UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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HASBRO, INC.
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Letter from our Chairman and CEO |
Dear Fellow Hasbro Shareholders,
Please join Hasbro’s Boardteam of Directors, membersalmost 7,000 global employees worked tirelessly last year to deliver revenues of $5.47 billion, increase operating profit margin, generate $976.3 million in operating cash flow to end the year with $1.45 billion in cash, pay off $123 million in debt and return $373 million to shareholders through our senior management team and your fellow shareholders at Hasbro’s 2016 Annual Meeting. The meeting will be held at our headquarters in Pawtucket, Rhode Island on Thursday, May 19 at 11:00 AM Eastern Time.
The attached Notice of Annual Meeting of Shareholders and Proxy Statement provide you with information regarding the businessquarterly dividend. We also welcomed eOne to be conductedHasbro at the Meeting and other important matters regardingbeginning of the year, integrating our Company. Our goal in the following document is to articulate simply and thoroughly the details you’ll need to make informed voting decisions. Your vote is important, so please vote – either online, by phone or by mail with the enclosed proxy or voting information card.
2015 was a record year for Hasbro. The Company delivered record revenues and earnings despite a significant impact from foreign exchange. The execution of our long-term strategy is delivering strong results, illustrated by our Brand Blueprint to build global brand franchises. We first established this strategy approximately ten years ago, and our continued investment in the capabilities to execute against it is enabling Hasbro to connect more deeply with consumers on a global basis. The successful execution of this strategy is beginningcompanies to unlock the full economic value inwhich comes from the combination of our brandsbusinesses. The teams accomplished all this while facing a global pandemic that disrupted our ability to work, to make our products and providing a multi-year road map from whichentertainment, for consumers to shop and customers to run their businesses. The Hasbro team rose to meet the Company is operating.
Hasbro’s Boardneeds of Directors plays a fundamental role in establishingour consumers and ensuring the success of this strategy. Through collaboration and strategic oversight we are facilitating the decision making of Hasbro’s senior management team. We are dedicated to attracting, retaining and developing the top talent in the industry with a thoughtful and disciplined approach to compensation, recruitment and succession planning at the highest levels. This is true both for senior managementaudiences, as well as the Board. needs of each other and our communities while delivering a good result for the year.
Our Board today represents a grouppriority was first and foremost the health, safety and well-being of industry leading experts with diverse experiencesour employees while also supporting our communities and industry backgrounds. In early 2016, Sir Crispin Davis joinedsupply chains. I am so proud of our Boardamazing work which included producing face shields at partner manufacturing facilities for donation as an independent director. Crispin’s proven leadershipwell as organizing PPE donations through eOne entertainment productions; providing meals, learning resources, as well as toys and exceptional track record of successfully transforming a company while managing challenging global issues will be an invaluable asset to Hasbro’s Board.
Hasbro’s Board of Directorsgames through charitable organizations; launching our Bring Home the Fun Campaign which helped families keep kids engaged and learning; and supporting our Wizard Play Network member stores through Wizard’s Mystery Booster Initiative, among many other activities around the world. Community is committed to you, our shareholders, and furthering your interests. We value the input we receive from shareholders, including as part of our ongoing outreach programs,Hasbro’s DNA, and our corporate strategy is focused on delivering long-term shareholder value. Part of that commitment involves utilizing bestwas clear in class governance principles. In 2015,how we established the role of Lead Independent Director with enhanced duties and responsibilities beyond the previous Presiding Director role. In addition, inmanaged through 2020. Our response to the affirmative votepandemic is further detailed in the accompanying proxy statement.
As an organization with a purpose-led strategy, we took this one step further with the appointment of Kathrin Belliveau as Chief Purpose Officer, a newly created position. We know ESG performance is an area of growing importance, but for us, it has long been a driving force in our decision-making. We have led our industry in areas like product safety, sustainability, human rights and ethical sourcing, as well as diversity and inclusion. On D&I matters, we are prioritizing the reshaping of our shareholdersorganization to reflect the world around us and promoting a culture of inclusive perspectives and experiences. I believe this is both a responsibility and an imperative to lead through our values and embed this thinking across the organization. We have made tremendous progress, and there is more to do. We share this progress in this proxy statement, in our Form 10-K and on a 2015 proxy access proposal,our CSR website.
While navigating the dynamic nature of last year, we remained focused on the long-term strategic plan for growing Hasbro. The value of play and feedback duringentertainment, of our ongoing dialogue with shareholders, in Octoberbrands, of our diverse portfolio and talent across consumer products, our Wizards of the Board adopted a Proxy Access bylaw amendment. We encourage you to read more aboutCoast business and digital gaming and our eOne entertainment was evident throughout last year and reinforced the bylaw amendmentimportance of each in the attached Proxy Statement.future growth of our company. To achieve this growth, succession planning and talent management remain a top priority for Hasbro and the Board. For the eOne talent we brought on board, we ensured retention agreements were in place prior to announcing the acquisition. We have partnered across the organization to understand who our future leaders will be, and how we can provide them with opportunities to lead. We worked to reward and retain our key employees during a year that was trying and challenging but also showcased their leadership. Our results enabled us to pay employees a bonus in recognition of all they accomplished.
In additionHasbro has truly redefined itself as a leading play and entertainment company. The work we are doing continues to discussing Proxy Access, since last May’s Annual Meetingrate us highly among leading global companies, including being ranked among the 2020 100 Best Corporate Citizens by 3BL Media, being named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past ten years, and one of America’s Most JUST Companies by Forbes and JUST Capital for the past four years. We value and appreciate your continued support of Hasbro, in not only what we have continued the dialogue with shareholders on important issues including compensation, corporate social responsibility and governance.do but in how we do it.
Sincerely,
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Brian Goldner Chairman of the Board and Chief Executive Officer |
Letter from our Lead Independent Director |
Dear Fellow Hasbro Shareholders,
On behalf of Hasbro’s Board of Directors, management teamI invite you to review the enclosed Notice of Annual Meeting and allProxy Statement and I encourage you to vote your shares at the 2021 Annual Meeting of Shareholders being held virtually on May 20, 2021 at 11:00 a.m. Eastern Time.
You will be asked to vote on a slate of 11 directors to Hasbro’s Board of Directors; the compensation of Hasbro’s named executive officers; and our selection of KPMG as our independent registered public accounting firm for 2021.
In 2020, as the global pandemic unfolded, Hasbro’s Board of Directors implemented bi-weekly calls with senior management. We heard directly from the leaders across the business about the impact of COVID-19. The teams focused their actions and discussions around demand, supply, liquidity and community, including importantly how employees were managing both professionally and personally. We were able to stay close to the business while remaining focused on the long-term strategic goals of the Company, including the integration of eOne into our business and across our Brand Blueprint.
As part of our employeeslong-term focus, we thankestablished oversight of CSR initiatives at the board level many years ago. As CSR and ESG have risen in importance for many stakeholders, we have been thinking and acting several steps ahead. As part of these efforts, we have put together a board that is reflective of the world around us and, as of the Annual Meeting in May, will be made up of 55% female representation. Our board also represents diverse skills that represent the Company today and where it will grow in future years. As Hasbro built capabilities in digital, in entertainment and in gaming we ensured the board also shared that expertise. In 2020, we were delighted to have Laurel Richie join us with her background at organizations like the WNBA and Girl Scouts of America and a resume in marketing and brands as well as a passion for Diversity and Inclusion.
We also have overseen the Company’s long-standing work to reduce its footprint, ensuring responsible environmental stewardship including ambitious goal setting around reducing greenhouse gas emissions and energy consumption, as well as impactful innovations in the design and packaging of our products.
As Lead Independent Director, I have had the opportunity to speak with many of you, our shareholders. This dialogue is invaluable to how we shape our next steps as a Board and as an organization. This will be my final year serving as Lead Independent Director and I will be transitioning this responsibility to Richard Stoddart to continue in this important role following the Annual Meeting in May.
Thank you for your ongoingcontinued support of Hasbro and look forward to continuing our dialogue over the years to come.Hasbro.
Sincerely,
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Lead Independent Director Hasbro’s Board of Directors |
Hasbro, Inc. Notice of 2021
HASBRO, INC.Annual Meeting of Shareholders
NOTICE OF 2016 ANNUAL MEETING OF SHAREHOLDERS
| Date: | Thursday, May 20, 2021 | |
| Time: | 11:00 a.m. | |
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| Approve advisory vote on the compensation of the Company’s named executive officers.
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| Ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the | |||||
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Voting
You are cordially invited to attend the meeting and vote your shares virtually over the Internet, to hear from our senior management, and to ask questions, both before and during the meeting. We expect that the vast majority of beneficial holders will be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option is intended to be provided as a convenience to beneficial holders only, and there is no guarantee this option will be available for every type of beneficial holder voting control number. Accordingly, we encourage you to vote before the meeting by Internet, telephone or mail. Similarly, if you are not able to attend the meeting virtually, you may vote by Internet, telephone or mail. See the Proxy Statement for specific instructions. Please vote your shares.
Important Notice Regarding the Availability of Proxy Materials
On or about April 1, 2021 we will begin mailing a Notice of Internet Availability of Hasbro’s Proxy Materials to shareholders informing them that this Proxy Statement, our 2020 Annual Report to Shareholders and voting instructions are available online. As is more fully described in that Notice, all shareholders may choose to access our proxy materials on the Internet or may request to receive paper copies of the proxy materials.
By Order of the Board of Directors,
Barbara Finigan
Tarrant Sibley
Executive Vice President, Chief Legal Officer and &
Corporate Secretary
Dated: April 4, 20161, 2021
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PROXY STATEMENT HIGHLIGHTSProxy Statement Highlights
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider and you should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2015 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 27, 2015.
Annual Meeting of Shareholders
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Meeting Agenda and Voting Recommendations
Date and Time 11:00 a.m. Local Time Thursday, May 20, 2021 |
Record Date Wednesday March 24, 2021 |
Where Virtually online at www.meetingcenter.io/269042063 |
Meeting Agenda and Recommendation of the Board of Directors |
Agenda Item | Board Recommendation | Page Number | ||
Proposal 1 Election of Eleven Directors |
FOR each director nominee | |||
Proposal
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Compensation of the Company’s Named Executive Officers |  FOR | |||
Proposal Ratification of KPMG LLP as the Independent Registered Public Accounting Firm for | FOR | |||
How to Vote |
| VOTE RIGHT AWAY THROUGH ADVANCE VOTING METHODS | VOTING DURING THE MEETING | |||||
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Vote by Internet Go to the website identified and enter the control number provided on your proxy card or voting instruction form. | Vote by Phone Call the number on your proxy card or voting instruction form. You will need the control number provided on your proxy card or voting instruction form. | Vote by Mail Complete, sign and date the proxy card or voting instruction form and mail it in the accompanying pre-addressed envelope. | Vote During the Meeting See the instructions below regarding how to vote at the meeting. | |||
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2020 Business Highlights |
2020 OVERVIEW
Hasbro met the distinct and unique challenges of 2020 with tremendous resilience and excellence. We began the year on a positive note with the completion of our acquisition of Entertainment One (eOne), a global entertainment company. eOne adds global children’s brands, such as PEPPA PIG and PJ MASKS to our portfolio, and brings experienced talent, expertise and capabilities across television, film, new brand development and music.
Soon after our acquisition of eOne, in the first quarter of 2020, the impact of the COVID-19 global pandemic began being felt beyond China. The pandemic had a significant adverse impact on our business, as well as our employees, consumers, customers, partners, licensees, suppliers and manufacturers, due in part to the preventative measures taken to reduce the spread of the virus. We experienced disruptions in supply of products; adverse sales impact due to changes in consumer purchasing behavior and availability of products to consumers; limited production of scripted and unscripted live-action entertainment content due to the shutdown and gradual reopening of production studios; delays or postponements of entertainment productions and releases of entertainment content both internally and by our partners; and challenges of working remotely.
Our team persevered and excelled through these challenging times by leveraging the diverse and amazing talent in our Company, the breadth of our portfolio, the global footprint and evolving capabilities of our business, and the creativity, flexibility and innovativeness of our Company. We responded to the pandemic in many ways, as described below, with each response designed to protect the health and safety of our employees and other stakeholders. As consumers of all ages found themselves at home, they sought ways to connect and find joy. We filled that need through our brands, toys, games and content, which brought happiness and enjoyment to so many in this unprecedented global environment.
After a challenging first half of the year, our performance improved in the second half of the year. We advanced our commercial and retailer programs and supply chain capabilities to meet consumer demand while managing expenses and cash. We grew Hasbro’s operating profit margin and finished the year with $1.45 billion in cash on our balance sheet. We finished 2020 with growth in revenues and adjusted operating profit in the fourth quarter despite a tough comparison with successful theatrical releases a year ago.
2020 FINANCIAL PERFORMANCE
Despite the challenges of operating during the pandemic, we ended with a strong financial year. 2020 results reflected in the following bullet points are compared to the pro forma results of the Company which include the results of eOne for 2019.
Delivered net revenues of $5.47 billion, a decrease of 8% compared to 2019 due primarily to the shutdown of live-action productions and the overall impact of COVID-19 on other aspects of the business.
Revenues grew 4% in the U.S. and Canada segment.
Revenues were up 15% in Hasbro Gaming and the total gaming category.
Operating profit was $501.8 million, or 9.2% of revenues; and adjusted operating profit was $826.7 million, or 15.1% of revenues.
Reported net earnings were $222.5 million, or $1.62 per diluted share; and adjusted net earnings were $514.6 million, or $3.74 per diluted share.
Generated $976.3 million in operating cash flow.
Returned $373 million to shareholders in dividends.
Year-end cash and cash equivalents were $1.45 billion due primarily to strong cash management and collection efforts by the business.
Adjusted operating profit, adjusted net earnings and adjusted earnings per diluted share are non-GAAP financial measures as defined under SEC rules. A reconciliation of these non-GAAP financial measures to GAAP is provided in Appendix B to this Proxy Statement.
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Proposal 1 — Election of Directors
You are being asked to vote on the election of the following eleven nominees for director. All directors are elected annually by the affirmative vote of a majority of votes cast. Detailed information about each director’s background, skills and areas of expertise can be found beginning on page 6.
Name and Principal Occupation | Age* | Director Since | Independent | Audit | Comp | Cyber | Exec | Fin | NGS | |||||||||||||||||||||||||||
Kenneth A. Bronfin Senior Managing Director of Hearst Ventures | 61 | 2008 | |  | | |
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Michael R. Burns Vice Chairman of Lions Gate Entertainment Corp. | 62 | 2014 | |
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Hope F. Cochran Managing Director of Madrona Venture Group | 49 | 2016 | |   |
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Lisa Gersh Outside Advisor; Former Chief Executive Officer of Alexander Wang | 62 | 2010 | | | |
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Brian D. Goldner Chairman and Chief Executive Officer of Hasbro | 57 | 2008 |
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Tracy A. Leinbach Retired Executive Vice President and Chief Financial Officer of Ryder System, Inc. | 61 | 2008 | | | |
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Edward M. Philip Retired Chief Operating Officer of Partners in Health | 55 | 2002 | | ** |
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Laurel J. Richie Former President of Women’s National Basketball Association | 62 | 2020 | |
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Richard S. Stoddart Former President and Chief Executive Officer of InnerWorkings, Inc. | 58 | 2014 | |
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Mary Beth West Former Senior Vice President, Chief Growth Officer of The Hershey Company | 58 | 2016 | |
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Linda K. Zecher Chief Executive Officer and Managing Partner of The Barkley Group | 67 | 2014 | | |
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| * | Age and Committee memberships are as of April 1, 2021. |
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Exec: | Executive Committee | |
Fin: | Finance Committee | |
NGS: | Nominating, Governance and Social Responsibility Committee |
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Profile of our Board Nominees
Our nominees for director consists of a strong group of proven leaders and executives with experience across a wide range of industries giving us a diverse set of skills, viewpoints and expertise. It is also well balanced by age, gender and tenure. The Board nominees consists of an experienced, diverse, well-functioning group, with each member contributing and having his or her voice heard while supporting and appropriately challenging management. We believe the mix of experience, diversity and perspectives on the Board serves to strengthen management and our Company.
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Corporate Governance Matters |
Board NomineesCorporate Governance Highlights
| Name | Age | Director Since | Principal Occupation | Independent Director | Committee Memberships | |||||||||
Basil L. Anderson | 70 | 2002 | Former Vice Chairman of Staples, Inc. | ü | Compensation; Executive; Nominating, Governance and Social Responsibility (Chair) | |||||||||
Alan R. Batkin | 71 | 1992 | Chairman and Chief Executive Officer of Converse Associates, Inc. | ü | Audit; Nominating, Governance and Social Responsibility | |||||||||
Kenneth A. Bronfin | 56 | 2008 | Senior Managing Director of Hearst Ventures | ü | Compensation; Executive; Finance (Chair) | |||||||||
Michael R. Burns | 57 | 2014 | Vice Chairman of Lions Gate Entertainment Corp. | ü | Audit; Finance | |||||||||
Sir Crispin H. Davis | 66 | 2016 | Former Chief Executive Officer of Reed Elsevier, PLC | ü | Compensation; Nominating, Governance and Social Responsibility | |||||||||
Lisa Gersh | 57 | 2010 | Chief Executive Officer of Goop, Inc. | ü | Compensation; Nominating, Governance and Social Responsibility | |||||||||
Brian D. Goldner | 52 | 2008 | Chairman, President and Chief Executive Officer of Hasbro, Inc. | Executive | ||||||||||
Alan G. Hassenfeld | 67 | 1978 | Former Chairman and Chief Executive Officer of Hasbro, Inc. | ü | Executive (Chair); Finance | |||||||||
Tracy A. Leinbach | 56 | 2008 | Former Executive Vice President and Chief Financial Officer of Ryder System, Inc. | ü | Audit (Chair); Executive; Nominating, Governance and Social Responsibility | |||||||||
Edward M. Philip | 50 | 2002 | Chief Operating Officer of Partners in Health | ü | Compensation (Chair); Executive; Nominating, Governance and Social Responsibility | |||||||||
Richard S. Stoddart | 53 | 2014 | Chief Executive Officer of Leo Burnett Worldwide | ü | Audit; Finance | |||||||||
Linda K. Zecher | 62 | 2014 | President and Chief Executive Officer of Houghton Mifflin Harcourt Company | ü | Audit; Compensation | |||||||||
 | Entire Board is elected annually | |||||
| 10 out of 11 director nominees are independent | |||||
| 55% of our director nominees are women | |||||
| Balance of experience, gender, diversity, tenure and qualifications | |||||
| Lead Independent Director role with clearly defined responsibilities | |||||
| All required committees consist of independent directors | |||||
| Risk oversight by Board and its committees | |||||
| Separate Cybersecurity and Data Privacy Committee | |||||
| Annual Board and committee self-evaluations | |||||
| Director orientation and continuing education | |||||
| Policy limiting the number of boards on which our directors may serve | |||||
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| Comprehensive shareholder outreach program | |||||
| No shareholder rights plan | |||||
| Annual shareholder advisory vote on executive compensation (“Say-on-Pay”) | |||||
| Majority vote standard with a plurality carve-out for contested elections | |||||
| Proxy access bylaw provision | |||||
| Prohibit the pledging or hedging of Company stock | |||||
| Strong compensation clawback policy | |||||
| Stock ownership and share retention policy for Board members, executive officers and other key employees | |||||
| Written code of conduct and corporate governance principles | |||||
| Long-standing commitment to corporate sustainability | |||||
2015 Business Highlights
In 2015, we delivered record revenues and earnings as we continued driving the performance of our Company across brands, business segments and geographic markets. Through a focus on Franchise and Partner brands, consumer engagement, consumer insights, innovative product development and compelling storytelling, we are connecting with consumers more deeply and across more demographics than ever before. Our focus remains on the long-term profitable growth of our Company and on achieving our strategic objectives and investment priorities.
Shareholder Outreach and Responsiveness to ShareholdersEngagement
Hasbro has engaged with our major shareholders on governance and compensation matters for several years. We do this as part of our commitment to be responsive to shareholders and to ensure that our actions are informed by the viewpoints of you, our investors. We were disappointed with the results of the votes onOur shareholder engagement efforts are year-round.
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In addition to discussions just before our executive compensation programs (the Say-on-Pay vote) at both our 2013 and 2014 Annual Meetings. Following our failed 2014 Say-on-Pay vote and informed by our discussions with our shareholders, both our Board of Directors and our Chief Executive Officer, Brian Goldner, mutually decided to amend certain terms of Mr. Goldner’s employment agreement. These amendments were implemented in August of 2014 and were described in detail in our proxy statement for the 2015 Annual Meeting.
Following these amendments our shareholders overwhelmingly supported our 2015 Say-on-Pay vote, with 96.7% of the shares voted at the 2015 Annual Meeting voting in favor of Say on Pay. Following the 2015 Annual Meeting, we again spokeinitiate discussions during a quieter period several months before, typically in the fourth quarter, reaching out to our largest shareholders. A board member, such as the lead independent director, will participate in these discussions when requested and the board is updated on any feedback. Our objectives are to build relationships and gain insights into the views of our shareholders around key areas, including Environmental, Social and Governance (ESG) and Corporate Social Responsibility (CSR), compensation and corporate governance, as well as any other topics or trends shareholders may wish to share. We believe that positive, two-way dialogue builds informed relationships that promote transparency and accountability. Management provides written and oral updates on the discussions with shareholders who expressedto our Board, and the Board considers shareholder perspectives, as well as the interests of all stakeholders, when overseeing company strategy, formulating governance practices and designing compensation programs.
In 2020 and early 2021, we proactively extended an interestinvitation to our top 25 shareholders (who held in speaking with management, including each holder who submitted a shareholder proposal foraggregate approximately 55% of our 2015 Annual Meeting. Weoutstanding shares) to meet and we had discussions with all of thesuch shareholders who accepted our invitation to meet, comprising holders of approximately 41% of our total shares outstanding, and 70% of the shares held by our top 25 holders, at the time of those discussions. Based upon our continuing dialoginvitation. We also spoke with shareholders who reached out to us. The meetings with our shareholders were positive and productive. This year we covered a variety of topics, including the impact of COVID-19, CSR/ESG programs and priorities, executive compensation, corporate governance and our 2015 Say-on-Pay vote results, we believe our current compensation program for our executive officers, including the changes we made to our compensation programs in 2014, reflect our shareholders’ views and strongly drive our pay for performance objectives.
In 2015 we also implemented a proxy access bylaw provision which allows holders who have held 3% or moreintegration of our shares for at least three years to include in our proxy materials nominees for election to the Board. Such holders may include the greater of 20% of the total number of nominees or two nominees. Up to twenty holders may aggregate their holdings under this provision. We adopted the proxy access bylaw provision in response to the affirmative vote of our shareholders on a proxy access shareholder proposal presented at our 2015 Annual Meeting and following conversations with many of our shareholders who supported proxy access. The proxy access bylaw provision is discussed in detail beginning on page 16 of this proxy statement.
Our amendments to Mr. Goldner’s employment agreement and adoption of the proxy access bylaw provision were all part of our commitment to listen to and be responsive to you, our shareholders.
| • Discussed the impact of COVID-19
• Shareholders viewed our response to COVID-19 as impressive, showing leadership and responsibility, particularly due to our safety protocols followed for our employees and manufacturers, as well as our financial and other support to our employees and the community during this difficult time. See our CD&A for a summary of our COVID-19 response. | |
CSR/ESG | • Discussed key focus areas, achievements and goals in the corporate social responsibility space, including diversity and inclusion, human capital management, climate change, renewable energy, human rights and ethical sourcing. • Shareholders were complimentary of our efforts in these areas, viewing us as a leader, as demonstrated through our comprehensive disclosure available, including in our recently updated CSR report, a copy of which can be viewed on our website at https://csr.hasbro.com/en-us/news, and our well-defined goals in the area of diversity and inclusion, and environmental sustainability through our goal to eliminate plastic packaging by the end of 2022. See below for a further description of our CSR and ESG efforts. | |
COMPENSATION | • Discussed compensation policies and practices and performance metrics, including changes to compensation due to the pandemic and use of ESG measures in compensation decisions. • Shareholders indicated that they were generally supportive of changes to compensation due to COVID-19 provided that such changes are reasonable and short-term, and learned that we are incorporating ESG measures into individual compensation objectives. | |
CORPORATE GOVERNANCE | • Discussed our corporate governance practices, including our board diversity, skills and refreshment. • Shareholders recognized our commitment to diversity on our Board, and indicated that board refreshment and board skills should be something we consider on a continuous basis. | |
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CSR and ESG |
Overview
At Hasbro, we understand that doing well includes doing good in the world and for all our constituents. CSR and ESG have gone from being important considerations in our business strategy to being a central focus, integral to our success. To that end, in 2020 we established a new executive position, Chief Purpose Officer, filled by Kathrin Belliveau, an established Hasbro leader in Corporate Social Responsibility and Government Affairs. Ms. Belliveau oversees our efforts in Corporate Social Responsibility, Sustainability, Ethical Sourcing and Philanthropy and Social Impact, as well Global Government Relations and Global Communication.
The COVID-19 pandemic focused our attention and resources on the health, safety and well-being of our employees, supply chains and communities around the world. At the same time, we continued to make meaningful progress across all of our CSR and ESG priority areas, including Environmental Responsibility, Product & Content Safety, Human Rights & Ethical Sourcing and Culture & Human Capital Management, including Diversity & Inclusion.
Building on Our Success and Reaching New Heights
We continue to build and execute innovative, best-in-class CSR and ESG strategies and programs that resonate with our stakeholders and serve Hasbro’s purpose to make the world a better place for all children and all families. Below are some of the highlights from 2019 and 2020, and recent accolades:
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CSR Governance
Our governance of CSR starts with our board of directors. The Nominating, Governance and Social Responsibility Committee of the Board of Directors oversees our policies and practices with respect to significant issues of corporate social responsibility, including human capital management, such as diversity and inclusion. The Compensation Committee of our Board of Directors oversees our compensation programs.
For corporate social responsibility objectives, our chairman and CEO chairs an internal executive CSR Committee, comprised of senior management and leadership, that sets the strategic direction for CSR policies and initiatives, and ensures their integration throughout the entire global organization. Our corporate CSR team, led by our Chief Purpose Officer, works cross-functionally to develop and implement strategic initiatives across our company and advise on key issues. Additionally, our Chief Human Resources Officer (“CHRO”), is responsible for developing and executing key aspects of our human capital strategy, including the attraction, acquisition, development and engagement of talent to deliver on the Company’s strategy and the design of competitive compensation and employee benefit programs.
Key Areas of Focus
| • | Environmental Responsibility. We recognize the impact our business has on the environment and are working to reduce our footprint. We view sustainability challenges as opportunities to innovate and to continuously improve our product design and operational efficiencies. The long-term viability and health of our own operations and our supply chain, and the significant potential for environmental improvements, are critical to our business success. |
Climate change and its risks are issues we continue to monitor and manage. In addition to initiatives to reduce our energy consumption and improve energy efficiency, we support projects that increase the generation of renewable energy in the marketplace. We continued to meet our renewable energy goal, reaching virtually 100 percent (99.7%) in our owned and operated facilities.
To address the greenhouse gases generated by electricity consumption, Hasbro purchases Renewable Energy Certificates (RECs) which support the production of renewable energy such as wind, solar, thermal and similar renewable sources, at levels equal to what we use from the public grid. These RECs are bought in and applied to the markets where the energy is used by Hasbro facilities across the globe. We purchase carbon offsets to address the remaining GHG emissions generated by the use of gas and liquid fuel at our leased and owned facilities, company vehicles, all employee business air travel and the remaining small amount of emissions generated by electricity consumption at our facilities in markets where renewable energy credits are not available.
We have also begun to evaluate the climate impacts of our supply chain. In 2019, we began a comprehensive measurement of our supply chain footprint, with virtually 100% of our suppliers participating. Our next step will be to set reduction goals for our suppliers. We are also evaluating the possibility of setting a net zero emissions goal and incorporating corresponding science-based targets.
| • | Human Rights and Ethical Sourcing. Our Human Rights & Ethical Sourcing program, first launched in 1993, is dedicated to ensuring that facilities involved in the production of our toys and games or licensed consumer products comply with Hasbro’s Global Business Ethics Principles. The program is designed to provide fair and safe working conditions; treat all workers with fairness, dignity and respect; and engage with our suppliers to address safety, health and the environmental impacts of our supply chain. While working on these issues with partners, suppliers, third-party factories and licensees is complex, we remain vigilant in our commitment to ensure workers in our supply chain are treated in accordance with applicable laws and our high ethical standards. |
| • | Human Capital Management. Our key human capital management objectives are to attract, develop and retain a talented diverse and inclusive workforce. The experience, dedication and diverse backgrounds of our employees are at the heart of our success, energizing everything we do, from developing innovative products to creating immersive entertainment experiences. Working together, we seek to create a culture of Community, Creativity, Inclusion, Integrity and Passion in which everyone feels valued and empowered to deliver their best every day. As our organization continues to grow and evolve, we remain steadfast in our ambition to provide a supportive and inclusive community that is the best place our employees ever work. |
We believe that the more inclusive we are as a company, the more effective our employees will be and the stronger our business will perform. Hasbro views D&I as a strategic CSR priority that is linked to the future success of our business and the growth of our brands. In 2018, our Chairman and CEO, Brian Goldner, along with
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800 other CEOs, signed on to the CEO Action for Diversity and Inclusion pledge, developed by the accounting firm PwC, to publicly affirm Hasbro’s commitment to D&I as a fundamental value and corporate priority. |
We recognize and reward our employees with a total rewards package that includes competitive base pay, equity compensation (for certain levels), annual incentives, product discounts and other comprehensive benefits, including wellness programs that help people integrate work and life commitments. We regularly review salary ratios for men and women in similar roles to help maintain internal equity and market competitiveness across the globe, including among managers.
We are committed to the continued development of our people. Strategic talent reviews and succession planning occur on a planned cadence annually — globally and across all business areas.
| • | Incentive Compensation. To emphasize the importance of ESG in our business strategy, in 2021 we are including an environmental, social and governance objective into our executives’ annual incentive plan modifiers, which are designed to reward progress against our ESG goals, including specifically diversity and inclusion. |
Key Goals and Initiatives
ENVIRONMENTAL RESPONSIBILITY |
SOURCING | HUMAN CAPITAL MANAGEMENT | ||
Environmental Goals and Initiatives: • Eliminate virtually all plastic in packaging for new products by the end of 2022. • Expand our industry-first toy recycling program, in partnership with TerraCycle (a leader in product recycling outside of municipal recycling). • Achieve on an annual basis 100% renewable energy across owned/operated facilities. • Evaluate the climate impacts of our supply chain and set reduction goals for our suppliers. • Evaluate the possibility of setting a net zero emissions goal. • Reduce energy consumption by 25%, greenhouse gas emissions by 20%, waste to landfill by 50%, water consumption by 15%, by the end of 2025. | Human Rights and Ethical Sourcing: • Annually achieve 100% social compliance audit rate for all third-party vendor sub-contractor facilities, as well as 100% follow-up audit rate for all facilities with pending remediation issues. • Require third-party factories to participate and complete the Hasbro Ethical Sourcing Academy, a 30-hour, e-learning social compliance course, which trains and reinforces Hasbro’s rigorous ethical sourcing requirements. • Empower female factory workers through our Worker Well-Being program through training on life-enhancing skills and knowledge such as nutrition, reproductive health, problem solving and financial literacy. | Human Capital Management: • Increase the percentage of women in director and above roles globally to 50% by 2025. • Expand ethnically and racially diverse employee representation in the U.S. to 25% by 2025. • Include a 50% diverse slate of candidates for all open U.S. positions where there is underrepresentation. | ||
Corporate Governance Highlights
Hasbro is committed to strong corporate governance, ethical conduct, sustainability and the accountabilityFor a further discussion of our CSR efforts and goals, please see Part I, Item 1, Business, of our Annual Report on Form 10-K or the fiscal year ended December 27, 2020, under the headings “Corporate Social Responsibility (CSR)” and “Human Capital Management”, which descriptions are incorporated herein by reference. You may also review our CSR report and update contained on our website at https://csr.hasbro.com/en-us/news. The contents of our website are not incorporated by reference into this Proxy Statement.
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Executive Compensation Matters |
Proposal 2 — Advisory Vote on Compensation of Named Executive Officers
Our Board of Directors recommends that shareholders vote, on an advisory basis, to approve the compensation paid to our named executive officers (“NEOs”) as described in this Proxy Statement. Detailed information can be found beginning on page 30. Our compensation programs embody a pay-for-performance philosophy that supports our business strategy and aligns executive interests with those of our shareholders. Highlights of our compensation programs for 2020 and our senior management team to the Company’s shareholders.compensation best practices follow.
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TYPE OF ANNUAL CASH COMPENSATION | ||
Base Salary | • Fixed compensation • Set at industry competitive level, in light of individual experience and performance | |
Management Incentive Awards | • Performance-based • Tied to company and individual achievement against stated annual financial and strategic goals • Aligns management behavior with shareholder interests • Performance measures evaluated (weighting) • Total Net Revenues (40%) • Operating Margin (40%) • Free Cash Flow (20%) | |
TYPE OF LONG-TERM INCENTIVE COMPENSATION | ||
Performance Contingent Stock Awards | • Represent ~50% of annual target equity award value • Earned based on challenging long-term three-year goals requiring sustained strong operating performance • Tied to achievement of EPS, Net Revenue and ROIC targets over a 3-year performance period | |
Stock Options | • Represent ~50% of annual target equity award value for CEO (25% for the other NEOs) • 7-year term • Vest in three equal annual installments over the first three anniversaries of the grant date | |
Restricted Stock Units | • Granted to the NEOs other than the CEO (25% of annual target equity award value for NEOs) • Vest in three equal annual installments over the first three anniversaries of the grant date | |
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Our Auditors |
Proposal 3 — Ratification of Independent Registered Public Accounting Firm
You are being asked to vote to ratify the selection of KPMG LLP as our independent registered public accounting firm for fiscal 2021. Detailed information about this proposal can be found beginning on page 77.
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGQuestions and Answers about the Proxy Materials and the Annual Meeting
| Q: | Why are these materials being made available to me? |
| A: | The Board of Directors (the “Board”) of Hasbro, Inc. (the “Company” or “Hasbro”) is making these proxy materials available to you on the Internet, or sending printed proxy materials to you in certain situations, including upon your request, beginning on or about April |
The Meeting will take place at 11:00 a.m. local time on Thursday, May |
Q: What proposals will be voted on at the Meeting?
| A: | There are three proposals scheduled to be voted on at the Meeting: |
| Q: | Why did I receive a Notice of the Internet Availability of Hasbro’s Proxy Materials, instead of a full set of printed proxy materials? |
| A: | Rules adopted by the Securities and Exchange Commission (“SEC”) allow us to provide access to our proxy materials over the Internet instead of mailing a full set of such materials to every shareholder. We have sent a Notice of Internet Availability of Hasbro’s Proxy Materials (the “Notice”) to our shareholders who have not |
| requested to receive a full set of the printed proxy materials. |
We have chosen to send the Notice to shareholders, instead of automatically sending a full set of printed |
| Q: | How do I access Hasbro’s proxy materials online? |
| A: | The Notice provides instructions for accessing the proxy materials for the Meeting over the Internet, |
| Q: | How do I request a paper copy of the proxy materials? |
| A: | Paper copies of Hasbro’s proxy materials will be made available at no cost |
| Q: | What shares owned by me can be voted? |
| A: | All shares of the Company’s common stock, par value $.50 per share (“Common Stock”) owned by you as of the close of business on March |
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| Q: | What is the difference between holding shares as a shareholder of record and as a beneficial owner? |
| A: | Most Hasbro shareholders hold their shares through a broker, bank or other nominee rather than directly in their own name as the shareholder of record. As summarized below, there are some distinctions between shares held of record and those owned beneficially. |
Shareholder of Record
If your shares are registered directly in your name with Hasbro’s Transfer Agent, Computershare Trust Company, N.A. (“Computershare”), you are considered, with respect to those shares, theshareholder of record (or a registered shareholder). As theshareholder of record,, you have the right to grant your voting proxy directly to the individuals named as proxies by Hasbro or to vote in person at the Meeting.
Beneficial Owner
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares heldin street nameand your broker, bank or other nominee is considered, with respect to those shares, theshareholder of
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recordrecord.. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote and are also invited to attend the Meeting. However, since you are not theshareholder of record, you may not vote these shares in person at the Meeting unless you receive a proxy from your broker or nominee. Your broker or nominee has provided voting instructions for you to use.virtually. If you wish to vote virtually via the Internet during the Meeting, please see the instructions below in “How can I attend the MeetingMeeting?” and “How can I vote in person, please markmy shares during the box on the voting instruction card you received and return it to your broker or nominee or contact your broker or nominee to obtain a legal proxy or follow the instructions on the Notice or voting instruction card that you received.Meeting?”.
Effect of Not Casting Your Vote
Whether you hold your shares in street name as a beneficial owner, or you are a shareholder of record, it is critical that you cast your vote.
If you hold your shares in street name, inyou must cast a brokerage account, it is critical that you cast your vote if you want it to count in the election of Directorsdirectors (Proposal No. 1 in this Proxy Statement),1) and in the shareholder advisory vote on the compensation of the Company’s named executive officers (Proposal No. 2). In the past, if you held your shares in street name and you did
Brokers do not indicate how you wanted your shares voted in the election of Directors, your broker was allowed to vote those shares on your behalf in the election of Directors as they felt appropriate. Regulatory changes removedhave the ability of your broker to vote your uninstructed shares in the election of Directorsdirectors on a discretionary basis, and brokers do not have any discretionary ability to vote shares on the election of Directors or on the advisory vote with respect to the compensation of the Company’s named executive officers. Thus,Therefore, if you hold your shares in street name and you do not instruct your broker how to vote in the election of Directors and directors, or
on the advisoryProposal 2, no vote on the compensation of the Company’s named executive officers, no votes will be cast on your behalf on those matters.the matter for which no instructions have been provided. Your broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointmentselection of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 2021 (Proposal No. 3).
If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Meeting.Meeting, including the ratification of the appointment of the independent registered public accounting firm.
| Q: | How can I attend the Meeting? |
| A: | As part of our continuing precautions regarding the COVID-19 pandemic, we are holding our Meeting only virtually on the Internet, and there will be no in person portion of the Meeting. Our virtual meeting will be structured in a manner intended to provide our shareholders with a participation experience similar to an in-person meeting. We hope to resume an in-person component of our meeting in 2022. |
Registered Holders. To participate in the Meeting |
Beneficial Holders. If you hold your shares |
| 1. | Register in Advance. You may register in advance by submitting proof of your |
By email: Forward the email from your broker and attach an image of |
| legalproxy@computershare.com. | ||
| By mail: | Computershare | |
| Hasbro Legal Proxy | ||
| P.O. Box 43001 | ||
| Providence, RI 02940-3001 | ||
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| 2. | Register at the Annual Meeting. For the 2021 proxy season, an industry solution has been agreed upon to allow beneficial holders to register online at the Annual Meeting to attend, ask questions and vote. We expect that the vast majority of beneficial holders will be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option is intended to be provided as a convenience to beneficial holders only, and there is no guarantee this option will be available for every type of beneficial holder voting control number. The inability to provide this option to any or all beneficial holders shall in no way impact the validity of the Annual Meeting. Beneficial holders may choose the Register in Advance of the Annual Meeting option above, if they prefer to use this traditional, paper-based option. |
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| Q: | Do I need to register to attend the Annual Meeting virtually? |
| A. | Registration is only required if you are a Beneficial Holder, as set forth above. |
Online access to the webcast will open approximately 15 minutes prior to the start of the Annual Meeting. Shareholders attending the meeting virtually will be able to submit questions during the Meeting. To submit questions in advance of the Annual Meeting, visit www.meetingcenter.io/269042063 before 11:00 A.M. Eastern Time on May 20, 2021 and enter your control number and meeting password, HAS2021. |
Stockholders who attend the Meeting virtually via the Internet will have the opportunity to participate fully in the Meeting. |
| Q: | How can I vote my shares |
| A: | When the meeting is in |
| Q: | How can I vote my shares without attending the |
| A: | Whether you hold shares directly as the shareholder of record or beneficially in street name, you may direct your vote without attending the |
By Internet— If you have Internet access, you may submit your proxy from any location by following the Internet voting instructions on the Notice you received or by following the Internet voting instructions on the proxy card or voting instruction card sent to you. |
By Telephone— You may submit your proxy by following the telephone voting instructions on the proxy card or voting instruction card sent to you. |
By Mail— You may do this by marking, dating and signing your proxy card or, for shares held in street name, the voting instruction card provided to you by your broker or nominee, and mailing it in the enclosed, self-addressed, postage prepaid envelope. No postage is required if mailed in the United States. Please note that for Hasbro shareholders |
Please note that you cannot vote by marking up the Notice of Internet Availability of the Proxy Materials and mailing that Notice back. Any votes returned in that manner will not be counted. |
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| Q: | What is the quorum for the Meeting? |
| A: | Holders of record of the Common Stock at the close of business on March 24, 2021 are entitled to vote at the Meeting or any adjournments thereof. As of that date, there were 137,559,166 shares of Common Stock outstanding and entitled to vote and a majority of the outstanding shares will constitute a quorum for the transaction of business at the Meeting. Abstentions and broker non-votes are counted as present at the Meeting for purposes of determining whether there is a quorum at the Meeting. A broker non-vote occurs when a broker holding shares for a customer does not vote on a particular proposal because the broker has not received voting instructions on the matter from its customer and is barred by stock exchange rules from exercising discretionary authority to vote on the matter. |
| Q: | What vote is required to approve each proposal? |
| A: | The vote required to approve each proposal is: |
| Q: | How are votes counted? |
| A: | Each share of Common Stock entitles its holder to one vote on all matters to come before the Meeting, including the election of |
If you properly sign and return your proxy card or complete your proxy via the Internet or telephone, your shares will be voted as you direct. If you sign and submit your proxy card or voting instruction card with no instructions, your shares will be voted in accordance with the recommendations of the Board. |
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| If you are a shareholder of record and do not |
If you are a beneficial shareholder and do not vote via the Internet, telephone, |
| Q: | What is the recommendation of our Board on each of the matters scheduled to be voted on at the Meeting? |
| A: | Our Board recommends that you vote “FOR” each of the nominees for director (Proposal 1) and “FOR” each of Proposals 2 and 3. |
| Q: | Can I change my vote or revoke my proxy? |
| A: | You may change your proxy instructions at any time prior to the vote at the Meeting. For shares held directly in your name, you may accomplish this by granting another proxy that is properly signed and bears a later date, by sending a properly signed written notice to the Secretary of the Company or by attending the Meeting virtually and voting |
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| Q: | What does it mean if I receive more than one Notice or more than one proxy or voting instruction card? |
| A: | It means your shares are registered differently or are held in more than one account. Please provide voting instructions for all Notices or proxy and voting instruction cards you receive. |
| Q: | Where can I find the voting results of the Meeting? |
| A: | We will announce preliminary voting results at the Meeting. We will publish final voting results in a Current Report on Form 8-K within a few days following the Meeting. |
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| What happens if I have previously consented to electronic delivery of the Proxy Statement and other annual meeting materials? |
| A: | If you have previously consented to electronic delivery of the annual meeting materials you will receive an email notice with instructions on how to access the Proxy Statement, notice of meeting and annual report on the Company’s website, and the proxy card for registered shareholders and voting instruction card for beneficial or “street name” shareholders, on the voting website. The notice will also inform you how to vote your proxy over the Internet. You will receive this email notice at approximately the same time paper copies of the |
| Notice, or annual meeting materials are mailed to shareholders who have not consented to receive materials electronically. Your consent to receive the annual meeting materials electronically will remain in effect until you specify otherwise. |
| Q: | If I am a shareholder of record how do I consent to receive my annual meeting materials electronically? |
| A: | Shareholders of record who choose to vote their shares via the Internet will be asked to choose a current and future delivery preference prior to voting their shares. After entering the access information requested by the electronic voting site, click “Submit” and then respond as to whether you would like to receive current proxy material electronically or by mail. If you already have access to the materials, choose that option and click the “Next” button. On the following screen, choose whether you would like to receive future proxy materials by e-mail (and enter and verify your e-mail address), by mail or make no change or no preference and click “Next.” During the year, shareholders of record may sign up to receive their future annual meeting materials electronically over the Internet by |
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ELECTION OF DIRECTORSElection of Directors (Proposal No. 1)
TwelveEffective at the Meeting, the Board has set the number of directors areat eleven, and you will be asked to be electedelect eleven directors at the Meeting. All of the directors elected at the Meeting will serve until the 20172022 Annual Meeting of Shareholders (the “2017“2022 Meeting”), and until their successors are duly elected and qualified, or until their earlier death, resignation or removal.
At the Meeting, Alan G. Hassenfeld, a director since 1978, Chairman of the Board from 1989 to 2008, and former President and Chief Executive Officer of the Company, will retire from the Board, and will not stand for re-election. Mr. Hassenfeld will be appointed as Chairman Emeritus effective following the Meeting, with the roles and responsibilities described on page 25 of this Proxy Statement. Sir Crispin Davis, a director since 2016, and John A. Frascotti, a director since 2018, will also retire from the Board and will not stand for re-election at the Meeting. In addition to serving as a director, Mr. Frascotti served as our President and Chief Operating Officer from 2018 until his retirement from this position in March 2021, President from 2017 until August 2018, President of Hasbro Brands from 2014 to 2017, and Executive Vice President and Chief Marketing Officer from 2008 to 2014. We are truly grateful for the contributions of Messrs. Hassenfeld, Davis, and Frascotti.
The Board, upon recommendation of the Nominating, Governance and Social Responsibility Committee of the Board, has recommended the persons named below as nominees for election as directors to serve until the 2017 Meeting, the persons named below.2022 Meeting. All of the nominees are currently directors of the Company. The proxies cannot be voted for more than twelveeleven directors at the Meeting.
Unless otherwise specified in your voting instructions, the shares voted pursuant thereto will be cast for“FOR” the persons named below as nominees for election as directors. If, for any reason, any of the nominees named below should be unable to serve as a director, it is intended that such proxy will be voted for the election, in his or her place, of a substituted nominee who would be recommended by the Board. The Board, however, has no reason to believe that any nominee named below will be unable to serve as a director.
SELECTION OF BOARD NOMINEES
In considering candidates for election to the Board, the Board,board, the Nominating, Governance and Social Responsibility Committee ofand the Board and the Company consider a number of factors, including employment and other experience, qualifications, gender, diversity and other attributes, skills, expertise and involvement in areas that are of importance to the Company’s business, business ethics and professional reputation, other Boardboard service, business, financial and strategic judgment, the Company’s needs, and the desire to have a Board that represents a diverse mix of backgrounds, perspectives and expertise. Each of the nominees for election to the Board at the meetingMeeting has served in senior positions at complex organizations and has demonstrated a successful track record of strategic, business and financial planning, execution and operating skills in these positions. In addition, each of the nominees for election to the Board has proven experience in management and leadership development and an understanding of operating and corporate governance issues for a large multinational company.
The following highlights certain skills, experience and characteristics possessed by the nominees for election to the Board. Further information seton each nominee’s qualifications is provided below in the individual biographies. In addition to the skills listed below, our directors each have experience with oversight of risk management, as described below under “Role of the Board in Risk Oversight.”
| Bronfin | Burns | Cochran | Gersh | Goldner | Leinbach | Philip | Richie | Stoddart | West | Zecher | ||||||||||||||||||||||||||||||||||
EXPERIENCE | ||||||||||||||||||||||||||||||||||||||||||||
Senior Management | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Industry Background | | | | | | | | | | |||||||||||||||||||||||||||||||||||
Sales and Marketing | | | | | | | | | | | ||||||||||||||||||||||||||||||||||
Strategic Planning | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Global Business | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Digital Gaming/Media/Products | | | | | | | | | ||||||||||||||||||||||||||||||||||||
Talent Development | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Governance/ESG | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Finance/Accounting | | | | | | | | |||||||||||||||||||||||||||||||||||||
IT/Technology | | | | | | |||||||||||||||||||||||||||||||||||||||
GENDER | M | M | F | F | M | F | M | F | M | F | F | |||||||||||||||||||||||||||||||||
RACIAL/ETHNIC DIVERSITY | | | ||||||||||||||||||||||||||||||||||||||||||
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Nominees for Election as Directors
The following sets forth below as tocertain biographical information regarding each director nominee includes: (i) his or her age; (ii) all positions and offices with the Company; (iii) principal occupation or employment during the past five years; (iv) current directorshipsas of publicly-held companies or investment companies; (v) other previous directorships of publicly-held companies or investment companies during the past five years; (vi) period of serviceApril 1, 2021, as a director of the Company; and (vii)well as particular experience, qualifications, attributes or skills (beyond those indicated in the preceding chart), which led the Company’s Board to conclude that the nominee should serve as a director of the Company. Except as otherwise indicated, each person has had the same principal occupation or employment during the past five years.
Nominees for Election as Directors
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 Age: 61 Director Since: 2008 Committees: • Audit • Compensation • Cybersecurity and |
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EXPERIENCE Kenneth A. Bronfin is Senior Managing Director of Hearst Ventures (the strategic investment
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QUALIFICATIONS • Extensive expertise and experience | ||||
| in operational and executive roles in the media and digital services • Experience in a number of executive positions where he was in charge of • Experience serving on • Substantial knowledge, expertise and experience, including operations and business planning experience, in the media, digital products and digital services industries, including | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • None | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
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| Michael R. Burns
Age: 62 Director Since: 2014 Committees: • Finance • Nominating, Governance and Social Responsibility | ||
EXPERIENCE Michael R. Burns is the Vice Chairman and a member of the
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QUALIFICATIONS • Extensive knowledge and experience in content development and brand building, including in the use of creative storytelling and immersive entertainment across platforms to build global | ||||
| entertainment • Significant experience in the entertainment • Expertise in strategic planning, • Investment banking, corporate finance, and | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Lions Gate Entertainment Corp. | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
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Director Since: 2016 Committees: • Audit (Chair) • Executive • Finance | |||
EXPERIENCE Hope F. Cochran is a Managing Director at Madrona Venture Group (a technology-focused venture capital group). Prior to joining Madrona in January 2017, Ms. Cochran was the Chief Financial Officer of King Digital Entertainment from 2013 to 2016. From 2005 to 2013, Ms. Cochran was the Chief Financial Officer for Clearwire, Inc. | ||||
QUALIFICATIONS • Extensive experience spanning more than 20 years as a senior financial executive in the digital gaming and telecom industries. • Significant knowledge of development of digital content businesses. • International business expertise in managing global teams, and talent in managing, growing and overseeing global businesses. • Substantial experience as a chief financial officer and overseeing financial and accounting issues for public companies. | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • MongoDB, Inc. • Audit Committee Chair • Compensation Committee • New Relic, Inc. • Audit Committee Chair | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
| Lisa Gersh Age: 62 Director Since: 2010 Committees: • Audit • Compensation (Chair) • Executive | |||
EXPERIENCE Lisa Gersh is an outside advisor to companies investing in the media space. She previously served as the Chief Executive Officer of | ||||
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QUALIFICATIONS • Extensive experience in the media, branded products and entertainment industries, including television, digital entertainment and publishing. • Operating and executive positions with multiple leading media and brand-driven companies, including as Chief Executive Officer of Alexander Wang, Chief Executive Officer of Goop, Inc., President and Chief Executive Officer of Martha Stewart Living Omnimedia and • Expertise in • Skilled and highly knowledgeable in marketing and branding, | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Establishment Labs Holdings Inc. • Nominating and Governance Committee Chair • Pershing Square Tontine Holdings, Ltd. • Compensation Committee Chair • Audit Committee | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • comScore, Inc. | ||||
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| Brian
Age: 57 Director Since: 2008 Committees: • None | |||
EXPERIENCE Brian D. Goldner has served as the | ||||
Worldwide Director in charge of the Los Angeles Office of J. Walter Thompson and as a Vice President and Account Director of Leo Burnett Advertising.
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QUALIFICATIONS • Chief architect in the transformation of Hasbro’s business globally and in successfully formulating, executing and • Possesses knowledge, expertise and experience regarding strategic and operational planning and execution in global brand and • Pioneered Hasbro’s entry into entertainment and oversees the Company’s omni-channel storytelling. • Led the Company’s digital-first approach, engaging consumers in content to commerce solutions across multiple platforms. • Forged important relationships with some of the most valuable properties in the
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OTHER CURRENT PUBLIC COMPANY BOARDS
• ViacomCBS Inc.
• Compensation Committee
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS
• Molson Coors Brewing
• The Gap, Inc.
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Age: 61 Director Since: 2008 Committees: • Audit • Compensation • Nominating, Governance and
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EXPERIENCE Tracy A. Leinbach served as the Executive Vice President and Chief Financial Officer for Ryder System, Inc. (a global logistics and transportation and supply chain solutions provider) from 2003 until 2006. Prior thereto, Ms. Leinbach served as Executive Vice President, Fleet Management Solutions for Ryder since 2001. | |||
• Extensive business experience in global operations, strategic and financial planning, auditing and accounting. • Significant experience involving • Experience as a controller and chief financial officer at many of Ryder’s subsidiaries and divisions. • Possesses knowledge, expertise and experience in strategic planning, management, operations, logistics and risk management for a large multinational | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Veritiv Corporation • Compensation and Leadership Development Committee • Nominating and Governance Committee • Personnel and Compensation Committee | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • Forward Air Corporation | ||||
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 Age: 55 Director Since: 2002 Lead Independent Director Since: 2017 Committees: • Compensation • Executive • Nominating, Governance and Social Responsibility | ||||
EXPERIENCE Edward M. Philip | ||||
January 2004. In 1995, Mr. Philip joined Lycos, Inc. (an Internet service provider and search company) as one of its founding members. During his time with Lycos, Mr. Philip held the positions of President, Chief Operating Officer and Chief Financial Officer at different times.
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QUALIFICATIONS • More than • Experience in strategic, business and financial planning in consumer-based and technology-based industries and in overseeing management teams of such companies, as well as in managing teams responding to complex and critical international issues. • Possesses expertise • Expertise in consumer trends and in the family entertainment • Significant experience in corporate finance, financial reporting and accounting matters for large multinational public | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Experience Investment Corp. • Audit Committee • United Airlines Holdings, Inc. • Audit Committee • Nominating and Governance Committee • BRP Inc. • Human Resources and Compensation Committee • Nominating, Governance and Social Responsibility Committee | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
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| Laurel J. Richie Age: 62 Director Since: 2020 Committees: • Compensation • Nominating, Governance and Social Responsibility | ||
EXPERIENCE Laurel J. Richie served as President of the Women’s National Basketball Association LLC (“WNBA”) from May 2011 to November 2015. Prior to her appointment in 2011 to the WNBA, she served as Chief Marketing Officer of Girl Scouts of the United States of America from 2008 to 2011. From 1984 to 2008, she held various positions at Ogilvy & Mather, including Senior Partner and Executive Group Director and founding member of the agency’s Diversity Advisory Board. Ms. Richie is a former Trustee of the Naismith Basketball Hall of Fame and currently serves as chair of the Board of Trustees at Dartmouth College, and a consultant to Fortune 100 c-suite executives on matters of personal leadership and corporate culture. | ||||
QUALIFICATIONS • Significant executive management and leadership experience, together with strategic and operational expertise. • Extensive experience and skills in global marketing and brand-management skills. • Deep experience in corporate culture. • Leader in creating and supporting diverse and inclusive teams. | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Bright Horizons Family Solutions Inc. • Audit Committee • Nominating and Corporate Governance Committee Chair • Synchrony Financial • Nominating and Corporate Governance Committee • Management Development and Compensation Committee Chair | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
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| Richard S. Stoddart
Age: 58 Director Since: 2014 Committees: • Cybersecurity and • Executive • Nominating, Governance and Social Responsibility (Chair) | |||
EXPERIENCE Richard S. Stoddart is the former President and Chief Executive Officer of InnerWorkings, Inc. (a global marketing execution firm), serving in that role since 2017 until 2020 when Innerworkings, Inc. was acquired. Mr. Stoddart was the Chief Executive Officer of Leo Burnett Worldwide
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QUALIFICATIONS • Extensive experience in the | ||||
| advertising, marketing and communications industries, including in television, digital, social media, point-of-sale, packaging and • As the former Chief Executive Officer of InnerWorkings, the largest global marketing execution company, Mr. Stoddart became recognized for his strategic and commercial leadership of the company, investor and analyst communications, and financial stewardship as well as his expertise in all facets of marketing execution and marketing supply chain management. • In his prior role as Chief Executive Officer of one of the world’s largest advertising agencies, Mr. Stoddart • Possesses knowledge, expertise and experience regarding branding and brand building, marketing | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • None | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • Innerworkings, Inc. | ||||
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| Mary Beth West Age: 58 Director Since: 2016 Committees: • Executive • Finance (Chair) • Nominating, Governance and Social Responsibility | ||
EXPERIENCE Mary Beth West served as Senior Vice President, Chief Growth Officer of The Hershey Company from May 2017 until January 2020. Ms. West served as Executive Vice President, Chief Customer & Marketing Officer of J.C. Penney Company from 2015 through March 2017. From 2012 to 2014 she was the Executive Vice President, Chief Category & Marketing Officer for Mondelez International, Inc. Prior thereto, she served as the Chief Marketing Officer for Kraft Foods, Inc. from 1986 to 2012. | ||||
QUALIFICATIONS • Extensive experience and expertise in marketing, brand building, managing global franchises, understanding and applying consumer insights, and in developing compelling retail and sales experiences. • Possesses expertise in strategic and operational planning and execution, skill in managing global teams and a proven track record in delivering top tier consumer experiences and in building global brands. • Significant experience in developing growth strategies for complex consumer brand organizations, through use of insights, analytics, marketing, innovation, and research and development. • Deep experience in growing some of the world’s best known consumer brands through creative consumer engagement. | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • Albertsons Companies • Compensation Committee • Nominating, Governance and ESG Committee | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • None | ||||
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| Linda K. Zecher
Age: 67 Director Since: 2014 Committees: • Audit • Cybersecurity and • Executive | |||
EXPERIENCE Linda K. Zecher is the Chief Executive Officer and Managing Partner of the Barkley Group (a consulting firm focused on cybersecurity and digital transformation), serving in this capacity since January 2017. Prior to that, Ms. Zecher served as the President and Chief Executive Officer, and a member of the Board of
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QUALIFICATIONS • Extensive experience in leading the | ||||
| transformation of businesses in the fields of digital publishing, digital learning, and online sales and • Expertise and skill in driving technological innovation and in leading content development and distribution across channels and platforms. • Possesses expertise and experience in unified analog and digital content development and distribution, in strategic planning and execution for businesses focused on global cross-platform content development and • Expertise in digital brand building, online business development and in driving technological innovation. | ||||
OTHER CURRENT PUBLIC COMPANY BOARDS • C5 Capital • Audit Committee • Tenable Holdings, Inc. • Compensation Committee • Governance Committee | ||||
FORMER PUBLIC COMPANY BOARDS HELD IN THE PAST FIVE YEARS • Houghton Mifflin Harcourt | ||||
Vote Required.Under the Company’s majority vote standard in order to be elected a director must receive a number of “For” votes that exceed the number of votes cast “Against” the election of the director. As such, an abstention is effectively a vote against a director. The Company’s majority vote standard and mandatory resignation policy are discussed in detail beginning on page 1122 of this proxy statement.Proxy Statement.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTEFOR THE ELECTION OF EACH OF THE TWELVEELEVEN DIRECTOR NOMINEES NAMED ABOVE.
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Hasbro is committed to strong corporate governance, ethical conduct, sustainability and the accountability of our Board and our senior management team to the Company’s shareholders.
Code of Conduct
Hasbro has a Code of Conduct which is applicable to all of the Company’s officers, other employees and directors, including the Company’s Chief Executive Officer, Chief Financial Officer and Controller. The Code of Conduct addresses such issues as conflicts of interest, protection of confidential Company information, financial integrity, compliance with laws, rules and regulations, insider trading and proper public disclosure. Compliance with the Code of Conduct is mandatory for all Company officers, other employees and directors. Any violation of the Code of Conduct can subject the person at issue to a range of sanctions, including dismissal.
The Code of Conduct is available on Hasbro’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance.” Although the Company generally does not intend to provide waivers of, or amendments to, the Code of Conduct for its Chief Executive Officer, Chief Financial Officer, Controller, or any other officers, directors or employees, information concerning any waiver of, or amendment to, the Code of Conduct for the Chief Executive Officer, Chief Financial Officer, Controller, or any other executive officer or director of the Company, will be promptly disclosed on the Company’s website in the location where the Code of Conduct is posted.
Corporate Governance Principles
Hasbro has adopted a set of Corporate Governance Principles which address qualifications for members of theOur Board of Directors director responsibilities, director access to management and independent advisors, director compensation and many other matters related to the governance of the Company. The Corporate Governance Principles are available on Hasbro’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance.”
Director Independence
Hasbro’s Board has adopted Standards for Director Independence (the “Independence Standards”) in accordance with The NASDAQ Stock Market’s corporate governance listing standards. The Independence Standards specify criteria used by the Board in making determinations with respect to the independence of its members and include strict guidelines for directors and their immediate family members with respect to past employment or affiliation with the Company or its independent auditor. The Independence Standards are available on Hasbro’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance.” A copy of the Independence Standards is also attached as Appendix A to this Proxy Statement.
The Independence Standards restrict commercial relationships between directors and the Company and include the consideration of other relationships with the Company, including charitable relationships, in making independence determinations. The Board has
Audit Compensation Cybersecurity and Data Privacy Executive Finance Nominating, Governance and Social Responsibility The members of |
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determined in accordance with our Independence Standards, that each of the following directors are independentour required committees, namely Audit, Compensation and have no relationships which impact an independence determination under the Company’s Independence Standards: Basil L. Anderson, Alan R. Batkin, Kenneth A. Bronfin, Michael R. Burns, Sir Crispin H. Davis, Lisa Gersh, Alan G. Hassenfeld, Tracy A. Leinbach, Edward M. Philip, Richard S. Stoddart and Linda K. Zecher.
Alan G. Hassenfeld was formerly an employee and Chief Executive Officer of the Company. However, Mr. Hassenfeld’s officer and employee relationship with the Company ended in December of 2005. Although Mr. Hassenfeld has a greater than 5% shareholding in the Company, which is detailed in the stock ownership tables in this Proxy Statement, that interest is only a minority interest in the total share ownership of the Company. The Board does not believe that the former employment relationship or equity interest impact Mr. Hassenfeld’s independence.
The only member of the Company’s Board who was determined not to be independent was Brian D. Goldner, the Company’s current Chairman, President and Chief Executive Officer.
Lead Independent Director
At the Company’s 2015 Annual Meeting, the role of Presiding Non-Management Director was replaced with an expanded role of Lead Independent Director. This reflected Hasbro’s continued commitment to good governance and to providing a strong voice for its independent directors. Basil Anderson serves in the role of Lead Independent Director. Mr. Anderson has served on the Board since 2002 and currently also serves as Chairman of the Nominating, Governance and Social Responsibility, Committee.
The Lead Independent Director’s primary responsibilities include:
Board Leadership Structure
The Chairman of the Company’s Board is elected by the Board on an annual basis. Currently, Mr. Goldner serves as Chairman of the Board, as well as President and Chief Executive Officer. Mr. Goldner’s appointment as Chairman in May of 2015 reflected the integral role he has played and continues to play in the transformation of Hasbro’s business globally and in successfully formulating and executing the Company’s strategy, including its expansion into new geographies and new categories, both before and following his appointment as Chief Executive Officer in 2008. The Board believes that combining these roles at this time is best for the Company and its shareholders as it will facilitate the functioning of the Board with senior management in strategic planning for the Company and in determining the Company’s key business opportunities and objectives, and setting plans for achieving those objectives. Hasbro believes the combination of these roles with a proven leader positions the Company well for future success.
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The Chairman of the Board provides leadership to the Board by, among other things, working with the Lead Independent Director and the Corporate Secretary to set Board calendars, determine agendas for Board meetings, ensure proper flow of information to Board members, facilitate effective operation of the Board and its Committees, help promote Board succession planning and the recruitment and orientation of new directors, oversee director performance, assist in consideration and Board adoption of the Company’s strategic plan and annual operating plans, and help promote senior management succession planning.
The Lead Independent Director, whose responsibilities are described in detail above, works with the Chairman in ensuring the proper operation of the Board, and serves as the principal liaison between the non-management, independent directors and the Chairman and other constituents of the Company, such as shareholders.
Majority Vote Standard
The Company has a majority vote standard for the election of directors in uncontested director elections (with a plurality vote standard applying to contested director elections), coupled with a director resignation policy for those directors who do not receive a majority vote.
In an election of directors which is not a contested election (as defined below), when a quorum is present, each nominee to be elected by shareholders shall be elected if the votes cast “for” such nominee exceed the votes cast “against” such nominee. In cases where as of the tenth (10th) day preceding the date on which the Company first mails its notice of meeting, for the meeting at which directors are being elected, the number of nominees for director exceeds the number of directors to be elected (referred to as a “contested election”), when a quorum is present, each nominee to be elected by shareholders shall be elected by a plurality of the votes cast.
In order for an incumbent director to become a nominee for re-election to the Board, such person must submit an irrevocable resignation, contingent on both that person not receiving a “for” vote that exceeds the “against” vote cast in an election that is not a contested election and acceptance of that resignation by the Board in accordance with the policies and procedures of the Board adopted for such purpose. In the event an incumbent director fails to receive a “for” vote that exceeds the “against” vote in an election that is not a contested election, the Company’s Nominating, Governance and Social Responsibility Committee shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director.
The Board shall act on the resignation, taking into account the recommendation of the Nominating, Governance and Social Responsibility Committee, and publicly disclose (by filing an appropriate disclosure with the Securities and Exchange Commission) its decision regarding the resignation and, if such resignation is rejected, the rationale for that decision, within sixty (60) days following the final certification of the vote at which the election was held. The Nominating, Governance and Social Responsibility Committee in making its recommendation, and the Board in making its decision, may each consider all factors and information that they consider relevant and appropriate. Both the Nominating, Governance and Social Responsibility Committee, in making their recommendation, and the Board in making its decision, with respect to any given nominee who has not received the requisite vote in an election that is not a contested election, will act without the participation of the nominee in question.
Overboarding Policy
The Company has a policy providing that our board members may not serve on the boards of directors of more than a total of four public companies (including the Company’s Board) and/or registered investment fund families. If the director is also a sitting Chief Executive Officer of a public company, the director may not serve on more than one other public company board or registered investment fund family board, in addition to the Company’s board.
Proxy Access
In response to the affirmative vote of a majority of our shareholders on a proxy access shareholder proposal at our 2015 Annual Meeting, and other feedback received from our shareholders, including as part of our ongoing shareholder outreach, in October 2015 the Board amended the Company’s Amended and Restated By-Laws to implement a “proxy access” procedure. The By-Law amendment allows a shareholder or a group of up to 20 shareholders, who has maintained continuous ownership of at least 3% of the voting power of the Company’s outstanding voting stock for at least 3 years, to include nominees for election to the Board of Directors in the Company’s proxy statement. Subject to compliance with the requirements of the proxy access By-Law provisions, the shareholder or group of shareholders may include director nominees for up to the greater of (i) 20% of the Board, rounded down to the nearest whole number, or (ii) 2 nominees. Details concerning the Proxy Access procedure are set forth in this proxy statement beginning on page 16.
Share Retention Requirements
The Company has historically had share ownership guidelines which apply to all officers and employees at or above the Senior Vice President level and establish target share ownership levels which executives are expected to achieve over a five-year period and then maintain, absent extenuating circumstances. To further align executives’ interests with the long-term interests of shareholders, effective
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March 1, 2014, the Company adopted amendments to the share ownership policy, which include a requirement to retain a portion of any net shares realized from stock vesting or option exercises during the five-year period an executive has to achieve their stock ownership requirement until the executive’s ownership requirement level is satisfied. Until the applicable ownership level is achieved, the executive is required to retain an amount equal to at least 50% of the net shares received as a result of the exercise, vesting or payment of any equity awards granted to the executive following such executive becoming subject to the policy. Once the required stock ownership level is achieved, the executive is required to maintain the stock ownership level for as long as the executive is employed by the Company and is subject to the policy.
Equity Awards Granted in 2013 and Beyond Subject to Double Trigger Following a Change in Control
At the Company’s 2013 Annual Shareholder Meeting, shareholders approved amendments to the Company’s Restated 2003 Stock Incentive Performance Plan, as amended. This approval by our shareholders provided that all awards granted in 2013 and thereafter, including the equity awards granted to Mr. Goldner pursuant to his Amended and Restated Employment Agreement, will be subject to a double trigger change in control provision. This means that rather than vesting automatically upon a change in control, such awards will only vest following a change in control if the award recipient’s employment with the Company is terminated under specified circumstances.
Clawback Policy
In 2012 the Company’s Board adopted a Clawback Policy. All equity and non-equity incentive plan compensation granted by the Company in 2013 and thereafter will be subject to this Clawback Policy. The policy provides that if an accounting restatement is required due to the Company’s material non-compliance with any accounting requirements, then all of the Company’s executive officers, regardless of whether they were at fault or not in the circumstances leading to the restatement, will be subject to forfeiting any excess in the incentive compensation they earned over the prior three years over what they would have earned if there had not been a material non-compliance in the financial statements.
Adoption of a Policy Prohibiting the Pledging or Hedging of Company Stock
In 2012 the Board adopted a policy prohibiting any pledges or hedges of Company stock by directors, officers or other employees on a prospective basis. The Board believes this policy furthers the interest of shareholders by ensuring that directors, officers and employees have the same economic incentives as shareholders and that equity held by directors, officers and employees will not be sold in situations beyond the control of the director, officer or employee.
No Tax Gross-Ups
We do not have any existing tax gross-up arrangements with any of our directors, officers or other employees and we have made a commitment to not enter into such arrangements in the future.
Corporate Social Responsibility
Corporate social responsibility (CSR) unites Hasbro’s desire to play a part in building a safe and sustainable world for future generations and to positively impact the lives of millions of children and families every year. The Company focuses its CSR initiatives on three key areas: product safety, ethical sourcing and environmental sustainability. Another important element of the Company’s CSR efforts is its tradition of supporting children worldwide through a variety of philanthropic programs. Hasbro recently received several prestigious recognitions in this area, including being named by Ethisphere as a 2016 World’s Most Ethical Company. This was our fifth consecutive year to receive that award. We are also ranked as one of the Most Community Minded Companies on Bloomberg News’ “The Civic 50” and well as the 100 Best Corporate Citizens #2/100 and #1 in Consumer Discretionary Companies.
Board Meetings and Director Attendance at the Annual Meeting
During 2015, the Board held eight meetings. All directors attended at least 75% of the aggregate of (i) the Board meetings held during their tenure as directors during 2015 and (ii) the meetings of any committees held during their tenure as members of such committees during 2015. Although the Company does not have a formal policy requiring attendance of directors at the annual meeting of shareholders, the expectation of the Company and the Board is that all directors will attend the annual meeting of shareholders unless conflicts prevent them from attending. All members of the Board who were members as of the 2015 Annual Meeting of Shareholders attended the 2015 Annual Meeting of Shareholders.
Board Committees
Audit Committee. The Audit Committee of the Board, which currently consists of Tracy A. Leinbach (Chair), Alan R. Batkin, Michael R. Burns, Richard S. Stoddart and Linda K. Zecher, held eleven meetings in 2015. The Audit Committee is responsible for the appointment,
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compensation and oversight of the Company’s independent auditor and assists the Board in fulfilling its responsibility to oversee management’s conduct of the Company’s financial reporting process, the financial reports provided by the Company, the Company’s systems of internal accounting and financial controls, and the quarterly review and annual independent audit of the Company’s financial statements. The current Audit Committee Charter adopted by the Board is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance — Committee Charters.”
The Board has determined that each member of the Audit Committee meets both the Company’s Independence Standards and the requirements for independence under The NASDAQ Stock Market’s corporate governance listing standards. The Board has determined that Tracy A. Leinbach qualifies as an Audit Committee Financial Expert, as such term is defined in the rules and regulations promulgated by the United States Securities and Exchange Commission.
The Board does not have a policy setting rigid limits on the number of audit committees on which a member of the Company’s Audit Committee can serve. Instead, in cases where an Audit Committee member serves on more than three public company audit committees, the Board evaluates whether such simultaneous service would impair the service of such member on the Company’s Audit Committee.
Compensation Committee. The Compensation Committee of the Board, which currently consists of Edward M. Philip (Chair), Basil L. Anderson, Kenneth A. Bronfin, Crispin H. Davis, Lisa Gersh and Linda K. Zecher, held five meetings in 2015. The Compensation Committee is responsible for establishing and overseeing the compensation and benefits for the Company’s senior management, including all of the Company’s executive officers, is authorized to make grants and awards under the Company’s employee stock equity plan and shares responsibility for evaluation of the Company’s Chief Executive Officer with the Nominating, Governance and Social Responsibility Committee.
The current Compensation Committee Charter adopted by the Board is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance — Committee Charters.” The Board has determined that each member of the Compensation Committee meets both the Company’s Independence Standards and the requirements for independence under The NASDAQ Stock Market’s corporate governance listing standards. For a further description and discussion concerning the Compensation Committee, including its composition and its processes and procedures for determining the compensation of the Company’s executive officers, please see the Compensation Committee Report on page 21 of this Proxy Statement, and the Compensation Discussion and Analysis which begins immediately thereafter.
As is discussed in more detail on page 39 of this Proxy Statement, in reviewing the proposed fiscal 2015 compensation and retention program for the Company’s executive officers at the beginning of 2015, the Compensation Committee received input and recommendations from Compensation Advisory Partners LLC (“CAP”) who served as an outside compensation consultant for the Compensation Committee. For its work with respect to advising on the 2015 compensation program, CAP was retained by, and reported directly to, the members of the Committee. CAP advised the Committee with respect to the Committee’s review of the Company’s 2015 executive compensation programs and provided additional information as to whether the Company’s proposed 2015 executive compensation programs were competitive, fair to the Company and the executives, reflected appropriate pay for performance, provided appropriate retention to executives, and were effective in promoting the performance of the Company’s executives and achievement of the Company’s business and financial goals. CAP did not perform any other work for the Company in 2015 and in order to maintain CAP’s independence the Committee has established a policy that CAP will not provide any services directly to the Company and will only provide services directly to the Committee. CAP does not have any relationship with the Company which the Committee believes in any way adversely impacts CAP’s independence. The Committee’s review of CAP’s independence is discussed in more detail on page 39 of this Proxy Statement.
In addition to the work performed by CAP directly for the Committee with respect to the 2015 compensation program, Willis Towers Watson (“Towers Watson”) was retained by the Company’s Human Resources and Compensation Departments to perform analysis on the Company’s current and proposed compensation and benefit programs, including preparation of proxy tables and executive tally sheets for management, consulting and benefits administration services for the Company, including services for the Company’s health and group benefits programs and retirement plans, work in connection with the Company’s online total reward statements for employees and work providing compensation surveys and other compensation and benefits information.
Additionally, the Company’s Human Resources and Compensation Departments retained Mercer LLC to perform consulting services relating to the Company’s retirement investments and to provide compensation surveys and other compensation and benefits information.
Executive Committee. The Executive Committee of the Board, which currently consists of Alan G. Hassenfeld (Chair), Basil L. Anderson, Kenneth A. Bronfin, Brian D. Goldner, Tracy A. Leinbach and Edward M. Philip , did not meet in 2015. The Executive Committee acts on such matters as are specifically assigned to it from time to time by the Board and is vested with all of the powers that are held by the Board, except that by law the Executive Committee may not exercise any power of the Board relating to the adoption of amendments to the Company’s Articles of Incorporation or By-laws, adoption of a plan of merger or consolidation, the sale, lease or exchange of all or substantially all the property or assets of the Company or the voluntary dissolution of the Company. The current Executive Committee Charter adopted by the Board is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance — Committee Charters.”
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Finance Committee. The Finance Committee of the Board, which currently consists of Kenneth A. Bronfin (Chair), Michael R. Burns, Alan G. Hassenfeld and Richard S. Stoddart, met four times in 2015. The Finance Committee assists the Board in overseeing the Company’s annual and long-term financial plans, capital structure, use of funds, investments, financial and risk management and proposed significant transactions. The current Finance Committee Charter adopted by the Board is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance — Committee Charters.” The Board has determined that each member of the Finance Committee meets both the Company’s Independence Standards and the requirements for independence under The NASDAQ Stock Market’s corporate governance listing standards.
Nominating, Governance and Social Responsibility Committee. The Nominating, Governance and Social Responsibility Committee of the Board (the “Nominating Committee”), which currently consists of Basil L. Anderson (Chair), Alan R. Batkin, Crispin H. Davis, Lisa Gersh, Tracy A. Leinbach and Edward M. Philip, met five times in 2015. The Nominating Committee identifies and evaluates individuals qualified to become Board members and makes recommendations to the full Board for possible additions to the Board and on the director nominees for election at the Company’s annual meeting. The Nominating Committee also oversees and makes recommendations regarding the governance of the Board and the committees thereof, including the Company’s governance principles, Board and Board committee evaluations and the Chair of the Nominating Committee shares with the Compensation Committee responsibility for evaluation of the Chief Executive Officer.
In addition, the Nominating Committee periodically reviews, and makes recommendations to the full Board with respect to, the compensation paid to non-employee directors for their service on the Company’s Board, including the structure and elements of non-employee director compensation. In structuring the Company’s director compensation, the Nominating Committee seeks to attract and retain talented directors who will contribute significantly to the Company, fairly compensate directors for their work on behalf of the Company and align the interests of directors with those of stockholders. As part of its review of director compensation, the Nominating Committee reviews external director compensation market studies to assure that director compensation is set at reasonable levels which are commensurate with those prevailing at other similar companies and that the structure of the Company’s non-employee director compensation programs is effective in attracting and retaining highly qualified directors. In 2006, the Company adopted director stock ownership guidelines which require that a director may not sell any shares of the Company’s Common Stock, including shares acquired as part of the yearly equity grant, until the director holds shares of common stock with a value equal to at least five times the current non-employee directors’ annual retainer (currently requiring holdings with a value of $475,000). Please see the Compensation of Directors section beginning on page 58 of this Proxy Statement for a full discussion of the Company’s compensation of its directors.
Further, the Nominating Committee oversees the Company’s codes of business conduct and ethics, and analyzes significant issues of corporate social responsibility and related corporate conduct, including product safety, environmental sustainability and climate change, human rights and ethical sourcing, responsible marketing, transparency, public policy matters, community relations and charitable contributions. The current Nominating, Governance and Social Responsibility Committee Charter adopted by the Board is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance — Committee Charters.” The Board has determined that each member of the Nominating Committee meets both the Company’s Independence Standards and the requirements for independence under The NASDAQ Stock Market’s corporate governance listing standards.
In making its nominations for election to the Board the Nominating Committee seeks candidates who meet the current challenges and needs of the Board. As part of this process the Committee considers a number of factors, including, among others, a candidate’s employment and other professional experience, past expertise and involvement in areas which are relevant to the Company’s business, business ethics and professional reputation, independence, other board experience, and the Company’s desire to have a Board that represents a diverse mix of backgrounds, perspectives and expertise. The Company does not have a formal policy for considering diversity in identifying and recommending nominees for election to the Board, but the Nominating Committee considers diversity of viewpoint, experience, education, skill, background and other qualities in its overall consideration of nominees qualified for election to the Board. The Nominating Committee will consider and evaluate nominees recommended by shareholders for election to the Board on the same basis as candidates from other sources if such nominations are made in accordance with the process set forth in the following pages under “Shareholder Proposals and Director Nominations.” The Nominating Committee uses multiple sources for identifying and evaluating nominees for director, including referrals from current directors, recommendations by shareholders and input from third-party executive search firms. As part of the Company’s robust board succession planning process and efforts to continually maintain the high functioning of the board, Sir Crispin Davis was appointed to the Board in February 2016.
As of December 6, 2015 (the date that is 120 calendar days before the first anniversary of the release date of the proxy statement for the Company’s last Annual Meeting of Shareholders) the Nominating Committee had not received a recommended nominee for election to the Board in 2015 from an individual shareholder, or group of shareholders, who beneficially owned more than 5% of the Company’s Common Stock.
Role of the Board in Risk Oversight
The Board of Directors is actively involved in risk oversight for the Company. Although the Board as a whole has retained oversight over the Company’s risk assessment and risk management efforts, the efforts of the various committees of the Board are instrumental in this process. Each committee, generally through its Chair, then regularly reports back to the full Board on the conduct of the committee’s functions. The Board, as well as the individual Board committees, also regularly speaks directly with key officers and employees of the
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Company involved in risk assessment and risk management. Set forth below is a description of the role of the various Board committees, and the full Board, in risk oversight for the Company.
The Audit Committee assists the Board in risk oversight for the Company by reviewing and discussing with management, internal auditors and the independent auditors the Company’s significant financial and other exposures, and guidelines and policies relating to enterprise risk assessment and risk management, including the Company’s procedures for monitoring and controlling such risks. In addition to exercising oversight over key financial and business risks, the Audit Committee oversees, on behalf of the Board, financial reporting, tax, and accounting matters, as well as the Company’s internal controls over financial reporting. The Audit Committee also plays a key role in oversight of the Company’s compliance with legal and regulatory requirements.
The Finance Committee of the Board reviews and discusses with management the Company’s financial risk management activities and strategies, including with respect to foreign currency, credit risk, interest rate exposure, and the use of hedging and other techniques to manage these risks. As part of its review of the operating budget and strategic plan the Finance Committee also reviews major business risks to the Company and the Company’s efforts to manage those risks.
The Compensation Committee oversees the compensation programs for the Company’s executive officers. As part of that process the Compensation Committee ensures that the performance goals and metrics being used in the Company’s compensation plans and arrangements align the interests of executives with those of the Company and its shareholders and maximize executive and Company performance, while not creating incentives on the part of executives to take excessive or inappropriate risks.
The Nominating, Governance and Social Responsibility Committee has oversight over the Company’s governance policies and structures, management and director succession planning, corporate social responsibility, and issues related to health, safety and the environment, as well as risks and efforts to manage risks to the Company in those areas.
The full Board then regularly reviews the efforts of each of its committees and discusses, at the level of the full Board, the key strategic, financial, business, legal and other risks facing the Company, as well as the Company’s efforts to manage those risks.
Director Retirement Age
The Board has established a target retirement age of 72. Normally, a Director who has reached this age will serve out his or her current term and not stand for re-election at the end of that term. However, the Board recognizes that from time to time there may be unusual circumstances where exceptions need to be made to this general rule to retain needed continuity and expertise, or for other business reasons.
Additional Availability of Corporate Governance Materials
In addition to being accessible on the Company’s website, copies of the Company’s Code of Conduct, Corporate Governance Principles and the charters of the five committees of the Board of Directors are all available free of charge to any shareholder upon request to the Company’s Chief Legal Officer and Corporate Secretary, c/o Hasbro, Inc., 1011 Newport Avenue, P.O. Box 1059, Pawtucket, Rhode Island 02861.
Shareholder Proposals and Director Nominations
General Shareholder Proposals
To Be Considered at the Annual Meeting and Considered for Inclusion in the Proxy Materials. Any proposal which a shareholder of the Company wishes to have considered for inclusion in the proxy statement and proxy relating to the Company’s 2017 Annual Meeting of Shareholders must be received by the Secretary of the Company at the Company’s executive offices no later than December 5, 2016 (the date that is 120 calendar days before the anniversary of the release date of the proxy statement relating to the 2016 Annual Meeting of Shareholders). The address of the Company’s executive offices is 1011 Newport Avenue, Pawtucket, Rhode Island 02861. Such proposals must also comply with the other requirements of the rules of the United States Securities and Exchange Commission relating to shareholder proposals.
To Be Considered at the Annual Meeting But Not Included in the Proxy Materials. With the exception of the submission of director nominations for consideration by the Nominating Committee, which must be submitted to the Company in the manner described below, any new business proposed by any shareholder to be taken up at the 2017 Annual Meeting, but not included in the proxy statement or proxy relating to that meeting, must be stated in writing and filed with the Secretary of the Company no later than 150 days prior to the date of the 2017 Annual Meeting. Except for shareholder proposals made pursuant to the preceding paragraph, the Company will retain discretion to vote proxies at the 2017 Annual Meeting with respect to proposals received prior to the date that is 150 days before the date of such meeting, provided (i) the Company includes in its 2017 Annual Meeting proxy statement advice on the nature of the proposal and how it intends to exercise its voting discretion and (ii) the proponent does not issue a proxy statement.
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Director Nominations
Director Nominations to be made at the Annual Meeting But Not Included in the Proxy Materials. The Company’s By-laws provide that shareholders may themselves nominate directors for consideration at an annual meeting provided they give written notice to the Secretary of the Company. Such notice must be received at the principal executive office of the Company not less than 60 days nor more than 90 days prior to the one-year anniversary date of the immediately preceding annual meeting of shareholders and provide specified information regarding the proposed nominee and each shareholder proposing such nomination. Nominations made by shareholders in this manner are eligible to be presented by the shareholder to the meeting, but such nominees will not have been considered by the Nominating Committee as a nominee to be potentially supported by the Company and will not have been included in the Company’s proxy materials.
Director Nominations to be Considered by the Company’s Nominating Committee. To be considered by the Nominating Committee, director nominations must be submitted to the Chief Legal Officer and Corporate Secretary of the Company at the Company’s executive offices, 1011 Newport Avenue, Pawtucket, Rhode Island 02861 not less than ninety (90) nor more than one hundred and twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting. As such, director nominations to be considered for the Company’s 2017 Annual Meeting of Shareholders must be submitted no later than February 18, 2017. The Nominating Committee is only required to consider recommendations made by shareholders, or groups of shareholders, that have beneficially owned at least 1% of the Company’s Common Stock for at least one year prior to the date the shareholder(s) submit such candidate to the Nominating Committee and who undertake to continue to hold at least 1% of the Company’s Common Stock through the date of the next annual meeting. In addition, a nominating shareholder(s) may only submit one candidate to the Nominating Committee for consideration.
Submissions to the Nominating Committee should include (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company that are owned beneficially or of record by the person, (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, and (v) confirmation that the candidate is independent under the Company’s Independence Standards and the rules of The NASDAQ Stock Market or if(“Nasdaq”) and our Standards for Director Independence (“Independence Standards”). Additionally, all members of our Audit Committee meet the candidateadditional SEC and Nasdaq independence and experience requirements applicable specifically to audit committee members, and all members of our Compensation Committee satisfy the additional Nasdaq independence requirements specifically applicable to compensation committee members. The Chair of each committee regularly reports to our Board of Directors on committee deliberations and decisions. Each committee’s charter is not independent under all such criteria, a descriptionposted on our website at https://hasbro.gcs-web.com/corporate-governance.
The principal functions of each committee, together with the reasons why the candidate is not independent; and (b) as to the shareholder(s) giving the notice (i) the name and record address of such shareholder(s) and each participant in any group of which such shareholder is a member, (ii) the class or seriescommittee composition and number of shares of capital stock of the Company thatmeetings held in 2020, are owned beneficially or of record by such shareholder(s) and each participant in any group of which such shareholder is a member, (iii) if the nominating shareholder is not a record holder of the shares of capital stock of the Company, evidence of ownership as provided in Rule 14a-8(b)(2) under the Exchange Act, (iv) a description of all arrangements or understandings between such shareholder(s) and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder(s), and (v) any other information relating to such shareholder(s) that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
The Nominating Committee may require that any proposed nominee for election to the Board furnish such other information as may reasonably be required by the Nominating Committee to determine the eligibility of such proposed nominee to serve as director of the Company. The written notice from the nominating shareholder specifying a candidate to be considered as a nominee for election as a director must be accompanied by a written consent of each proposed nominee for director. In this written consent the nominee must consent to (i) being named as a nominee for director, (ii) serve as a director and represent all shareholders of the Company in accordance with applicable laws and the Company’s Articles of Incorporation, By-laws and other policies if such nominee is elected, (iii) comply with all rules, policies or requirements generally applicable to non-employee directors of the Company, and (iv) complete and sign customary information requests upon the request of the Company.
Proxy Access Procedure for Director Nominees. Setset forth below is a summary of the Company’s proxy access procedure which was adopted in 2015 and which is contained in Section 2.10(d) of the Company’s Amended and Restated By-laws. Shareholders are referred to the By-laws for the full details related to this procedure. Pursuant to the proxy access procedure, the Company shall include in its proxy statement (including its form of proxy) for any annual meeting of shareholders the name of any shareholder nominee for election to the Board of Directors submitted pursuant to Section 2.10(d) of the By-laws (each a “Shareholder Nominee”) provided (i) timely written notice of such Shareholder Nominee satisfying the requirements of Section 2.10(d) is delivered to the Secretary of the Company by or on behalf of a shareholder or shareholders that, at the time the notice is delivered, satisfy the ownership and other requirements of Section 2.10(d) (such shareholder or shareholders, and any person on whose behalf they are acting, the “Eligible Shareholder”), (ii) the Eligible Shareholder expressly elects in writing at the time of providing the notice required by Section 2.10(d) to have its nominee included in the Corporation’s proxy statement, and (iii) the Eligible Shareholder and the Shareholder Nominee otherwise satisfy the requirements of Section 2.10 of the By-laws.
To be timely, an Eligible Shareholder’s notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Company not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the one-year anniversary date of the immediately preceding annual meeting of shareholders; provided that if the date of the annual meeting is
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advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the one hundred twentieth (120th) day prior to such annual meeting and not later than the later of (x) the ninetieth (90th) day prior to the date of such annual meeting or (y) the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.
In addition to including the name of the Shareholder Nominee in the Company’s proxy statement for the annual meeting, the Company also shall include (i) the information concerning the Shareholder Nominee and the Eligible Shareholder that is required to be disclosed in the Company’s proxy statement pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) if the Eligible Shareholder so elects, a Statement (defined below) (collectively, the “Required Information”). Nothing in Section 2.10(d) shall limit the Company’s ability to solicit against and include in its proxy statement its own statements relating to any Shareholder Nominee.
The number of Shareholder Nominees (including Shareholder Nominees that were submitted by an Eligible Shareholder for inclusion in the Company’s proxy statement pursuant to Section 2.10(d) but either are subsequently withdrawn or that the Board of Directors decides to nominate (each a “Board Nominee”)) appearing in the Company’s proxy statement with respect to a meeting of shareholders shall not exceed the greater of (i) two (2) or (ii) 20% of the number of directors in office as of the last day on which notice of a nomination may be delivered pursuant to Section 2.10(d) (the “Final Proxy Access Nomination Date”) or, if such amount is not a whole number, the closest whole number below 20% (the “Permitted Number”).
In the event that the number of Shareholder Nominees submitted by Eligible Shareholders pursuant to Section 2.10(d) exceeds the Permitted Number, each Eligible Shareholder shall select one Shareholder Nominee for inclusion in the Company’s proxy statement until the Permitted Number is reached, going in the order of the amount (largest to smallest) of shares of the Company’s capital stock each Eligible Shareholder disclosed as owned in the original written notice of the nomination submitted to the Company. If the Permitted Number is not reached after each Eligible Shareholder has selected one Shareholder Nominee, this selection process shall continue as many times as necessary, following the same order each time, until the Permitted Number is reached.
An Eligible Shareholder must have owned (as defined below) continuously for at least three (3) years a number of shares that represents 3% or more of the total voting power of the Company’s outstanding shares of capital stock entitled to vote on the election of directors (the “Required Shares”) as of both the date the written notice of the nomination is delivered to or mailed and received by the Company in accordance with Section 2.10(d) and the record date for determining shareholders entitled to vote at the meeting, and must continue to own the Required Shares through the meeting date. For purposes of satisfying the ownership requirement under Section 2.10(d), the shares of the Company’s capital stock owned by one or more shareholders, or by the person or persons who own shares of the Company’s capital stock and on whose behalf any shareholder is acting, may be aggregated, provided that the number of shareholders and other persons whose ownership of shares is aggregated for such purpose shall not exceed twenty (20). The following shall be treated as one Eligible Shareholder if such Eligible Shareholder shall provide, together with the notice delivered to the Company pursuant to this Section, documentation reasonably satisfactory to the Board of Directors or its designee that demonstrates compliance with the following criteria: (1) funds under common management and investment control; (2) funds under common management and funded primarily by the same employer; or (3) a “family of investment companies” or a “group of investment companies” (each as defined in the Investment Company Act of 1940 and the rules, regulations and forms adopted thereunder, all as amended). With respect to any one particular annual meeting, no person may be a member of more than one group of persons constituting an Eligible Shareholder under Section 2.10 (d).
A person shall be deemed to “own” only those outstanding shares of the Company’s capital stock as to which the person possesses both (i) the full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares (x) sold by such person or any of its affiliates in any transaction that has not been settled or closed, (y) borrowed by such person or any of its affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Company’s capital stock, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (A) reducing in any manner, to any extent or at any time in the future, such person’s or affiliates’ full right to vote or direct the voting of any such shares, and/or (B) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such person or affiliate.
A person shall “own” shares held in the name of a nominee or other intermediary so long as the person retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A person’s ownership of shares shall be deemed to continue during any period in which (i) the person has loaned such shares, provided that the person has the power to recall such loaned shares on five (5) business days’ notice or (ii) the person has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement that is revocable at any time by the person.
The Eligible Shareholder must provide with its timely notice of nomination the following information in writing to the Secretary of the Company: (i) one or more written statements from the record holder of the shares (and from each intermediary through which the
Audit |
• Assists the Board in its oversight of: - the integrity of the Company’s financial statements, including management’s conduct of the Company’s financial reporting process, the financial reports provided by the Company, the Company’s systems of internal accounting and financial controls, and the quarterly review and annual independent audit of the Company’s financial statements; - the Company’s compliance with legal and regulatory requirements; - the independent auditor’s qualifications and independence; and - performance of the Company’s internal audit function and internal auditor. | 11 | Hope F. Cochran (Chair)† Kenneth A. Bronfin Lisa Gersh† Tracy A. Leinbach† Linda K. Zecher† † The Board has determined that this person qualifies as an Audit Committee Financial Expert under applicable SEC rules. | ||||||
shares are or have been held during the requisite three (3) year holding period) verifying that, as of a date within seven (7) calendar days prior to the date the written notice of the nomination is delivered to or mailed and received by the Company, the Eligible Shareholder owns, and has owned continuously for the preceding three (3) years, the Required Shares, and the Eligible Shareholder’s agreement to provide, (A) within five (5) business days after the record date for the meeting, written statements from the record holder and intermediaries verifying the Eligible Shareholder’s continuous ownership of the Required Shares through the record date, and (B) immediate notice if the Eligible Shareholder ceases to own any of the Required Shares prior to the date of the applicable annual meeting of shareholders; (ii) documentation satisfactory to the Company demonstrating that a group of funds treated as one shareholder meet the applicable requirements; (iii) a representation that the Eligible Shareholder (including each member of any group of shareholders that together is an Eligible Shareholder hereunder): (A) intends to continue to own the Required Shares through the date of the annual meeting; (B) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control of the Company, and does not presently have such intent; (C) has not nominated and will not nominate for election to the Board of Directors at the meeting any person other than the Shareholder Nominee being nominated pursuant to Section 2.10(d); (D) has not engaged and will not engage in, and has not and will not be, a “participant” in another person’s “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the meeting other than its Shareholder Nominee or a Board Nominee; (E) will not distribute to any shareholder any form of proxy for the meeting other than the form distributed by the Company; and (F) will provide facts, statements and other information in all communications with the Company and its shareholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (iv) the written consent of each Shareholder Nominee to be named in the proxy statement as a nominee and to serve as a director if elected; (v) a copy of the Schedule 14N that has been filed with the SEC as required by Rule 14a-18 under the Exchange Act; (vi) in the case of a nomination by a group of persons that together is an Eligible Shareholder, the designation by all group members of one group member that is authorized to act on behalf of all members of the nominating shareholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination; and (vii) an undertaking from the Eligible Shareholder as to the matters set forth in Section 2.10(d) of the By-laws.
The Eligible Shareholder may include with its timely notice of a nomination, a written statement for inclusion in the Company’s proxy statement for the meeting, not to exceed 500 words, in support of the Shareholder Nominee’s candidacy (the “Statement”). Notwithstanding anything to the contrary, the Company may omit from its proxy statement any information or Statement that it believes would violate any applicable law, rule, regulation or listing standard. At the request of the Company, each Shareholder Nominee must provide the Company with an agreement as to the matters specified in Section 2.10(d) of the By-laws.
The Company shall not be required to include a Shareholder Nominee in its proxy statement (or, if the proxy statement has already been filed, to allow the nomination of a Shareholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the Company): (i) if the Eligible Shareholder has nominated for election to the Board of Directors at the annual meeting any person (other than the Shareholder Nominee) and does not expressly elect at the time of providing the notice to have its nominee included in the Company’s proxy statement; (ii) if the Eligible Shareholder has or is engaged in, or has been or is a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the meeting other than its Shareholder Nominee or a Board Nominee; (iii) who is not independent under the applicable listing standards, any applicable rules of the SEC and any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Company’s directors, as determined by the Board of Directors; (iv) whose election as a member of the Board of Directors would cause the Company to be in violation of the By-Laws, the Articles of Incorporation, the listing standards of the principal exchange upon which the Company’s capital stock is traded, or any applicable state or federal law, rule or regulation; (v) if the Shareholder Nominee is or becomes a party to any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity in connection with his or her nomination, service or action as a director of the Company, or any agreement, arrangement or understanding with any person or entity as to how the Shareholder Nominee would vote or act on any issue or question as a director, in each case that has not been disclosed to the Company; (vi) who is or has been, within the past three (3) years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended; (vii) whose then-current or within the preceding ten (10) years’ business or personal interests place such Shareholder Nominee in a conflict of interest with the Company or any of its subsidiaries that would cause such Shareholder Nominee to violate any fiduciary duties of directors established pursuant to Rhode Island law, including but not limited to the duty of loyalty and duty of care, as determined by the Board of Directors; (viii) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past ten (10) years; (ix) who is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended; or (x) if such Shareholder Nominee or the applicable Eligible Shareholder shall have provided information to the Company in respect of such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, as determined by the Board of Directors. 13
Notwithstanding anything to the contrary set forth herein, the Board of Directors or the person presiding at the meeting shall declare a nomination by an Eligible Shareholder to be invalid, and such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the Company, if (i) the Shareholder Nominee and/or the applicable Eligible Shareholder shall have breached its or their agreements, representations, undertakings and/or obligations pursuant Section 2.10(d), as determined by the Board
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Compensation |
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of Directors or the person presiding at the meeting or (ii) the Eligible Shareholder (or a qualified representative thereof) does not appear at the meeting to present any nomination pursuant to Section 2.10(d).
Any Shareholder Nominee who is included in the Company’s proxy statement for a particular meeting of shareholders but either (i) withdraws from or becomes ineligible or unavailable for election at the meeting or (ii) does not receive a number of votes cast in favor of his or her election at least equal to 25% of the shares present in person or represented by proxy at the annual meeting and entitled to vote on the Shareholder Nominee’s election, shall be ineligible to be included in the Company’s proxy statement as a Shareholder Nominee pursuant to Section 2.10(d) for the next two (2) annual meetings of shareholders following the meeting for which the Shareholder Nominee has been nominated for election.
• Oversight of the Company’s incentive compensation and equity-based plans, including authorization to make grants and awards under the Company’s employee stock incentive performance plan.
| 6 | Lisa Gersh (Chair) Kenneth A. Bronfin Crispin H. Davis Tracy A. Leinbach Edward M. Philip Laurel J. Richie | ||||||||
Data Privacy |
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The Company has a policy that any transaction which would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the United States Securities and Exchange Commission, with respect to a director or nominee for election as a director, must be reviewed and approved or ratified by the Company’s full Board, excluding any director interested in such transaction. All other related person transactions which would require disclosure under Item 404(a), including, without limitation, those involving executive officers of the Company, must be reviewed and approved or ratified by either the Company’s full Board or a committee of the Board which has been delegated with such duty. Any such related person transactions will only be approved or ratified if the Board, or the applicable committee of the Board, determines that such transaction will not impair the involved person’s service to, and exercise of judgment on behalf of, the Company, or otherwise create a conflict of interest which would be detrimental to the Company. This policy is contained in Section 20, entitled “Code of Conduct; Conflicts of Interest” of the Company’s Corporate Governance Principles.
In 2015 the Company entered into a Rights Agreement with NGC Films, Inc. (“NGC”), an affiliate of Lions Gate Entertainment Corp., pursuant to which NGC Films has the option to acquire rights to produce and release a motion picture based upon the Company’s MONOPOLY property. Pursuant to that agreement NGC Films paid a $250,000 option fee to the Company in 2015. If NGC ultimately exercises its option it will pay the Company an agreed upfront rights fee for the motion picture rights and a producer fee, as well as future contingent compensation based upon the receipts from the motion picture. The Company will pay NGC a royalty on sales of picture-based merchandise sold by the Company. The terms of the Rights Agreement were reviewed with and approved by the Company’s Board of Directors prior to this transaction being entered to ensure they were commercially reasonable and appropriate. The Rights Agreement was negotiated at arms-length between the Company and NGC and the Company believes that the terms of its agreement with NGC are commercially reasonable and appropriate. Mr. Burns, a member of the Company’s Board of Directors, is the Vice Chairman of Lions Gate Entertainment Corp.
The Company is also entering an agreement with Lions Gate Films Inc. (“Lions Gate Films”) pursuant to which Lions Gate Films will distribute a motion picture being developed by the Company based upon the Company’s MY LITTLE PONY property. Lions Gate Films will receive a specified distribution fee for distributing the motion picture. This Agreement is also being negotiated at arms-length between the Company and Lions Gate Films and the terms have been reviewed with and approved by the Company’s Board of Directors. The Company believes the terms are commercially reasonable and appropriate.
• Assists the Board in its oversight of the protection of the Company’s customers’, consumers’, and employees’ privacy and personal information.
| 5 | Linda K. Zecher (Chair) Kenneth A. Bronfin Alan G. Hassenfeld Richard S. Stoddart | ||||||||
Executive |
| — | Alan G. Hassenfeld (Chair)
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Hope F. Cochran
The Compensation Committee (the “Compensation Committee” or the “Committee”) of the Company’s Board of Directors (the “Board”) is responsible for establishing and overseeing the compensation programs for the Company’s executive officers, including all of the Company’s Named Executive Officers appearing in the compensation tables following this report, and is authorized to make grants and awards under the Company’s equity compensation plans. The Committee operates under a written charter, which has been established by the Company’s Board and which is reviewed and evaluated by both the Committee and the Board on an annual basis. The Compensation Committee charter is available on the Company’s website at www.hasbro.com, under “Corporate — Investors — Corporate Governance.”
The Committee is composed solely of persons who are both “Non-Employee Directors,” as defined in Rule 16b-3 of the rules and regulations of the United States Securities and Exchange Commission, and “outside directors,” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Board has determined that each member of the Committee is independent under the Company’s Independence Standards and the requirements of The NASDAQ Stock Market’s corporate governance listing standards. The exercise of independent judgment in furtherance of the interests of the Company and its shareholders is a cornerstone of the Committee’s actions.
The following section of this Proxy Statement, entitled “Compensation Discussion and Analysis”, contains a detailed discussion regarding the philosophy, policies, processes and compensation plans utilized by the Committee in establishing the compensation programs for the Company’s executive officers and in assuring that the Company’s compensation programs attract and retain top executive talent, align the interests of the executive team with those of the Company’s shareholders, create a powerful linkage between pay and performance and maximize the business results of the Company.
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis that follows this report. Based on its review and discussions with management, the Committee recommended to the Company’s full Board, and the full Board has approved, the inclusion of the Compensation Discussion and Analysis in this Proxy Statement for the Meeting and, by incorporation by reference, in the Company’s Annual Report on Form 10-K for the year ended December 27, 2015.
Report issued by the members of the Compensation Committee as of the Company’s 2015 fiscal year end.
Edward Philip (Chair)
Basil Anderson
Kenneth Bronfin
Lisa Gersh
Linda Zecher
Edward M. Philip
Richard S. Stoddart
Mary Beth West
Linda K. Zecher
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Finance | • Assists the Board in overseeing the Company’s annual and long-term financial plans, capital structure, use of funds, investments, financial and risk management and proposed significant transactions. • Reviews short and long term financing plans, including debt and equity financings and use of securitization facilities. • Reviews use of funds for investments, dividends and share repurchases and acquisitions. | 4 | Mary Beth West (Chair) Michael R. Burns Hope F. Cochran Crispin H. Davis Alan G. Hassenfeld | ||||||
Nominating, Governance and Social Responsibility | • Identifies and evaluates individuals qualified to become Board members and makes recommendations to the full Board for possible additions to the Board and on the director nominees for election at the Company’s annual meeting. • Oversees and makes recommendations regarding the governance of the Board and its committees. • Shares responsibility for evaluation of the CEO. • Periodically reviews and makes recommendations to the full Board with respect to, the compensation paid to non-employee directors for their service on the Company’s Board. • Oversees the Company’s codes of conduct and ethics. • Analyzes significant issues of corporate social responsibility and related corporate conduct, including product safety, environmental sustainability and climate change, human rights and ethical sourcing, gender, diversity, and inclusion, human capital management, responsible content and marketing, transparency, public policy matters, community relations and charitable contributions. • Periodically reviews and assesses the Company’s communications and engagements with shareholders, stakeholders and the general public with respect to its policies and practices in the areas of corporate governance and corporate social responsibility, including the CSR report and other communications contained on the Company’s website, and receives periodic updates from the Company’s Chief Purpose Officer. | 5 | Richard S. Stoddart (Chair) Michael R. Burns Crispin H. Davis Tracy A. Leinbach Edward M. Philip Laurel J. Richie Mary Beth West | ||||||
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COMPENSATION DISCUSSION AND ANALYSISRole of the Board in Risk Oversight
The Board of Directors is actively involved in risk oversight for the Company. Although the Board as a whole has retained oversight over the Company’s risk assessment and risk management efforts, the efforts of the various committees of the Board are instrumental in this process. Each committee, generally through its Chair, then regularly reports back to the full Board on the conduct of the committee’s functions. The Board, as well as the individual Board committees, also regularly speaks directly with key officers and employees of the Company involved in risk assessment and risk management.
Set forth below is a description of the role of the various Board committees, and the full Board, in risk oversight for the Company.
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| • Assists the • Oversees, on behalf of the Board, financial reporting, tax, and accounting matters, as well as the Company’s internal controls over financial reporting. • Key role in oversight of the Company’s compliance with legal and regulatory requirements. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation | • Assists the Board in oversight of the compensation programs for
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Cybersecurity and Data Privacy |
• Assists the Board in its oversight of the Company’s compliance with applicable global data privacy and security regulations and requirements, and the Company’s other cyber risk management activities, including measures to maintain the availability, integrity and functionality of the Company’s information technology systems, networks, and assets. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance | • Reviews and discusses with management the Company’s financial risk management activities and strategies, including with respect to foreign currency, credit risk, interest rate exposure, and the use of hedging and other techniques to manage these risks. • As part of its review of the operating budget and strategic plan, the Finance Committee reviews major business risks to the Company and the Company’s efforts to manage those risks. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nominating, Governance and Social Responsibility | • Assists the Board in its oversight of the Company’s governance policies and structures, management and director succession planning, corporate social responsibility, diversity, gender and inclusion, human capital management, and issues related to health, safety and the environment, as well as risks and efforts to manage risks to the Company in those areas. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Board | • The
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The following table sets forth information concerning compensation of the Company’s directors for fiscal 2020. Mr. Goldner, the Company’s Chairman and Chief Executive Officer, and Mr. Frascotti, the Company’s former President and Chief Operating Officer, served on the Board during fiscal 2020. However, neither Mr. Goldner nor Mr. Frascotti received any compensation for their Board service in fiscal 2020 beyond their compensation as officers of the Company.
Name
| Fees
| Stock
| Option
| Change in Compensation
| All Other
| Total
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Kenneth A. Bronfin | $ | 142,120 | $ | 160,000 | $ | 0 | N/A | $ | 92,462 | $ | 394,582 | |||||||||||||||||||
Michael R. Burns | $ | 115,024 | $ | 160,000 | $ | 0 | N/A | $ | 0 | $ | 275,024 | |||||||||||||||||||
Hope F. Cochran | $ | 142,524 | $ | 160,000 | $ | 0 | N/A | $ | 0 | $ | 302,524 | |||||||||||||||||||
Crispin H. Davis | $ | 0 | $ | 303,027 | $ | 0 | N/A | $ | 42,737 | $ | 345,764 | |||||||||||||||||||
Lisa Gersh | $ | 0 | $ | 325,027 | $ | 0 | N/A | $ | 134,701 | $ | 459,727 | |||||||||||||||||||
Alan G. Hassenfeld | $ | 110,024 | $ | 160,000 | $ | 0 | N/A | $ | 81,277 | $ | 351,301 | |||||||||||||||||||
Tracy A. Leinbach | $ | 142,524 | $ | 160,000 | $ | 0 | N/A | $ | 33,204 | $ | 335,728 | |||||||||||||||||||
Edward M. Philip | $ | 157,524 | $ | 160,000 | $ | 0 | N/A | $ | 253,790 | $ | 571,314 | |||||||||||||||||||
Laurel J. Richie | $ | 19,996 | $ | 86,400 | $ | 0 | N/A | $ | 707 | $ | 107,103 | |||||||||||||||||||
Richard S. Stoddart | $ | 122,524 | $ | 160,000 | $ | 0 | N/A | $ | 68,686 | $ | 351,210 | |||||||||||||||||||
Mary Beth West | $ | 137,524 | $ | 160,000 | $ | 0 | N/A | $ | 9,670 | $ | 307,194 | |||||||||||||||||||
Linda K. Zecher | $ | 135,024 | $ | 160,000 | $ | 0 | N/A | $ | 50,850 | $ | 345,874 | |||||||||||||||||||
| (a) | Includes amounts which are deferred by directors into the interest account under the Deferred Compensation Plan for Non-Employee Directors, as well as interest earned by directors on existing balances in the interest account. Does not include the amount of cash retainer payments deferred by the director into the stock unit account under the Deferred Compensation Plan for Non-Employee Directors, which amounts are reflected in the Stock Awards column. |
| (b) | Please see note 15 to the financial statements included in the Company’s
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The following table provides the aggregate amounts we have returned to our shareholders since 2011, in the form of both cash dividends and share repurchases.
Finally, the following table shows our return on invested capital over the last five years. Return on invested capital is computed as net earnings divided by the sum of long-term debt (less debt issuance costs), short-term borrowings and shareholders’ equity.
Hasbro has engaged with our major shareholders on governance and compensation matters for several years. We do this as part of our commitment to be responsive to shareholders and to ensure that our actions are informed by the viewpoints of you, our investors. We were disappointed with the results of the votes on our executive compensation programs (the Say-on-Pay vote) at both our 2013 and 2014 Annual Meetings. Following our failed 2014 Say-on-Pay vote and informed by our discussions with our shareholders, both our Board of Directors and our Chief Executive Officer, Brian Goldner, mutually decided to amend certain terms of Mr. Goldner’s employment agreement. These amendments were implemented in August of 2014 and were described in detail in our proxy statement for the 2015 Annual Meeting.
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Following these amendments our shareholders overwhelmingly supported our 2015 Say-on-Pay vote, with 96.7% of the shares voted at the 2015 Annual Meeting voting in favor of Say on Pay. Following the 2015 Annual Meeting we again spoke with shareholders who expressed an interest in speaking with management, including each holder who submitted a shareholder proposal for our 2015 Annual Meeting. We had discussions with all of the shareholders who accepted our invitation to meet, comprising holders of approximately 41% of our total shares outstanding, and 70% of the shares held by our top 25 holders, at the time of those discussions. Based upon our continuing dialog with shareholders and our 2015 Say-on-Pay vote results, we believe our current compensation program for our executive officers, including the changes we made to our compensation programs in 2014, reflect our shareholder’s views and strongly drive our pay for performance objectives.
Executive Compensation Program Structure and Alignment with Performance
The Compensation Committee has implemented a carefully-structured executive compensation program that is tightly linked to long- term shareholder value creation. The program incorporates a combination of short- and long-term forms of executive compensation that are structured to incentivize company performance and the achievement of corporate objectives the Committee believes are critical to driving long-term shareholder value. At the same time, the program incorporates elements that ensure the Company is able to attract and retain top executive talent with the diverse skills in family entertainment, branded-play, consumer products, media and technology which are critical to the successful execution of our strategy and ongoing business transformation.
In support of this linkage to long-term shareholder value creation, a significant portion of the total compensation opportunity for our Named Executive Officers is performance-based and at risk. The following charts summarize the components of our 2015 compensation program for our CEO. The chart below shows that 83% of our CEO’s total compensation for 2015, based on the values reflected in the following Summary Compensation Table, was performance based and at risk.
2015 CEO Pay-At-Risk
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Our CEO’s long-term equity compensation is 100% performance-based. While the value of the CEO’s annual equity compensation is divided approximately evenly between performance contingent stock awards and stock options, for the other Named Executive Officers they receive approximately 25% of their long-term incentive target award in time-based restricted stock units, approximately 50% in contingent stock performance awards and approximately 25% in stock options. The CEO’s compensation does not use time-based restricted stock units to further increase the linkage between earned pay and performance for the CEO.
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Variable Compensation Outcomes
Annual and long-term incentives are based on clear, measurable and objective performance goals that consider the overall financial performance of the Company and the individual contribution of each NEO to that performance.
Performance goals for the annual management incentive awards were established by the Committee early in fiscal 2015 based on the 2015 operating plan and budget approved by the Company’s Board of Directors. The Committee gives careful consideration to selecting metrics that will be used to drive annual business performance, and setting performance objectives that are both challenging but achievable. For 2015, the Committee selected three financial performance metrics to capture the most important aspects of the top and bottom line performance of the Company, in the form of revenues, profitability (operating margin), and cash generation (free cash flow). There is no payout for a given metric if the Company achieves less than 80% of the target performance against that metric. In 2015, given the Company’s strong financial performance, we achieved an aggregate weighted performance payout of 126% of target under the annual management incentive plan. In addition to reflecting the corporate financial objectives that are establishedgrant date fair value for stock awards made to the directors (this expense for the director stock award in 2020 was $160,000 per director continuing service on the Board), the stock awards column also includes, to the extent applicable, the (i) amount of cash retainer payments deferred by the director into the stock unit account under the annual performance plan,Deferred Compensation Plan for Non-Employee Directors and (ii) a 10% matching contribution which the CEO,Company makes to a director’s account under the Deferred Compensation Plan for Non-Employee Directors on all amounts deferred by such director into the Company’s stock unit account under that plan.
No options were granted to any of the non-employee directors in |
| (c) | The non-employee directors who were serving on the |
Name
| Outstanding
| Outstanding
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Kenneth A. Bronfin | 0 | 27,404 | ||||||||
Michael R. Burns | 0 | 0 | ||||||||
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Name
| Outstanding
| Outstanding
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Hope F. Cochran | 0 | 0 | ||||||||
Crispin H. Davis | 0 | 9,738 | ||||||||
Lisa Gersh | 0 | 25,674 | ||||||||
Alan G. Hassenfeld | 0 | 30,521 | ||||||||
Tracy A. Leinbach | 0 | 10,369 | ||||||||
Edward M. Philip | 0 | 40,948 | ||||||||
Laurel J. Richie | 0 | 1,040 | ||||||||
Richard S. Stoddart | 0 | 13,598 | ||||||||
Mary Beth West | 0 | 4,195 | ||||||||
Linda K. Zecher | 0 | 11,122 | ||||||||
The outstanding stock awards consist of the aggregate number of non-employee director stock grants that the director elected to defer the receipt of any such shares until his or her retirement from the Board. To the extent a director did not defer the stock award, it is not included in the table and the shares have already been issued to the director. Each director was given the option, prior to the beginning of the year of grant, to receive the shares subject to the upcoming annual grant either at the time of grant, or to defer receipt of the shares until he or she retires from the Board. |
| (d) | Comprised of (i) deemed dividends which are paid on outstanding balances in stock unit accounts under the Deferred Plan and |
Current Director Compensation Arrangements
In structuring the Company’s director compensation, the Nominating, Governance and Social Responsibility Committee seeks to attract and retain talented directors who will contribute significantly to the Company, fairly compensate directors for their work on behalf of the Company and align the interests of directors with those of stockholders. As part of its review of director compensation, the Nominating, Governance and Social Responsibility Committee reviews external director compensation market studies to assure that director compensation is set at reasonable levels which are commensurate with those prevailing at other similar companies and that the structure of the Company’s non-employee director compensation programs is effective in attracting and retaining highly qualified directors.
All members of the Board who are not otherwise employed by the Company (“non-employee directors”) receive annual cash retainers for service on the Board and its committees. Below is a summary of the cash retainers for service in 2020.
| Annual Retainers | Amount ($) | ||||
Annual Base Board Retainer | $ | 95,000 | |||
Annual Retainers (in addition to Annual Base Board Retainer) | |||||
• Lead Independent Director | $ | 35,000 | |||
• Chair of Audit Committee | $ | 40,000 | |||
• Chair of Compensation Committee | $ | 35,000 | |||
• Chair of Finance Committee | $ | 30,000 | |||
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| Annual Retainers | Amount ($) | ||||
• Chair of Nominating, Governance and Social Responsibility Committee | $ | 20,000 | |||
• Chair of Cybersecurity and Data Privacy Committee | $ | 20,000 | |||
• Audit Committee Member (other than Chair) | $ | 20,000 | |||
• Compensation Committee Member (other than Chair) | $ | 15,000 | |||
• Finance Committee (other than Chair) | $ | 7,500 | |||
• Nominating, Governance and Social Responsibility Committee (other than Chair) | $ | 12,500 | |||
• Cybersecurity and Data Privacy Committee (other than Chair) | $ | 7,500 | |||
No meeting fees were paid for attendance at meetings of the full Board or committees.
In May of every year, the Company anticipates issuing to each non-employee director that number of shares of Common Stock which have a set fair market value (based on the fair market value of the Common Stock on the date of grant). In fiscal 2020, the director stock grants had grant date fair market values of $160,000. These shares are immediately vested, but the Board has adopted stock ownership guidelines which mandate that Board members may not sell any shares of the Company’s Common Stock which they hold, including shares which are obtained as part of this yearly stock grant, until they own shares of Common Stock with an aggregate market value equal to at least $475,000 (which is equivalent to five times the annual Board retainer). Board members are permitted to sell shares of Common Stock they hold with a value in excess of $475,000, as long as they continue to hold at least $475,000 worth of Common Stock.
Pursuant to the Deferred Compensation Plan for non-employee directors (the “Deferred Plan”), which is unfunded, non-employee directors may defer some or all of the annual Board retainer and meeting fees into a stock unit account, the value of each unit initially being equal to the fair market value of one share of Common Stock as of the end of the quarter in which the compensation being deferred would otherwise be payable. Stock units increase or decrease in value based on the fair market value of the Common Stock. In addition, an amount equal to the dividends paid on an equivalent number of shares of Common Stock is credited to each non-employee director’s stock unit account as of the end of the quarter in which the dividend was paid. Non-employee directors may also defer any portion of their retainer and/or meeting fees into an interest account under the Deferred Plan, which bears interest at the five-year treasury rate.
The Company makes a deemed matching contribution to a director’s stock unit account under the Deferred Plan equal to 10% of the amount deferred by the director into the stock unit account, with one-half of such Company contribution vesting on December 31st of the calendar year in which the deferred compensation otherwise would have been paid and one-half on the next December 31st, provided that the participant remains a director on such vesting date. Unvested Company contributions will automatically vest on death, total disability or retirement by the director at or after age seventy-two. Compensation deferred under the Deferred Plan, whether in the stock unit account or the interest account, will be paid out in cash after termination of service as a director. Directors may elect that compensation so deferred be paid out in a lump sum or in up to ten annual installments, commencing either in the quarter following, or in the January following, the quarter in which service as a director terminates.
The Company also offers a matching gift program for its Board members pursuant to which the Company will match charitable contributions, up to a maximum yearly Company match of $5,000, made by Board members to qualifying non-profit organizations and academic institutions.
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Hasbro is committed to strong corporate governance, ethical conduct, sustainability and the accountability of our Board and our senior management team to the Company’s shareholders. We review our corporate governance principles and practices on a regular basis. Set forth below is a summary of our key governance principles and practices.
Code of |
Hasbro has a Code of Conduct which is applicable to all of the Company’s officers, employees and directors, including the Company’s Chief Executive Officer, Chief Financial Officer and Controller. The Code of Conduct addresses such issues as conflicts of interest, protection of confidential Company information, financial integrity, compliance with laws, rules and regulations, insider trading and proper public disclosure. Compliance with the Code of Conduct is mandatory for all Company officers, employees and directors. Any violation of the Code of Conduct can subject the person at issue to a range of sanctions, including dismissal.
The Code of Conduct is available on Hasbro’s website at https://hasbro.gcs-web.com/corporate-governance. Although the Company generally does not intend to provide waivers of, or amendments to, the Code of Conduct for its Chief Executive Officer, Chief Financial Officer, Controller, or any other officers, directors or employees, information concerning any waiver of, or amendment to, the Code of Conduct for the Chief Executive Officer, Chief Financial Officer, Controller, or any other executive officer or director of the Company, will be promptly disclosed on the Company’s website in the location where the Code of Conduct is posted.
Corporate Governance Principles |
Hasbro has adopted a set of Corporate Governance Principles which address qualifications for members of the Board of Directors, director responsibilities, director access to management and independent advisors, director compensation and many other matters related to the governance of the Company. The Corporate Governance Principles are available on Hasbro’s website at https://hasbro.gcs-web.com/corporate-governance.
Director Independence |
Hasbro’s Board has adopted Independence Standards in accordance with Nasdaq corporate governance listing standards. The Independence Standards specify criteria used by the Board in making determinations with respect to the independence of its members and include strict guidelines for directors and their immediate family members with respect to past employment or affiliation with the Company or its independent auditor. The Independence Standards restrict commercial relationships between directors and the Company and include the consideration of other relationships with the Company, including charitable relationships, in making independence determinations. The Independence Standards are available on Hasbro’s website at https://hasbro.gcs-web.com/corporate-governance. A copy of the Independence Standards is also attached as Appendix A to this Proxy Statement.
The Board has determined in accordance with our Independence Standards, that each of the following directors are independent and have no relationships which impact an independence determination under the Company’s Independence Standards: Kenneth A. Bronfin, Michael R. Burns, Hope F. Cochran, Sir Crispin H. Davis, Lisa Gersh, Alan G. Hassenfeld, Tracy A. Leinbach, Edward M. Philip, Laurel J. Richie, Richard S. Stoddart, Mary Beth West and Linda K. Zecher.
The only members of the Company’s Board who were determined not to be independent were Brian D. Goldner, the Company’s current Chairman and Chief Executive Officer, and John A. Frascotti, the Company’s former President and Chief Operating Officer. As noted above, Messrs. Hassenfeld, Davis, and Frascotti are retiring from the Board at the Meeting, and will not serve for re-election. Therefore, of the 11 nominees for director at the Meeting, 10 are independent with Mr. Goldner being the only non-independent nominee.
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Lead Independent Director |
At the Company’s 2015 Annual Meeting, the role of Presiding Non-Management Director was replaced with an expanded role of Lead Independent Director. This reflected Hasbro’s continued commitment to good governance and to providing a strong voice for its independent directors. Edward M. Philip served in the role of Lead Independent Director during 2020. It is expected that Richard Stoddart will assume the role of Lead Independent Director in May 2021.
The Lead Independent Director’s primary responsibilities include:
reviewing and approving all information and materials to be sent to the Board;
reviewing and approving agendas and meeting schedules for all Board and Committee meetings, including to assure that there is sufficient time for discussion of all agenda items;
developing the agendas for, and moderating, executive sessions of the Board’s non-management and independent directors;
advising management on the quality, quantity and timeliness of information provided to the Board;
presiding at all meetings of the Board at which the Chairman and Chief Executive Officer is not present, including all executive sessions of the non-management and independent directors;
providing feedback to the Chairman and Chief Executive Officer regarding the matters discussed at such meetings and sessions, as appropriate;
having the authority to call meetings of the non-management and independent directors whenever the Lead Independent Director deems it appropriate or necessary;
serving as the principal liaison between the non-management and independent directors and the Chairman and Chief Executive Officer and management;
serving as the liaison between the non-management and independent directors and other constituents of the Company, such as shareholders, and meeting and consulting with major shareholders as part of the Company’s shareholder outreach programs and when otherwise requested by such shareholders;
serving as a conduit for third parties to contact the non-management and independent Directors as a group;
regularly consulting with the Chairman and Chief Executive Officer and other members of the Board on matters related to corporate governance and Board performance;
facilitating the retention of outside advisors for the independent directors and the Board as needed; and
performing such other duties as the Board may from time to time delegate or request.
Board Leadership Structure |
The Chairman of the Board is elected by the Board on an annual basis. Currently, Mr. Goldner serves as Chairman of the Board, as well as Chief Executive Officer. Mr. Goldner’s appointment as Chairman in May 2015 reflected the integral role he has played and continues to play in the transformation of Hasbro’s business globally and in successfully formulating, reshaping, executing and accelerating the Company’s strategy, both before and following his appointment as Chief Executive Officer in 2008. The Board believes that combining these roles at this time is best for the Company and its shareholders as it will facilitate the functioning of the Board with senior management in strategic planning for the Company, in determining the Company’s key business opportunities and objectives as well as setting plans for achieving those objectives. Hasbro believes the combination of these roles with a proven leader positions the Company well for future success.
The Chairman of the Board provides leadership to the Board by, among other things, working with the Lead Independent Director and the Chief Legal Officer and Corporate Secretary to set Board calendars, determine agendas for Board meetings, ensure proper flow of information to Board members, facilitate effective operation of
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the Board and its Committees, help promote Board succession planning and the recruitment and orientation of new directors, oversee director performance, assist in consideration and Board adoption of the Company’s strategic plan and annual operating plans, and help promote senior management succession planning.
The Lead Independent Director, whose responsibilities are described in detail above, works with the Chairman to ensure the proper operation of the Board, and serves as the principal liaison between the non-management, independent directors and the Chairman and other constituents of the Company, such as shareholders.
Majority Vote Standard |
The Company has a majority vote standard for the election of directors in uncontested director elections (with a plurality vote standard applying to contested director elections), coupled with a director resignation policy for those directors who do not receive a majority vote.
In an election of directors which is not a contested election (as defined below), when a quorum is present, each nominee to be elected by shareholders shall be elected if the votes cast “for” such nominee exceed the votes cast “against” such nominee. In cases where as of the tenth (10th) day preceding the date on which the Company first mails its notice of meeting, for the meeting at which directors are being elected, the number of nominees for director exceeds the number of directors to be elected (referred to as a “contested election”), when a quorum is present, each nominee to be elected by shareholders shall be elected by a plurality of the votes cast.
In order for an incumbent director to become a nominee for re-election to the Board, such person must submit an irrevocable resignation, contingent on both that person not receiving a “for” vote that exceeds the “against” vote cast in an election that is not a contested election and acceptance of that resignation by the Board in accordance with the policies and procedures of the Board adopted for such purpose. In the event an incumbent director fails to receive a “for” vote that exceeds the “against” vote in an election that is not a contested election, the Company’s Nominating, Governance and Social Responsibility Committee shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director.
The Board shall act on the resignation, taking into account the recommendation of the Nominating, Governance and Social Responsibility Committee, and publicly disclose (by filing an appropriate disclosure with the SEC) its decision regarding the resignation and, if such resignation is rejected, the rationale for that decision, within sixty (60) days following the final certification of the vote at which the election was held. The Nominating, Governance and Social Responsibility Committee in making its recommendation, and the Board in making its decision, may each consider all factors and information that they consider relevant and appropriate. Both the Nominating, Governance and Social Responsibility Committee, in making their recommendation, and the Board in making its decision, with respect to any given nominee who has not received the requisite vote in an election that is not a contested election, will act without the participation of the nominee in question.
Director Outside Board Service |
The Company has a policy providing that our board members may not serve on the boards of directors of more than a total of four public companies (including the Company’s Board) and/or registered investment fund families. If the director is also a sitting chief executive officer of a public company, the director may not serve on more than one other public company board or registered investment fund family board, in addition to the Company’s board.
The Board does not have a policy setting rigid limits on the number of audit committees on which a member of the Company’s Audit Committee can serve. Instead, in cases where an Audit Committee member serves on more than three public company audit committees, the Board evaluates whether such simultaneous service would impair the service of such member on the Company’s Audit Committee.
Director Orientation and Continuing Education |
New directors receive an orientation to assist them in their roles as Board and committee members. Orientation includes subjects such as board governance and operation, Company history, strategic plans, business operations,
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financial position and legal and regulatory environment. Management also provides information on an ongoing basis to assure that Board members are aware of the business, legal and other developments necessary to fulfill their role. We also make available outside educational opportunities as the Board deems relevant and appropriate.
Annual Self-Evaluation for the Board and |
Every year the entire Board, as well as each of the committees of the Board, conduct a self-evaluation process. This process includes each director and each committee member submitting confidential feedback on the performance of the Board, as well as the performance of each committee on which they serve. The feedback is then collected and reviewed and discussed by the applicable committees, as well as the entire Board of Directors. This feedback informs changes the Board and the committees consider making to their processes and areas of review for the next year.
Board Tenure |
Although the Company does not have a formal policy with respect to Board tenure, the Board does seek to keep a balance of tenures to provide continuity of understanding of the business, long-term succession planning, and meaningful onboarding of new directors, including educating new directors with respect to the Company’s business, while also providing for new perspectives brought to bear by new Board members. The Board is targeting a mix of tenures in which roughly one-third of the Board members have been on the Board for five years or less, one-third of the members have been on the Board for six to ten years, and one-third of the members have served on the Board for longer than ten years. Although that is a general target, the composition of Board tenures may vary over time for many factors, including the availability of appropriate director candidates.
Proxy Access |
We have adopted a “proxy access” procedure in our Amended and Restated By-Laws. Our proxy access bylaw allows a shareholder or a group of up to 20 shareholders, who has maintained continuous ownership of at least 3% of the voting power of the Company’s outstanding voting stock for at least 3 years, to include nominees for election to the Board of Directors in the Company’s proxy statement. Subject to compliance with the requirements of the proxy access By-Law provisions, the shareholder or group of shareholders may include director nominees for up to the greater of (i) 20% of the Board, rounded down to the nearest whole number, or (ii) 2 nominees.
Share Retention Requirements |
The Company has share ownership guidelines which apply to all officers and employees at or above the Senior Vice President level and establish target share ownership levels which executives are expected to achieve over a five-year period and then maintain, absent extenuating circumstances. The Company also requires employees at those levels to retain a portion of any net shares realized from stock vesting or option exercises during the five-year period an executive has to achieve their stock ownership requirement until the executive’s ownership requirement level is satisfied. Until the applicable ownership level is achieved, the executive is required to retain an amount equal to at least 50% of the net shares received as a result of the exercise, vesting or payment of any equity awards granted to the executive following such executive becoming subject to the policy. Once the required stock ownership level is achieved, the executive is required to maintain the stock ownership level for as long as the executive is employed by the Company and is subject to the policy.
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Equity Awards Subject to Double Trigger Following a Change in Control |
Under the Company’s Restated 2003 Stock Incentive Performance Plan, as amended, all awards are subject to a double trigger change in control provision. This means that rather than vesting automatically upon a change in control of the Company, such awards will only vest following a change in control if the award recipient’s employment with the Company is terminated under specified circumstances.
Clawback Policy |
Under our Board approved Clawback Policy, all equity and non-equity incentive plan compensation granted by the Company in 2013 and thereafter is subject to this Clawback Policy. The policy provides that if an accounting restatement is required due to the Company’s material non-compliance with any accounting requirements, then all of the Company’s executive officers, regardless of whether they were at fault or not in the circumstances leading to the restatement, will be subject to forfeiting any excess in the incentive compensation they earned over the prior three years over what they would have earned if there had not been a material non-compliance in the financial statements.
Policy Prohibiting the |
Under the Company’s Board approved insider trading policy, we prohibit any pledges or hedges of Company stock by directors, officers or other employees on a prospective basis. The Board believes this policy furthers the interest of shareholders by ensuring that directors, officers and employees have the same economic incentives as shareholders and that equity held by directors, officers and employees will not be sold in situations beyond the control of the director, officer or employee.
No Tax Gross-Ups |
We do not have any existing tax gross-up arrangements with any of our directors, officers or other employees and we have made a commitment to not enter into such arrangements in the future.
Board Meetings and Director Attendance at the Annual Meeting |
During 2020, the Board held 8 meetings. All directors attended at least 75% of the aggregate of (i) the Board meetings held during their tenure as directors during 2020 and (ii) the meetings of any committees held during their tenure as members of such committees during 2020. Although the Company does not have a formal policy requiring attendance of directors at the annual meeting of shareholders, the expectation of the Company and the Board is that all directors will attend the annual meeting of shareholders in person or virtually via the Internet unless conflicts prevent them from attending. All members of the Board attended the 2020 Annual Meeting of Shareholders.
Director Retirement Age |
The Board has established a target retirement age of 72. Normally, a Director who has reached this age will serve out his or her current term and not stand for re-election at the end of that term. However, the Board recognizes that from time to time there may be unusual circumstances where exceptions need to be made to this general rule to retain needed continuity and expertise, or for other business reasons.
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Succession Planning |
Succession planning starts with Mr. Goldner, his team, including the Company’s Chief Human Resources Officer and the Compensation and Nominating, Governance and Social Responsibility Committees but is continued with the full Board. The Board devotes significant time on its agenda to reviewing and discussing the succession plans for the CEO and each of his direct reports as well as the talent pipeline leading to those positions, part of building a diverse and inclusive workforce. In recent years, the Board and Mr. Goldner have intensified their focus on succession planning. Succession planning is among the Board’s top priorities and included in the annual goals for executive management. Mr. Goldner provides a periodic talent update to the Board and Compensation Committee and the Board and the Nominating, Governance and Social Responsibility Committee reviews in-depth succession plans at least annually, considering long-term, medium-term and short-term options. The Board also has exposure to succession candidates through their periodic participation in Board meetings and/or engagement outside of Board meetings.
Director Emeritus |
The Board may in its discretion designate one or more former directors as a Director Emeritus. In certain situations, such as when the person being appointed has previously served as Chairman of the Board, the Director Emeritus may be designated as a Chairman Emeritus. The appointment of a Director Emeritus is expected to be infrequent and reserved for Directors who have served in a special capacity for, and made unusually valuable contributions to, the Company over an extended period of time. Each such designation shall be for a one-year term or until such Director Emeritus’ earlier death, resignation, retirement or removal by the Board (for any reason or no reason). Each Director Emeritus may be re-appointed by the Board in its discretion for one or more additional one-year terms. Directors Emeritus may attend Board meetings as and when invited by the Board and attend meetings of any committee of the Board as and when invited by the committee, but they are not entitled to vote or be counted for quorum purposes at any such meetings. The Company will reimburse Directors Emeritus for the reasonable costs of attending meetings to which they are invited and performing the functions requested by the Company, but they will otherwise serve without compensation by the Company. A Director Emeritus will not be considered a Director for any other purpose, including under the Company’s Articles of Incorporation and By-Laws, applicable federal securities laws and state corporation law, and a Director Emeritus shall have no power or authority to manage the affairs of the Company and shall not have any of the liabilities or duties of directors or officers under law in his or her capacity as a Director Emeritus. Directors Emeritus will be entitled to the indemnification protections afforded by the Company to its officers and Directors.
Effective following the Meeting, Mr. Alan Hassenfeld has been appointed as Chairman Emeritus. The Board believes his extraordinary accomplishments as a board member of Hasbro, together with his knowledge of and expertise in the business, including more than 40 years of experience in the toy, game and family entertainment industry, his extensive service in senior leadership roles at Hasbro, culminating in his service as the Company’s Chairman of the Board and Chief Executive Officer, expertise regarding strategic and operational planning and execution in the toy, game and family entertainment industries, experience in global markets, international business operations, and in issues of corporate social responsibility and sustainability, makes him a valuable resource to the Board and they plan to continue to access that experience and expertise through Mr. Hassenfeld’s role as Chairman Emeritus.
Additional Availability of Corporate Governance Materials |
In addition to being accessible on the Company’s website, copies of the Company’s Code of Conduct, Corporate Governance Principles and the charters of the six committees of the Board of Directors are all available free of charge to any shareholder upon request to the Company’s Chief Legal Officer and Corporate Secretary, c/o Hasbro, Inc., 1011 Newport Avenue, P.O. Box 1059, Pawtucket, Rhode Island 02861.
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Shareholder Proposals |
To Be Considered at the Annual Meeting and Considered for Inclusion in the Proxy Materials. Any proposal which a shareholder of the Company wishes to have considered for inclusion in the proxy statement and proxy relating to the Company’s 2022 Annual Meeting of Shareholders must be received by the Secretary of the Company at the Company’s executive offices no later than December 2, 2021 (the date that is 120 calendar days before the anniversary of the release date of the proxy statement relating to the 2021 Annual Meeting of Shareholders). The address of the Company’s executive offices is 1011 Newport Avenue, Pawtucket, Rhode Island 02861. Such proposals should be sent to the attention of the Chief Legal Officer and Corporate Secretary and must also comply with the other requirements of the rules of the SEC relating to shareholder proposals.
To Be Considered at the Annual Meeting But Not Included in the Proxy Materials. With the exception of the submission of director nominations for consideration by the Nominating, Governance and Social Responsibility Committee, which must be submitted to the Company in the manner described below, any new business proposed by any shareholder to be taken up at the 2022 Annual Meeting, but not included in the proxy statement or proxy relating to that meeting, must be stated in writing and filed with the Secretary of the Company no later than 150 days prior to the date of the 2022 Annual Meeting. Except for shareholder proposals made pursuant to the preceding paragraph, the Company will retain discretion to vote proxies at the 2022 Annual Meeting with respect to proposals received prior to the date that is 150 days before the date of such meeting, provided (i) the Company includes in its 2022 Annual Meeting proxy statement advice on the nature of the proposal and how it intends to exercise its voting discretion and (ii) the proponent does not issue a proxy statement.
Director Nominations |
Our Nominating, Governance and Social Responsibility Committee is responsible for identifying individuals qualified to be members of our Board of Directors and reviewing candidates recommended by our shareholders. In making its nominations for election to the Board, the Nominating, Governance and Social Responsibility Committee seeks candidates who meet the current challenges and needs of the Board. As part of this process the Committee considers a number of factors, including:
a candidate’s employment and other professional experience;
gender, diversity and other attributes, skills, expertise and involvement in areas which are relevant to the Company’s business;
business ethics and professional reputation;
independence;
other board service and experience; and
the Company’s desire to have a Board that represents a diverse mix of backgrounds, perspectives and expertise.
In identifying and recommending nominees for election to the Board, the Nominating, Governance and Social Responsibility Committee does value and consider diversity of viewpoint, experience, education, skill, background and other qualities in its overall consideration of nominees qualified for election to the Board.
The Nominating, Governance and Social Responsibility Committee will consider and evaluate nominees recommended by shareholders for election to the Board on the same basis as candidates from other sources if such nominations are made in accordance with the processes set forth below. The Nominating, Governance and Social Responsibility Committee uses multiple sources for identifying and evaluating nominees for director, including referrals from current directors, recommendations by shareholders and input from third-party executive search firms. The Company is proud that of the eleven director nominees standing for election to the Board at the 2021 Annual Meeting of Shareholders, six of those candidates are female.
Director Nominations to be made at the Annual Meeting But Not Included in the Proxy Materials. The Company’s By-Laws provide that shareholders may themselves nominate directors for consideration at an annual meeting provided they give timely written notice to the Secretary of the Company. Notice must be received at the principal
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executive office of the Company not less than 90 days nor more than 120 days prior to the one-year anniversary date of the immediately preceding annual meeting of shareholders (provided that if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more than 30 days before or after such anniversary date, notice by the shareholder must be delivered not earlier than 120 days prior to the annual meeting and not later than (i) the ninetieth (90th) day prior to the date of such annual meeting or (ii) the tenth (10th) day following the day on which the notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs). To be in proper form the notice must provide specified information regarding the proposed nominee and each shareholder proposing such nomination, as set forth in the Company’s By-Laws. As such, director nominations to be considered for the Company’s 2022 Annual Meeting of Shareholders must be submitted no earlier than January 20, 2022, and no later than February 19, 2022. Nominations made by shareholders in this manner are eligible to be presented by the shareholder to the meeting, but such nominees will not have been considered by the Nominating, Governance and Social Responsibility Committee as a nominee to be potentially supported by the Company and will not have been included in the Company’s proxy materials.
Director Nominations to be Considered by the Company’s Nominating, Governance and Social Responsibility Committee. To be considered by the Nominating, Governance and Social Responsibility Committee, director nominations must be submitted to the Chief Legal Officer and Corporate Secretary of the Company at the Company’s executive offices, 1011 Newport Avenue, Pawtucket, Rhode Island 02861 not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting. As such, director nominations to be considered for the Company’s 2022 Annual Meeting of Shareholders must be submitted no earlier than January 20, 2022, and no later than February 19, 2022. The Nominating, Governance and Social Responsibility Committee is only required to consider recommendations made by shareholders, or groups of shareholders, that have beneficially owned at least 1% of the Company’s Common Stock for at least one year prior to the date the shareholder(s) submit such candidate to the Nominating, Governance and Social Responsibility Committee and who undertake to continue to hold at least 1% of the Company’s Common Stock through the date of the next annual meeting. In addition, a nominating shareholder(s) may only submit one candidate to the Nominating, Governance and Social Responsibility Committee for consideration.
Submissions to the Nominating, Governance and Social Responsibility Committee should include:
as to each person whom the shareholder proposes to nominate for election or re-election as a director:
Name | Plan Name | Executive Contributions in Last Fiscal Year ($)(a) | Registrant Contributions in Last Fiscal Year ($)(a) | Aggregate Earnings in Last Fiscal Year ($)(b) | Aggregate Withdrawals/ Distributions ($)(b) | Aggregate Balance at Last Fiscal Year End ($)(c) | ||||||||||||||||
Brian Goldner |
Non-Qualified Deferred Compensation Plan | $ | 153,625 | — | $ | 629,245 | — | $ | 3,336,899 | |||||||||||||
| Supplemental Savings Plan | — | $ | 461,952 | $ | 282,912 | — | $ | 6,795,845 | ||||||||||||||
Deborah Thomas |
Non-Qualified Deferred Compensation Plan | — | — | $ | 109,612 | — | $ | 800,037 | ||||||||||||||
| Supplemental Savings Plan | — | $ | 172,350 | $ | 54,688 | — | $ | 1,409,020 | ||||||||||||||
John Frascotti |
Non-Qualified Deferred Compensation Plan | $ | 1,410,000 | — | $ | 139,700 | — | $ | 3,630,662 | |||||||||||||
| Supplemental Savings Plan | — | $ | 208,350 | $ | 52,845 | — | $ | 1,408,784 | ||||||||||||||
Darren Throop |
Non-Qualified Deferred Compensation Plan | — | — | — | — | — | ||||||||||||||||
| Supplemental Savings Plan | — | — | — | — | — | |||||||||||||||||
Dolph Johnson |
Non-Qualified Deferred Compensation Plan | — | — | $ | 45,879 | — | $ | 179,900 | ||||||||||||||
| Supplemental Savings Plan | — | $ | 111,600 | $ | 46,347 | — | $ | 1,156,627 | ||||||||||||||
| Name | Plan Name | Executive Contributions in Last Fiscal Year ($)(a) | Registrant Contributions in Last Fiscal Year ($)(a) | Aggregate Earnings in Last Fiscal Year ($)(b) | Aggregate Distributions | Aggregate Balance ($)(c) | ||||||||||||||||
Brian Goldner | Nonqualified Deferred Compensation Plan Supplemental Savings Plan | | $102,136 — | | | — $304,650 | | | $ 15,322 $172,199 | |
| — — |
| | $1,184,493 $3,764,825 | | ||||||
Deborah Thomas | Nonqualified Deferred Compensation Plan | $209,056 | — | $ (5,082) | $(110,815) | $ 521,015 | ||||||||||||||||
| Supplemental Savings Plan | — | $ 80,415 | $ 25,175 | — | $ 591,479 | |||||||||||||||||
Duncan Billing | Nonqualified Deferred Compensation Plan Supplemental Savings Plan | | $296,247 — | | | — $ 71,456 | | | $ 8,651 $ 38,022 | |
| — — |
| | $ 734,888 $ 836,140 | | ||||||
John Frascotti | Nonqualified Deferred Compensation Plan | $173,739 | — | $ 8,925 | — | $ 376,965 | ||||||||||||||||
| Supplemental Savings Plan | — | $ 88,512 | $ 18,555 | — | $ 468,648 | |||||||||||||||||
Wiebe Tinga | Nonqualified Deferred Compensation Plan Supplemental Savings Plan |
| — — |
|
| — — |
|
| — — |
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| — — |
|
| — — |
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Amounts included in the “Non-Qualified Deferred Compensation” table above consist of executive deferrals and registrant contributions under the Supplemental Plan and the Non-Qualified Deferred Compensation Plan, each of which are described below. Supplemental Plan (401(k)) Each of the Named Executive Officers other than Mr. Throop participated in the Supplemental Plan. All registrant contributions reflected in the preceding table were allocated to the Supplemental Plan. Elective deferrals are not permitted under the Supplemental Plan. Account balances received interest at the rate of 4.6% per year for 2020. This rate reflects the 2020 return, less an allowance for certain expenses, paid by the insurance companies providing this corporate owned life insurance product to Hasbro. Matching contributions are fully vested at all times while the annual Company and transition contributions are subject to a 3-year vesting requirement, however remaining benefits are subject to forfeiture for violations of non-competition or confidentiality obligations or for termination due to certain criminal acts involving Company property. Benefits under the Supplemental Plan are payable as a lump sum upon termination of employment (including retirement and death), subject to a six-month waiting period under Code Section 409A, as applicable. Effective January 1, 2008, this plan was expanded to include new program employer contributions in excess of IRS limits. Non-Qualified Deferred Compensation Plan The Company’s Non-Qualified Deferred Compensation Plan is available to all of the Company’s U.S. based employees who are at or above job level 7 and whose base compensation is equal to or greater than $130,000 for 2020, including the Named Executive Officers. Participants may defer up to 75% of their base salary and 85% of the awards they are paid under the Company’s non-equity incentive plans. Participant account balances are credited with earnings based on the participant’s selection from the list of measurement funds offered in the plan, including a fixed rate option. The allocation of investments may be changed as often as daily, with the exception of the Hasbro Stock Fund and the fixed rate option. Selection of the Hasbro Stock Fund and the fixed rate option is made once per year and becomes effective the following January. Rates of return earned (lost) by the Named Executive Officers are the same as the rates of return earned (lost) by other participants selecting the same investment choices. As such, the Company does not consider these rates of return to be “above-market” within the meaning of the rules of the SEC. Generally, account balances under the plan may be paid as a lump sum or in installments over a five, ten or fifteen-year period following the termination of employment, except amounts designated as short-term payouts which are payable at a pre-selected date in the future. Account balances may be distributed prior to retirement in the event of a financial hardship, but not in excess of the amount needed to meet the hardship.
The following table provides information as to the value of incremental payments and other benefits that would have been received by the NEOs upon a termination of their employment with the Company due to various types of situations, including upon a change in control of the Company, assuming such termination and change in control had taken place on December 24, 2020 (the last business day of the Company’s 2020 fiscal year), and based on any agreements with the NEO in place as of December 24, 2020. The benefits reflect the closing price of the Company’s Common Stock of $93.15 on December 24, 2020, where appropriate. Following these tables is a narrative description of the plans and agreements pursuant to which these payments and benefits are payable. In addition to the benefits detailed in the following tables, the NEOs are eligible to receive vested benefits under the Company’s pension plans and deferred compensation plans, to the extent applicable, which are quantified in the preceding tables in this Proxy Statement, as well as benefits under stock options held by such executive officers which are vested and exercisable as of the date of their termination. In addition, the NEOs, other than Mr. Throop, are eligible to participate in the Company’s post-retirement life insurance program, which is available to all salaried employees employed by the Company on December 31, 2019, who at such time met the eligibility requirements for early or normal retirement.
66 The NEOs would not receive any incremental payments or other benefits if they voluntarily resigned from the Company (except resignation for Good Reason, where noted) or were involuntarily terminated by the Company for cause.
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The Company has a policy that any transaction which would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the SEC, with respect to a director or nominee for election as a director, must be reviewed and approved or ratified by the Company’s full Board, excluding any director interested in such transaction. All other related person transactions which would require disclosure under Item 404(a), including, without limitation, those involving executive officers of the Company, must be reviewed and approved or ratified by either the Company’s full Board or a committee of the Board which has been delegated with such duty. Any such related person transactions will only be approved or ratified if the Board, or the applicable committee of the Board, determines that such transaction will not impair the involved person’s service to, and exercise of judgment on behalf of, the Company, or otherwise create a conflict of interest which would be detrimental to the Company. This policy is contained in Section 20, entitled “Code of Conduct; Conflicts of Interest” of the Company’s Corporate Governance Principles. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires Hasbro’s executive officers and directors and persons who beneficially own more than 10% of our Common Stock (collectively, “Reporting Persons”) to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Reporting Persons are required by SEC regulations to furnish Hasbro with copies of all Section 16(a) reports that they file. Based solely on our review of such reports received or written representations from certain Reporting Persons, we believe that during fiscal 2020 all Reporting Persons complied with all applicable reporting requirements under Section 16(a), except for one late report on Form 4 filed on November 9, 2020, to report the November 3, 2020 sale of 7,168 shares of Common Stock pursuant to a Rule 10b5-1 trading plan by Deborah Thomas, which was filed late after discovering that the filing was not accepted on the due date due to Edgar transmission issues. Management knows of no other matters that may be presented to the Meeting. However, if any other matter properly comes before the Meeting, or any adjournment or postponement thereof, it is intended that proxies in the accompanying form will be voted in accordance with the judgment of the persons named therein.
In accordance with a notice sent to certain street name shareholders of our Common Stock who share a single address, only one copy of the Notice of Internet Availability of Proxy Materials or proxy materials for the year ended December 27,
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The cost of soliciting proxies in the accompanying form has been or will be borne by the Company. In addition to solicitation by mail, arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy material to their principals and the Company will reimburse them for any reasonable expenses incurred in connection therewith. The Company has also retained Morrow It is important that your shares be represented at the Meeting. If you are unable to be present in person, you are respectfully requested to vote by Internet, by telephone or by marking, signing and dating a proxy and returning it in as promptly as possible. No postage is required if mailed in the United States. By Order of the Board of Directors
Tarrant Sibley Executive Vice President, Chief Legal Officer Dated: April Pawtucket, Rhode Island
The following are the standards that will be employed by the Hasbro, Inc. (the “Company”) Board of Directors in determining issues of director independence pursuant to applicable legal requirements and the rules of The NASDAQ Stock Market. For purposes of these standards (i) the Company is meant to include not only Hasbro, Inc., but all of its subsidiaries and divisions, and (ii) a director’s immediate family is deemed to include the following relationships, whether by blood, marriage or adoption: the director’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law, or anyone else residing in such person’s home.
The Board of Directors (the “Board”) must affirmatively determine that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization which has a relationship with the Company). The Company will disclose this determination in compliance with all applicable rules and regulations.
No director who is an employee (or whose immediate family member is an executive officer) of the Company can be independent until at least three years after such employment or executive officer relationship has ended.
No director who is affiliated with or employed by (or whose immediate family member is affiliated or employed in a professional capacity by) a present or former internal or external auditor of the Company can be independent until at least three years after the end of either the affiliation or the employment or auditing relationship.
No director can be independent if he or she directly or indirectly receives from the Company any fees or compensation other than that which is related solely to his or her (i) service as a member of the Board or one of its committees, (ii) benefits under a tax-qualified retirement plan or (iii) non-discretionary compensation. A director who accepts any consulting, advisory or other compensatory fees from the Company other than in this connection will not be considered independent. The same prohibition applies with respect to members of a director’s immediate family, with the exclusion of compensation received by an immediate family member as a non-executive officer employee of the Company, which will be considered in making an independence determination, but which does not preclude a determination of independence.
No director who (or whose immediate family member) is employed as an executive officer of another entity where any of the Company’s present executives serve on that entity’s compensation committee can be independent until at least three years after the end of such service or employment relationship.
No director who is an executive officer, partner, controlling shareholder or an employee (or whose immediate family member is an executive officer, partner or controlling shareholder) of an entity (including a charitable entity) that makes payments to or receives payments from the Company in amount which, in any single fiscal year, exceeds the greater of $200,000 or 5% of such entity’s consolidated gross revenues, can be independent until three years after falling below such threshold.
No director who is performing, or is a partner, member, officer, director or employee of any entity performing, paid consulting, legal, investment banking, commercial banking, accounting, financial advisory or other professional services work (“professional services”) for the Company can be independent until three years after such services have ended. Additional Relationships to Consider in Determining Director Independence The following are suggested parameters that the Board has agreed to consider in determining whether a director has a material relationship or affiliation with the Company that would impact a finding of independence. If a director satisfies all of the criteria set forth below it would suggest that the director, absent other contrary considerations, does not have a material relationship with the Company and is independent. If a director fails to satisfy one or more of the criteria set forth below, further Board inquiry and discussion is needed to determine if the director has a material relationship with the Company or may be found independent. Business and Professional Relationships of Directors and Their Family Members
The director is not currently providing personally, and has not provided personally within the past three years, property, goods or services (other than services as a member of the Board or any committees thereof) to the Company or any of its executive officers.
A-1 No member of the director’s immediate family is currently providing personally, or has provided personally within the past three years, property, goods or services (other than services as an unpaid intern of the Company) to the Company or any of its executive officers.
The director is not currently receiving personally, and has not received personally within the past three years, property, goods or services from the Company. The foregoing requirements do not apply to compensation, services or goods paid or provided to the director solely in connection with the director’s service on the Board or any committees thereof, including $1,000 or less a year in the Company’s products which may be given to the director or one or more of the director’s family members as a director benefit.
No member of the director’s immediate family is currently receiving personally, or has received personally within the past three years, property, goods or services from the Company, excluding the de minimus Company product benefit mentioned above. The foregoing requirements do not apply to unpaid internships provided to a member of the director’s immediate family.
The director is not an executive officer or employee of any entity to which the Company was indebted at any time within the past three years or which was indebted to the Company at any time within the past three years in an amount that exceeded at the end of any such year the greater of (i) 2% of such entity’s consolidated assets or (ii) $1,000,000. Compensation
Notwithstanding the restriction described above with respect to direct or indirect receipt of consulting, advisory or other compensatory fees other than in connection with Board or committee service, arrangements between the Company and (i) entities affiliated with the director or (ii) immediate family members of the director, which may be deemed to provide a form of indirect compensation to the director, will not result in a loss of status as an independent director provided such relationships do not violate the requirements set forth above. Charitable Relationships
The director is not an executive officer or an employee of an entity that has received charitable contributions from the Company in excess of $100,000 in any of the past three fiscal years.
No member of the director’s immediate family is an executive officer of an entity that has received charitable contributions from the Company in excess of $100,000 in any of the past three fiscal years. Stock Ownership
The director’s stock ownership, as determined in accordance with the rules of the SEC as applied to preparation of proxy statements, does not exceed 5% of the Company’s outstanding stock. Other Family Relationships
The director is not related to any other member of the Company’s board of directors or any officer of the Company.
A-2 Appendix B — GAAP to Non-GAAP Reconciliation
As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measure. Management believes that adjusted net earnings, adjusted net earnings per diluted share and adjusted operating profit provides investors with an understanding of the underlying performance of our business absent unusual events. Management believes that EBITDA and Adjusted EBITDA are appropriate measures for evaluating the operating performance of our business because they reflect the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. These non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in our consolidated financial statements and filings with the SEC. As used herein, “GAAP” refers to accounting principles generally accepted in the United States of America. Reconciliation of as Reported to Adjusted Operating Results (Unaudited) (Thousands of Dollars)
B-1
B-2 Reconciliation of Net Earnings and Earnings Per Share (Unaudited) (Thousands of Dollars)
ENDORSEMENT LINE SACKPACK 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters heres how to vote! You may vote online or by phone instead of mailing this card. Votes from participants in the Hasbro 401K must be received by May 18, 2021 at 9:00 A.M. Online Go to www.investorvote.com/HAS or scan the QR code login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/HAS Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 123456789012345 IF
Dear Fellow Shareholders: You are cordially invited to attend the Your Vote Matters.Whether or not you plan to attend the Sincerely, Brian D. Goldner Chairman of the Board
HASBRO, INC. Annual Meeting of Shareholders May 20, 2021 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement of Hasbro, Inc. (the UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE
IMPORTANT! D Non-Voting Items Change of Address Please
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Robust shareholder engagement process
