions)
(Unaudited)
is defined as Adjusted Gross Profit divided by net sales. | Reconciliation of Gross Profit to Adjusted Gross Profit | | | | $ | 8,298 | | for the Year Ended December 30, 2023
(dollars in millions)
(Unaudited) |
| Net Sales | | | | | 26,485 | | |
GROSS PROFIT | | $8,926 |
| Items Affecting Comparability | | |
| Restructuring activities | | 57 |
| Unrealized losses/(gains) on commodity hedges | | 1 |
| ADJUSTED GROSS PROFIT | | $8,984 |
Adjusted Gross Profit Margin for the Year Ended December 30, 2023
(in millions)
(Unaudited) |
| | |
| Adjusted Gross Profit | | $8,984 |
| Net sales | 31.3 | 26,640 |
%ADJUSTED GROSS PROFIT MARGIN | | 33.7% |
| |
| 2024 Proxy Statement | 125 |
FREE CASH FLOW
Free Cash Flow is defined as net cash provided by/(used for) operating activities less capital expenditures. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.
Reconciliation of Net Cash Provided By/(Used for) Operating Activities to Free Cash Flow for the Year Ended
(in millions)
(Unaudited) |
| | | | | | | |
| | | December 30,
2023 | | December 31,
2022 | | Year-over-year
change |
| NET CASH PROVIDED BY/(USED FOR) OPERATING ACTIVITIES | | $3,976 | | $2,469 | | 61.0% |
| Capital expenditures | | (1,013) | | (916) | | |
| FREE CASH FLOW | | $2,963 | | $1,553 | | 90.7% |
| |
| 2024 Proxy Statement | 126 |
Reconciliation of Net Cash Provided By/(Used for) Operating Activities to Free Cash Flow for the Year Ended
(in millions)
(Unaudited)| | | | | December 31,
2022 | | | December 25,
2021 | | | | | | Year-over-year
change | |
| | Net cash provided by/(used for) operating activities | | | | $ | 2,469 | | | | | $ | 5,364 | | | | | | | | | 54.0% | | |
| | Capital expenditures | | | | | (916) | | | | | | (905) | | | | | | | | | | | |
| | Free Cash Flow | | | | $ | 1,553 | | | | | $ | 4,559 | | | | | | | | | 65.2% | | |
The Kraft Heinz Company 2023 Proxy Statement|A-3
NET LEVERAGE
Net Leverage is defined Company’sas debt less cash, cash equivalents and short-term investments divided by Adjusted EBITDA.
Reconciliation of Net Income/(Loss) to Adjusted EBITDA for the 12 Months Ended December 30, 2023
(in millions)
(Unaudited) |
| | |
| NET INCOME/(LOSS) | | $ 2,846 |
| Interest expense | | 912 |
| Other expense/(income) | | 27 |
| Provision for/(benefit from) income taxes | | 787 |
| Operating income/(loss) | | 4,572 |
| Depreciation and amortization (excluding restructuring activities) | | 923 |
| Divestiture-related license income | | (54) |
| Restructuring activities | | 60 |
| Deal costs | | — |
| Unrealized losses/(gains) on commodity hedges | | 1 |
| Impairment losses | | 662 |
| Certain non-ordinary course legal and regulatory matters | | 2 |
| Equity award compensation expense | | 141 |
| ADJUSTED EBITDA | | $ 6,307 |
| | |
| Commercial paper and other short-term debt | | $ — |
| Current portion of long-term debt | | 638 |
| Long-term debt | | 19,394 |
| Less: Cash and cash equivalents | | (1,400) |
| | $18,632 |
| | |
| NET LEVERAGE | | 3.0 |
| |
| 2024 Proxy Statement | 127 |
Reconciliation of Net Income/(Loss) to Adjusted EBITDA for the 12 Months Ended December 31, 2022
(in millions)
(Unaudited)| | Net income/(loss) | | | | $ | 2,368 | | |
| | Interest expense | | | | | 921 | | |
| | Other expense/(income) | | | | | (253) | | |
| | Provision for/(benefit from) income taxes | | | | | 598 | | |
| | Operating income/(loss) | | | | | 3,634 | | |
| | Depreciation and amortization (excluding restructuring activities) | | | | | 922 | | |
| | Divestiture-related license income | | | | | (56) | | |
| | Restructuring activities | | | | | 74 | | |
| | Deal costs | | | | | 9 | | |
| | Unrealized losses/(gains) on commodity hedges | | | | | 63 | | |
| | Impairment losses | | | | | 999 | | |
| | Certain non-ordinary course legal and regulatory matters | | | | | 210 | | |
| | Equity award compensation expense | | | | | 148 | | |
| | Adjusted EBITDA | | | | $ | 6,003 | | |
| | | | | | | | | |
| | Commercial paper and other short-term debt | | | | $ | 6 | | |
| | Current portion of long-term debt | | | | | 831 | | |
| | Long-term debt | | | | | 19,233 | | |
| | Less: Cash and cash equivalents | | | | | (1,040) | | |
| | | | | | $ | 19,030 | | |
| | | | | | | | | |
| | Net Leverage | | | | | 3.2 | | |
A-4|ir.kraftheinzcompany.com
THE KRAFT HEINZ COMPANY200COMPANY
200 EAST RANDOLPH ST.SUITE 7600CHICAGO,ST.
SUITE 7600
CHICAGO, IL 60601VOTE60601
 | | SCAN TO
VIEW MATERIALS & VOTE | |  |
VOTE BY INTERNETBeforeINTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode aboveUseabove
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m.Easternp.m. Eastern Time on May 3, 20231, 2024 (other than participants in Kraft Heinz retirement plan accounts). Have your proxycardproxy card in hand and follow the instructions to obtain your records and create an electronic voting instruction form.Duringform.
During The Annual Meeting - Go to www.virtualshareholdermeeting.com/KHC2023YouKHC2024
You may attend and vote during the Annual Meeting via the Internet. Have your proxy card in hand and followthe instructions.VOTEfollow the instructions.
VOTE BY PHONE - 1-800-690-6903Use1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time onMay 3, 2023on May 1, 2024 (other than participants in Kraft Heinz retirement plan accounts). Have your proxy card inhandin hand when you call and follow the instructions.VOTEinstructions.
VOTE BY MAILMark,MAIL
Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or toVoteto Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.KRAFT11717.
KRAFT HEINZ RETIREMENT PLAN ACCOUNTSAllACCOUNTS
All votes by participants in the Kraft Heinz Stock Fund(s) of the Kraft Heinz Savings/Kraft Heinz UnionSavingsUnion Savings Plans and/or the Kraft Heinz Canada ULC Retirement Savings Plan, or the Altria Deferred ProfitSharing Plan for Hourly Employees, the Altria Deferred Profit-Sharing Plan for Salaried Employees, thePhilipPhilip Morris International Deferred Profit-Sharing Plan or the MillerCoors LLC Employees'Employees’ Retirement& Savings Plan must be submitted by Internet, phone, or mail and received by 11:59 p.m.Easternp.m. Eastern Time on May 1, 2023. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !For Against AbstainTHE KRAFT HEINZ COMPANY1a. Gregory E. Abel1b. Humberto P. Alfonso1c. John T. Cahill1f. Timothy Kenesey1g. Alicia Knapp1d. Lori Dickerson Fouché1e. Diane Gherson1h. Elio Leoni Sceti1. Election of Directors:Company ProposalsThe Board of Directors recommends a vote FOR eachof the director nominees listed in Proposal 1.1i. Susan Mulder1j. James Park1l. John C. Pope1k. Miguel Patricio2. Advisory vote to approve executive compensation.Stockholder Proposals4. Stockholder Proposal - Simple majority vote, if properlypresented.5. Stockholder Proposal - Report on water risk, if properlypresented.6. Stockholder Proposal - Civil rights audit, if properlypresented.3. Ratification of the selection of PricewaterhouseCoopersLLP as our independent auditors for 2023.The Board of Directors recommends a vote FOR Proposals2 and 3.The Board of Directors recommends a vote AGAINSTProposals 4-6.The proxies are authorized to vote, in their discretion, on any other matters that may comebefore the Annual Meeting or any adjournment or postponement thereof.Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Jointowners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.Support our sustainability efforts by signing up for electronicdelivery of future proxy materials at www.proxyvote.com.Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateApril 29, 2024.
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THE KRAFT HEINZ COMPANYANNUALCOMPANY
Company Proposals
The Board of Directors recommends a vote FOR each of the director nominees listed in Proposal 1. |
| | For | Against | Abstain | |
| 1. | Election of Directors: | | | | |
| | | | | |
| 1a. | Carlos Abrams-Rivera | ☐ | ☐ | ☐ | |
| | | | | |
| 1b. | Humberto P. Alfonso | ☐ | ☐ | ☐ | |
| | | | | |
| 1c. | John T. Cahill | ☐ | ☐ | ☐ | |
| | | | | |
| 1d. | Lori Dickerson Fouché | ☐ | ☐ | ☐ | |
| | | | | |
| 1e. | Diane Gherson | ☐ | ☐ | ☐ | |
| | | | | |
| 1f. | Timothy Kenesey | ☐ | ☐ | ☐ | |
| | | | | |
| 1g. | Alicia Knapp | ☐ | ☐ | ☐ | |
| | | | | |
| 1h. | Elio Leoni Sceti | ☐ | ☐ | ☐ | |
| | | | | |
| 1i. | James Park | ☐ | ☐ | ☐ | |
| | | | | |
| 1j. | Miguel Patricio | ☐ | ☐ | ☐ | |
| | | | | |
| 1k. | John C. Pope | ☐ | ☐ | ☐ | |
| | | | | |
|
|
| The Board of Directors recommends a vote FOR Proposals 2 and 3. | For | Against | Abstain |
| | | | |
| 2. | Advisory vote to approve executive compensation. | ☐ | ☐ | ☐ |
|
| 3. | Ratification of the selection of PricewaterhouseCoopers LLP as our independent auditors for 2024. | ☐ | ☐ | ☐ |
|
| Stockholder Proposals |
|
| The Board of Directors recommends a vote AGAINST Proposals 4-6. |
| For | Against | Abstain |
|
| 4. | Stockholder Proposal - Report on recyclability claims, if properly presented. | ☐ | ☐ | ☐ |
| | | | |
| 5. | Stockholder Proposal - Report on group-housed pork, if properly presented. | ☐ | ☐ | ☐ |
| | | | |
| 6. | Stockholder Proposal - Report on greenhouse gas goals, if properly presented. | ☐ | ☐ | ☐ |
| | | | |
| The proxies are authorized to vote, in their discretion, on any other matters that may come before the Annual Meeting or any adjournment or postponement thereof. |
| | | | |
| Support our sustainability efforts by signing up for electronic delivery of future proxy materials at www.proxyvote.com. |
|
|
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | |
| | | | | |
| | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date | |
THE KRAFT HEINZ COMPANY
ANNUAL MEETING OF STOCKHOLDERSThursday,STOCKHOLDERS
Thursday, May 4, 202311:2, 2024
11:00 a.m. Eastern Timewww.virtualshareholdermeeting.com/KHC2023 Time
www.virtualshareholdermeeting.com/KHC2024
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Stockholders to be Held on May 4, 2023:2, 2024:
The Notice of Annual Meeting, 20232024 Proxy Statement, and 20222023 Annual Report on Form 10-K are available at
ir.kraftheinzcompany.com/proxy. proxy.
THE KRAFT HEINZ COMPANYAnnualCOMPANY
Annual Meeting of StockholdersMay 4, 2023Stockholders
May 2, 2024 11:00 a.m. Eastern TimeThisTime
This proxy is solicited by the Board of DirectorsThisDirectors
This proxy is solicited by the Board of Directors for use at the Annual Meeting of Stockholders on May 4, 20232, 2024 (the "Annual Meeting"“Annual Meeting”).The. The shares of stock held in your account or in a dividend reinvestment account will be voted as you specify on the reverse side.Thisside.
This proxy, when properly signed, will be voted in the manner specified in this proxy card. However, if this proxy is signed but no choice is specified, this proxy will be voted FOR each of the director nominees listed in Proposal 1; FOR Proposals 2 and 3; and AGAINST Proposals 4, 5, and 6.By6.
By signing this proxy, you revoke all prior proxies and appoint Heidi Miller and Nicole Fritz and each of them, with full power of substitution, to vote the shares on the matters shown on the reverse side of this card and any other matters that may come before the Annual Meeting or any adjournment or postponement thereof. Furthermore, this proxy will be voted in the discretion of the proxies upon such other business or matters as may properly come before the Annual Meeting or any adjournment or postponement thereof (including, if applicable, on any matter that the Board of Directors did not know would be presented at the Annual Meeting by a reasonable time before this proxy solicitation was made or for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unable to serve or for good cause will not serve). In addition, if you are a current or former Kraft or Kraft Heinz employee and have investments in the Kraft Heinz Stock Fund(s) of the Kraft Heinz Savings/Kraft Heinz Union Savings Plans and/or theKraftthe Kraft Heinz Canada ULC Retirement Savings Plan, or you are a participant in the Altria Deferred Profit-Sharing Plan for Hourly Employees, the Altria Deferred Profit-Sharing Plan for Salaried Employees, the Philip Morris International Deferred Profit-Sharing Plan or theMolsonthe Molson Coors LLC Employees Retirement & Savings Plan, your vote directs the plan(s) trustee(s) how to vote the shares allocated toyourto your account(s). If your voting instructions are not received by 11:59 p.m. Eastern Time on May 1, 2023,April 29, 2024, the trustee(s) will vote the shares allocated to your account(s) in the same proportion as the respective plan shares for which voting instructions have been timely received, unless contrary to the Employee Retirement Income Security Act of 1974 (ERISA).Continued.
Continued and to be signed on reverse side
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Audit Committee
Compensation Committee
Governance Committee![[MISSING IMAGE: ic_auditcom-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ic_auditcom-pn.jpg)
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Chair![[MISSING IMAGE: ph_johnpope-4c.gif]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ph_johnpope-4c.gif)
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Independent
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6x ANNUAL CASH RETAINER![[MISSING IMAGE: ph_abcsambal-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-036287/ph_abcsambal-4c.jpg)
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