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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, DC 20549
SCHEDULE 14A
(RuleRULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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| ☐ | Soliciting Material under§240.14a-12 |
Conagra Brands, Inc.
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[NOT APPLICABLE]
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[Inside Front Cover – Intentionally Left Blank]
 | Conagra Brands, Inc. | |||
| 222 W. Merchandise Mart Plaza | ||||
| Suite 1300 | ||||
| Chicago, Illinois 60654 | ||||
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August10, 2018August 6, 2021
Dear fellow shareholder:Shareholders,
I am pleased to invite you to join us for the Conagra Brands Inc. Annual Meeting of Shareholders, or the Annual Meeting, which will be held virtually via live webcast on Friday,Wednesday, September 21, 2018,15, 2021, at 8:30 a.m. Central Daylight Time2:00 p.m. CDT. You will be able to attend and participate in the Grand Salon onAnnual Meeting online, vote your shares electronically, and submit your questions during the 11th floormeeting by visiting www.virtualshareholdermeeting.com/CAG2021.
We have decided to hold the Annual Meeting virtually again this year due to the ongoing coronavirus (COVID-19) pandemic. In addition to supporting the health and well-being of our shareholders, employees, and their families, we believe that hosting a virtual Annual Meeting enables greater shareholder attendance and participation, improves meeting efficiency and our ability to communicate effectively with our shareholders, and reduces the cost of the Gwen Hotel, 521 North Rush Street in Chicago, Illinois.
Annual Meeting. The Annual Meeting will include a brief report on our business, a discussion of and voting on the matters described in the Notice of 20182021 Annual Meeting of Shareholders and Proxy Statement, and a question-and-answer session.
ThankFor Conagra Brands, fiscal 2021 was a year of successfully managing through dynamic conditions. New consumers found our brands and became repeat purchasers of our innovative products. We grew share versus the competition and continued to invest in the long-term health of our business. Our dedicated employees performed well in very challenging circumstances and without their dedication, we could not have delivered for our consumers, customers, or shareholders. We enter fiscal 2022 believing in the long-term prospects for our business.
On behalf of our entire organization, I thank you for your continuedshared confidence that Conagra Brands continues to be a compelling investment in Conagra Brands.opportunity.
Sincerely,
Sean Connolly
President and Chief Executive Officer
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2021 PROXY STATEMENT III
Notice of 2021 Annual Meeting of Shareholders and Proxy Statement
| When | Where | Who May Vote | ||
| Wednesday, | Online at | Shareholders of record as | ||
| September 15, 2021 2:00 p.m. CDT | www.virtualshareholdermeeting.com /CAG2021 | of the close of business on July 26, 2021 | ||
ITEMS OF BUSINESS
| 1. | To elect the director nominees named in the Proxy Statement, each for a term expiring at the next Annual Meeting; |
| 2. | To ratify the appointment of KPMG LLP as our independent auditor for fiscal 2022; |
| 3. | To approve, on an advisory basis, our named executive officer compensation; |
| 4. | To consider one shareholder proposal described in the Proxy Statement, if properly presented at the Annual Meeting; and |
| 5. | To transact any other business properly brought before the Annual Meeting, or any postponement or adjournment thereof. |
Colleen Batcheler
Executive Vice President, General Counsel and Corporate Secretary
August 6, 2021
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Attend Online You are entitled to attend and participate in the Annual Meeting if you were a shareholder of record as of the close of business on July 26, 2021. To attend and participate in the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. You may also ask questions, vote online, and examine our shareholder list during the Annual Meeting by following the instructions provided at www.virtualshareholdermeeting.com/CAG2021. Please see “Additional Information About the Meeting” beginning on page 91 of the accompanying Proxy Statement for details regarding the Annual Meeting. |
Even if you plan to attend the Annual Meeting, please promptly vote your shares in advance by proxy. YOUR VOTE IS IMPORTANT. |
IV CONAGRA BRANDS
| 1 | ||||
Board of Directors & Corporate Governance | ||||
VOTING ITEM #1: Election of Director Nominees | ||||
| Voting Recommendations | 5 | |||
| Who We Are | 11 | |||
| How We Are Selected | 22 | |||
| How We Govern | 24 | |||
| How We Are Compensated | 36 | |||
Audit Matters | ||||
VOTING ITEM #2: Ratification of the Appointment of KPMG LLP as Our Independent Auditor for Fiscal 2022 | ||||
| Audit / Finance Committee Report | 41 | |||
Executive Compensation Matters | ||||
VOTING ITEM #3: Approval, on an Advisory Basis, of Our Named Executive Officer Compensation | ||||
VOTING ITEM #4: Shareholder Proposal | ||||
| Compensation Discussion and Analysis | 47 | |||
| Other Fiscal 2021 Compensation | 62 | |||
| Compensation Committee Report | 69 | |||
| Summary Compensation Table — Fiscal 2021 | 69 | |||
| Grants of Plan-Based Awards — Fiscal 2021 | 72 | |||
| Outstanding Equity Awards at Fiscal Year-End — Fiscal 2021 | 73 | |||
| Option Exercises and Stock Vested — Fiscal 2021 | 75 | |||
| Pension Benefits — Fiscal 2021 | 75 | |||
| Nonqualified Deferred Compensation — Fiscal 2021 | 76 | |||
| Potential Payments Upon Termination or Change of Control | 78 | |||
| CEO Pay Ratio | 88 | |||
Stock Ownership | ||||
| Information on Stock Ownership | 89 | |||
Other Matters | ||||
| Additional Information About the Meeting | 91 | |||
| Appendix A — Reconciliation of GAAP and Non-GAAP Information | A-1 | |||
| Appendix B — ESG Quick Summary | B-1 | |||
2021 PROXY STATEMENT V
Proxy Statement
We are pleased to provide access to ourproviding the enclosed proxy materials viato you in connection with the Internet. Our Noticesolicitation by the Board of Directors of Conagra Brands, Inc. (referred to as Conagra Brands, Conagra or the company) of proxies to be voted at the Annual Meeting Proxy Statement and Annual Report for the fiscal year ended May 27, 2018 are available athttp://www.conagrabrands.com/investor-relations/financial-reports/annual-reports.
If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a paper copy of our Notice of Annual Meeting, Proxy Statement and Annual Report unless you specifically request a copy. You may request a paper copy by following the instructionsShareholders to be held on the Notice of Internet Availability of Proxy Materials.September 15, 2021. We began making our proxy materials available to shareholders on or about August10, 2018.August 6, 2021.
This summary highlights some of the information contained in this proxy statement. You should read the entire proxy statement before voting.
Our Company
Conagra Brands (NYSE: CAG), headquartered in Chicago, is one of North America’s leading branded food companies. Conagra Brands combines a rich heritage of making great food with a sharpened focus and entrepreneurial spirit. We’re committed to modernizing our iconic food brands, leveraging fresh opportunities, and adapting to a changing landscape – all with a culture that is ready to capture growth and drive shareholder value.
Conagra’s iconic brands, such as Birds Eye®, Duncan Hines®, Healthy Choice®, Marie Callender’s®, Reddi-wip®, and Slim Jim®, as well as emerging brands, including Angie’s® BOOMCHICKAPOP®, Duke’s®, Earth Balance®, Gardein®, and Frontera®, offer choices for every occasion.
1 CONAGRA BRANDS
NoticeOur Vision
During fiscal 2021, we revisited our company’s mission and vision, and recommitted as an organization to our collective focus. At Conagra, we aspire to have the most impactful, energized, and inclusive culture in food. We seek to build a diverse team that embraces debate to challenge marketplace and business conventions. We strive to be respected for our great brands, great food, great margins, and consistent results.
By the Numbers
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Number of Locations | Fiscal 2021 Revenue: | Number of Employees | ||||||
~50 | ~$11.2 Billion | ~18,600 |
Fiscal 2021 Highlights
For Conagra Brands, fiscal 2021 was a year of 2018 Annual Meetingsuccessfully managing through dynamic conditions. New consumers found our brands and became repeat purchasers of Shareholdersour innovative products. We grew share versus the competition and continued to invest in the long-term health of our business. Our dedicated employees performed well in very challenging circumstances and our commitment to employee health and safety remained a primary focus. We enter fiscal 2022 continuing to believe in the long-term prospects for our business.
Given the dynamic environment created by the COVID-19 pandemic, we provided fiscal 2021 guidance on a quarter-to-quarter basis. Ultimately, we delivered results consistent with and in some instances above our guidance throughout the year.
Organic Net Sales | Adjusted Operating Margin | Adjusted Diluted EPS | ||||||||
| FY21 Q1 | Exceeded Guidance | Exceeded Guidance | Exceeded Guidance | |||||||
| FY21 Q2 | Exceeded Guidance | Exceeded Guidance | Exceeded Guidance | |||||||
| FY21 Q3 | Exceeded Guidance | Met Guidance | Met Guidance | |||||||
| FY 21 Q4 | Met Guidance | Met Guidance | Met Guidance |
We achieved our leverage goal for fiscal 2021 ahead of schedule.
2021 PROXY STATEMENT 2
Specific performance highlights from fiscal 2021 include the following:
We experienced strong organic net sales growth in all three of our retail segments in fiscal 2021, driven by increased demand due to COVID-19, as well as growth in e-commerce sales, and a robust innovation slate.
Our adjusted operating margin grew again in fiscal 2021. We delivered operating margin of 15.9% and adjusted operating margin of 17.5%1.
We achieved our net leverage ratio2 goal of 3.6x in the second quarter of fiscal 2021 – two quarters ahead of our year-end target.
We continued our portfolio sculpting work in fiscal 2021. We completed the divestiture or exit of several smaller, non-core businesses: H.K. Anderson peanut butter-filled pretzels, Peter Panpeanut butter, and Egg Beaters liquid eggs.
Our Board of Directors increased our quarterly dividend by 29% during fiscal 2021 and we paid $475 million in cash dividends overall. Upon achievement of our net leverage ratio ahead of schedule, we repurchased approximately $300 million of common stock.
| 1 | A reconciliation of this non-GAAP measure to the most directly comparable GAAP measure is included in Appendix A to this Proxy Statement. |
| 2 | Net leverage ratio is defined as total principal debt outstanding less unrestricted cash divided by Adjusted EBITDA for a trailing twelve-month period. |
Investing in Our Culture: Our vision is to have the most impactful, energized, and inclusive culture in food. We believe that a diverse team and inclusive culture are key enablers of shareholder value creation. During fiscal 2021, we continued our work to deliver against our vision. During the first quarter of the year, we established a Diversity and Inclusion Leadership Council, comprised of our Chief Executive Officer, his Senior Leadership team, and members of our Human Resources team. While the importance of diversity and inclusion are not new to Conagra, we established the Council to expand our D&I strategy, track our progress, and ensure execution of our D&I goals. The Council refreshed the company’s D&I strategic plan during fiscal 2021, and declared a focus on recruiting, advocating for, and developing diverse talent. The Council established the following goals3 for expanding diversity in our organization:
At least 40% of management-level roles held by women |
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Double people of |
ItemsIn support of Businessthe achievement of our goals, we undertook a variety of initiatives in fiscal 2021:
| • | In October 2020, we launched Conagra’s inclusive leadership development program. Through the end of fiscal 2021, we trained over 1,400 managers in inclusive leadership practices. |
| • | In November 2020, we partnered with The Hatchery Chicago to create a twelve-week culinary internship program to facilitate careers in the food industry for individuals from underrepresented communities. |
| • | In May 2021, we announced partnerships with the Thurgood Marshall College Fund and the Hispanic Scholarship Fund through which Conagra will make donations to each organization to fund college scholarships in an effort to ensure that black and brown students receive equitable access to higher education opportunities. Conagra employees will also actively engage with scholarship recipients to provide professional development opportunities. |
| • | Throughout fiscal 2021, the Human Resources Committee of our Board received regular reports from management on our D&I progress. The HR Committee has embedded D&I into its standing agenda and intends to discuss the topic at every regularly scheduled meeting it holds in fiscal 2022. |
| 3 | Versus 2020 baseline. |
To elect as directors
3 CONAGRA BRANDS
Fiscal 2019—2021
We maintain a long-term strategic plan at Conagra and strive to set rolling three-year financial targets that the nine nominees namedHR Committee can incorporate into long-term incentive compensation plans for our most senior executives. The three-years ending with fiscal 2021 were far more dynamic than originally expected. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and breadth of our portfolio. We expected fiscal 2020 to be a year focused on integrating the Pinnacle business and delivering turn-around plans for several large brands acquired in the Proxy Statementtransaction. However, by the end of the third quarter, the COVID-19 pandemic had introduced new challenges. During fiscal 2021, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers, and shareholders while keeping our employees safe.
As a result of our team’s agility and results-orientation over the last three years, we believe that we enter fiscal 2022 with a solid foundation from which to continue to deliver for investors.
Fiscal 2021 Compensation
To ratify
For fiscal 2021, our HR Committee established an executive compensation program that was designed to promote attainment of our fiscal 2021 operating plan and fiscal 2019 to 2021 long-term goals. More specifically, the appointment of KPMG LLP as our independent auditor for fiscal 2019program contained the following elements:
To vote, on an advisory basis, to approve our named executive officer compensation
To transact any other business properly brought before the meeting
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| Incentive Compensation: | |
• Base Salary | • Fiscal 2021 Annual Incentive Plan (cash settled) | |
• Health and Welfare Benefits | • Fiscal 2019 – 2021 Long-term Incentive Plan (stock settled) | |
• Retirement Benefits |
In designing the program, the HR Committee chose to include a mix of compensation types (salary, benefits, cash-based incentives, and equity-based incentives) and a mix of performance periods (single year and multi-year) to promote long-term, strategic decision-making. This approach was also intended to minimize the likelihood that our executives would be motivated to pursue overly risky initiatives or unsustainable results.
Percentage of our CEO’s FY21 compensation opportunity tied to | 6x Our CEO’s stock ownership requirement, as a multiple of his base salary |
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Whether or not you plan to attendin-person, please be sure to vote your shares by proxy.
Your vote is important.
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Summary of the Proxy Statement
We have included this summary of the Proxy Statement to assist your review of the proposals to be acted upon. The following information is only a summary; you should read the entire Proxy Statement before voting.
Fiscal 2018 Voting Items
No Hedging or pledging of company stock permitted for employees or members of the Board | Yes Clawback Policy in place to recoup unwarranted incentive compensation | Fully Independent The HR Committee’s compensation consultant performs no work for management |
2021 PROXY STATEMENT 4
As more fully described in the “Compensation Discussion and Analysis” section of the Proxy Statement, beginning on page 47, the HR Committee considered the positive business outcomes described above in determining final payouts under our incentive programs with performance periods concluding in fiscal 2021. Our Chief Executive Officer and other senior executives named in this Proxy Statement received above target payouts under both the fiscal year 2021 annual incentive plan and fiscal year 2019 to fiscal year 2021 cycle of the long-term performance share plan.
The HR Committee believes that its fiscal 2021 compensation decisions appropriately reflect its pay-for-performance philosophy.
At the 2021 Annual Meeting of Shareholders, we are asking shareholders to vote on the following items:
| Proposal | Board’s Voting Recommendation | |||
| FOR | |||
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year 2022 | FOR |
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| FOR | |||
4. A shareholder proposal regarding shareholder action by written consent | AGAINST | |||
Our Corporate Citizenship
Our Environmental and Social Responsibility
At Conagra, we believe that when our people, our communities, and the environment are nourished and thriving, so are we. As a result, we take a strategic approach to corporate citizenship. We focus our efforts on the topics we believe are most material to the food industry, to our business, and to our stakeholders: Good Food, Better Planet, Responsible Sourcing, and Stronger Communities.
A few highlights of our work follow.
Good Food Consumers around the globe are increasingly focused on the sustainability of their diets. Conagra recognizes the Food and Agriculture Organization of the United Nations’ definition of sustainable diets, which takes into consideration the nutritional value, cultural context, and economic, social, and environmental impacts of consumer food choices. As part of our ongoing effort to promote the adoption of sustainable diets in the markets we serve, Conagra offers a variety of products made with plant protein. Plant-based brands and platforms are now significant parts of our business; in fiscal year 2021, Conagra’s total ingredient buy by volume was approximately 78% plant-based. In July 2020, Conagra was acknowledged for our work in this area, receiving recognition by FAIRR as among the top-ranked U.S. companies in efforts to diversify toward more sustainable proteins. | We publish an annual Citizenship Report and encourage you to read it in its entirety. https://www.conagrabrands.com/our-company/corporate-social-responsibility. We also publish information based on the Standard for the Processed Foods industry under the Sustainability Accounting Standards Board (SASB) framework. Our SASB disclosure, which is not intended to be incorporated by reference into this Proxy Statement, can be found on our website. | |
5 CONAGRA BRANDS
Better Planet Climate Change Mitigation- Conagra has committed to reducing absolute Scope 1 and 2 greenhouse gas emissions by 25% by 2030 as compared to a fiscal year 2020 baseline. In addition, Conagra has committed to reducing Scope 3 greenhouse gas emissions from purchased goods and services by 20% per metric ton of material sourced within that same timeframe. In February 2021, each of these 2030 greenhouse gas reduction targets was validated by the Science-Based Targets Initiative. |
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Our 2030 greenhouse gas emissions goals supplement the work we’ve been doing for years. Since 2009, Conagra has decreased our carbon footprint by nearly 300,000 metric tons.
Water Conservation– Our water conservation projects have conserved 3.6 billion gallons of water since 2009, including 64 million gallons of water in fiscal year 2021. During fiscal 2021, more than 85% of our operational water came from areas on the lower end of the World Resources Institute water risk spectrum.
Zero Waste- In fiscal year 2021, eight of our manufacturing facilities diverted more than 95% of waste materials from landfills through recycling and other innovative waste reduction measures.
A key enabler of our sustainability work is the direct engagement of those closest to our operations: our employees. Our Sustainable Development Awards program is a cornerstone of our Better Planet strategy and uses an annual, internal competition to recognize innovative projects related to sustainable production. Each year, our employees identify, design, implement, and then submit for recognition projects that save energy, conserve water, and reduce waste.
| Responsible Sourcing |
We source goods and services in accordance with our Supplier Code of Conduct, under which suppliers are required to: reduce environmental impacts such as deforestation, greenhouse gas emissions, and waste generation; protect water resources through restorative or conservation efforts; support social needs in the communities in which they operate though philanthropic investment, diversity and inclusion efforts, and human rights practices; and support efforts to implement traceability of goods and services throughout the supply chain.
Our approach to product packaging takes environmental impacts into account while continuing to ensure food quality and safety. We are also focused on encouraging our supply chain partners to engage in sustainable agriculture practices. In September 2020, we partnered with U.S. Farmers and Ranchers in Action and other stakeholders to create the Decade of Ag Vision, a collaborative effort to restore our environment through agriculture that regenerates natural resources.
100% We are striving toward making 100% of our current plastic packaging renewable, recyclable, or compostable by 2025. | 84% In fiscal year 2020, approximately 84% of our packaging materials by volume met our goal of being renewable, recyclable, or compostable. |
50% to 70% We have introduced new products featuring serving bowls made from recyclable, plant- based fibers, enabling us to reduce the carbon footprint associated with manufacturing the bowls by 50% to 70%.
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We recently launched new packaging for our Swiss Miss hot cocoa brand, designed to reduce the package’s carbon footprint by 98 metric tons each year. |
2021 PROXY STATEMENT 6
| Stronger Communities |
Corporate Ethics and Culture -Our Code of Conduct provides guideposts for how our employees and Board members are expected to conduct themselves when representing Conagra both inside and outside the company. We conduct annual trainings to ensure that employees are aware of our expectations and their obligations under the Code of Conduct.
We take pride in our culture and we’re guided by our six Timeless Values:
| • | Integrity: Doing the right things and doing things right |
| • | External focus: Centering on the consumer, customer, competitor, and investor |
| • | Broad-mindedness: Seeking out and respecting varied perspectives; embracing collaboration and assuming positive intent |
| • | Agility: Converting insights into action with the speed of an entrepreneur |
| • | Leadership by all: Simplifying, making decisions, inspiring others, and acting like an owner |
| • | Focus on results: Leveraging a “refuse-to-lose” obsession with impact and value creation |
Human Rights, Diversity and Inclusion - We seek to leverage our differences as a competitive advantage. In fiscal year 2021, Conagra received a perfect score of 100% on the Human Rights Campaign’s Corporate Equality Index for the seventh year in a row. Our President and Chief Executive Officer is an original signatory to the CEO Action for Diversity and Inclusion™ Pledge.
As discussed above, we have developed a comprehensive strategy to increase representation of people of color and women in management roles and, during fiscal 2021, published five-year representation goals for our workforce. We plan to use recruitment, advocacy, and development initiatives to enhance the diversity of our talent and create a more inclusive workplace for all.
Employee Health & Safety - Our global Environment, Occupational Health and Safety Philosophy drives us towards continuous environment, health and safety (“EH&S”) improvement, as measured by environmental and safety indicators implemented through our EH&S management approach. Our Occupational Safety & Health Administration incident rate during fiscal year 2021 was 2.00 incidents per 100 full-time workers.
Community Impact & Philanthropy - We believe in giving back to the communities in which we live and work. Employee volunteerism, product donations, and financial contributions are all a part of our community impact approach. Each year Conagra Brands employees participate in activities to recognize Hunger Action Month in September, participate in our United for Change fundraising campaign during the fall, and volunteer during our annual Month of Service in April. While we engage on an array of topics, we recognize the unique opportunity we have to a make a difference in the global effort to end food insecurity.
Top 50 In 2019, 2020, and 2021, Conagra was named | 25 million meals In fiscal 2021, Conagra donated over 22 |
7 CONAGRA BRANDS
Our Commitment to Good Governance
Our Board is committed to performing its responsibilities in a manner consistent with sound governance practices. It routinely reviews its processes, assesses the regulatory and legislative environment, communicates with investors, and adapts governance practices as needed to support informed, competent, and independent oversight on behalf of our shareholders. Examples of practices discussed in more detail throughout this proxy statement include the following:
Independent Board Leadership
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Majority Voting in Uncontested Director Elections | To be elected in an uncontested election, a director nominee must receive the affirmative vote of a majority of the votes cast in the election. If an incumbent nominee is not elected, he or she must promptly tender a resignation, subject to acceptance or rejection by the Board. | |
Proxy Access | Our Bylaws permit shareholders to nominate directors through proxy access. Any shareholder, or group of up to 20 shareholders collectively, owning at least 3% of the outstanding shares of Conagra Brands common stock continuously for at least three years may nominate director candidates for inclusion in our proxy materials. | |
Board Refreshment | As of August 6, 2021, the average tenure of our Board members was 7 years. No director may be nominated to a new term if he or she would be over age 72 at the time of the election. | |
Board Diversity | The Board values diversity and strives to build a group that delivers diverse views, perspectives, backgrounds, and experiences. As of August 6, 2021: • 58% of the Board was female or ethnically diverse • Our average age was 63 • 75% of our Board’s leadership positions were held by women
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We will also transact any other business that is properly brought before the meeting.
Fiscal 2018 Highlights2021 PROXY STATEMENT 8
Fiscal 2018 was a successful year for Conagra Brands and another important year in our transformation. We accomplished the following:
Board’s Role in Risk Oversight |
Each of the | |
Board’s Role in Overseeing Human Capital Management | The Human Resources Committee’s oversight of • talent acquisition, development, assessment, and retention of employees; • diversity and inclusion strategy, goals and results; • trends in workforce management; • opportunities to
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“Great food and great results are natural outcomes of a strategy that starts with the question – what’s the right thing to – Sean Connolly | ||||
Capital Returned to Shareholders: We paid $342 million in dividends during fiscal 2018, and repurchased approximately $967 million of our common stock. Over the last three fiscal years, we have returned nearly $3.2 billion to shareholders.
9 CONAGRA BRANDS
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Culture: Today, we have a more energized and enthusiastic team of employees who bring an externally focused, entrepreneurial spirit to their work every day.
By strengthening our foundation over the last three fiscal years, including during fiscal 2018, we readied ourselves to embark on the next phase of our evolution. On June 26, 2018, shortly after the end of fiscal 2018, we entered into a definitive agreement to acquire Pinnacle Foods Inc., makers of well-known brands such asBirds Eye, Duncan Hines, Earth Balance, EVOL, Gardein, Glutino,Hungry-Man, Log Cabin, Tim’s Cascade Snacks, Udi’s,Vlasic and Wish-Bone, among others. We believe that the combination of two portfolios of iconic brands – ours and Pinnacle’s - will serve as a catalyst to accelerate value creation for shareholders.
1 A reconciliation of thisnon-GAAP measure to the most directly comparable GAAP measure is included inAppendix A to this Proxy Statement.
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Director Nominees
Our director nominees are as follows. With the exception of Mr. Arora, who was first appointed to the Board in July 2018, each nominee was elected by shareholders at the 2017 annual meeting.
| Name and Position | Age* |
Director Since
| Independent | Committee Memberships | ||||
Anil Arora
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57
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2018
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✓
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Audit / Finance
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Thomas K. Brown
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62
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2013
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✓
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Audit / Finance
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Stephen G. Butler
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70
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2003
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✓
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Audit / Finance (Chair) Executive Committee
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Sean M. Connolly, CEO
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52
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2015
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Executive Committee
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Joie A. Gregor
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68
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2009
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✓
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Nominating, Governance & Public Affairs (Chair) Audit / Finance Executive Committee
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Rajive Johri
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68
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2009
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✓
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Nominating, Governance & Public Affairs Human Resources
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Richard H. Lenny, Chairman
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66
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2009
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✓
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Nominating, Governance & Public Affairs Human Resources Executive Committee (Chair)
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Ruth Ann Marshall
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64
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2007
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✓
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Nominating, Governance & Public Affairs Human Resources (Chair) Executive Committee
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Craig P. Omtvedt
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68
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2016
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✓
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Audit / Finance
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* Ages as of July 31, 2018
Auditor Ratification
KPMG LLP has conducted the audits of our financial statements since fiscal 2006 and the Audit / Finance Committee of our Board has appointed the firm to conduct the fiscal 2019 audit. In the event that shareholders do not ratify the appointment, the Audit / Finance Committee will reconsider the appointment. Even if the appointment of KPMG LLP is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in Conagra Brands’ and its shareholders’ best interests.
Fiscal 2018 Executive Compensation
Our fiscal 2018 performance, together with the company’s results since our new strategic journey began three years ago, have created significant value for shareholders. We have repeatedly delivered on our financial commitments to investors. Given the pay for performance philosophy of the Human Resources Committee, management has also been rewarded. As more fully described in the Proxy Statement, our named executive officers, including our Chief Executive Officer, received annual incentive payouts at levels slightly above target for fiscal 2018, driven by strong profit and net sales growth performance. In addition, the named executive officer participants in the plan each received long-term incentive payouts for the fiscal 2016 through 2018 performance period at approximately 158.7% of target.
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The Human Resources Committee believes that its fiscal 2018 compensation decisions appropriately reflect itspay-for-performance philosophy. This philosophy is focused on compensating executives based on performance and aligning management’s interests with those of our shareholders.
We thank you for your continued investment in Conagra Brands.
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Conagra Brands, Inc.
222 Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
We are furnishing this Proxy Statement to our shareholders in connection with the solicitation by the Board of Directors of proxies to be voted at the Conagra Brands, Inc. 2018 Annual Meeting of Shareholders, which we refer to as the 2018 Annual Meeting. We are first making our proxy materials available to shareholders on or about August10, 2018.
Shareholders of record as of the close of business on July 31, 2018 are entitled to attend and to vote at the 2018 Annual Meeting and at any postponements or adjournments of the 2018 Annual Meeting. On July 31, 2018, there were 391,645,253 voting shares of common stock, par value $5.00 per share, of Conagra Brands, Inc., or Conagra Brands, issued and outstanding. Each share of common stock is entitled to one vote for each director to be elected and one vote for each of the other matters to be voted on.
Your vote is very important. The Board of Directors recommends that you submit a proxy card in advance of the 2018 Annual Meeting to ensure that your shares are voted as you direct, even if you are unable to attend the 2018 Annual Meeting.
If you hold shares of common stock of Conagra Brands in your own name (known as ownership “of record”), you may attend the meeting and vote your shares in person or you may vote your shares by proxy in one of the following manners:
By completing, signing, dating and returning (in the postage-paid envelope provided) the proxy card enclosed with paper copies of our proxy materials;
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By calling (800)690-6903 on a touch-tone telephone and following the recorded instructions.
Internet and telephone voting is available through 11:59 p.m. Eastern Time on Tuesday, September 18, 2018 for shares held in the Conagra Brands Employee Stock Purchase Plan or the TreeHouse Private Brands Retirement Income Savings Plan. Internet and telephone voting is available through 11:59 p.m. Eastern Time on Thursday, September 20,2018 for all other shares.
If a broker, bank or other nominee holds your shares (also known as ownership in “street name”), your broker, bank or nominee, as applicable, will send you a voting instruction form. You may vote your shares by completing, signing, dating and returning the voting instruction form according to the instructions provided by your broker, bank or other nominee. If you wish to vote in person at the meeting, you must obtain from your broker, bank or nominee a legal proxy executed in your favor.
Please see “Additional Information” at the end of this Proxy Statement for more information about voting.
Voting Item #1 – Election of Directors
Our business is managed under the direction of the Board of Directors, and you are being asked to vote to elect the next members of the Board. Currently, the Board consists of 12 directors whose terms expire at the 20182021 Annual Meeting. Based on athe recommendation of the Board’s Nominating Governance and Public Affairs Committee, which we refer to as the N/G/PACorporate Governance Committee, the Board has nominated nine12 current directors, as named in this proxy statement,Proxy Statement, for election at the 20182021 Annual Meeting. Information about
The following biographies detail the age and principal occupations during at least the past five years for each ofdirector nominee; the nine nominees is set forth onyear the pages that follow. nominee was first appointed to the Board; and the public company directorships they now hold and have held.
If elected, each of the directors will hold office until the Conagra Brands 20192022 Annual Meeting of Shareholders, and until their successors have been elected and qualified. We have no reason to believe that any of the nominees for director will be unable to serve if elected.
Director Nominees’ Skills and Qualifications
Our Board is a highly independent, well-qualified group of individuals that collectively has the experience, background and diversity to be effective in overseeing our long-term strategy. The skills and characteristics that the Board seeks in evaluating the composition of the Board overall, and which inform Board succession planning and director nomination processes, include the following:
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In addition, all directors are expected to demonstrate high standards of ethics and integrity and to commit sufficient time to effectively carry out the duties of a director.
Our director nominees’ individual experiences, skills and characteristics are highlighted in the following matrix. This matrix is intended as a summary and is not an exhaustive list of each nominees’ contributions to the Board. Further biographical information about our director nominees is set forth on the pages that follow.
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Voting Item #1 – Election of Directors
The Board also values diversity and strives to build a Board of diverse attitudes, perspectives and experiences. While diversity is viewed broadly at Conagra Brands, the Board also measures its diversity along more traditional lines, including by examining:
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The collective profile of our director nominees, as of July 31, 2018, is as follows:
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The Board maintains a succession planning process that enables it to regularly evaluate the alignment of the Board’s membership with the needs of Conagra Brands. Through this process, the Board adds new skills and qualifications required for membership on the Board as appropriate. The Board desires its members to collectively hold a broad range of skills, education, experiences, and qualifications that can be leveraged for the benefit of the company and its shareholders.
For additional information on the director nomination process, please see “Roles and Responsibilities of the Board and Its Committees – The Board’s Nominating, Governance and Public Affairs Committee – Director Nomination Process” below.
Director Independence
The Board has determined that eight of our nine nominees for director – directors Arora, Brown, Butler, Gregor, Johri, Lenny, Marshall and Omtvedt – have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board has also determined that each of Messrs. Alford, Dickson and Goldstone, each of whom served as a director during fiscal 2018, had no material relationships with Conagra Brands and was independent within the meaning of applicable independence standards.
In making its independence determinations, the Board applied the listing standards of the New York Stock Exchange, or NYSE, and the categorical independence standards contained in our Corporate Governance Principles. The Board considers even immaterial relationships in its decision-making process to ensure a complete view of each director’s independence.
The Board also reviewed our commercial relationships with companies on whose boards members of the Board served during fiscal 2018 (i.e., McDonald’s Corporation, Information Resources, Inc., Ford Motor Company, Unified Grocers Inc., Illinois Tool Works Inc., Conduent Incorporated, The Chefs’ Warehouse, Inc. and 3M Company). The relationships with these companies involved Conagra Brands’ purchase or sale of products and services in the ordinary course of business onarm’s-length terms in amounts and under other circumstances that did not affect the relevant directors’ independence under our Corporate Governance Principles or under applicable law and NYSE listing standards.
Voting Item #1 – Election of Directors
In addition to satisfying our independence standards, each member of the Audit / Finance Committee of the Board, which we refer to as the Audit / Finance Committee, must satisfy an additional Securities and Exchange Commission, or SEC, independence requirement that provides that the member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than his or her director’s compensation and may not be an “affiliated person” of Conagra Brands. Each member of the Audit / Finance Committee satisfies this additional independence requirement.
Similarly, the SEC and NYSE have adopted rules relating to the independence of members of the Human Resources Committee, which we refer to as the HR Committee. These rules require consideration of the source of HR Committee members’ compensation, including any consulting, advisory or other compensatory fees paid to the HR Committee member, and HR Committee member affiliation with us, any of our subsidiaries or any affiliates of our subsidiaries. Each member of the HR Committee satisfies these additional independence requirements.
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Voting Item #1 – Election of DirectorsSince:
Biographical Information for Director Nominees (as of July 31, 2018)
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Independent
Board Committees:
| Other public company directorships: • Envestnet, Inc. since 2015 • Yodlee, Inc. (as Chairman) from March 2014 until November 2015 Experiences, qualifications, and skills considered in re-nominating Mr. Arora: •Public Company Experience; Former C-Suite Executive: Strong leadership capabilities and insights from experience as President and Chief Executive Officer of Yodlee, Inc. from start-up phase through its IPO and subsequent acquisition by Envestnet, and subsequently as Vice Chairman of Envestnet and Chief Executive of Envestnet | Yodlee. •Technology Expertise: Extensive experience in technology, operating at the intersection of the consumer, internet, and technology sectors. •M&A Experience: Led Yodlee through its growth from start-up through ultimate acquisition. |
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| Mr. Arora Prior to joining Yodlee, Mr. Arora served in various positions with Gateway, Inc. (a computer hardware manufacturer). Earlier in his career, Mr. Arora served in various strategy and marketing positions for The Pillsbury Company (a manufacturer and marketer of branded consumer foods) and Kraft Foods Group, Inc. (a manufacturer and marketer of branded consumer foods).
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11 CONAGRA BRANDS
Thomas “Tony” K. Brown Age: 65 Director Since: October 15, 2013 Independent Board Committees: • Audit / Finance Committee • Nominating and Corporate Governance Committee | Other public company directorships:
Experiences, qualifications, and skills considered in
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| Mr. Brown served as Group Vice President, Global Purchasing with Ford Motor Company (a motor vehicles manufacturer) from 2008 until his retirement in August 2013. He joined Ford Motor Company in 1999 and served in various leadership capacities in global purchasing during his tenure. Prior to joining Ford Motor Company, |
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2021 PROXY STATEMENT 12
Voting Item #1 – Election of Directors
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Chirico
Age: 64 Director Since: February 1, 2021 Independent
Board Committees:
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Other public company directorships: • Dick’s Sporting Goods, Inc. (a sporting goods retail company) since 2003
Experiences, qualifications, and skills considered in
•Market Facing Experience; International Expertise: Substantial international business and
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| Mr. Chirico served as Chief Executive Officer of PVH Corp. (a wholesale and retail apparel company) from 2006 until his retirement in 2021. He currently serves as Chairman of PVH Corp., a role he has held since 2007. Prior to serving as its Chief Executive Officer, Mr. Chirico served in various roles of increasing responsibility with PVH Corp., including as Controller, Chief Financial Officer, and President and Chief Operating Officer. Prior to joining PVH Corp., Mr. Chirico was a Partner at Ernst & Young LLP (an international accounting firm) and ran its Retail and Apparel Practice Group. |
13 CONAGRA BRANDS
Sean M. Connolly Age: 55 Director Since: April 6, 2015 Not Independent Board Committees: • Executive Committee | Other public company directorships: • The Hillshire Brands Company from June 2012 to August 2014 Experiences, qualifications, and skills considered in re-nominating Mr. Connolly: •Public Company Experience; Active C-Suite Executive: Broad understanding of governance issues facing public companies from his board service to other public companies as well as from his current board service to privately held S.C. Johnson & Son, Inc. (a manufacturer of household cleaning supplies and other consumer chemicals); closest knowledge of our business and operations as a result of his service as the President and CEO of Conagra Brands. •Market Facing Experience: Extensive career focused on and committed to building leading consumer brands in the food industry. •M&A Experience: Transactional experience during his tenure with several companies in the consumer packaged goods industry. | Mr. Connolly has served as our President and Chief Executive Officer and a member of the Board since April 6, 2015. Previously, he served as President and Chief Executive Officer and a director of The Hillshire Brands Company (a branded food products company) from June 2012 to August 2014. Before becoming CEO of Hillshire, Mr. Connolly served as Executive Vice President of Sara Lee Corporation (a branded food products Prior to joining Sara Lee in anticipation of thespin-off of Hillshire, Mr. Connolly served as President of Campbell North America, the largest division of Campbell Soup Company (a branded food products company); President, Campbell USA; and President, North American Foodservice for Campbell. Before joining Campbell in 2002, he served in various marketing and brand management roles at The Procter & Gamble Company (a branded consumer
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2021 PROXY STATEMENT 14
Joie A. Gregor Age: 71 Director Since: February 6, 2009 Independent Board Committees: • Executive Committee • Human Resources Committee • Nominating and Corporate Governance Committee (Chair) | Other public company directorships:
Experiences, qualifications, and skills considered inre-nominating
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Voting Item #1 – Election of Directors
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Ms. Gregor served as a Managing Director Before her time with Warburg Pincus, Ms. Gregor’s professional experience included the following:
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15 CONAGRA BRANDS
Fran Horowitz Age: 57 Director Since: August 2, 2021 Independent Board Committees: • Audit / Finance Committee | Other public company directorships:
Experiences, qualifications, and skills considered inre-nominating Ms.
| Ms. Horowitz has been the Chief Executive Officer of Abercrombie & Fitch Co. since February 2017. Prior to that, she was President and Chief Merchandising Officer of Abercrombie & Fitch Co., where she was responsible for all brands (December 2015 to February 2017) and Brand President of Hollister (October 2014 to December 2015). Prior to joining Abercrombie & Fitch Co., Ms. Horowitz held leadership positions with a variety of leading fashion retailers, including Ann, Inc., Express, Inc. and Bloomingdale’s. |
2021 PROXY STATEMENT 16
Rajive Johri Age: 71 Director Since: January 1, 2009 Independent Board Committees: • Audit / Finance Committee • Nominating and Corporate Governance Committee |
| Other public company directorships: • Charter Communications Inc. (a telecommunications and mass media company) from 2006 until 2009 Experiences, qualifications, and skills considered in re-nominating Mr. Johri: •Public Company Experience; Former C-Suite Executive: Broad understanding of governance issues facing public companies from his tenure with other public companies; strong leadership capabilities and insights, including through his service as President of First National Bank of Omaha. •Finance / Capital Management Expertise; Risk Management Expertise: Significant expertise in finance, accounting, and risk and compliance oversight from his service to banking organizations, including risk assessment and risk management experience. •International Expertise: Substantial international business and management experience from prior service to banking institutions with responsibility over various geographic regions. | Mr. Johri served as President and Director of First National Bank of Omaha (a banking institution) from 2006 until his retirement in 2009. From September 2005 to June 2006, Mr. Johri served as President of First National Credit Cards Center for First National Bank of Omaha. Prior to |
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17 CONAGRA BRANDS
Voting Item #1 – Election of Directors
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Richard H. Lenny Age: 69 Director Since: March 17, 2009
Non-Executive Chairman Since: May 28, 2018
Independent
Board Committees:
As Board Chair Mr. Lenny is also deemed an ex-officio member of the Audit/Finance Committee.
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Other public company directorships:
Experiences, qualifications, and skills considered inre-nominating Mr. Lenny:
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| Mr. Lenny served as Chairman, President and Chief Executive Officer of The Hershey Company (manufacturer, distributor and marketer of candy, snacks, and candy-related grocery products) from 2001 until his retirement in 2007. Prior to joining The Hershey Company, Mr. Lenny served as Group Vice President of Kraft Foods, Inc. (a packaged food company) and as President of Nabisco Biscuit Company (a packaged food company). Mr. Lenny served as non-executive Chairman of Information Resources, Inc. (a market research firm) from 2013 until 2018. He served as a senior advisor with Friedman, Fleischer & Lowe, LLC (a private equity firm) from 2014 until 2016 and as an operating partner from 2011 until 2014. |
2021 PROXY STATEMENT 18
Melissa Lora Age: 59 Director Since: January 4, 2019 Independent Board Committees: • Audit / Finance Committee (Chair) • Executive Committee | Other public company directorships: • KB Home (one of the largest homebuilders in the United States) since 2004 (lead independent director since 2016) • MGIC Investment Corporation (a mortgage insurance company) since 2018 Experiences, qualifications, and skills considered in re-nominating Ms. Lora: •Public Company Experience; Former C-Suite Executive: Strong leadership capabilities and insights from her experience in various leadership roles at Taco Bell Corp.; broad understanding of governance issues facing public companies from her board service to other public companies, including as lead independent director of KB Home. •Market Facing Experience; International Expertise: Substantial international business and management experience from service as President of Taco Bell International. •Finance / Capital Management Expertise; Risk Management Expertise: Deep expertise in finance, risk, and compliance oversight from more than a decade of service as Chief Financial Officer of an operating division (Taco Bell Corp.) of Yum! Brands, Inc., as well as a decade of service as the Chair of the Audit Committee of KB Home. | Ms. Lora served as President of Taco Bell International, a segment of Taco Bell Corp. (a subsidiary of Yum! Brands, Inc., one of the world’s largest restaurant companies) from 2013 until her retirement in 2018. She previously served in various roles at Taco Bell Corp., including Global Chief Financial and Development Officer from 2012 to 2013, Chief Financial and Development Officer from 2006 to 2012, and Chief Financial Officer from 2001 to 2006. |
19 CONAGRA BRANDS
Ruth Ann Marshall Age: 67 Director Since: May 23, 2007 Independent Board Committees: • Executive Committee • Human Resources Committee (Chair) • Nominating and Corporate Governance Committee | Other public company directorships: • Global Payments Inc. (a provider of payment technology services) since 2006 • Regions Financial Corporation (a provider of banking, trust, stock brokerage and mortgage services) since 2011 Experiences, qualifications, and skills considered in re-nominating Ms. Marshall: •Public Company Experience; Former C-Suite Executive: Strong leadership capabilities and insights from her service to MasterCard International, Inc., including marketing, account management and customer service; broad understanding of governance issues facing public companies from her board service to other public companies. •Market Facing Experience; International Expertise; Technology Expertise: Significant domestic and international experience in growing the MasterCard Americas business, including through new product development; technology expertise built through a career in the payments technology industry. •Finance / Capital Management Expertise; Risk Management Expertise: Expertise in finance from her service to MasterCard and on the Audit Committee of Regions Financial and transactional experience from her board service to other public companies. | Ms. Marshall was President of the Americas at MasterCard International, Inc. (payments industry) from October 1999 until her retirement in June 2006. At MasterCard, Ms. Marshall was responsible for building all aspects of MasterCard’s issuance and acceptance business in the United States, Canada, Latin America, and the Caribbean. Prior to joining MasterCard International, Inc., Ms. Marshall served as Senior Executive Vice President of Concord EFS, Inc. (an electronic payment services company), where she oversaw marketing, account management, customer service, and product development. |
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2021 PROXY STATEMENT 20
Voting Item #1 – Election of Directors
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Craig P. Omtvedt Age: 71 Director Since: November 11, 2016
Independent
Board Committees:
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| Other directorships: • General Cable Corp. (a wire and cable manufacturer) from 2004 until 2018 • The Hillshire Brands Company from 2012 until 2014 • Oshkosh Corporation (a manufacturer and marketer of specialty vehicles and vehicle bodies) since 2008 (non-executive Chairman of the Board from 2017 to 2020) Experiences, qualifications, and skills considered in re-nominating Mr. Omtvedt: •Public Company Experience; Former C-Suite Executive: Broad understanding of governance issues facing public companies from his board service to other public companies; strong leadership capabilities and insights from his service as Chief Financial Officer of Fortune Brands. •Finance / Capital Management Expertise; Risk Management Expertise: Deep expertise in accounting and finance, based on decades of experience in accounting and finance roles, including Chief Financial Officer, Chief Accounting Officer, and Chief Internal Auditor, at a public company. | ||||||||||
| Mr. Omtvedt served as Senior Vice President and Chief Financial Officer of Fortune Brands, Inc. (a former leading consumer products company) from 2000 until his retirement in October 2011. He served as a consultant to Beam Inc., the successor to Fortune Brands, during 2012. Previously, Mr. Omtvedt held a series of finance leadership positions of increasing responsibility with Fortune Brands, including Senior Vice President and Chief Accounting Officer; Vice President and Chief Accounting Officer; and Vice President, Deputy Controller and Chief Internal Auditor. He first joined Fortune Brands in 1989. Before joining Fortune Brands, Mr. Omtvedt served in financial positions of increasing responsibility at both The Pillsbury Company and Sears, Roebuck & Company. |
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Age: 44 Director Since: February 16, 2019 Independent
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• HD Supply Holdings, Inc. (an industrial distributor) from 2017 until 2020 • Team Health Holdings, Inc. (a supplier of outsourced healthcare professional staffing and administrative services) from 2016 until 2017 Experiences, qualifications, and skills considered inre-nominating Mr.
•M&A Experience: Significant transactional experience from his service to GSC Partners acquiring companies through the bankruptcy restructuring process, as well as his service in investment banking at | Mr. Ostfeld is a partner of JANA Partners LLC (investment manager) where he is co-portfolio manager of JANA Strategic Investments, its active equity ownership strategy. Prior to joining JANA Partners LLC in 2006, Mr. Ostfeld was with GSC Partners in its distressed debt private equity group focused on acquiring companies through the bankruptcy restructuring process and enhancing value as an active equity owner. Prior to GSC Partners, Mr. Ostfeld was an investment banker at Credit Suisse First Boston where he worked on a variety of M&A and capital raising assignments. |
21 CONAGRA BRANDS
Voting Item #1 – Election of Directors
The nine director nominees for election to the Board currently serve as members of the Board. All nominees, other than Mr. Anil Arora, were elected by shareholders at our 2017 Annual Meeting of Shareholders. The Board appointed Mr. Arora as a director of Conagra Brands effective as of July 17, 2018. Mr. Arora was first introduced to the N/G/PA Committee as a potential nominee by current director, Richard H. Lenny.
If any of the nominees becomes unavailable for election to the Board for any reason not presently known or contemplated, the proxy holders will have discretionary authority in that instance to vote the proxies for a substitute. The proxies cannot be voted for a greater number of persons than the nine nominees named.
Three current Board members are not standing forre-election at the 2018 Annual Meeting. Bradley A. Alford and Thomas W. Dickson have not been nominated to stand forre-election. In accordance with our retirement policy for directors, Steven F. Goldstone has not been nominated to stand forre-election and will retire from the Board at the 2018 Annual Meeting.
Roles and Responsibilities of the Board and Its CommitteesHow We Are Selected
Board Leadership Structure
The Board believesdesires that independent Board leadership isits membership collectively hold a critical componentbroad range of our governance structure. Our Corporate Governance Principles require us to have either an independent Chairmanskills, education, experiences, and qualifications that can be leveraged for the benefit of the company and its shareholders. Not only must individuals exhibit high standards for ethics and integrity to be nominated for Board or, ifservice, they must be willing to commit the positionstime needed to faithfully carry out a director’s duties, including overseeing our strategy, CEO succession planning, and director refreshment processes.
We seek to maintain a Board comprised predominately of Chairman and Chief Executive Officer are held by the same person, a lead independent director. Since 2005, our Chairman and CEO roles have been separate. With separate Chairman and CEO roles, our CEO can focus his time and energy on setting the strategic direction for the company, overseeing daily operations, engaging with external constituents, developing our leaders and promoting employee engagement at all levels of the organization. Meanwhile, our independent Chairman leads the Board in the performance of its duties by establishing agendas and ensuring appropriate meeting content, engagingdirectors. In addition to independence, we seek individuals with the CEOfollowing experiences, skills, and senior leadership team between Board meetings on business developments and providing overall guidance to our CEO as to the Board’s views and perspectives, particularly on the strategic direction of the company.
Board Committees
The Board has established four standing committees: the Audit / Finance Committee, the Executive Committee, the HR Committee, and the N/G/PA Committee. The Audit / Finance Committee, HR Committee and N/G/PA Committee operate under written charters that have been approved by the full Board; each are comprised entirely of independent directors.
Membership on each of the Board’s standing committees, as of July 31, 2018, was as follows:
Name | Audit / Finance Committee | Executive Committee | HR Committee | N/G/PA Committee | ||||||||||||||||
Bradley A. Alford
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Anil Arora
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Thomas K. Brown
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Stephen G. Butler
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Sean M. Connolly
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Thomas W. Dickson
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Stephen F. Goldstone
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Joie A. Gregor
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Rajive Johri
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Richard H. Lenny
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Ruth Ann Marshall
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Craig P. Omtvedt
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Total Meetings in FY2018 | 12
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Voting Item #1 – Election of Directors
The Board’s Audit / Finance Committeecharacteristics:
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Financial Expertise and Financial Literacy
The Board has determined that directors Butler and Omtvedt are qualified as audit committee financial experts within the meaning of SEC regulations and that directors Arora, Brown and Gregor are financially literate within the meaning of NYSE rules.
Related-Party Transactions
The Audit / Finance Committee has adopted a written policy regarding the review, approval, and ratification of related-party transactions. Under the policy, all related-party transactions must bepre-approved by the Audit / Finance Committee unless circumstances makepre-approval impracticable. In the latter case, management may enter into the transaction, but the transaction remains subject to ratification by the Audit / Finance Committee at its next regular,in-person meeting. In determining whether to approve or ratify a related-party transaction, the Audit / Finance Committee will take into account, among other factors it deems appropriate, whether the transaction is fair and reasonable to the company and the extent of the related-party’s interest in the transaction. No director is permitted to participate in any approval of a related-party transaction in which he or she is involved. On at least an annual basis, the Audit / Finance Committee reviews and assesses ongoing related-party transactions to determine whether the relationships remain appropriate. All related-party transactions are disclosed to the full Board.
Voting Item #1 – Election of Directors
The Board’s Executive Committee
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ExecutiveThe following matrix summarizes, for each director nominee and Director Compensation
The HR Committee has retained authority overas of August 2, 2021, the determination of executive and director compensation, subject onlyskills they bring to the further involvementBoard, their age and Board tenure, their independence, and other qualities and characteristics that contribute to our goal of the other independent directors with respect to the approvalbuilding a Board of the overall compensation fordiverse views, perspectives, backgrounds, and experiences.
Director
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Arora |         | 60 | 3 |  | |
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Brown | | 65 | 8 | | |
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Chirico | | 64 | ~1 | |
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Connolly | | 55 | 6 | CEO |
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Gregor | | 71 | 13 | |
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Lora | | 59 | ~3 | |
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Marshall | | 67 | 14 | |
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| 63 | 7 years | 11 (92%) | 3 (27%) | 4 (33%) | 1 (9%) | |||||||
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non-employee2021 PROXY STATEMENT directors22
Our Nominating and any base salary changeCorporate Governance Committee plays a key role in identifying candidates for the CEO. The HR Committee may delegate its responsibilities to subcommittees comprised of one or more HR Committee members or to selected members of management, subject to requirements of ourby-lawsBoard who fulfill these requirements. More information on director recruitment and applicable laws, regulations and the terms of shareholder-approved plans. Additional information about the HR Committee’sselection processes for determining executive compensation and the role of the HR Committee’s compensation consultant can be found in the “Compensation Discussion and Analysis” sectionbeginning on page 31 of this Proxy Statement.
Compensation Committee InterlocksDirector Refreshment
As noted in the table above, six of our director nominees have less than five years of experience on our Board and Insider Participationthis is intentional.
The committee members set forth above served as membersBoard uses refreshment processes to enable it to evaluate the continued alignment of the HR Committee during fiscal 2018. During fiscal 2018, none ofBoard’s membership with the current or former executive officers of Conagra Brands or any of its current employees served on the compensation committee (or equivalent) or the board of directors of another entity whose executive officer(s) served on the HR Committee or the Boardneeds of Conagra Brands.
Voting Item #1 – ElectionAs a result of Directorsour refreshment processes, our Board represents a mix of long-tenured directors and directors who provide new and different insights, expertise, and experiences.
Director Independence
Additional information aboutTo be considered independent, the roles and responsibilitiesBoard must affirmatively determine that a director has no material relationship with Conagra Brands. In making its independence determinations, the Board applies the listing standards of the HR Committee is provided inNew York Stock Exchange, or NYSE, and the “Compensation Discussion and Analysis” section of this Proxy Statement.
The Board’s Nominating, Governance and Public Affairs Committee
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Director Nomination Process
The N/G/PA Committee considers Board candidates suggested by Board members, management and shareholders. The N/G/PA Committee may also retain a third-party search firm to identify candidates. A shareholder recommending a prospective nominee for Board membership must notify our Corporate Secretary in writing at least 120 days before the annual meeting and include whatever supporting material the shareholder considers appropriate. The N/G/PA Committee will also consider nominations by a shareholder pursuant to the provisions of our amended and restated bylaws. See “Additional Information – Shareholder Proposals to be Included in our 2019 Proxy Statement” and “Additional Information – Other Shareholder Proposals to be Presented at our 2019 Annual Meeting.”
The N/G/PA Committee makes an initial determination as to whether to conduct a full evaluation of a director candidate once he or she has been identified. This initial determination is based on whether additional Board members are necessary or desirable. It is also based on whether, based on the information provided or otherwise available to the N/G/PA Committee, the prospective nominee is likely to satisfy the evaluation factors described below. If the N/G/PA Committee determines that additional consideration is warranted, it may request a third-party (e.g., a search firm) to gather additional information about the prospective director candidate. The N/G/PA Committee may also elect to interview a candidate.
The N/G/PA Committee evaluates each prospective director candidate against the standards and qualifications set forthcontained in our Corporate Governance Principles,Principles. The Board considers even immaterial relationships, including buttransactions, relationships, and arrangements with the company, in its decision-making process to ensure a complete view of each director’s independence.
The Board has determined that 11 of our 12 nominees for director – directors Arora, Brown, Chirico, Gregor, Horowitz, Johri, Lenny, Lora, Marshall, Omtvedt and Ostfeld – have no material relationships with Conagra Brands and are independent within the meaning of applicable independence standards. The Board also determined that Stephen Butler, who served as a director until his retirement in September 2020, had no material relationships with Conagra Brands and was independent within the meaning of applicable independence standards. Mr. Connolly is not limited to:considered to be independent due to his employment with Conagra Brands.
Board skill needs, taking into accountTo take a holistic approach to its independence determinations, the Board Skills Matrix and the experience of current Board members;
the candidate’s background, including demonstrated high standards of ethics and integrity, as well as the candidate’s ability to work toward business goals with other Board members;
whether the candidate has sufficient time to effectively carry out the duties of a director;
Voting Item #1 – Election of Directors
the candidate’s ability to represent all shareholders and not a particular interest group;
the candidate’s qualifications as independent and ability to serve on various committees of the Board;
diversity, including the extent to which the candidate reflects the composition of our constituencies; and
business experience, which should reflect a broad level of experience at the policy-making level.
With respect to Board diversity, the N/G/PA Committee assesses whether the Board, collectively, represents diverse views, backgrounds and experiences that will enhance the Board’s and our effectiveness. The N/G/PA Committee seeks directors who have qualities to achieve the goal of a well-rounded, diverse Board as a whole.
After completing its evaluation process, the N/G/PA Committee makes a recommendation to the full Board as to who should be nominated, and the Board determines the director nominees after considering the N/G/PA Committee’s recommendations. The evaluation process for nominees recommended by shareholders does not differ from the process set forth above.
The Board’s Role in Risk Oversight
Our senior leadership is responsible for identifying, assessing, and managing our exposure to risk. A component of this work is performed through twomanagement-led, Board-appointed committees: the Enterprise Risk Management Committee, which is chaired by our Chief Risk Officer and focuses on assessing and managing enterprise-wide risk, and the Risk Oversight Committee, which ischaired by our Chief Risk Officer and focuses on financial risk related to commodities, foreign currency, interest rate, credit, insurable risk, risk of loss and counterparty risk. The Board and its committees play an active role in overseeing management’s activities and ensuring that management’s plans are balanced from a risk/reward perspective. The Board and its committees perform this oversight through the following mechanisms.
Board Level Discussion
Each fiscal year, at least one Board meeting includes a discussion of our strategic plan and the longer-term risks and opportunities we face. At other times of the year, the Board receives reports from significant business units and functions. These presentations include a discussion of the business, regulatory, compliance, operational, and other risks associated with planned strategies and tactics, as well as succession planning matters.
Audit / Finance Committee Oversight
The Audit / Finance Committee’s charter requires it to review our processes for identifying and managing enterprise-wide risks facingalso reviewed commercial relationships between Conagra Brands including, butand companies on whose boards our nominees served during fiscal 2021. The relationships with these companies involved Conagra Brands’ purchase or sale of products and services in the ordinary course of business on arm’s-length terms in amounts and under other circumstances that did not limitedaffect the relevant directors’ independence under our Corporate Governance Principles or under applicable law and NYSE listing standards.
In addition to financial risks (such as derivative and treasury risks) and operational risks, and to overseesatisfying our risks related to capital structure, including borrowing, liquidity, and allocation of capital. The Audit / Finance Committee also oversees our management of financial risks by, among other things, reviewing our significant accounting policies and the activities of management’s Enterprise Risk Management Committee and Risk Oversight Committee, maintaining direct oversight of our Internal Audit function, holding regular executive sessions with our Chief Financial Officer and Controller, our head of Internal Audit, and our independent auditors, and receiving regular legal and regulatory updates. Our management provides an enterprise risk management report to the Audit / Finance Committee on a semi-annual basis. The Chairindependence standards, each member of the Audit / Finance Committee reportsof the Board must satisfy an additional Securities and Exchange Commission, or SEC, independence requirement. This requirement provides that the member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than his or her director’s compensation and may not be an “affiliated person” of Conagra Brands. Each member of the Audit / Finance Committee satisfies this additional independence requirement.
The SEC and NYSE have also adopted heightened standards relating to the full Board on its activities.
independence of members of the Human Resources Committee, Oversight
Thewhich we refer to as the HR Committee. These standards require consideration of the source of HR Committee reviews the company’s leadership development activitiesmembers’ compensation, including any consulting, advisory or other compensatory fees paid to ensure appropriate succession planning occursan HR Committee member, and reviews the relationship between the company’s compensation programs and risk. The Chaireach HR Committee member’s affiliation with us, any of our subsidiaries or any affiliates of our subsidiaries. Each member of the HR Committee reports to the full Board on its activities.satisfies these additional independence requirements.
23 CONAGRA BRANDS
Voting Item #1 – Election of Directors
Nominating, Governance and Public Affairs Committee Oversight
The N/G/PA Committee assists the Board in managing risks associated with Board organization, membership, and structure. It also assists management in the oversight of reputational risks and key public affairs matters. The Committee reviews the company’s policies and programs related to corporate citizenship, social responsibility, and public policy issues, such as sustainability, environmental responsibility, and philanthropic and political activities and contributions. The Chair of the N/G/PA Committee reports to the full Board on its activities.
Because issues related to risk oversight often overlap, certain issues may be addressed at both the committee and full Board level.
Our Corporate Governance Practices
Our Corporate Governance PracticesHow We Govern
Commitment to Board Best Practices
The Board is committed to performing its responsibilities in a manner consistent with sound governance practices. It routinely reviews its processes, assesses the regulatory and legislative environment, communicates with investors, and adoptsadapts its governance practices as needed thatto support informed, competent, and independent oversight on behalf of our shareholders. Our Corporate Governance Principles provide a summary of these practices and are available on our website at http://www.conagrabrands.com/investor-relations/corporate-governance/principles.principles. Highlights of our corporate governance practices include the following:
Fully Independent Key Committees | Critical aspects of the Board’s work are handled by three key standing committees, each of which is comprised solely of independent directors: an Audit/Finance Committee, a Human Resources Committee, and a Nominating and Corporate Governance Committee. | |
Annual Election of
|
To promote | |
Majority Voting in
Director Elections | To be elected in an uncontested election, a director nominee must receive the affirmative vote of a majority of the votes cast in the election. If an incumbent nominee is not elected, he or she is required to promptly tender a resignation to the Board, subject to acceptance or rejection by the Board. Within 90 days of the certification of the election results, the Board will publicly disclose its decision as to whether to accept or reject the resignation. | |
Executive Sessions |
The Board meets on a
| |
92% Director Independence | The Board has determined that | |
2021 PROXY STATEMENT 24
Independent Board Leadership |
The Board believes that independent Board leadership is a critical component of our governance structure. Since 2005, our Board Chairman and CEO roles have been separate. | |
Director Attendance
|
During fiscal Board members are | |
Board, Committee, Individual
|
Each of the Board, the Audit / Finance Committee, the HR Committee, and the | |
Our Corporate Governance Practicesannually.
Retirement Age | No director may be nominated to a new term if he or she would be over age 72 at the time of the election. | |
Orientation and Continuing Education | We conduct an orientation program for each new director as soon as possible following
Board members | |
Commitment
25 CONAGRA BRANDS
| Proxy Access | Our Amended and Restated Bylaws, or the Bylaws, permit shareholders to nominate directors through proxy access. Any shareholder, or group of up to 20 shareholders collectively, owning at least 3% of the outstanding shares of Conagra Brands common stock continuously for at least three years may nominate director candidates for inclusion in our proxy materials (not to exceed the greater of two candidates or 20% of the number of directors then in office). |
Board Leadership Structure
The Board believes that independent Board leadership is a critical component of our governance structure. Our Corporate Governance Principles require us to Compensation Best Practiceshave either an independent Board Chair or, if the positions of Chair and CEO are held by the same person, an independent lead director. Since 2005, our Chair and CEO roles have been separate. With separate Chair and CEO roles, our CEO can focus his time and energy on setting the strategic direction for the company, overseeing daily operations, engaging with external constituents, developing our leaders, building our culture, and promoting employee engagement at all levels of the organization. Meanwhile, our independent Chair leads the Board in the performance of its duties by establishing agendas and ensuring appropriate meeting content, engaging with the CEO and senior leadership team between Board meetings on business developments, and providing overall guidance to our CEO as to the Board’s views and perspectives, particularly on the strategic direction of the company.
Annual Advisory VoteBoard Committees — Overview
The Board has established four standing committees: the Audit / Finance Committee, the Executive Committee, the HR Committee, and the Nominating and Corporate Governance Committee. The Audit / Finance Committee, HR Committee and Nominating and Corporate Governance Committee operate under written charters that have been approved by the full Board; each of these three committees is comprised entirely of independent directors.
2021 PROXY STATEMENT 26
Membership on Named each of the Board’s standing committees as of August 2, 2021 is as follows:
| Name | Audit / Finance Committee | Executive Committee | HR Committee | Nominating and Corporate Governance Committee | ||||
Anil Arora | | |||||||
Tony Brown | | | ||||||
Manny Chirico | | |||||||
Sean M. Connolly | | |||||||
Joie A. Gregor | | | Chair | |||||
Fran Horowitz | | |||||||
Rajive Johri | | | ||||||
Richard H. Lenny | Chair | | | |||||
Melissa Lora | Chair | | ||||||
Ruth Ann Marshall | | Chair | | |||||
Craig P. Omtvedt | | |||||||
Scott Ostfeld | | |||||||
Total Meetings in FY2021 | 10 | -- | 5 | 6 | ||||
Executive Committee
The Executive Committee exists to act on behalf of the Board between meetings as exigency requires or at the request of the full Board. Its membership includes the Board Chair, the Chairs of each other standing Committee, and the Chief Executive Officer. During fiscal 2021, its membership was comprised of Directors Connolly, Gregor, Lenny (who served as Committee Chair), Lora and Marshall. It did not meet.
27 CONAGRA BRANDS
Audit / Finance Committee
Committee Members: | Primary Responsibilities | |||||||
Tony Brown Manny Chirico Fran Horowitz Rajive Johri Melissa Lora, Chair Craig P. Omtvedt |
| |||||||
Financial Expertise and Financial Literacy
The Board has determined that each director who served on the Audit / Finance Committee during fiscal 2021 (including Mr. Stephen Butler, who retired in September 2020) is financially literate within the meaning of NYSE rules and independent in accordance with SEC rules, NYSE listing standards, and the company’s independence standards. The Board also determined that directors Butler, Chirico, Johri, Lora and Omtvedt are qualified as audit committee financial experts within the meaning of SEC regulations.
Related-Party Transactions
The Audit / Finance Committee has adopted a written policy regarding the review, approval, and ratification of related-party transactions. Under the policy, all related-party transactions are subject to reasonable prior review and approval by the Audit / Finance Committee. In circumstances where it is not reasonable or practical to wait until the next Audit / Finance Committee meeting to review a proposed related-party transaction, the chair of the Audit / Finance Committee may review and approve such related-party transaction. Any such approval must be reported to and ratified by the Audit / Finance Committee at its next regular, in-person meeting.
In determining whether to approve or ratify a related-party transaction, the Audit / Finance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related-party’s interest in the transaction. No director is permitted to participate in any approval of a related-party transaction in which he or she is a related party, except that the Board member will provide all material information concerning the
2021 PROXY STATEMENT 28
related party transaction to the Audit / Finance Committee. On at least an annual basis, the Audit / Finance Committee reviews and assesses ongoing related-party transactions to determine whether they comply with the company’s guidelines and that the relationships remain appropriate. All related-party transactions are disclosed to the full Board.
During fiscal 2021, one related party transaction arose. David B. Biegger served as the company’s Executive Vice President and Chief Supply Chain Officer Compensation
Consistentuntil his retirement at fiscal year-end. One of Mr. Biegger’s immediate family members is employed by the company as a Senior Brand Manager and earned total compensation in excess of $120,000. The immediate family member’s position did not report, directly or indirectly, to Mr. Biegger. In addition, the individual is compensated in a manner that is appropriate for their responsibilities and experience and in accordance with standard compensation practices available to other individuals in comparable roles. The relationship described was reviewed and ratified in accordance with our shareholders’ preferencepolicy for review of transactions with related persons.
Human Resources Committee
Committee Members: | Primary Responsibilities | |||||||
Anil Arora Joie A. Gregor Richard H. Lenny Ruth Ann Marshall, Chair Scott Ostfeld |
| |||||||
Executive and Director Compensation
The HR Committee has retained authority over the determination of executive and non-employee director compensation, subject only to the further involvement of the other independent directors with respect to the approval of the overall compensation for non-employee directors and any base salary change for the CEO. The HR Committee may delegate its responsibilities to subcommittees comprised of one or more HR Committee members or to selected members of management, subject to requirements of our Bylaws and applicable laws, regulations, and the terms of
29 CONAGRA BRANDS
shareholder-approved compensation plans. Additional information about the HR Committee’s processes for determining executive compensation, as indicatedwell as the role of executive officers and the HR Committee’s compensation consultant in those determinations, can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Human Capital Management
In addition to leading the Board’s oversight of senior executive succession planning, the HR Committee oversees management’s work related to ensuring employees at the 2017 Annual Meetingall levels of Shareholders, our shareholders are given an opportunity every year to vote, on an advisory basis, to approve our named executive officer compensation.
Stock Ownership Guidelines for Directors and Senior Leadership
Directors and senior leaders across the company are subjectfully engaged and realizing their potential. The HR Committee’s review of the company’s human capital management initiatives includes, but is not limited to:
| • | talent acquisition, development, assessment, and retention of employees; |
| • | diversity and inclusion goals and results; and |
| • | the company’s culture and its connection to overall strategy. |
The HR Committee receives regular reports from management and, for some topics, external advisors, on the company’s talent strategy. During fiscal 2021, the Committee reviewed topics including:
| • | our diversity and inclusion strategy; |
| • | trends in workforce management, particularly in light of COVID-19; and |
| • | opportunities to further leverage technology in developing workforce analytics. |
The HR Committee also reviews the human capital strategic plan and progress on work underway to stock ownership guidelines. Allensure Conagra achieves its vision of having the most energized, highest impact culture in food.
non-employeeCompensation Committee Interlocks and Insider Participation
The individuals listed in the table above are the only individuals to have served on the HR Committee during fiscal 2021. During fiscal 2021, no member of the HR Committee was an employee, officer, or former officer of the company. None of our executive officers served during fiscal 2021 on the board of directors or compensation committee (or other committee serving an equivalent function) of any entity that had an executive officer serving as a member of our Board or the HR Committee.
Additional information about the roles and responsibilities of the HR Committee is provided in the “Compensation Discussion and Analysis” section of this Proxy Statement.
2021 PROXY STATEMENT 30
Nominating and Corporate Governance Committee
Committee Members: | Primary Responsibilities | |||||||
Tony Brown Joie A. Gregor, Chair Rajive Johri Richard H. Lenny Ruth Ann Marshall |
| |||||||
Director Nomination Process
The Nominating and Corporate Governance Committee considers Board candidates suggested by Board members, management, and shareholders. During fiscal 2021, the Nominating and Corporate Governance Committee also retained a third-party search firm to identify director candidates. The Nominating and Corporate Governance Committee provided the third-party search firm with guidance as to the skills, experience and qualifications that the Nominating and Corporate Governance Committee was seeking in potential candidates, and the search firm identified candidates for the Nominating and Corporate Governance Committee’s consideration.
When a potential candidate is brought to the Board’s attention, the Nominating and Corporate Governance Committee makes an initial determination as to whether to conduct a full evaluation of the individual. This initial determination is based on whether additional Board members are necessary or desirable. It is also based on whether, based on the information provided or otherwise available to the Nominating and Corporate Governance Committee, the prospective nominee is likely to satisfy the evaluation factors described below. If the Nominating and Corporate Governance Committee determines that additional consideration is warranted, it may request a third-party to gather additional information about the prospective director candidate. The Nominating and Corporate Governance Committee may also elect to interview a candidate.
Although the Nominating and Corporate Governance Committee does not have specific minimum qualifications that must be met for a candidate to be nominated as a director, the Nominating and Corporate Governance Committee evaluates each prospective director candidate against the standards and qualifications set forth in our Corporate Governance Principles, including, but not limited to:
| • | Board skill needs, considering the qualifications and skills outlined on page 22 of this Proxy Statement and the experience of current Board members; |
| • | the candidate’s background, including demonstrated high standards of ethics and integrity, as well as the candidate’s ability to work toward business goals with other Board members; |
| • | diversity, including the extent to which the candidate reflects the composition of our constituencies; |
| • | whether the candidate has sufficient time to effectively carry out the duties of a director; |
31 CONAGRA BRANDS
| • | the candidate’s qualifications as independent and ability to serve on various committees of the Board; and |
| • | business experience, which should reflect a broad level of experience at the policy-making level. |
In evaluating potential director nominees, the Nominating and Corporate Governance Committee assesses whether the Board, collectively, represents diverse views, perspectives, backgrounds, and experiences that will enhance the Board’s and our effectiveness. The Nominating and Corporate Governance Committee seeks directors are expectedwho have qualities to acquireachieve the goal of a well-rounded, diverse Board as a whole, including through the consideration of diversity in professional experience, skills, board tenure, race, ethnicity, gender, and hold during their tenureage.
After completing its evaluation process, the Nominating and Corporate Governance Committee makes a recommendation to the Board as to who should be nominated, and the Board determines the director nominees after considering the Nominating and Corporate Governance Committee’s recommendations.
The evaluation process for nominees recommended by shareholders does not differ from the process set forth above. Shareholders wishing to submit candidates for election as directors must notify our Corporate Secretary in writing by delivering or mailing a notice to our principal executive offices at 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654. Such submissions must comply with the requirements set forth in our Bylaws, including advance notice procedures.
Shareholders may also directly nominate candidates pursuant to our “proxy access” Bylaws.
Ability of Shareholders to Nominate Directors via Proxy Access
If a shareholder or group of shareholders wishes to nominate a candidate directly, they may do so in accordance with the provisions set forth in our Bylaws. Specifically, our Bylaws permit any shareholder, or group of up to 20 shareholders collectively owning 3% or more of our outstanding shares of Conagra Brands common stock with a value ofcontinuously for at least $500,000. Directors are expectedthree years to acquire these shares within five years following their firstnominate and include in our proxy materials director nominees for election to the Board. Current ownership levelsA shareholder or shareholders, as applicable, can nominate up to the greater of:
| • | 20% of the total number of directors on the Board, rounding down to the nearest whole number, and |
| • | two directors, |
all in accordance with the requirements set forth more fully in our Bylaws.
Under our Bylaws, requests to include shareholder-nominated candidates for director in ournon-employee Board members are detailed proxy materials through this process must be received no earlier than 150 days and no later than 120 days prior to the first anniversary of the date on which our definitive proxy statement for the prior year’s annual meeting of shareholders was first released to shareholders.
During fiscal 2021, Mr. Manny Chirico joined the Board. Mr. Chirico was identified as a director candidate by a third-party search firm. After evaluating Mr. Chirico in the sectionmanner described above and considering input from our other independent directors and our CEO, the Nominating and Corporate Governance Committee identified Mr. Chirico as a director candidate and recommended him as a nominee to the Board. The Board unanimously approved the recommendation.
The Board’s Role in Risk Oversight
Our senior leadership is responsible for identifying, assessing, and managing our exposure to risk. The Board and its committees play an active role in overseeing management’s activities and ensuring that management’s plans are balanced from a risk/reward perspective. The Board and its committees perform this oversight through a variety of this Proxy Statement entitledmechanisms.
“Non-Employee2021 PROXY STATEMENT Director Compensation – Director Stock Ownership Requirements.”32
Board-Level Discussions
Each fiscal year, the Board reviews and discusses our strategic plan and the longer-term risks and opportunities we face. The Board routinely receives reports from significant business units and functions, and these presentations include a discussion of the business, regulatory, compliance, operational, and other risks associated with planned strategies and tactics. The Board also receives regular reports regarding the activities of management’s Enterprise Risk Management Committee, which focuses on assessing and monitoring enterprise-wide risk.
Without the right talent, we cannot implement the strategies we devise. Oversight of the company’s approach to and investment in human capital management and talent development are thus key governance matters for the Board. Directly, and through its HR Committee, the Board engages regularly with management on human capital matters. Specific HR Committee activities are supplemented by full Board actions. For example, the full Board receives an annual succession planning presentation from management during which potential successors to senior leader acrossleadership roles are discussed, arranges opportunities to engage directly with emerging talent in the organization, and discusses the evolution of Conagra’s culture in the context of the CEO’s annual goals and objectives.
During fiscal 2021, the full Board also spent time at each of its regularly scheduled meetings discussing risks associated with the COVID-19 pandemic. Among the topics discussed were:
| • | COVID-19 case trends within our employee population |
| • | Incremental health and safety practices incorporated into our operations, as well as efforts to secure vaccinations for our employees |
| • | Risks associated with our ability to supply to the heightened levels of demand as consumers ate more at home |
| • | The ability of our supply chain partners to deliver on their commitments to us |
| • | Heightened cybersecurity risks associated with the need for our office-based staff to work from home |
| • | Our ability to provide a philanthropic response |
Audit / Finance Committee Oversight
The Audit / Finance Committee’s charter requires it to review our processes for identifying and managing enterprise-wide risks facing the company, is subjectincluding, but not limited to, stock ownership guidelines equalfinancial risks (such as derivative and treasury risks), cybersecurity and information technology risks, and operational risks, and to a multipleoversee our risks related to capital structure, including borrowing, liquidity, and allocation of that person’s salary. Sean Connolly,capital. The Audit / Finance Committee also oversees our Presidentmanagement of financial risks by, among other things, reviewing our significant accounting policies and CEO, is required to own sharesthe activities of management’s Enterprise Risk Management Committee, maintaining oversight of our common stock havingInternal Audit function, holding regular executive sessions with our Chief Financial Officer and Controller, our head of Internal Audit, and our independent auditors, and receiving regular legal and regulatory updates from legal counsel. Our management provides an enterprise risk management report to the Audit / Finance Committee on a value of at least six times his salary, and each of our other named executive officers is required to own shares of our common stock having a value of at least three or four times his or her salary. See the section of this Proxy Statement entitled “Compensation Discussion and Analysis – Additional Information on Compensation Practices – Committee’s Views on Executive Stock Ownership” for a summarysemi-annual basis.
The Chair of the stock ownershipAudit / Finance Committee reports to the Board on the Committee’s activities.
Human Resources Committee Oversight
The HR Committee reviews the company’s leadership development activities to ensure appropriate succession planning occurs. This includes the establishment of each named executive officer.
Anti-Pledging / Hedging Policy
Our directors and executive officers, including our named executive officers, are prohibited from pledging their shares of Conagra Brands stock or hedging their ownership of Conagra Brands stock, including by trading in publicly-traded options, puts, calls, or other derivative instruments related to Conagra Brands stock or debt.
Clawback Policy
We have a clawback policy that requires excess amounts paid to any of our senior officers under our incentive compensation programs to be recoveredan emergency succession protocol in the event of the CEO’s sudden incapacity or departure.
33 CONAGRA BRANDS
The HR Committee also reviews the relationship between the company’s compensation programs and risk and has adopted a series of policies and practices to reduce risk in our compensation programs. These policies and practices include, but are not limited to, the following:
| Annual Advisory Vote on Named Executive Officer Compensation | Consistent with our shareholders’ preference, last indicated at the 2017 Annual Meeting of Shareholders, our shareholders are given an opportunity every year to vote, on an advisory basis, to approve our named executive officer compensation. | |||
Stock Ownership Guidelines for Directors and Senior Leaders | Directors and senior leaders across the company are subject to stock ownership guidelines. All non-employee directors are expected to acquire and hold during their tenure shares of our common stock with a value of at least $500,000. Each senior leader across the company is subject to stock ownership guidelines equal to a multiple of that person’s salary. Mr. Connolly, our President and CEO, is required to own shares of our common stock having a value of at least six times his salary, and each of our other named executive officers is required to own shares of our common stock having a value of at least three or four times his or her salary. | |||
Anti-Pledging / Hedging Policy | Our directors and executive officers, including our named executive officers, are prohibited from pledging their shares of company stock or hedging their ownership of company stock, including by trading in publicly-traded options, puts, calls, or other derivative instruments related to company stock or debt. Our hedging policy for directors and executive officers does not apply to other employees. | |||
Clawback Policy | We have a clawback policy that requires excess amounts paid to any of our senior officers under our incentive compensation programs to be recovered in the event of a material restatement of our financial statements for fiscal 2013 or later fiscal years, when such restatement results from the fraudulent, dishonest, or reckless actions of the senior officer. | |||
The Chair of the senior officer.HR Committee reports to the Board on the Committee’s activities.
Nominating and Corporate Governance Committee Oversight
The Nominating and Corporate Governance Committee assists the Board in managing risks associated with Board organization, membership, and structure.
The Committee also assists management in the oversight of environmental, social, and governance risks. The Committee reviews the company’s policies and programs related to corporate citizenship, social responsibility, and public policy issues, such as environmental sustainability and philanthropic giving. The Nominating and Corporate Governance Committee also oversees the modest political activities of the company, including political contributions and lobbying expenditures, to ensure they focus on adding shareholder value and enhancing our position as a good corporate citizen. We publish a report of these activities on our website.
The Chair of the Nominating and Corporate Governance Committee reports to the Board on the Committee’s activities.
2021 PROXY STATEMENT 34
Our Corporate Governance Practices
Commitment to Investor Engagement
We conduct
Our management team conducts investor outreach throughout the year. Our efforts help ensure that management and the Board understand and consider the issues that matter most to our stockholders and allow us to effectively address them. Management regularly attends investor conferences and holdsone-on-one meetings and calls with investors, and also has the opportunity to directly interact with investors and analysts during our quarterly earnings conference calls.
Commitment to Investing in Our People
We recognize that our employees are our greatest asset, and we strive to be a talent magnet. We are committed to our employees’ safety, development, and wellness. We take pride in attracting, retaining, and developing top talent, and we offer competitive compensation and benefit packages. We also provide comprehensive learning and development programs for our employees that begin immediately upon hire and continue throughout our employees’ careers.
Commitment to Sustainable Business Practices and Corporate Citizenship
We believe that we have an obligation to be a good steward of the environment, give back to the communities we serve, and drive economic gain for stakeholders. These commitments are ingrained in our operations and our processes and have become a partshareholders. Examples of our culture. We have established clear corporate citizenship goals, and we favor transparency with stakeholders on our corporate responsibility progress. We are proud of our focus on corporate citizenship, and we routinely discuss these matters with the N/G/PA Committee.
A few examples of our many corporate responsibility achievements in recent yearsapproach include the following:
| • | Management regularly attends investor conferences, holds one-on-one and small group meetings and calls with investors, and also interacts with investors and the analyst community during our quarterly earnings conference calls. |
| • | On two occasions over the last five years, management has hosted a large-scale investor day event at our corporate headquarters and webcast the presentations live. The company intends to host another investor meeting in the spring of 2022. |
| • | Our Investor Relations team is available to respond to investor inquiries and can be reached via email at IR@conagra.com or by telephone at (312) 549-5002. |
| • | At each regular meeting of the Board of Directors, management provides an Investor Relations review to ensure the Board is apprised of the most up-to-date perspectives of the investment community. |
We publish an annual Citizenship Report, whichwelcome opportunities to engage and receive feedback directly from our shareholders and other key stakeholders and believe that such engagement is periodically updated and is available oncritical to our website athttp://www.conagrabrands.com/our-company/corporate-social-responsibility/citizenship-reports.
We sponsor an annual, internal Sustainable Development Awards program, which is intended to drive and reward innovative approaches to sustainability. During fiscal 2018, employees entered 57 projects ineffectiveness. You may contact any of our directors individually, any Committee of the program. Together, these projects reduced wasteBoard, our independent directors as a group, our Chairman of the Board, or the Board generally by more than 9,200 tons, optimized and improved packaging while using 1,400 fewer tonswriting to:
Chairman of material, conserved more than 170 million gallons of water, and reduced greenhouse gas emissions by more than 5,900 metric tons.
Conagra Brands employees volunteered approximately 5,600 hours during our April 2018 monthBoard of service. This year, 117 volunteer projects were organizedDirectors
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Communications are reviewed by employees across 18 statesthe Corporate Secretary and, 5countries. With nearly 2,300 employees taking part, our activities generatedif appropriate, by Internal Audit, and forwarded to the equivalent of 639,169 meals for people facing food insecurity.
For more than 20 years,addressee(s). The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to Conagra Brands or our business, or determined to pose a possible security risk to the addressee.
You may also communicate with us by attending the Annual Meeting and the Conagra Brands Foundation have been leading the fight against hunger. Through a longstanding partnership with the Feeding America network, we have provided more than 475 million pounds of food and invested more than $46 millionvoting. We encourage you to help alleviate hunger over this time.
Commitment to Political Contributions and Lobbying Expenditure Oversight
The N/G/PA Committee receives reportsshare your feedback by voting on the modest political activities of the company. Our political expenditures are limited, and we focus on matters that we believe will create or preserve shareholder value. We publish a report of these activities on our website at http://www.conagrabrands.com/investor-relations/corporate-governance/political-activity-disclosure.
Our Corporate Governance Practices
Corporate Governance Materials Available on Our Website
To learn more about our governance practices, you can review any of the following listed documents at http://www.conagrabrands.com/investor-relations/corporate-governance:
• Audit / Finance Committee Charter | • HR Committee Charter | |
• Nominating and Corporate Governance Committee Charter | • Procedures for bringing concerns or complaints to the attention of the Audit / Finance Committee | |
• Corporate Governance Principles | • Political Activity Disclosure | |
• Code of Ethics for Senior Corporate Officers | • Code of Conduct | |
• Procedures for communicating with the Board | ||
From time to time these documents are updated, and we promptly post the updated documents toon our website. The information on our website is not, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference into any of our other filings with the SEC. TheThese documents are also available in print to any shareholder who requests them from the Corporate Secretary of Conagra Brands.Secretary.
Communications with the Board
Interested parties may communicate with the members of the Board, ournon-management 35 CONAGRA BRANDS directors as a group, or the Chairman of the Board by writing to:
Conagra Brands Board of Directors
c/o Corporate Secretary, Conagra Brands, Inc.
222 Merchandise Mart Plaza, Suite 1300
Chicago, Illinois 60654
Communications are compiled by the Corporate Secretary and forwarded to the addressee(s) on at least abi-weekly basis. The Corporate Secretary routinely filters communications that are solicitations, consumer complaints, unrelated to Conagra Brands, or Conagra Brands’ business or determined to pose a possible security risk to the addressee.
Non-Employee Director Compensation
Non-Employee Director CompensationHow We Are Compensated
We use a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on the Board. On an annual basis, the HR Committee recommends thenon-employee director compensation program to the full Board for approval. In setting director compensation, the HR Committee receives input from FWFrederic W. Cook & Co., Inc. (FW Cook), its independent compensation consultant, on factors including the time commitment and skill level required to serve on the Board, as well as broader market practices. In addition, our shareholder-approved Conagra Brands, Inc. 2014 Stock Plan places limitsa limit on the equity awards that may be awarded to each non-employee directorsdirector in any fiscal year.
A summary ofnon-employee director compensation for fiscal 20182021 is set forth below.
Non-Employee Director Compensation –— Directors Other than the ChairmanBoard Chair
The following table summarizes the compensation program for ournon-employee directors other than the ChairmanBoard Chair that was in effect during fiscal 2018:2021. No changes were made to the compensation program described below from fiscal 2020 to fiscal 2021.
Annual Cash Retainer: |
| $100,000 per year(1) | ||
Annual Chair Retainer(2): |
| |
| $20,000 for each Committee Chair(1) | |
Meeting Fees: | None, unless the director’s attendance is required at more than a total of 24 Board and Committee meetings during a fiscal year. A fee of $1,500 is paid for each meeting attended and at which a | |
Equity Compensation: | A grant of restricted stock units, or RSUs, with a value equal to $150,000, effective on the first trading day of the fiscal year(3) | |
| (1) | Directors who join the Board or who are elected as the Chair of a Committee after the start of a fiscal quarter receive a prorated retainer for that quarter based on the number of days served. |
| (2) | Excludes the Executive Committee. No retainer is paid for service to this Committee. |
| (3) | Directors who join the Board after the start of a fiscal year receive a prorated grant for that year based on the number of partial and full months served. |
The compensation program described above reflectsAll non-employee directors (other than the following Board-approved increases overChair) serving as of the first trading day of fiscal 2017,2021 received 4,453 RSUs on June 1, 2020 (targeted value of $150,000). These RSUs vested on June 1, 2021. In connection with his appointment to the Board in February 2021, Mr. Chirico received 1,448 RSUs on March 1, 2021 (target value of $50,000), which were approved after a revieware scheduled to vest on March 1, 2022.
Vesting of company and market practice: (1) a $10,000 increasethe RSUs in the annual cash retainer; (2) a $10,000 increase in equity compensation (RSU) value; and (3) a $5,000 increase to each Committee Chair retainer.
The number of RSUs granted to eachnon-employee director other than the Chairman was determined by dividing $150,000 by the average closing price of our common stock on the NYSE for the thirty trading days prior to the grant date of May 30, 2017. The RSUs vested one year from the date of grant and were subject to continued service during the entire term of the RSUs. Vesting would have beencompensation program is accelerated in the event of death or permanent disability. If thea director wasis no longer serving one year from the date of grant, vesting wasis prorated 25% for each fiscal quarter during which the director served for any amount of time.
Dividend equivalents wereare paid on the RSUs at the regular dividend rate in shares of our common stock.
2021 PROXY STATEMENT 36
Non-Employee Director Compensation
Non-employee directors other than the Chairman who join the Board or who are elected to a Chairmanship after the start of the fiscal year are entitled to receive a prorated retainer (based on the actual number of days of service).Non-employee directors other than the Chairman who join the Board after the start of the fiscal year are also entitled to receive a prorated RSU grant (based on the number of months remaining in the fiscal year at that time).
Non-Employee Director Compensation – Chairman— Board Chair
In lieu of the elements described above, the Chairman’sBoard Chair’s compensation for fiscal 20182021 consisted of a grant of RSUs with a targeted value equal to $425,000, with the$425,000. The number of RSUs granted, 12,618, was determined by dividing $425,000 by the average closing price of our common stock on the NYSE for the thirty30 trading days prior to the grant date of May 30, 2017. This reflects a Board-approved $25,000 increase over fiscal 2017’s amount.June 1, 2020. The material terms of the RSUs were identical to those described above for the other non-employee directors other than the Chairman.directors.
OtherNon-Employee Director Compensation Programs
In addition to the cash payments and equity awards described above, all non-employee directors were entitled to participate in the following programs during fiscal 2018:
Medical plan access was available to directors who were enrolled in the plan by December 22, 2014, with the cost of the premium borne entirely by the director. Directors who were not enrolled by that date were not eligible to participate;
A matching gifts program was available to allnon-employee directors; Conagra Brands matched up to $10,000 of a director’s charitable donations per fiscal year; and
A nonqualified deferred compensation plan was available to allnon-employee directors. This plan providednon-employee directors the ability to defer receipt of their cash or stock compensation. This program did not provide above-market or preferential earnings (as defined by SEC rules).
Director Compensation Table – Fiscal 2018
Mr. Arora joined the Board effective July 17, 2018, after the end of fiscal 2018. He did not receive any director compensation from us for fiscal 2018.
Name
| Fees Earned or Paid in Cash ($)(1)
| Stock Awards ($)(2)
| All Other Compensation ($)(3)
| Total ($)
| ||||||||||||||||
Bradley A. Alford
|
| 100,000
|
|
| 149,650
|
| 7,000
|
| 256,650
|
| ||||||||||
Thomas K. Brown
|
| 100,000
|
|
| 149,650
|
| -
|
| 249,650
|
| ||||||||||
Stephen G. Butler
|
| 120,000
|
|
| 149,650
|
| 10,000
|
| 279,650
|
| ||||||||||
Thomas W. Dickson
|
| 100,000
|
|
| 149,650
|
| -
|
| 249,650
|
| ||||||||||
Steven F. Goldstone
|
| -
|
|
| 424,067
|
| 10,000
|
| 434,067
|
| ||||||||||
Joie A. Gregor
|
| 104,500
|
|
| 149,650
|
| 10,000
|
| 264,150
|
| ||||||||||
Rajive Johri
|
| 100,000
|
|
| 149,650
|
| 10,000
|
| 259,650
|
| ||||||||||
Richard H. Lenny
|
| 120,000
|
|
| 149,650
|
| 10,000
|
| 279,650
|
| ||||||||||
Ruth Ann Marshall
|
| 120,000
|
|
| 149,650
|
| 10,000
|
| 279,650
|
| ||||||||||
Craig P. Omtvedt
|
| 100,000
|
|
| 149,650
|
| 10,000
|
| 259,650
|
| ||||||||||
|
Non-Employee Director Compensation2021:
A matching gifts program was available to all non-employee directors. Conagra Brands matched up to $10,000 of a director’s charitable donations made during the fiscal |
A nonqualified deferred compensation plan was available to all non-employee directors. This |
Name
| Outstanding Stock Awards Held at FYE (#) (a)
| Outstanding Stock Options Held at FYE (#)
| ||||||
Bradley A. Alford |
| 3,956
|
|
| -
|
| ||
Thomas K. Brown |
| 3,956
|
|
| -
|
| ||
Stephen G. Butler |
| 3,956
|
|
| 20,153
|
| ||
Thomas W. Dickson |
| 3,956
|
|
| -
|
| ||
Steven F. Goldstone |
| 11,210
|
|
| 409,881
|
| ||
Joie A. Gregor |
| 3,956
|
|
| -
|
| ||
Rajive Johri |
| 3,956
|
|
| -
|
| ||
Richard H. Lenny |
| 3,956
|
|
| 27,206
|
| ||
Ruth Ann Marshall |
| 3,956
|
|
| 26,199
|
| ||
Craig P. Omtvedt
|
| 3,956
|
|
| -
|
| ||
(a) For Mr. Goldstone, includes 201 dividend equivalents accrued on RSUs. For all othernon-employee directors, includes 71 dividend equivalents accrued on RSUs.
|
Non-Employee Director Compensation
Director Stock Ownership Requirements
The Board has adopted stock ownership requirements for itsnon-employee directors. Allnon-employee directors including the Chairman, are expected to acquire and hold shares of common stock of Conagra Brands during their tenure with a value of at least $500,000. All directors must acquire this ownership level within five years following their first election to the Board. Shares personally acquired by thenon-employee directors through open market purchases, orshares acquired upon settlement of RSUs, and shares acquired upon the deferral of fees, are counted toward the ownership requirement. Unexercised stock options are not counted. Prior to meeting the guideline,
non-employee 37 CONAGRA BRANDS
Non-employee directors agree not to sell any shares of company common stock of Conagra until they have reached the guideline. The following table reflectsDuring fiscal 2021, all of our Board members met the stock ownership as of July 31, 2018, ofnon-employee directors who were serving as ofguidelines or followed the end of fiscal 2018. Mr. Arora joined the Board effective July 17, 2018, after the end of fiscal 2018 and is therefore excluded from the table below.retention requirement.
Director
| Stock Ownership Guideline
| Actual Ownership (1)
| ||
Mr. Alford(2)
| $500,000
| $1,892,443
| ||
Mr. Brown(2)
| $500,000
| $859,895
| ||
Mr. Butler
| $500,000
| $4,583,037
| ||
Mr. Dickson(2)
| $500,000
| $514,454
| ||
Mr. Goldstone
| $500,000
| $13,438,629
| ||
Ms. Gregor
| $500,000
| $2,143,235
| ||
Mr. Johri
| $500,000
| $2,320,077
| ||
Mr. Lenny
| $500,000
| $2,199,959
| ||
Ms. Marshall
| $500,000
| $3,471,134
| ||
Mr. Omtvedt(2) | $500,000 | $363,686 | ||
| Director Compensation Table – Fiscal 2021 |
Name
| Fees Earned or Paid in ($)
| Stock Awards ($)(1)
| All Other Compensation ($)(2)
| Total ($)
| ||||
Anil Arora | 100,000 | 154,608 | 10,000 | 264,608 | ||||
Thomas K. Brown | 100,000 | 154,608 | 5,000 | 259,608 | ||||
Stephen G. Butler (3) | 60,000 | 77,321 | 10,000 | 147,321 | ||||
Manny Chirico (4) | 32,692 | 49,449 | — | 82,141 | ||||
Joie A. Gregor | 120,000 | 154,608 | 10,000 | 284,608 | ||||
Rajive Johri | 100,000 | 154,608 | 10,000 | 264,608 | ||||
Richard H. Lenny | — | 438,097 | 10,000 | 448,097 | ||||
Melissa Lora | 110,000 | 154,608 | 10,000 | 274,608 | ||||
Ruth Ann Marshall | 120,000 | 154,608 | 10,000 | 284,608 | ||||
Craig P. Omtvedt | 100,000 | 154,608 | 10,000 | 264,608 | ||||
Scott Ostfeld (5) | 100,000 | 154,608 | — | 254,608 | ||||
| (1) |
|
| (2) |
|
| (3) | Mr. Butler ceased Board service following our Annual Meeting of Shareholders on September 23, 2020. |
| (4) | Mr. Chirico was appointed to the Board |
| (5) | With the approval of the Board, Mr. Ostfeld has assigned his compensation for Board services to JANA Partners LLC. |
2021 PROXY STATEMENT 38
The Audit / Finance Committee Reporthas sole authority to appoint, retain, compensate, oversee, and terminate our independent auditor. In addition, the Committee evaluates and ensures the rotation of the lead audit partner as our independent auditor and will, if it deems it advisable, consider the rotation of the audit firm.
The Audit / Finance Committee has appointed KPMG LLP, an independent registered public accounting firm, as our independent auditor for fiscal 2022 to conduct the audit of our financial statements. KPMG LLP has conducted the audits of our financial statements since fiscal 2006. Since that time, five different partners of the firm have served as the audit lead. The Audit / Finance Committee and the Board request that the shareholders ratify this appointment.
Representatives from KPMG LLP are expected to be present at the Annual Meeting. The representatives will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If shareholders do not ratify the appointment of KPMG LLP as our independent auditor, the Audit / Finance Committee will reconsider the appointment. Even if the appointment of KPMG LLP is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in the company’s and its shareholders’ best interests.
Fees billed by KPMG LLP for services provided for fiscal years 2021 and 2020 were as follows:
Fiscal 2021 | Fiscal 2020 | |||
Audit Fees | $5,664,000 | $5,737,000 | ||
Audit-Related Fees | 54,000 | 38,000 | ||
Tax Fees | 11,000 | 12,000 | ||
All Other Fees | 9,000 | 2,000 | ||
Total Fees | $5,738,000 | $5,789,000 | ||
| • | Audit Fees. Audit fees consist of the audits of our annual financial statements, the reviews of our quarterly financial statements and foreign statutory audits. |
| • | Audit-Related Fees. In fiscal years 2021 and 2020, audit-related fees consisted of a pension plan audit, a compilation engagement, and other attestation services. |
| • | Tax Fees. In fiscal years 2021 and 2020, tax fees consisted of tax consultation and tax compliance services. |
| • | All Other Fees. In fiscal years 2021 and 2020, other fees consisted of fees for access to an online accounting research and disclosure tool and training platform. |
The Audit / Finance Committee pre-approves all audit and non-audit services performed by our independent auditor. The Audit / Finance Committee will periodically grant a general pre-approval of categories of audit and non-audit services. Any other services must be specifically approved by the Audit / Finance Committee, and any proposed services exceeding pre-approved cost levels must be specifically pre-approved by the Audit / Finance Committee. In periods between Audit / Finance Committee meetings, the Chair of the Audit / Finance Committee has been delegated authority from the Audit / Finance Committee to pre-approve additional services; any such pre-approvals are subsequently communicated to the full Audit / Finance Committee at its next meeting.
The Audit / Finance Committee approved 100% of the services performed by KPMG LLP that were billed as Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees during fiscal years 2021 and 2020.
The Board of Directors recommends a vote “FOR” the ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2022.
2021 PROXY STATEMENT 40
Audit / Finance Committee Report
The Audit / Finance Committee assists the Board in fulfilling its oversight responsibilities by reviewing (1) the integrity of the financial statements of the company, (2) the qualifications, independence and performance of the company’s independent auditor and internal audit department, (3) the compliance by the company with legal and regulatory requirements, and (4) the company’s perspectives on financing strategies and capital structure.structure, in light of its strategic long range plans. The Audit / Finance Committee acts under a written charter, adopted by the Board, a copy of which is available on our website.
Management is responsible for the company’s financial reporting process and internal controls. TheOur independent auditor is responsible for performing an independent audit of the company’s consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles and assessing the effectiveness of the company’s internal control over financial reporting. The Audit / Finance Committee oversees the company’s financial reporting process and internal controls on behalf of the Board.
The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee, and terminate theour independent auditor. The Audit / Finance Committee reviews the company’s annual audited financial statements, quarterly financial statements, and other filings with the SEC. The Audit / Finance Committee reviews reports on various matters, including: (1) critical accounting policies of the company; (2) material written communications between theour independent auditor and management; (3) theour independent auditor’s internal quality-control procedures; (4) significant changes in the company’s selection or application of accounting principles; and (5) the effect of regulatory and accounting initiatives on the financial statements of the company. The Audit / Finance Committee also has the authority to conduct investigations within the scope of its responsibilities and to retain legal, accounting, and other advisors to assist the Audit / Finance Committee in its functions.
During the last fiscal year, the Audit / Finance Committee met and held discussions with representatives of Conagra Brands’ management, its internal audit staff, and KPMG LLP, Conagra Brands’ independent auditor. Representatives of financial management, the internal audit staff, and theour independent auditor have unrestricted access to the Audit / Finance Committee and periodically meet privately with the Audit / Finance Committee. The Audit / Finance Committee reviewed and discussed with the company’s management and KPMG LLP the audited financial statements contained in the company’s Annual Report on Form10-K for the fiscal year ended May 27, 2018.30, 2021.
The Audit / Finance Committee also discussed with theour independent auditor the matters required to be discussed by the auditor with the Audit / Finance Committee under applicable requirements of the Public Company Accounting Oversight Board, regardingor the independent auditor’s communications withPCAOB, and the Audit Committee, as well as by SEC regulations.SEC. The Audit / Finance Committee also reviewed and discussed with KPMG LLP its independence and, as part of that review, received the written disclosures and the letter from KPMG LLP required by applicable professional and regulatory standards relating to KPMG’srequirements of the PCAOB regarding KPMG LLP’s communications with the Audit / Finance Committee concerning independence from Conagra Brands, including those of the Public Company Accounting Oversight Board.Brands. The Audit / Finance Committee also considered whether the provision ofnon-audit services provided by KPMG LLP to the company during fiscal 20182021 was compatible with the auditor’s independence.
Based on these reviews and discussions and the report of theour independent auditor, the Audit / Finance Committee recommended to the Board, and the Board approved, that the audited financial statements be included in the company’s Annual Report on Form10-K for the fiscal year ended May 27, 201830, 2021 for filing with the SEC.
Conagra Brands, Inc. Audit / Finance Committee
| Rajive Johri | ||||
| Melissa Lora, Chair | Craig P. Omtvedt | |||
Voting Item #2: Ratification of the Appointment of Our Independent Auditor for FY2019
|
The Audit / Finance Committee has sole authority to appoint, retain, compensate, oversee and terminate the independent auditor. In addition, the Committee evaluates and ensures the rotation of the lead audit partner at the independent auditor and will, if it deems it advisable, consider the rotation of the audit firm.
The Audit / Finance Committee has appointed KPMG LLP, an independent registered public accounting firm, as our independent auditor for fiscal 2019 to conduct the audit of our financial statements. KPMG LLP has conducted the audits of our financial statements since fiscal 2006. The Audit / Finance Committee and the Board request that the shareholders ratify this appointment.
Representatives from KPMG LLP are expected to be present at the 2018 Annual Meeting. The representatives will have the opportunity to make a statement and will be available to respond to appropriate questions. In the event that shareholders do not ratify the appointment, the Audit / Finance Committee will reconsider the appointment. Even if the appointment of KPMG LLP is ratified, the Audit / Finance Committee may appoint a different independent auditor at any time if, in its discretion, it determines that such a change would be in Conagra Brands’ and its shareholders’ best interests.
Fees billed by KPMG LLP for services provided for fiscal years 2018 and 2017 were as follows:
Fiscal 2018 | Fiscal 2017 | |||||||||||||||
Audit Fees | $ | 4,953,000 | $ | 7,061,000 | ||||||||||||
Audit-Related Fees | 84,000 | 60,000 | ||||||||||||||
Tax Fees | 19,000 | 95,000 | ||||||||||||||
All Other Fees | — | — | ||||||||||||||
Total Fees | $ | 5,056,000 | $ | 7,216,000 | ||||||||||||
|
|
|
The Audit / Finance Committeepre-approves 41 CONAGRA BRANDS all audit andnon-audit services performed
As required by the independent auditor. The Audit / Finance Committee will periodically grant a generalpre-approval of categories of audit andnon-audit services. Any other services must be specifically approved by the Audit / Finance Committee, and any proposed services exceedingpre-approved cost levels must be specificallypre-approved by the Audit / Finance Committee. In periods between Audit / Finance Committee meetings, the ChairmanSection 14A of the Audit / Finance Committee has been delegated authority from the CommitteeSecurities Exchange Act of 1934, as amended, we are asking you topre-approve additional services; any suchpre-approvals are subsequently communicated to the full Audit / Finance Committee at its next meeting.
The Audit / Finance Committee approved 100% of the services performed by KPMG LLP that were billed as Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees during fiscal years 2018 and 2017.
|
Voting Item #3: Approval, approve, on an Advisory Basis, of Our Named Executive Officer Compensation
advisory basis, our named executive officer compensation. Consistent with our shareholders’ preference, aslast indicated at our 2017 Annual Meeting of Shareholders, we give our shareholders an opportunity to vote, on an advisory basis, to approve the compensation of our named executive officers on an annual basis pursuant to Section 14A of the Exchange Act.basis. This vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to our named executive officer compensation as we have described it in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, beginning on pages 28 47and 52,69, respectively.
Our executive compensation program is designed to reward performance, drive focus, engagement and execution, support our business strategies, discourage excessive risk-taking, make us competitive with other corporationsorganizations for top talent, and align the interests of our executive officers with the long-term interests of our shareholders. A few notable items associated with our fiscal 2021 program include the following:
Since we began seeking a shareholder vote on our named executive officer
| • | Consistent with our pay-for-performance philosophy, our named executive officers’ fiscal 2021 compensation opportunity was tied meaningfully to company performance. For our President and CEO, incentive compensation represented 89% of his fiscal 2021 total compensation opportunity. For our other named executive officers, incentive compensation represented approximately 77% of their total opportunity. |
| • | Our fiscal 2021 Annual Incentive Plan funded and paid out above target for each named executive officer, aligned with our performance during the year. |
| • | The fiscal 2019 to 2021 cycle of our performance share plan concluded in fiscal 2021 with payouts at levels above target for each named executive officer, aligned to the impactful transformation accomplished over the period. |
| • | Multiple performance metrics are utilized in our plans and programs to discourage excessive risk-taking. Our program’s design does not encourage excessive focus on a single performance goal to the detriment of other measures of success. |
| • | Substantial stock ownership requirements ensure that our senior executives maintain a significant stake in our long-term success. They many not hedge or pledge their Conagra stock. |
| • | Our clawback policy allows recovery of certain incentive compensation payments from executives in the event of a material restatement of our financial statements resulting from their fraudulent, dishonest, or reckless actions. |
| • | We design our compensation programs to motivate our executives to win regardless of marketplace or macroeconomic dynamics and to achieve our fundamental objectives of creating sustainable, profitable growth and long-term value for our shareholders. |
Year-after-year, shareholders have exhibited strong support of our executive compensation program. In fact, in each of the past threefive fiscal years, we have received over 95%92% approval on this voting item.
Our Compensation Discussion and Analysis describes in detail the components of our executive compensation program and the process by which the Board makes executive compensation decisions. Highlights of our program include the following:
Consistent with ourpay-for-performance philosophy, the majority of our named executive officers’ targeted fiscal 2018 compensation was tied to company performance. For our CEO, incentive compensation represented 88% of his total compensation opportunity. For our other named executive officers, incentive compensation represented 78% of their total opportunity.
Our fiscal 2018 Annual Incentive Plan funded and paid out slightly above target for each named executive officer, due to our earnings and net sales growth performance during fiscal 2018 and the individual contributions of our executives.
The fiscal 2016 to 2018 cycle of the performance share plan concluded this year with payouts at above-target levels for each named executive officer who participated in the plan, due to our strong financial performance over the last three fiscal years.
Multiple performance metrics are utilized in our plans and programs to discourage excessive risk-taking. Our program’s design does not encourage excessive focus on a single performance goal to the detriment of other measures of success.
Substantial stock ownership requirements ensure that our senior executives maintain a significant stake in our long-term success.
Our clawback policy allows recovery of certain incentive compensation payments from executives in the event of a material restatement of our financial statements resulting from their fraudulent, dishonest, or reckless actions.
We design our compensation programs to motivate our executives to win during tough economic times and to achieve our fundamental and overriding objective – to create sustainable, profitable growth for our shareholders.
Voting Item #3: Approval, on an Advisory Basis, of Our Named Executive Officer Compensation
While this vote is advisory and not binding on our company, the Board and its HR Committee value the opinions of our shareholders and expect to consider the outcome of the vote, along with other relevant factors, when considering named executive officer compensation in the future. We expect to hold our next advisory vote at our 2019 Annual Meeting.
We are asking our shareholders to once again indicate their support for our named executive officer compensation as described in this Proxy Statement. Accordingly, we are asking our shareholders to vote to approve the following resolution:
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in this Proxy Statement, is hereby APPROVED.”
While this vote is advisory and not binding on our company, the Board and its HR Committee value the opinions of our shareholders and expect to consider the outcome of the vote, along with other relevant factors, when considering named executive officer compensation in the future. We expect to hold our next advisory vote at our 2022 Annual Meeting of Shareholders.
The Board of Directors recommends a vote “FOR” the resolution approving our named executive officer compensation.
43 CONAGRA BRANDS
Voting Item #4: Adopt a Mainstream Shareholder Right—Written Consent
Shareholders request that our board of directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to give shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any appropriate topic for written consent. This includes that the least possible number of shares would be able to do so little as request a record date for written consent.
Hundreds of major companies enable shareholder action by written consent. This proposal topic won majority shareholder support at 13 large companies in a single year. This included 67%-support at both Allstate and Sprint. This proposal topic also won 63%-support at Cigna Corp. in 2019. This proposal topic would have received higher votes than 63% to 67% at these companies if more shareholders had access to independent proxy voting advice.
A shareholder right to act by written consent affords Conagra management strong protection for a holdout management mentality during the current rapid changing business environment. Since a significant percentage of shares do not vote at CAG annual meetings any action taken by written consent would still need 60% supermajority approval from the shares that normally cast ballots at the CAG annual meeting to equal the required majority from the CAG shares outstanding.
Plus Conagra shareholders have absolutely no right to call for a special shareholder meeting.
The avalanche of bare bones online shareholder meetings in 2020 makes the shareholder right to act by written consent more valuable. Shareholders are so restricted in online meetings that management will never want a return to the more transparent in-person shareholder meeting format.
Shareholders are restricted because all constructive questions and comments can be screened out by management. For instance the Goodyear online shareholder meeting was spoiled by a trigger-happy management mute button for shareholders. And AT&T, with 3000 institutional shareholders, would not even allow shareholders to speak.
Please vote yes:
45 CONAGRA BRANDS
Proposal 4: Adopt a Mainstream Shareholder Right – Written Consent
The Board of Directors recommends a vote “AGAINST” this proposal.
The Board of Directors believes that action by written consent is not in the best interest of shareholders and recommends a vote AGAINST this proposal.
Conagra’s existing governance practices protect shareholder rights and ensure director accountability.
Conagra has long demonstrated its commitment to governance practices that provide shareholders with strong rights to participate in the company’s direction:
| • | Shareholders elect the Board on an annual basis | ||
| • | Directors must submit an offer to resign if they fail to receive majority shareholder support |
| • | We permit shareholders to nominate directors through a robust proxy access bylaw |
| • | The Board constituent documents |
| • | We do not have a shareholder rights plan |
| • | Management is in regular contact with our shareholders to solicit their feedback |
| • | Our proxy materials include robust information on our Board’s processes and we welcome shareholder input throughout the year |
Adoption of this proposal is unnecessary given the Board’s existing governance practices.
Action by written consent can result in increased confusion for shareholders and less transparent decision-making.
Our current processes for shareholder action are designed to enable all shareholders to participate in the decision-making process. In contrast, implementing a written consent provision could have the detrimental effect of enabling a limited group of short-term focused shareholders to act in their own self-interest by advocating proposals that neither enhance long-term shareholder value nor advance the interests of shareholders as a whole. Different shareholder groups could submit multiple written consents simultaneously, creating a confusing and disruptive environment for shareholders and the company.
The adoption of a written consent provision could also preclude shareholders from engaging in fair and open discussion. Currently, any matter that Conagra or its shareholders wishes to present for a shareholder vote must be noticed in advance and presented at a meeting. The resulting transparency and fairness allow all shareholders to consider, discuss, and vote on pending actions. Conagra has a strong track-record of facilitating well-attended and engaging meetings. Even in 2020, when we held a virtual-only shareholder meeting due to the COVID-19 pandemic, approximately 91% of our outstanding shares were represented at the meeting, and every shareholder question submitted during the meeting was addressed live during the webcast.
In summary, the Board does not believe that a shareholder written consent is an appropriate corporate governance model for a company as committed to strong governance practices as Conagra.
The Board believes that adoption of this proposal is unnecessary and not in Conagra’s or our shareholders best interests.
2021 PROXY STATEMENT 46
Compensation Discussion and Analysis
Compensation Discussion and Analysis
Introduction
At Conagra Brands, our fundamental objectives are to create sustainable, profitable growth and long-term value for our shareholders. Management sets our annual and long-term business goals to support attainment of these objectives. The Board’s HR Committee (in this section, the Committee), designs and oversees the design of our executive compensation program to promote their attainment.achievement of our goals.
This Compensation Discussion and Analysis describes and analyzes our executive compensation program. Specifically, we describe and analyze the program’s application to the executive officers listed in the Summary Compensation Table; these are our “named executive officers.” For fiscal 2018,2021, or FY18,FY21, which began on May 29, 2017June 1, 2020 and ended on May 27, 2018,30, 2021, our named executive officers were:
Name | Title | |||
|
| |||
| President and Chief Executive Officer | |||
David S. Marberger | Executive Vice President and Chief Financial Officer | |||
Colleen R. Batcheler | Executive Vice President, General Counsel and Corporate Secretary | |||
Thomas M. McGough | Executive Vice President and Co-Chief Operating Officer | |||
| ||||
Darren C. Serrao | Executive Vice President and | |||
We have provided a summary of our fiscal 20182021 executive compensation program and fiscal 20182021 performance in the “Executive Summary” below. For more complete information on the program and the Committee’s processes related to the program, we encourage you to read this entire Compensation Discussion and Analysis.
Executive Summary
Since fiscal 2016, we have been implementing a strategic plan focused on transforming Conagra Brands into a pure-play, branded food companyAnalysis and on establishing a solid platform for our company’s future growth. Our work to date has included significant portfolio reshaping. We have soldnon-core businesses and successfully executed thespin-off related sections of Lamb Weston into an independent public company. Simultaneously, we have addedon-trend brands to our portfolio through a series of modernizing acquisitions. We have also invested within Conagra, building leading innovation capabilities and completely overhauling our culture.
At the start of fiscal 2018, we outlined for investors the imperatives for continuing our progress:this Proxy Statement.
Maintaining the improving trends in our net sales growth rate, including through the new innovation that was just starting to hit the marketplace;
47 CONAGRA BRANDS
Continuing to focus on executional excellence;Executive Summary
Continuing to expand margins; and
Further reshaping our portfolio through disciplined M&A activity.
With these considerations in mind, the Committee, during the summer of 2017, approved the fiscal 2018Our executive compensation program foris designed to encourage and reward behavior that promotes attainment of our named executive officers.
Compensation Discussionannual and Analysis
Elements of Fiscal 2018 Executive Compensation
long-term goals. In turn, those goals are intended to lead to sustainable, profitable growth, and long-term shareholder value. The elements of our fiscal 20182021 executive compensation program were as follows:
Base Salary and Benefits | ||
| ||
A fixed compensation program with salaries reviewed annually and adjusted as appropriate (as further described below). Benefit packages that are market competitive and generally broad-based in the company.
| ||
Annual Incentive Program | ||
| ||
A cash-based annual incentive program based on a single year of performance results. Performance measures are aligned to our annual operating plan. Payouts in fiscal 50% Weighting: Operating income, adjusted for items impacting comparability 30% Weighting: Net sales, adjusted for items impacting comparability 20% Weighting: Free cash flow, adjusted for items impacting comparability Long-Term Incentive Program A stock-based incentive program based on multi-year results or service. Pays out generally after three years.
| ||
• • Performance goals set as an EPS CAGR: The compound annual growth rate of our diluted earnings per share from continuing operations, adjusted for items impacting comparability
•
• | ||
the first year of the program (weighted 33%)
| ||
| ||
•
| Restricted Stock Units – 25% of Opportunity
• Opportunity to earn shares of our common stock if the employee generally remains with Conagra over the |
2021 PROXY STATEMENT 48
Fiscal 2021 Highlights
For Conagra Brands, fiscal 2021 was a year of successfully managing through dynamic conditions. New consumers found our brands and became repeat purchasers of our innovative products. We grew share versus the competition and continued to invest in the long-term health of our business. Our dedicated employees performed well in very challenging circumstances and our commitment to employee health and safety remained of primary focus. We enter fiscal 2022 believing in the long-term prospects for our business.
Given the dynamic environment created by the COVID-19 pandemic, we provided fiscal 2021 guidance on a quarter-to-quarter basis. Ultimately, we delivered results consistent with and in some instances above our guidance throughout the year.
Organic Net Sales | Adjusted Operating Margin | Adjusted Diluted EPS | ||||||||
| Exceeded Guidance | Exceeded Guidance | Exceeded Guidance | |||||||
FY21 Q2 | Exceeded Guidance | Exceeded Guidance | Exceeded Guidance | |||||||
FY21 Q3 | Exceeded Guidance | Met Guidance | Met Guidance | |||||||
FY21 Q4 | Met Guidance | Met Guidance | Met Guidance | |||||||
Fiscal 2018 ResultsWe achieved our leverage goal for fiscal 2021 ahead of schedule.
Fiscal 2018 was a successful year for Conagra Brands and another important year in our transformation. We accomplishedSpecific performance highlights from fiscal 2021 include the following:
| • |
|
2 A reconciliation of thisnon-GAAP measure to the most directly comparable GAAP measure is included inAppendix A to this Proxy Statement.
Compensation Discussion and Analysis
|
| • | Operating |
| • |
|
Capital Returned to Shareholders: We paid $342 million in dividends during fiscal 2018, and repurchased approximately $967 million of our common stock. Over the last three fiscal years, we have returned nearly $3.2 billion to shareholders.
|
| • | Portfolio Changes: We continued our portfolio sculpting work in fiscal 2021. We completed the divestiture or exit of several smaller, non-core businesses: H.K. Anderson peanut butter-filled pretzels, Peter Pan peanut butter, and Egg Beaters liquid eggs. |
| • | Capital Returned to Shareholders: Our Board of Directors increased our quarterly dividend by 29% during fiscal 2021 and we |
Investing in Our Culture: Our vision is to have the most impactful, energized, and inclusive culture in food. We believe that a diverse team and inclusive culture are key enablers of shareholder value creation. During fiscal 2021, we continued our work to deliver against our vision. During the first quarter of the year, we established a Diversity and Inclusion Leadership Council, comprised of our Chief Executive Officer, his Senior Leadership team, and members of our Human Resources team. While the importance of diversity and inclusion are not new to Conagra, we established the Council to expand our D&I strategy, track our D&I progress, and ensure execution of our D&I goals. The Council refreshed the company’s D&I
| 4 | A reconciliation of this non-GAAP measure to the |
Net leverage ratio is defined as total principal debt outstanding less unrestricted cash divided by Adjusted EBITDA for a trailing twelve-month period. |
Culture: Today,
49 CONAGRA BRANDS
strategic plan during fiscal 2021, and declared a focus on recruiting, advocating for, and developing diverse talent. The Council established the following goals6 for expanding diversity in our organization:
2025 Goal: At least 40% of management-level roles held by | 2025 Goal: Double people of color representation in |
In support of the achievement of our goals, we haveundertook a variety of initiatives in fiscal 2021:
| • | In October 2020, we launched Conagra’s inclusive leadership development program. Through the end of fiscal 2021, we trained over 1,400 managers in inclusive leadership practices. |
| • | In November 2020, we partnered with The Hatchery Chicago to create a twelve-week culinary internship program to facilitate careers in the food industry for individuals from underrepresented communities. |
| • | In May 2021, we announced a partnership with the Thurgood Marshall College Fund and the Hispanic Scholarship Fund through which Conagra will make donations to each organization to fund college scholarships in an effort to ensure that black and brown students receive equitable access to higher education opportunities. Conagra employees will also actively engage with scholarship recipients to provide professional development opportunities. |
| • | Throughout fiscal 2021, the Human Resources Committee of our Board received regular reports from management on our D&I progress. The Committee has embedded D&I into its standing agenda and intends to discuss the topic at every regularly scheduled meeting it holds in fiscal 2022. |
Fiscal Years 2019 — 2021
We maintain a long-term strategic plan at Conagra and strive to set rolling three-year financial targets that the Committee incorporates into the performance share plan. The three-years ending with fiscal 2021 were far more energizeddynamic than originally expected. During fiscal 2019, we acquired Pinnacle Foods, improving the scale and enthusiastic teambreadth of our portfolio. We expected fiscal 2020 to be a year focused on integrating the Pinnacle business and delivering turn-around plans for several large brands acquired in the transaction. However, by the end of the third quarter, the COVID-19 pandemic had introduced new challenges. During fiscal 2021, we rose to the challenge of the COVID-19 pandemic, and delivered for our consumers, customers, and shareholders while keeping our employees who bring an externally focused, entrepreneurial spirit to their work every day.safe.
By strengtheningAs a result of our foundationteam’s agility and results-orientation over the last three fiscal years, we readied ourselves to embark on the next phase of our evolution. On June 26, 2018, shortly after the end of fiscal 2018, we entered into a definitive agreement to acquire Pinnacle Foods Inc., makers of well-known brands such asBirds Eye, Duncan Hines, Earth Balance, EVOL, Gardein, Glutino,Hungry-Man, Log Cabin, Tim’s Cascade Snacks, Udi’s, Vlasic and Wish-Bone, among others. We believe that the combination of two portfolios of iconic brands – ours and Pinnacle’s – will serve aswe enter fiscal 2022 with a catalystsolid foundation from which to accelerate value creationcontinue to deliver for shareholders.investors.
Fiscal 20182021 Pay Outcomes Summarized
Our fiscal 2018 performance, together with our results since our new strategic journey began three years ago, have created significant value for shareholders. The company has repeatedly delivered on its financial commitments to investors. Given the Committee’s pay for performance philosophy, management has also been rewarded. As more fully described in this Compensation Discussion and Analysis, the Committee considered the positive business outcomes described above in determining final payouts under incentive programs with performance periods concluding in fiscal 2021. Our Chief Executive Officer and other senior executives named in this Proxy Statement received above target payouts under both the fiscal year 2021 annual incentive plan and fiscal year 2019 to fiscal year 2021 cycle of the long-term performance share plan.
The Committee believes that its fiscal 2021 compensation decisions appropriately reflect its pay-for-performance philosophy. This philosophy is focused on compensating executives based on actual company performance and aligning management’s interests with those of our shareholders.
Below is a more detailed analysis of the fiscal 2021 compensation program for our named executive officers, includingas well as actual fiscal 2021 payouts under the programs.
| 6 | Versus 2020 baseline. |
2021 PROXY STATEMENT 50
Our Fiscal 2021 Executive Compensation Program
For fiscal 2021, the Committee created an executive compensation program with multiple elements:
Fixed Compensation: • Base Salary • Health and Welfare Benefits • Retirement Benefits | Incentive Compensation: • Fiscal 2021 Annual Incentive Plan (cash settled) • Fiscal 2019 – 2021 Long-term Incentive Plan (stock settled) | |||
The use of a mix of compensation types (salary, benefits, cash-based incentives and equity-based incentives) and a mix of performance periods (single year and multi-year) was intended to promote behavior consistent with our long-term strategic plan and minimize the likelihood of executives having significant motivation to pursue risky or unsustainable results.
In overseeing this compensation program design, the Committee sought to encourage and reward behavior that would promote attainment of our annual and long-term goals and lead to sustainable growth in shareholder value. In particular, the Committee focused on:
| • | Aligning compensation programs, policies and practices to our company’s vision, mission and values; |
| • | Being market competitive, but emphasizing variable compensation to differentiate our program from that of peers; |
| • | Determining pay mix (fixed and variable compensation) based on executive position; |
| • | Providing a compensation structure that groups positions based on impact to the company; |
| • | Affording opportunities and flexibility in pay positioning to ensure fair and equitable compensation and room for growth; and |
| • | Recognizing and differentiating based on individual, team, and company performance. |
With respect to each named executive officer, the Committee also considered the following:
Mr. Sean Connolly. | Mr. Connolly has served as our President and Chief Executive Officer and a member of the Board since April 2015. The Committee believes that within our company, Mr. Connolly should have the largest aggregate compensation opportunity due to his level of responsibility and business experience. The Committee also believes Mr. Connolly should have the greatest proportion of his compensation opportunity at-risk. External market data supports this conclusion. For fiscal 2021, consistent with this belief, the independent directors set Mr. Connolly’s compensation opportunities at a level higher than the comparable opportunities for the other named executive officers. The Committee considered Mr. Connolly’s accountability for the performance of the entire organization as well as the terms and requirements of his employment agreement. | |
Mr. David S. | Mr. Marberger has served as our Executive Vice President and Chief Financial Officer since August 2016. As Chief Financial Officer, Mr. Marberger is our Principal Financial Officer, leads all Finance functions for the company, heads our Investor Relations department, and has accountability for the Information Technology and M&A functions. The Committee considered the broad scope of Mr. Marberger’s responsibilities, his previous experience as a Chief Financial Officer, his in-depth knowledge of the food industry, internal pay equity, and external market datain setting his compensation for fiscal 2021. | |
51 CONAGRA BRANDS
| Ms. Colleen R. Batcheler. | Ms. Batcheler has served as our Executive Vice President, General Counsel and Corporate Secretary since September 2009 and as Senior Vice President, General Counsel and Corporate Secretary since February 2008. She joined the company in 2006. When setting Ms. Batcheler’s compensation for fiscal 2021, the Committee considered Ms. Batcheler’s demonstrated results as an advisor to the organization on legal, governance, and policy matters over multiple years, the significant initiatives facing the company during fiscal 2021, internal pay equity, and external market data. | |
| Mr. Thomas M. McGough. | Mr. McGough has served as our Executive Vice President and Co-Chief Operating Officer since October 2018 and served as the President of our operating segments from May 2013 to October 2018. He joined the company in 2007 as Vice President, Marketing, and progressed through our branded food organization quickly, being named President, Specialty Foods, in August 2010 and then President, Grocery Products in July 2011. The Committee considered the scope of Mr. McGough’s responsibilities, the dynamic marketplace facing the branded food business, internal pay equity, and external market data in setting his compensation for fiscal 2021. | |
Mr. Darren C. | Mr. Serrao has served as our Executive Vice President and Co-Chief Operating Officer since October 2018 and served as our Executive Vice President and Chief Growth Officer from August 2015 to October 2018. As head of our Growth Center of Excellence, Mr. Serrao led our insights, innovation, research and development, and marketing teams. In setting Mr. Serrao’s compensation for fiscal 2021, the Committee considered his broad responsibility in the organization and the importance of innovation and transformation in our strategic plan. The Committee also considered internal pay equity and external market data. | |
The unique roles, contributions and tenure of our named executive officers had a meaningful impact on their total fiscal 2021 compensation opportunity. A consistent theme across our named executive officers, however, is that by design, targeted incentive compensation for fiscal 2021 was a significant percentage of the total compensation opportunity. The Committee’s general policy is to provide the greatest percentage of the incentive opportunity in the form of long-term compensation payable in shares of our common stock. The Committee believes that the emphasis on stock-based compensation is the best method of aligning management interests with those of our shareholders.
2021 PROXY STATEMENT 52
The charts below show the total target compensation opportunity (calculated using base salary earnings, targeted fiscal 2021 Annual Incentive Plan award, and targeted long-term incentive value) for Mr. Connolly and for our other named executive officers as a group.
 |
More detail on each fiscal 2021 compensation element follows.
Base Salaries
We pay salaries to our named executive officers to provide them with a base level of fixed income for services rendered. On average, 23% of the total fiscal 2021 compensation opportunity for each named executive officer, other than the President and Chief Executive Officer, receivedwas provided in the form of base salary. For Mr. Connolly, our President and Chief Executive Officer, 11% of his total compensation opportunity was provided in the form of base salary. For more information on Mr. Connolly’s base salary, see “Agreements with Named Executive Officers — Agreement with Mr. Connolly” below.
A summary of the salaries of our named executive officers is set forth below.
| Name | Fiscal 2021 Base Salary Rate ($) | Increase from Fiscal 2020 (%) | Percent of Target Total Direct Compensation (%) | |||
Mr. Connolly | $1,236,000 | 3.0% | 11% | |||
Mr. Marberger | $736,700 | 3.0% | 24% | |||
Ms. Batcheler | $540,750 | - | 20% | |||
Mr. McGough | $750,000 | 12.0% | 24% | |||
Mr. Serrao | $610,000 | - | 22% | |||
In fiscal 2021, the Committee approved base salary increases for Mr. Connolly, from $1,200,000 to $1,236,000, for Mr. Marberger, from $715,200 to $736,700, and for Mr. McGough, from $669,500 to $689,600 during annual incentive payouts at levels slightlypay
53 CONAGRA BRANDS
planning in order to align their salaries more closely to the market for their respective roles. The Committee approved an additional base salary increase for Mr. McGough from $689,600 to $750,000 in December 2020 to recognize the scope and impact of his role and contributions.The base salary rates for the other named executive officers were unchanged from fiscal 2020.
Please see the information included above target for fiscal 2018, driven by strong profit and net sales growth performance. In addition,a discussion of the other factors the Committee considered when determining the individual salaries of each of the named executive officers.
Incentive Programs – Overview
We use incentive programs to closely align management compensation with company performance. Our incentive programs reward the achievement of our annual operating plan and our long-term strategic plan. For fiscal 2021, opportunities under these programs combined to represent approximately 89% of Mr. Connolly’s compensation opportunity. For each named executive officer participants each received long-termother than the President and Chief Executive Officer, targeted incentive payouts undercompensation for fiscal 2021 was approximately 77% of the total compensation opportunity.
We provide details of our incentive programs below. Financial targets disclosed in these discussions are done so in the limited context of our incentive plans; they are not statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Annual Incentive Plan
The fiscal 2021 Annual Incentive Plan, or FY21 AIP, provided a cash incentive opportunity to approximately 4,175 employees, including our named executive officers. We have regularly provided an annual incentive opportunity to a broad group of employees to reinforce a sense of ownership across our company and drive and sustain a pay-for-performance culture.
At the start of fiscal 2021, the Committee approved fiscal 2021 operating income, fiscal 2021 net sales, and fiscal 2021 free cash flow as the funding metrics for the FY21 AIP (subject to adjustment, as appropriate, for items impacting comparability of results).
The Committee selected these three goals, with operating income weighted 50% in the plan, net sales weighted 30%, and free cash flow weighted 20%, to reward employees for achieving key elements of the fiscal year 2016 through fiscal year 2018 cycle2021 annual operating plan: sales growth, profit growth, and debt reduction. The Committee viewed the selection of these metrics as an appropriate acknowledgment of the performance share plancompany’s dual focus on increasing the operating earnings of the business and maximizing the business’s ability to generate cash to repay debt. Under the FY21 AIP, the total payout opportunity for participants continued to be capped at approximately 158.7%200% of targeted awards.
The operating income, net sales, and free cash flow goals for the FY21 AIP were as follows:
| Goals (Dollars in Millions) | ||||||||||||
| Metric | Weight | Threshold (25% Payout) | Below Target (95% Payout) | Target (100% Payout) | Above Target (105% Payout) | Maximum (200% Payout) | ||||||
Operating Income | 50% | $1,506.4 | $1,788.9 | $1,883.0 | $1,977.2 | $2,259.6 | ||||||
Net Sales | 30% | $9,712.8 | $10,360.3 | $10,792.0 | $11,223.7 | $11,871.2 | ||||||
Free Cash Flow | 20% | $480.0 | $570.0 | $600.0 | $630.0 | $720.0 | ||||||
2021 PROXY STATEMENT 54
Individual Payout Opportunities
In addition to setting the financial goals for the FY21 AIP, the Committee set corresponding target AIP opportunities for each named executive officer, measured as a percentage of his or her base salary for fiscal 2021. The following table shows the ranges of authorized payments for the named executive officers based on achievement of the operating income, net sales, and free cash flow goals approved for the FY21 AIP. No portion of the incentive was guaranteed.
| Named Executive Officer | Threshold AIP Award (as % of base salary earnings) | Target AIP Award (as % of base salary earnings) | Maximum AIP Award (as % of base salary earnings) | |||
Mr. Connolly | 39% | 155% | 310% | |||
Mr. Marberger | 25% | 100% | 200% | |||
Ms. Batcheler | 25% | 100% | 200% | |||
Mr. McGough | 25% | 100% | 200% | |||
Mr. Serrao | 23% | 90% | 180% | |||
The targets for all named executive officers other than Mr. Connolly, as percentages of base salary earned, remained unchanged from fiscal 2020. Mr. Connolly’s target, as a percentage of base salary, was increased from 150% to 155% to better align his total targeted compensation opportunity more closely to the market for his role. Please see the information above for a discussion of the factors the Committee considered when determining the individual target AIP awards of each of the named executive officers.
Fiscal 2021 Results
As discussed above, our results were above target in fiscal 2021. For FY21 AIP purposes, the Committee determined that Conagra achieved fiscal 2021 operating income of $1,963.6 million, fiscal 2021 adjusted net sales of $11,225.5 million, and fiscal 2021 free cash flow of $998.3 million. Formulaically, these results provided for a payout equal to 123.7% of target.
In determining attainment of
| (Dollars in Millions) | ||||||
| Metric (As Adjusted) | FY21 Target | FY21 AIP Results | Funding Level | |||
Operating Income | $1,883.0 | $1,963.6 | 104.3% of Target | |||
Net Sales | $10,792.0 | $11,225.5 | 105.3% of Target | |||
Free Cash Flow | $600.0 | $998.3 | 200.0% of Target | |||
Once the underlying performance goals for our incentive programs,metrics review was complete, the Committee considered the manner in which management executed the operating plan during the year to determine if any adjustments were necessary to the overall payout. The FY21 AIP permitted the Committee to increase or decrease the pool funding level by an amount, up to 15% of target, based on how the company achieved its business results. Reflecting on the many operational and strategic accomplishments from the year, Mr. Connolly recommended, and the Committee agreed, to exercise 3.7 points of negative discretion to the funded level in order to create a discretionary pool to reward extra ordinary performance by a subset of the AIP eligible employees. The Committee determined the financial performance results for fiscal 2021, after applying negative discretion and prior to the assessment of individual performance, warranted a payout level for all other AIP eligible participants equal to 120% of target.
Determination of Individual Named Executive Officer Awards
The Committee’s final step was to determine each named executive officer’s individual payout under the FY21 AIP. This process involved an assessment of the individual’s target award, the company performance against the performance goals, and each executive’s individual performance. Mr. Connolly’s input on the individual contribution of these leaders, and his recommendations on program payouts, also assisted the Committee in approving specific AIP payouts. The full
55 CONAGRA BRANDS
Board’s performance evaluation of Mr. Connolly was used in determining his payout. Ultimately, the Committee decided that each named executive officer should be compensated under the FY21 AIP as detailed in the chart below. The Committee believes that the AIP awards paid to the named executive officers for fiscal 2021 are consistent with the level of accomplishment by the company and each named executive officer during the year.
Named Executive Officer
| Target Opportunity
| Actual AIP Payout
| Actual Payout as
| |||
Mr. Connolly | $1,907,216 | $2,357,319 | 123.6% | |||
Mr. Marberger | $733,392 | $906,473 | 123.6% | |||
Ms. Batcheler | $540,750 | $668,367 | 123.6% | |||
Mr. McGough | $714,385 | $882,980 | 123.6% | |||
Mr. Serrao | $549,000 | $678,564 | 123.6% | |||
To incent management to make decisions that have positive long-term impacts, even at the expense of shorter-term results, and to prevent unusual gains and losses from having too great of an impact ofon plan payouts in any year, the Committee retained discretion in the FY21 AIP to exclude items impacting comparability from company-wide results and adjust actual results for specific items that it believes were not indicativeoccurred during the fiscal year. The use of adjustments approved by the comparableCommittee and applicable to the fiscal 2021 operating performance of our businesses. Some of these items created financial benefits,income, net sales, and some of them created incremental expense or lost sales. The impact of these items was removed from our results for purposes of determining plan payouts. A particularly notable category of adjustment, for fiscal 2018 and performance shares outstanding during fiscal 2018, was tax expense, in light of the Tax Cuts and Jobs Act’s effectiveness during our third fiscal quarter. More information can be foundfree cash flow metrics is described below under “Additional Information on Compensation Practices – Use of Adjustments in Compensation Decisions.Incentive Programs.”
Fiscal 2022 Annual Incentive Plan
At the start of fiscal 2022, the Committee approved operating income and net sales (in each case subject to adjustment as appropriate for items impacting comparability of results) as the funding metrics for the FY22 Annual Incentive Plan. The Committee increased the weight of the operating income funding metric from 50% to 70% and maintained the weight of the net sales funding metric of 30% in the FY22 Annual Incentive Plan design. Because the company achieved its deleveraging target during fiscal 2021, the Board chose to eliminate the free cash flow metric in fiscal 2022. A balanced capital allocation policy remains of critical importance to the company.
The Committee also approved the integration of diversity and inclusion into the company’s performance assessment process for the FY22 Annual Incentive Plan. The company believes that the achievement of its fiscal 2018 compensation decisions appropriately reflect itspay-for-performance philosophy. This philosophy is focused on compensating executives based ondiversity and inclusion initiatives, in alignment with the company’s strategy, will support the creation of sustainable long-term value for shareholders. The individual performance modifier for senior leaders will be meaningfully impacted by diversity and inclusion, as diversity and inclusion will be included as part of annual objectives for our senior leaders. Individual leaders will be held accountable for implementing our diversity and inclusion strategy through, among other means, the level of their payout of earned awards under the FY22 Annual Incentive Plan.
Long-Term Incentive Plan Overview
The Committee firmly believes in aligning management’sthe interests of our senior leaders with those of our shareholders.
3 A reconciliation of this non-GAAP measure The significant extent to the most directly comparable GAAP measurewhich equity is included inAppendix A to our named executive officers’ compensation opportunity evidences this Proxy Statement.
Compensation Discussion and AnalysisFor fiscal 2021, the long-term incentive program was intended to:
| • | provide variable, competitive compensation based on long-term company performance; |
Objectives
| • | incent and reward leaders who have the greatest ability to drive long-term company success; and |
| • | reward participants for desired results that align with shareholder value creation. |
The fiscal 2021 program for the named executive officers included two elements: an award of Our Compensation Program; Mitigating Risk
Our executive compensation program is designed to encourageperformance shares that are settled in shares of common stock, and reward behavior that promotes attainmentan award of our annual and long-term goals and that leads to sustainable growth in shareholder value. The Committee strives to accomplish the following as it develops the program:service-based restricted stock units (RSUs).
Align compensation programs, policies
2021 PROXY STATEMENT 56
The Committee annually establishes a target long-term incentive grant value for each named executive officer using a value-based approach. In fiscal 2021, as in recent years, 75% of this total targeted value was delivered in the form of a performance share grant, and practices to our company’s vision, mission and values;
Be market competitive, but emphasize variable compensation to differentiate our program from that25% of peers;
Determine pay mix based on executive position;
Provide a compensation structure that groups positions based on impact tothis total targeted value was delivered in the company;
Afford opportunities and flexibility in pay positioning to ensure fair and equitable compensation and room for growth; and
Recognize and differentiate based on individual, team and company performance.
The Committee’s designform of an RSU grant. Targeted values were converted into grant sizes by dividing the dollar value of the compensation program with multiple objectives in mind helps mitigatetargeted opportunity by the risk that employees will take unnecessary and excessive risks that threatenaverage of the long-term health and viabilityclosing market price of our company. With the assistance of Human Resources and Legal department personnel, the Committee undertook a risk review of our fiscal 2018 compensation programs for all employees. Basedcommon stock on the review, we believe our compensation programs encourage and reward prudent business judgment and appropriate risk-taking overNYSE for the 10 trading days prior to, but not including, the grant date. The aggregate target opportunities for fiscal 2021 long-term based in part onincentive awards for the following features of the programs:named executive officers were as follows:
| Named Executive Officer | Target Opportunity | |||
Mr. Connolly |
| |||
Mr. Marberger | $1,600,000 | |||
| $1,600,000 | |||
Mr. McGough | $1,600,000 | |||
Mr. Serrao | $1,600,000 | |||
Mr. Connolly’s target long-term incentive award increased from $7,500,000 to $7,750,000 in fiscal 2021. The increase was approved to better align his total targeted compensation to the market for his role. Other than Mr. Connolly’s increased target opportunity, no changes were made to the named executive officers’ target long-term incentive opportunities from fiscal 2020. Each element of the long-term incentive plan used in fiscal 2021 is discussed more fully below.
Long-Term Incentive Plan – Restricted Stock Units
RSUs generally represent the right to receive a defined number of shares of our common stock after completing a period of service established at the grant date. RSUs encourage long-term commitment to the company.
In general, all RSUs granted in fiscal 2021 vest in full on the third anniversary of the date of grant, subject to the executive’s continued employment with us. Awards granted in fiscal 2021 are not entitled to dividend equivalents.
The number of RSUs granted to each named executive officer pursuant to the fiscal 2021 long-term incentive program is set forth below.
| Named Executive Officer | RSUs Granted During Fiscal 2021 | |||
| 53,353 | |||
Mr. Marberger | 11,015 | |||
Ms. Batcheler | 11,015 | |||
Mr. McGough | 11,015 | |||
Mr. Serrao | 11,015 | |||
The Committee considered the factors set forth above with respect to each named executive officer when determining grant sizes by individual. Grants to the named executive officers were made on July 23, 2020. The grant date fair value of the RSUs awarded to our named executive officers is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2021.
57 CONAGRA BRANDS
Long-Term Incentive Plan – Performance Shares
Performance shares represent an opportunity to earn a defined number of shares of our common stock if we achieve pre-set performance goals over time. In general, the performance shares vest following completion of the third fiscal year following grant and provide the named executive officer participating in the cycle the opportunity to earn a payout, in shares of common stock, from 0% to 200% of their respective targeted award. Dividend equivalents are paid on the portion of performance shares actually earned at our regular dividend rate in additional shares of common stock.
The three-year nature of each performance share grant means that in any year, a named executive officer can have up to three outstanding performance share plan, or PSP, cycles outstanding. In fiscal 2021, for example, each named executive officer participated in our fiscal 2019 to 2021 PSP, our fiscal 2020 to 2022 PSP, and our fiscal 2021 to 2023 PSP.
The targeted number of performance shares granted to our named executive officers in fiscal 2021, together with the performance share grants made under the comparable program in fiscal 2020 and fiscal 2019, are set forth below.
| Named Executive Officer | Targeted Performance Shares for Fiscal 2021 to 2023 Cycle | Targeted Performance Shares for Fiscal 2020 to 2022 Cycle | Targeted Performance Shares for Fiscal 2019 to 2021 Cycle | |||
Mr. Connolly | 160,058 | 201,939 | 156,328 | |||
Mr. Marberger | 33,044 | 43,273 | 33,450 | |||
Ms. Batcheler | 33,044 | 43,273 | 33,450 | |||
Mr. McGough | 33,044 | 43,273 | 33,450 | |||
Mr. Serrao | 33,044 | 43,273 | 25,088 | |||
Goal Setting in the PSP
The Committee’s approach to selecting and setting performance goals for each cycle of the PSP is thorough. Prior to the start of a performance period, the Committee discusses proposed plan design, taking into consideration the company’s strategic plan. Then, shortly after the start of each performance period, the Committee approves the actual metric or metrics for the program and the specific financial hurdles that must be met for awards to be earned.
The Committee’s preferred approach is for the performance goals in each grant to cover the full three-years of the performance period and remain un-revised throughout the cycle. However, the Committee retains the discretion to modify goals or use longer or shorter performance periods if doing so is appropriate in light of relevant company dynamics or macroeconomic conditions. For example, in recent years, the Committee has amended plan targets under the PSP in light of the Pinnacle Foods acquisition and tax reform legislation known as the Tax Cuts and Jobs Act, or TCJA.
In July 2020, the Committee made the decision in connection with the implementation of the fiscal 2021 through 2023 cycle of the performance share plan to adopt a staged approach to goal setting. The Committee made the decision due to the significant uncertainty created by the ongoing COVID-19 pandemic and the challenge of setting long-term goals in such a dynamic time. Factors impacting the Committee’s decision included:
| • |
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| • | Uncertainty around government lockdowns, and the timing of the return of away-from-home eating |
| • | Uncertainty around the timing of the availability of vaccines |
| • | Uncertainty regarding the ability of the company to maintain a strong end-to-end supply chain as the pandemic spread across the country |
In lieu of approving a three-year EPS CAGR in July 2020, the Committee adopted a one-year EPS growth rate for the fiscal 2021 period and decided to weight achievement of that goal at 33% in the program.
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The Committee believes that appropriate goal setting is among the most important aspects of establishing the executive compensation program. As such, the Committee makes goal-setting decisions that it believes best maintain the alignment of the company’s long-term incentive program with the company’s external financial commitments to investors.
The balance of this subsection of the Compensation Discussion and Analysis describes, in more detail, each cycle of our PSP outstanding during fiscal 2021.
FY21 to FY23 Performance Share Awards
Performance shares for the fiscal 2021 to fiscal 2023 cycle of the long-term incentive plan were granted at the start of fiscal 2021. The performance measures adopted for the cycle include a one-year Adjusted Diluted EPS CAGR goal for FY21 (weighted at 33%) approved during fiscal 2021. The two-year Adjusted Diluted EPS CAGR for FY22-23 (weighted at 67%) was set after fiscal 2021 concluded. The performance period for this cycle will conclude at the end of fiscal 2023 and the awards will pay out, to the extent earned, in shares of common stock in summer 2023. The specific fiscal 2021 plan targets are as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | Weighting | ||||
Fiscal 2021 | 0.4% | 4.3% | 8.3% | 33% | ||||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity.
(2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity.
(3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. | ||||||||
The grant date fair value of the portion of the performance shares granted to the named executive officers under the fiscal 2021 to 2023 cycle that relate to the FY21 measurement period, based on the probable outcome of the performance conditions for such period, is included for fiscal 2021 in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2021.
FY20 to FY22 Performance Share Awards
Performance shares for the fiscal 2020 to fiscal 2022 cycle of the long-term incentive plan were granted at the start of fiscal 2020. The performance measure adopted for the cycle is a three-year EPS CAGR. The performance period will conclude at the end of fiscal 2022 and the awards will pay out, to the extent earned, in shares of common stock in summer 2022. The specific plan targets are as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | |||
Fiscal 2020 to 2022 | 7.7% | 11.4% | 14.9% | |||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity.
(2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity.
(3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. | ||||||
The grant date fair value of all performance shares granted to the named executive officers under the fiscal 2020 to 2022 cycle, based on the probable outcome of the performance conditions for such period, is included for fiscal 2020 in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2021.
59 CONAGRA BRANDS
FY19 to FY21 Performance Share Awards
Performance shares for the fiscal 2019 to fiscal 2021 cycle of the long-term incentive plan were granted at the start of fiscal 2019. As discussed in our 2019 proxy statement, the original EPS CAGR goals for this cycle were revised following the Pinnacle acquisition. The revised plan targets are as follows:
| Performance Period | Threshold EPS CAGR(1) | Target EPS CAGR(2) | Maximum EPS CAGR(3) | |||
Fiscal 2019 to 2021 | 2.5% | 5.8% | 8.9% | |||
(1) An EPS CAGR below this level results in no payout; achievement at this level results in a payout equal to 25% of the targeted opportunity.
(2) An EPS CAGR at this level results in a payout equal to 100% of the targeted opportunity.
(3) An EPS CAGR at or above this level results in a payout equal to 200% of the targeted opportunity. | ||||||
At the conclusion of fiscal 2021, the Committee assessed our performance against the fiscal 2019 to 2021 EPS CAGR goal and certified results overall. As set forth in the table below, our financial performance over the last three years resulted in a funding level equal to 166.4% of the targeted PSP awards.
Performance Period | Performance Metric | Plan Results | Payout Earned | Total Cycle Payout | ||||
Fiscal 2019 to 2021 | EPS CAGR, as adjusted | 8.1% | 166.4% | 166.4% | ||||
For more information about the Committee’s assessment of our performance versus program goals, see “Additional Information on Compensation Practices – Use of Adjustments in Incentive Programs” below.
The table below lists the number of shares of common stock that were issued to the named executive officers following fiscal 2021 for the fiscal 2019 to 2021 cycle of the PSP. It is generally the Committee’s practice to pay performance share awards at a level equal to the funded amount, without applying further discretion. The Committee followed this practice for the fiscal 2019 to fiscal 2021 PSP. The noted amounts include dividend equivalents on earned shares, which were paid in additional shares.
| Named Executive Officer | Targeted Performance Shares Granted for Fiscal 2019 to 2021 Cycle | Actual Performance Shares Earned for Fiscal 2019 to 2021 Cycle | Actual as % of Target (without Dividend Equivalents) | Actual as % of Target (with Dividend Equivalents) | ||||
Mr. Connolly | 156,328 | 283,629 | 166.4% | 181.4% | ||||
Mr. Marberger | 33,450 | 60,689 | 166.4% | 181.4% | ||||
Ms. Batcheler | 33,450 | 60,689 | 166.4% | 181.4% | ||||
Mr. McGough | 33,450 | 60,689 | 166.4% | 181.4% | ||||
Mr. Serrao | 25,088 | 45,518 | 166.4% | 181.4% | ||||
Performance-Based Restricted Stock Unit Awards
In fiscal 2019, the Committee approved one-time grants of performance based restricted stock units (PBRSUs) to the named executive officers and a very limited group of other senior officers of the company. The PBRSU awards are designed to strengthen the alignment between management and shareholders and incentivize shareholder value growth. In general, the PBRSU awards will be earned only to the extent management delivers strong absolute total shareholder return (TSR) and strong relative TSR versus the median TSR of the S&P 500 Index over a performance period
2021 PROXY STATEMENT 60
running from the date of grant (April 15, 2019) until May 27, 2022 (the last trading day of fiscal 2022). The PBRSU award agreements include non-competition restrictive covenants that generally apply until the earlier of the one-year anniversary of a participant’s termination of employment with us and the one-year anniversary of the vesting date of the PBRSU award.
The outstanding PBRSUs granted during fiscal 2019 are included in the Outstanding Equity Awards at Fiscal Year-End Table – Fiscal 2021.
Committee’s Views on Executive Stock Ownership
The Committee has adopted stock ownership guidelines applicable to approximately 92 of our most senior employees, including our named executive officers. These guidelines, which are represented as a percentage of salary, increase with level of responsibility within the company. The Committee has adopted these guidelines because it believes that management stock ownership promotes alignment with shareholder interests.
The named executive officers are expected to reach their respective ownership requirement within a reasonable period after appointment. Shares personally acquired by the executive through open market purchases or through our employee benefit plans (for example, our employee stock purchase plan), as well as outstanding RSU awards, are counted toward the ownership requirement. Unexercised stock options, unearned performance shares, and unearned PBRSUs are not counted. If a named executive officer’s ownership position is below the applicable ownership requirement, the named executive officer is required to hold 75% of the net sharesreceived from equity compensation awards.
The following table reflects the ownership, as of July 26, 2021, of our named executive officers.
| Named Executive Officer | Stock Ownership Guideline (% of Salary) | Actual Ownership (% of Salary)(1) | ||
Mr. Connolly | 600 | 2,519 | ||
Mr. Marberger | 400 | 786 | ||
Ms. Batcheler | 400 | 1,461 | ||
Mr. McGough | 400 | 622 | ||
Mr. Serrao | 300 | 901 | ||
(1) Based on the closing price of our common stock on the NYSE on July 26, 2021 ($34.25) and the salaries of the named executive officers in effect as of May 30, 2021. | ||||
61 CONAGRA BRANDS
Other Fiscal 2021 Compensation
The additional material elements of our compensation program for the named executive officers during fiscal 2021 were as follows:
Benefit Programs
We believeoffer a package of core employee benefits to our employees, including our named executive officers. With respect to health and welfare benefits, we offer health, dental, and vision coverage and life and disability insurance. The company and employee participants share in the cost of these programs.
We offer a matching-gifts program through our Conagra Brands Foundation. To maximize community impact, the Conagra Brands Foundation offers matching gift opportunities to all employees, including the named executive officers. Donations made by the Foundation on behalf of a named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2021.
With respect to retirement benefits, we maintain a qualified 401(k) retirement plan (with a company match on employee contributions and a nonelective employer contribution) and the named executive officers are entitled to participate in this plan on the same terms as other employees. Ms. Batcheler and Mr. McGough also participate in a qualified pension plan that was closed to new participants in 2013 and frozen effective December 31, 2017.
Some of the named executive officers and other employees at various levels of the organization participate in a voluntary deferred compensation policiesplan. The voluntary deferred compensation plan enables us to pay retirement benefits in amounts that exceed the limitations imposed by the Code under our qualified plans. The plan allows the named executive officers, as well as a broader group of employees, to defer receipt of a portion of their base salary and practicesannual cash incentive compensation. A company match is made on deferrals of any compensation above the IRS annual compensation limit ($290,000 for calendar year 2021), and a nonelective contribution is made on compensation above the limit. The program permits executives to save for retirement in a tax-efficient way at minimal administrative cost to the company. Executives who participate in the program are balancednot entitled to above-market (as defined by the SEC) or guaranteed rates of return on their deferred funds.
We include contributions made by the company to the named executive officers’ 401(k) plan and alignedvoluntary deferred compensation accounts in the “All Other Compensation” column of the Summary Compensation Table –Fiscal 2021. We provide a complete description of these retirement programs under the headings “Pension Benefits – Fiscal 2021 and “Nonqualified Deferred Compensation – Fiscal 2021” below.
Security Policy
The Committee has determined that it is appropriate to cover Mr. Connolly by our security policy. As a result, Mr. Connolly is required to take corporate aircraft for all business and personal air transportation. To offset a portion of the incremental cost to the company of his personal use of corporate aircraft, we entered into an aircraft time share agreement with creating shareholder valueMr. Connolly. Under the agreement, Mr. Connolly is responsible for reimbursing us, in cash, certain amounts to help offset a portion of our incremental costs of personal flights, consisting of the cost of fuel and incidentals such as landing and parking fees, airport taxes, and catering costs for such flights. We do not create riskscharge for the fixed costs that would be incurred in any event to operate the company aircraft (for example, aircraft purchase costs, maintenance, insurance, and flight crew salaries). Mr. Connolly’s reimbursement obligation to the company begins once the incremental cost of his personal flights exceeds $150,000 in a fiscal year. The incremental cost to us of providing these benefits in fiscal 2021, if any, is included in the “All Other Compensation” column of the Summary Compensation Table –Fiscal 2021.
2021 PROXY STATEMENT 62
A copy of the Conagra Brands, Inc. Aircraft Use Policy is available to any shareholder who requests it from the Corporate Secretary at 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
Agreements with Named Executive Officers
Agreement with Mr. Connolly
We entered into a letter agreement with Mr. Connolly on August 2, 2018, which replaced Mr. Connolly’s prior employment agreement that expired on August 1, 2018. The letter agreement generally describes Mr. Connolly’s duties and responsibilities as President and CEO, and, provides for a minimum base salary of $1.2 million subject to review and possible increase by the Committee and the Board’s independent directors, as well as a customary vacation allowance. The letter agreement also outlines Mr. Connolly’s participation in our incentive compensation programs. Regarding the annual incentive program, the agreement provides that Mr. Connolly’s target opportunity will be at least 150% of his base salary. With respect to long-term incentives, Mr. Connolly is entitled each year to receive a targeted long-term award opportunity with a value of at least $7.5 million for any routine three-year performance period approved by the Committee, subject to the terms and conditions established by the Committee.
The agreement subjects Mr. Connolly to our stock ownership guidelines. Mr. Connolly also remains bound to certain provisions in his prior employment agreement that survived the expiration of such agreement, including a one-year post-employment non-competition restriction and our standard confidentiality and non-solicitation agreement.
The agreement continues the application of our security policy to Mr. Connolly, as further described above and under “Executive Compensation — Summary Compensation Table — Fiscal 2021” below. In addition, we also agreed to pay Mr. Connolly for professional fees incurred in the negotiation and preparation of the new letter agreement (and related documents).
The agreement also entitles Mr. Connolly to participate in benefit plans and programs that are reasonably likelymade available to senior executives generally. For information about the terms of Mr. Connolly’s participation in our retirement plans and deferred compensation plans, see “Executive Compensation — Nonqualified Deferred Compensation – Fiscal 2021” below.
The letter agreement also includes retirement benefits for Mr. Connolly. It provides that, for Mr. Connolly’s equity awards granted on or after July 17, 2018, and for any annual incentive plan in effect in the year of his retirement, (a) any definition of “early retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attains at least age 55 but has not yet attained age 57, and (b) any definition of “normal retirement” will be no less favorable to Mr. Connolly than the requirement that Mr. Connolly attain at least age 57. In addition, if any RSU or performance share award or agreement with Mr. Connolly under the long-term incentive program for an award outstanding at the time of his termination of employment provides for immediate vesting (either pro-rata or in full, as applicable) in the event of normal retirement or early retirement (as such terms are defined in the RSU or performance share award or agreement), and such normal retirement or early retirement is not within two years of a change of control (as that term is defined in the RSU or performance share award or agreement), then such RSU or performance share award or agreement will be deemed to be amended by the letter agreement so that it provides for continued vesting after the retirement in accordance with the normal vesting schedule for such award (either pro-rata or in full, as applicable).
The letter agreement also provides for severance, termination, and change of control benefits.
Mr. Connolly’s severance benefits under the letter agreement are further described below under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
Change of Control Benefits
We have agreements with our named executive officers that are designed to promote stability and continuity of senior management in the event of a material adverse effect onchange of control. The Committee routinely evaluates participation in this program and its benefit levels to ensure their reasonableness.
63 CONAGRA BRANDS
Since fiscal 2012, individuals promoted or hired into positions that, in the Committee’s view, are appropriate for change of control program participation have not been entitled to any excise tax gross-up protection. Although the Committee continues to believe in the importance of maintaining a change of control program, it believes that offering excise tax gross-ups to new participants is inappropriate relative to best executive pay practices.
We provide a complete description of the amounts potentially payable to our company.named executive officers under these agreements under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
Severance Benefits
We have adopted a broad severance plan potentially applicable to all salaried employees, including the named executive officers. In some circumstances, as part of negotiations during the hiring or recruiting process, we have supplemented this plan with specific severance arrangements. No such arrangements currently exist with our named executive officers other than Mr. Connolly.
Design and Approval of Our Fiscal 20182021 Program
The Committee is charged with designing and approving our executiveCommittee’s process to design the compensation program and setting compensation opportunities for ourthe named executive officers is a robust one. To help ensure that its design objectives are met and certain other senior leaders. Theprogram elements are reasonable, the Committee uses a variety of inputs, to make these decisions, including the results of our annual“say-on-pay” vote, the advice of the Committee’s independent compensation consultant, company and participant-focused considerations, the input of our Chief Executive Officer, and the unique circumstances of each named executive officer.risk mitigation considerations. We address each of these inputs here.
Annual Say on Pay Vote
In designingoverseeing the executive compensation program for fiscal 2018,2021, the Committee looked to our shareholders. The Committee’s policy is to present a“say-on-pay” vote to our shareholders annually. In September 2017,2020, we received over 95% approval in oursay-on-pay vote, leading the Committee to the conclusion that material changes in compensation design, solely due to the outcome of thesay-on-pay vote, were not warranted for fiscal 2018.2021.
Independent Consultant and Market Data
The Committee also leveraged the advice and counsel of its independent compensation consultant, FW Cook, in setting fiscal 20182021 compensation. The consultant assists the Committee in monitoring policy positions of institutional shareholders and their advisors, emerging market practices in compensation design and philosophy, and policy developments relevant to the Committee’s work. The Committee’s consultant also provides internal and external pay comparison data. The Committee uses this data as a market check on its compensation decisions and does not mandate target ranges for our named executive officers’ salaries, annual incentive opportunities, long-term incentive opportunities, or total direct compensation levels as compared to the peer group. The Committee recognizes that over-reliance on external comparisons can be of concern; therefore, the Committee uses external comparisons as only one point of reference and is mindful of the value and limitations of comparative data.
The Committee’s first step in using external data for fiscal 20182021 was the identification of an appropriate peer group. FW Cook initially prepared a list of potential peer companies (with an emphasis on food and beverage companies) based on consideration of the following criteria:
| • | Operations and Scale: Companies similar in size (based on revenue, market capitalization, and |
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2021 PROXY STATEMENT 64
Compensation Discussion and Analysis
We completed thespin-off of our Lamb Weston business in November 2016, about six months prior to the start of fiscal 2018. As a result,Following discussion, the Committee asked FW Cookdecided tore-examine our peer group to ensure continued alignment with the company’s size post-spin. FW Cook identified potential peers with annual revenues within an approximate range of betweenone-third to three times our own on a post-spin basis. Ultimately, FW Cook’s recommendation resulted in multiple changes to our maintain fiscal 2020’s peer group for fiscal 2018. 2021 compensation decisions.
The Committee approved the following peer group of 1716 companies for purposes of assessing fiscal 20182021 compensation competitiveness:
| Campbell Soup Company |
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Church & Dwight Co., Inc. |
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The Clorox Company |
| Mondelez International, Inc. | ||||
Colgate-Palmolive Company |
| Newell Brands Inc. | ||||
The Estée Lauder Companies Inc. | Keurig Dr. Pepper |
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| Kimberly-Clark Corporation | |||||
The companies removed from our fiscal 2018 peer group were PepsiCo, Inc., Altria Group, Inc., The Coca-Cola Company, Dean Foods Company, The Kraft Heinz Company, and Tyson Foods, Inc. For fiscal 2018, Church & Dwight Co., Inc., The Estée Lauder Companies Inc., The J. M. Smucker Company, Mattel, Inc., Mead Johnson Nutrition Company, Newell Brands Inc., and Pinnacle Foods Inc. were added.
Company and Participant Focused Matters
The Committee also generally considered the following company and participant focused matters in making fiscal 2018 2021compensation decisions:
Focused Matters
| • Company performance in prior years and expectations for the future;
• The anticipated degree of difficulty inherent in the targeted incentive performance goals;
• The level of risk-taking the program would reward;
• The general business environment; and
• Practices and developments in compensation design and governance.
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| Participant-
| • Individual performance history;
• The anticipated degree of difficulty inherent in individual goals;
• Internal pay equity; and
• The potential complexity of each program, preferring programs that are transparent to participants and shareholders and easily administered. | |||||
The Chief Executive Officer’s Views
Mr. Connolly, our President and Chief Executive Officer, and President, played a role in several key areas of the design of our fiscal 20182021 executive compensation program.
| • | Selecting Performance Metrics and Targeted Performance Levels. An important part of designing incentive compensation programs is the selection of plan metrics and performance targets. To help ensure that the |
Compensation Discussion and Analysis
Committee’spay-for-performance goals are achieved, selected metrics must be tied to shareholder value creation. In addition, performance targets must be set at levels that balance investor expectations against achievability, without incenting undue risk taking. The Committee sought Mr. Connolly’s input on these matters for fiscal |
65 CONAGRA BRANDS
| term incentive plans. Mr. Connolly provided input based on his understanding of investor expectations and our operating plans and financial goals. The Committee had sole authority to approve the program metrics and targets but found Mr. Connolly’s input valuable. |
| • | Assessing Company Performance. Financial performance is at the core of our incentive programs. However, the Committee retains the discretion to modify payouts based on the manner in which business results are delivered. At the end of fiscal |
| • | Assessing Individual Performance. With respect to individual performance, which also informed fiscal |
Individual Named Executive Officer Considerations
The Committee, and, in the case of our Chief Executive Officer, the independent directors, considered the following when setting fiscal 2018 compensation. NoApart from this input from Mr. Connolly, no named executive officer played a direct role in his or her own compensation determination for fiscal 2018.
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Compensation Discussion and Analysis
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Below is a more detailed analysis of each element of the fiscal 2018 compensation program for our named executive officers, as well as actual fiscal 2018 payouts under the programs.
Our Fiscal 2018 Executive Compensation Program
The fiscal 2018 compensation of our named executive officers consisted of the following key components:
The Committee believes that using a mix of compensation types (salary, benefits, cash incentives and equity-based incentives) and a mix of performance periods (single year and multi-year) promotes behavior consistent with our long-term strategic plan and minimizes the likelihood of executives having significant motivation to pursue risky and unsustainable results.
By design, targeted incentive compensation for the named executive officers for fiscal 2018 was a significant percentage of the total compensation opportunity. The Committee’s general policy is to provide the greatest percentage of the incentive opportunity in the form of long-term compensation payable in shares of our common stock. The Committee believes that the emphasis on stock-based compensation is the best method of aligning management interests with those of our shareholders.
The charts below show the total compensation opportunity (calculated using base salary rate, targeted FY18 Annual Incentive Plan award, and targeted long-term incentive value) for Mr. Connolly and for our other named executive officers as a group.
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Compensation Discussion and Analysis
Base Salaries
We pay salaries to our named executive officers to provide them with a base level of fixed income for services rendered. On average, 22% of the total fiscal 2018 compensation opportunity for each named executive officer, other than the Chief Executive Officer, was provided in the form of base salary. For Mr. Connolly, our Chief Executive Officer, 12% of his total compensation opportunity was provided in the form of base salary. For more information on Mr. Connolly’s base salary, see “Agreements with Named Executive Officers — Agreement with Mr. Connolly” below.
A summary of the salaries of our named executive officers is set forth below.
Name
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Fiscal 2018 Base Salary Rate ($)
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Increase from Fiscal 2017 (%)
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Percent of Target Total
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Mr. Connolly
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$1,150,000
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4.5%
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12%
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Mr. Marberger
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$650,000
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12.1%
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23%
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Ms. Batcheler
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$540,750
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20%
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Mr. McGough
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$669,500
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23%
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Mr. Serrao
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$505,000
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11.8%
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23%
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In fiscal 2018, the Board approved a base salary increase for Mr. Connolly from $1,100,000 to $1,150,000, and the Committee approved a base salary increase for Mr. Marberger from $580,000 to $650,000and for Mr. Serrao from $451,681 to $505,000. Please see the section above entitled “Design and Approval of Our Fiscal 2018 Program – Individual Named Executive Officer Considerations” for discussion of the factors the Committee considered when determining the salaries of each of the named executive officers.
Incentive Programs
Consistent with its overall compensation objectives, the Committee aligned management compensation with company performance through a mix of annual and long-term incentive opportunities for fiscal 2018. Opportunities under these programs combined to represent approximately 88% of Mr. Connolly’s compensation opportunity for fiscal 2018. For each named executive officer other than the Chief Executive Officer, targeted incentive compensation for fiscal 2018 was approximately 78% of the total compensation opportunity.
We provide details of our incentive programs below. Financial targets disclosed in these discussions are done so in the limited context of our incentive plans; they are not statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Annual Incentive Plan
The FY18 Annual Incentive Plan, or FY18 AIP, provided a cash incentive opportunity to approximately 3,500 employees, including our named executive officers. We have regularly provided an annual incentive opportunity to a broad group of employees, to reinforce an ownership mentality across our company. However, in fiscal 2018, we expanded eligibility for the AIP, adding more than 1,500 people to the program, further increasing the connection between pay and performance within Conagra Brands.
For our named executive officers, our AIP has historically used a framework that positioned awards to potentially qualify as tax deductible “performance-based compensation” under Section 162(m) of the Internal Revenue Code, which
Compensation Discussion and Analysis
we refer to as the Code. This framework, discussed more in the following paragraphs, uses an overarching performance goal and underlying performance goals. Because the “performance-based compensation” exemption under Section 162(m) of the Code has been repealed (subject to limited transition relief), effective for taxable years beginning after December 31, 2017, we expect to discontinue this framework in fiscal 2019 and beyond. Please refer to our discussion under “Additional Information on Compensation Practices – Tax and Accounting Implications of the Committee’s Compensation Decisions” for more information on this plan design.
Overarching EPS Performance Goal. At the start of fiscal 2018, the Committee approved an overarching goal under the FY18 AIP of adjusted EPS of $0.10. This goal, applicable only to a small group of senior officers, including the named executive officers, was required to be achieved before any payouts under the FY18 AIP could be made to the officers. The FY18 AIP further provided that if the overarching adjusted EPS goal was achieved, the Committee could exercise negative discretion to potentially reduce, but not increase, authorized payouts. This negative discretion was to be guided by performance against the underlying financial goals described in the next paragraph.
UnderlyingPre-Established Financial Goals. At the start of fiscal 2018, the Committee approved fiscal 2018 EBIT as the primary funding metric for the FY18 AIP (subject to adjustment, as appropriate, for items impacting comparability of results). The Committee also approved a net sales growth “kicker” in the plan (also subject to adjustment). Assuming the overarching adjusted EPS goal was met, the named executive officers participating in the plan were eligible to earn a payout from 0% to 220% of their respective target amounts, calculated as follows:
Primary Metric – EBIT. The Committee developed EBIT goals to align with threshold, target and maximum incentive opportunities. Our EBIT performance would result in a pool that could fund payouts in the range from 0% to 200% of target.
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Net Sales Growth “Kicker”. For the FY18 AIP, the Committee included a net sales growth “kicker” to reinforce the importance of continued improvement in the company’s net sales growth trend. Under this “kicker,” management could earn an incremental incentive by delivering net sales growth above its operating plans. Specifically, 10 points of incentive funding would be added to the pool upon attainment of fiscal 2018 net sales growth that resulted in total net sales of $7.85 billion. 10 more points of incentive funding would be added to the pool upon attainment of fiscal 2018 net sales of $7.9 billion. The kicker was designed as a “stair-step” feature, and omitted any interpolation for performance between these levels. The maximum incremental funding from the kicker was 20 points.
The inclusion of the kicker meant that total payouts under the FY18 AIP could reach 220% of target. The Committee designed the kicker as a stretch goal, with a high degree of difficulty to achieve.
Individual Compensation Opportunities. In addition to setting the financial goals for the FY18 AIP, the Committee set corresponding target compensation opportunities for each named executive officer, measured as a percentage of his or her base salary for fiscal 2018. The following table shows the ranges of authorized payments (expressed as a percentage of base salary) for the named executive officers upon achievement of the EBIT and net sales growth goals approved for the
Compensation Discussion and Analysis
FY18 AIP. If the overarching adjusted EPS goal was not met, no payments would be made. No portion of the incentive was guaranteed.
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For fiscal 2018, both Mr. Marberger’s and Mr. Serrao’s target AIP award was increased from 80% of base salary to 90% of base salary. The targets for the remaining named executive officers remained unchanged from fiscal 2017. Please see the section above entitled “Design and Approval of Our Fiscal 2018 Program – Individual Named Executive Officer Considerations” for discussion of the factors the Committee considered when determining the target AIP awards of each of the named executive officers.
Fiscal 2018 Results. As discussed above, we overdelivered on our adjusted earnings goals in fiscal 2018. The company’s results led to slightly above-targetperformance under the FY18 AIP. More specifically, for FY18 AIP purposes, the Committee determined that we achieved fiscal 2018 adjusted EPS above $0.10 and fiscal 2018 EBIT of $1,357.9 million. In addition, the company achieved adjusted net sales growth results at a level that permitted an incremental 10 points of incentive funding. Formulaically, these results warranted a payout equal to 117% of target.
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To incent management to make decisions that have positive long-term impacts, even at the expense of shorter-term results, and to prevent unusual gains and losses from having too great of an impact on plan payouts in any year, the Committee retained discretion in the FY18 AIP to exclude items impacting comparability from company-wide results and adjust actual results for specific items that occurred during the fiscal year. The use of adjustments approved by the Committee and applicable to the fiscal 2018 adjusted EPS, EBIT and net sales growth metrics is described below under “Additional Information on Compensation Practices – Use of Adjustments in Compensation Decisions.”
Once the performance metrics review was complete, the Committee considered the manner in which management executed the operating plan during the year to determine the overall payout level. Reflecting on the many operational and strategic accomplishments from the year, the Committee determined the financial performance results for fiscal 2018, prior to the assessment of individual performance, warranted a payout level for all AIP participants equal to 113% of target.
Compensation Discussion and Analysis
Determination of Individual Named Executive Officer Awards. The Committee’s final step was to determine each named executive officer’s individual payout under the FY18 AIP. This process involved an assessment of each executive’s individual performance. The Committee considered the factors set forth above under the heading “Design and Approval of Our Fiscal 2018 Program – Individual Named Executive Officer Considerations” when determining named executive officer payouts under the FY18 AIP, including the application of those factors during fiscal 2018. Mr. Connolly’s input on the individual contribution of these leaders, and his recommendations on program payouts, also assisted the Committee in approving specific AIP payouts. The full Board’s performance evaluation of Mr. Connolly was used in determining his payout. The Committee believes that the AIP awards paid to the named executive officers for fiscal 2018 are consistent with the level of accomplishment by the company and each named executive officer during the year.
Named Executive Officer | Target Opportunity | Actual AIP Payout | Actual Payout as | |||
| Mr. Connolly | $1,713,462 | $2,250,000 | 131.3% | |||
| Mr. Marberger | $575,308 | $715,107 | 124.3% | |||
| Ms. Batcheler | $540,750 | $672,152 | 124.3% | |||
| Mr. McGough | $669,500 | $832,189 | 124.3% | |||
| Mr. Serrao | $447,117 | $581,029 | 130.0% |
Long-Term Incentive Plan
The Committee firmly believes in aligning the interests of our senior leaders with those of our shareholders. The significant extent to which equity is included in our named executive officers’ compensation opportunity evidences this belief.
For fiscal 2018, the long-term incentive program was intended to:
provide variable, competitive compensation based on long-term company performance;
incent and reward leaders who have the greatest ability to drive long-term company success; and
reward participants for desired results that align with shareholder value creation.
The fiscal 2018 program for the named executive officers included two elements: an award of performance shares that are settled in shares of common stock, and an award of service-based restricted stock units (RSUs).
The actual number of targeted performance shares and RSUs granted to each named executive officer under the long-term incentive plan for fiscal 2018 was determined using a value-based approach. Each named executive officer was provided a total targeted grant value, based on the considerations set forth above in the section entitled “Design and Approval of our Fiscal 2018 Program – Individual Named Executive Officer Considerations.” 75% of the total targeted value was delivered as performance shares, and 25% of the total targeted value was delivered as RSUs. Performance share and RSU grant sizes were determined by dividing the dollar value of the targeted opportunity by the average of the closing market price of our common stock for the 10 trading days prior to the grant date.
Prior to fiscal 2018, the long-term incentive program also included grants of stock options, with weighting among instruments of 50% performance shares, 25% RSUs and 25% stock options. During fiscal 2017, the Committee undertook a comprehensive review of the total rewards program and determined to eliminate stock options at all levels of the
Compensation Discussion and Analysis
organization.The Committee’s decision took into consideration the relatively slow growth in the consumer packaged goods industry, dilution impacts of stock options, market practice, and perceived value to participants. With the elimination of stock options from its program, the Committee broadened participation in the performance share plan, to ensure that a sizable portion of each participant’s long-term incentive remained fully performance based. Beginning in fiscal 2018, 25 additional leaders throughout the company were added to the performance share program.
Each element of the long-term incentive plan used in fiscal 2018 is discussed more fully below.
Long-Term Incentive Plan – Restricted Stock Units
RSUs generally represent the right to receive a defined number of shares of our common stock after completing a period of service established at the grant date. RSUs encourage long-term commitment to the company.
In general, all RSUs granted in fiscal 2018 vest in full on the third anniversary of the date of grant, subject to the executive’s continued employment with us. Awards granted in fiscal 2018 are not entitled to dividend equivalents.
The number of RSUs granted to each named executive officer pursuant to the fiscal 2018 long-term incentive program is set forth below.
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The Committee considered the factors set forth above under the heading “Design and Approval of Our Fiscal 2018 Program – Individual Named Executive Officer Considerations” when determining grant sizes by individual. Grants to the named executive officers other than Mr. Connolly were made on July 19, 2017. Mr. Connolly’s RSUs were granted on July 20, 2017.The grant date fair value of the RSUs awarded to our named executive officers is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2018.
Long-Term Incentive Plan – Performance Shares
Performance shares generally represent an opportunity to earn a defined number of shares of our common stock if we achievepre-set performance goals over time. The three-year nature of each performance share grant means that in any year, a named executive officer can have up to three outstanding performance share plan, or PSP, cycles outstanding. In fiscal 2018, for example, named executive officers could have been participants in our fiscal 2016 to 2018 PSP, our fiscal 2017 to 2019 PSP and our fiscal 2018 to 2020 PSP.
The targeted number of performance shares granted to our named executive officers in fiscal 2018, together with the performance share grants made under the comparable program in fiscal 2017 and fiscal 2016, are set forth below.
Named Executive Officer | Targeted Performance | Targeted Performance | Targeted Performance | |||
| Mr. Connolly | 151,128 | 88,665 | 94,372 | |||
| Mr. Marberger (2) | 35,710 | 22,698 | - | |||
| Ms. Batcheler | 35,710 | 22,698 | 24,159 | |||
| Mr. McGough | 35,710 | 22,698 | 24,159 | |||
| Mr. Serrao | 26,783 | 17,023 | 18,119 |
Compensation Discussion and Analysis
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The level at which our named executive officers will earn the awards subject to these grants is dependent on the company’s performance over time against two sets of goals: an overarching adjusted EPS goal and underlying performance goals.
Overarching EPS Performance Goal.Similar to the FY18 AIP, the PSP utilizes an overarching adjusted EPS performance goal for our most senior executive participants. The PSP’s framework was intended to allow performance share awards to potentially qualify as tax deductible under Section 162(m) of the Code. However, as described above, the “performance-based compensation” exemption under Section 162(m) has been repealed, effective for taxable years beginning after December 31, 2017, unless certain transition relief is available. Please refer to our discussion under “Additional Information on Compensation Practices – Tax and Accounting Implications of the Committee’s Compensation Decisions” for more information on this plan design.
The overarching adjusted EPS goal applicable to the named executive officers in each PSP cycle outstanding during fiscal 2018 was as follows:
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As with the FY18 AIP, the adjusted EPS goal must be met before any payout can be made to a named executive officer under the PSP. If the overarching adjusted EPS goal is met, the Committee can exercise negative discretion to potentially reduce, but not increase, authorized payouts. This negative discretion is guided by performance against underlying financial goals approved by the Committee.
UnderlyingPre-Established Performance Goals.Shortly after the start of each performance period in a cycle of the PSP, the Committee approves underlying performance goals aligned with threshold, target, and maximum incentive opportunities. If the overarching adjusted EPS goal for the cycle is ultimately met, the named executive officers participating in the cycle are eligible to earn a payout, in shares of common stock, of between 0% and 200% of their respective targeted award. Dividend equivalents are paid on the portion of the performance shares actually earned; dividend equivalents are paid at the regular dividend rate in shares of our common stock.
The balance of this section of the Compensation Discussion and Analysis describes each cycle of our PSP outstanding during fiscal 2018 including, immediately below, the Committee’s philosophy on goal setting for each of these cycles.
Goal Setting During Times of Significant Change.As discussed earlier in this Proxy Statement, the last three years at Conagra Brands have been transformational. In August 2015, when the Committee was considering the goals for the fiscal 2016 to 2018 cycle of the performance share program, Mr. Connolly was only four months into his tenure as our CEO. Portfolio, cost, and cultural overhauls at the company had just commenced. In addition, strategic alternatives were being launched for a major business unit, Private Brands. As a result, multi-year performance objectives were challenging to set. With such significant change underway, the Committee made the decision to deviate from its preferred approach to goal setting for the PSP. Typically, shortly after the start of each three-year performance period, the Committee approves a three-year goal for the cycle. However, given the change being led by Mr. Connolly as fiscal 2016 began, the Committee
Compensation Discussion and Analysis
adopted aphased-in approach to goal setting for the program, to ensure that financial objectives during this period of change were ultimately relevant and transparent.
Although the Committee expected to return to three-year goal setting for the fiscal 2017 to 2019 cycle of the program, thespin-off of Lamb Weston into an independent public company was pending at the start of fiscal 2017. The Committee therefore determined that it was appropriate to continue using a staged goal-setting approach for the PSP.
In fiscal 2018, the Committee returned to a three-year performance goal in the PSP.
In summary, the Committee has approached the performance share programs beginning in fiscal years 2016, 2017 and 2018 as follows:
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In fiscal years 2016 and 2017, the Committee adopted EBITDA Return on Capital as the relevant performance metric. This metric is calculated as follows:
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In fiscal year 2018, the Committee shifted the goals to a rate of compound annual growth in diluted earnings per share, as adjusted for items impacting comparability (EPS CAGR) to simplify the program for participant understanding and acknowledge the importance of capital allocation decisions in the company’s strategic plan. The Committee adopted aone-year EPS CAGR goal covering fiscal year 2018 for the fiscal 2016 to 2018 cycle, atwo-year EPS CAGR goal covering fiscal years 2018 and 2019 for the fiscal 2017 to 2019 cycle, and a three-year goal EPS CAGR goal in the fiscal 2018 to 2020 cycle.
Although the Committee returned to a three-year performance goal in the fiscal 2018 to 2020 cycle, a further development added complexity to the PSP – the Tax Cuts and Jobs Act, or TCJA, becoming law. As noted, the Committee implemented an EPS CAGR goal in fiscal 2018. At the time of this implementation, the company’s planned annual tax rate was approximately 33 to 34%. Following the passage of the TCJA, the company’s annualized planned tax rate decreased to approximately 23 to 24%. If the Committee did not take action, the TCJA would artificially inflate the company’s EPS growth rate when measuring performance for outstanding PSP cycles. In addition, the company decided to use a portion of its TCJA-driven cash savings to make an unplanned, significant contribution to its frozen, defined benefit pension plan. With a more fully funded and frozen plan, the trust was able to begin shifting its investment approach for the related trust assets to lower return asset classes. Due to the accounting treatment of pension plan asset returns, the company’s EPS will now be lower than planned.
Compensation Discussion and Analysis
After considering the impact of the TCJA and related pension actions on the company’s EPS CAGR goals in the fiscal 2017 to 2019 and fiscal 2018 to 2020 cycles of the PSP, and the Committee’s overarching desire to achieve simplicity, transparency and understandability in its compensation programs, it decided to amend the EPS CAGR goals for these two cycles. In July 2018, the Committee adopted the following changes:
Cycle
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Original EPS CAGR at
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Amended EPS CAGR
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Fiscal 2018 to 2019
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9.3%
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13.2%
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| Fiscal 2018 to 2020 | 9.5% | 12.4% |
In the following pages, we further detail the performance metrics, goals and current company performance under each of these cycles.
FY16 to FY18 Cycle of the Performance Share Plan
The performance metrics and goals adopted for the fiscal 2016 to 2018 cycle of the PSP were EBITDA Return on Capital (for fiscal years 2016 and 2017) and EPS CAGR (for fiscal year 2018). The specific plan targets are as set forth here:
Fiscal 2016 to 2018 Cycle
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Performance Period | Goal | Performance for | Performance for Target (1) | Performance for | ||||
Fiscal 2016 (1/3 of Total Grant) | Average EBITDA Return on Capital | 20.2% (3) | 22.8% | 25.1% | ||||
Fiscal 2017 (1/3 of Total Grant) | Average EBITDA Return on Capital | 17.9% (3) | 20.5% | 22.8% | ||||
Fiscal 2018 (1/3 of Total Grant) | Adjusted Diluted EPS CAGR | 0.6% (4) | 8.6% | 16.7% | ||||
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Compensation Discussion and Analysis
PSP Awards Earned for the FY16 to FY18 Cycle
At the conclusion of both fiscal year 2016 and fiscal year 2017, the Committee assessed our performance against the goals set forth in the plan. At the conclusion of fiscal 2018, the Committee assessed our performance against the fiscal 2018 goal and certified results overall. The company’s performance exceeded target in each year of the program. Ultimately, our strong financial performance over the last three years resulted in a funding level equal to 158.7% of the targeted PSP awards. It is generally the Committee’s practice to pay performance share awards at a level equal to the funded amount, without applying further discretion. For more information about the Committee’s assessment of our performance versus program goals, see “Additional Information on Compensation Practices – Use of Adjustments in Compensation Decisions” below.
Performance Period | Adjusted EPS Goal | Performance Metric | Plan Results
| Payout Earned
| Total Cycle Payout
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| FY16 (1) | Achieved | Average EBITDA Return on Capital | 25.1% | 200% | 158.7%
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| FY17 (2) | Achieved |
Average EBITDA Return on Capital | 21.4% | 122.8% | ||||||||||||||||
| FY18 | Achieved |
Adjusted Diluted EPS CAGR
| 13.8% | 153.4% | ||||||||||||||||
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The table below lists the number of shares of common stock that were issued to the named executive officers following fiscal 2018 for the fiscal 2016 to 2018 cycle of the PSP. Mr. Marberger did not participate in the cycle due to the timing of his hiring after the program’s start. The noted amounts include dividend equivalents on earned shares, which were paid in additional shares.
| Named Executive Officer | Targeted Performance Shares Granted for Fiscal 2016 to 2018 Cycle (1) | Actual Performance 2016 to 2018 Cycle | Actual as % of Target (without Equivalents) | Actual as % of Target (with Equivalents) | ||||||||||
Mr. Connolly
| 94,372
| 159,556
| 158.7%
| 169.1%
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Ms. Batcheler
| 24,159
| 40,845
| 158.7%
| 169.1%
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Mr. McGough
| 24,159
| 40,845
| 158.7%
| 169.1%
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Mr. Serrao
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18,119
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30,634
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158.7%
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169.1%
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Compensation Discussion and Analysis
Unvested Cycles of the Performance Share Plan: FY17 to FY19 Cycle
The performance measures and goals adopted for the fiscal 2017 to 2019 cycle of the PSP were based on EBITDA Return on Capital (for fiscal year 2017) and EPS CAGR (fiscal years 2018 to 2019). The plan will conclude at the end of fiscal 2019, and pay out, to the extent earned, in shares of common stock in summer 2019. The specific plan targets (as adjusted for the TCJA, as discussed above) are as set forth here:
Fiscal 2017 to 2019 Cycle
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Performance Period | Goal | Performance for | Performance for | Performance for | ||||
Fiscal 2017 (1) (1/3 of Total Grant) | Average EBITDA Return on Capital | 17.9% (4) | 20.5% | 22.8% | ||||
Fiscal 2018 to 2019 (2/3 of Total Grant)
| Adjusted Diluted EPS CAGR, as amended
| 8.0% (5) | 13.2% | 18.2% | ||||
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Unvested Cycles of the Performance Share Plan: FY18 to FY20 Cycle
The performance measure and goals adopted for the fiscal 2018 to 2020 cycle of the PSP were based on EPS CAGR. The plan will conclude at the end of fiscal 2020, and pay out, to the extent earned, in shares of common stock in summer 2020. The specific plan targets (as amended for the TCJA, as discussed above) are as set forth here:
Fiscal 2018 to 2020 Cycle
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Performance Period | Threshold Adjusted Diluted EPS CAGR, as amended (1) | Target Adjusted Diluted EPS CAGR, as amended (2) | Maximum Adjusted Diluted EPS CAGR, as amended (3) | |||
Fiscal 2018 to 2020 (100% of Total Grant) | 8.8% | 12.4% | 15.8% | |||
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The grant date fair value of all performance shares granted under the fiscal 2018 to 2020 cycle, based on the probable outcome of the performance conditions for such period, is included in the “Stock Awards” column of the Summary Compensation Table – Fiscal 2018.
Compensation Discussion and Analysis
Other Fiscal 2018 Compensation
The additional material elements of our compensation program for the named executive officers during fiscal 2018 were as follows:
Benefit Programs
We offer a package of core employee benefits to our employees, including our named executive officers. With respect to health and welfare benefits, we offer health, dental, and vision coverage and life and disability insurance. The company and employee participants share in the cost of these programs. We also offer a matching-gifts program through our Conagra Brands Foundation. To maximize community impact, the Conagra Brands Foundation offers matching gift opportunities to all employees, including the named executive officers. Donations made by the Foundation on behalf of a named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table –Fiscal 2018.
With respect to retirement benefits, we maintain a qualified 401(k) retirement plan (with a company match on employee contributions) and the named executive officers are entitled to participate in this plan on the same terms as other employees. Ms. Batcheler and Mr. McGough also participate in a qualified pension plan that was closed to new participants in 2013 and frozen effective December 31, 2017.
Some of the named executive officers and other employees at various levels of the organization participate in a voluntary deferred compensation plan. The voluntary deferred compensation plan enables us to pay retirement benefits in amounts that exceed the limitations imposed by the Code under our qualified plans. The plan allows the named executive officers, as well as a broader group of approximately 400 employees, to defer receipt of up to 50% of their base salary, up to 90% of their annual cash incentive compensation, or up to 90% of their base compensation plus annual incentive in excess of $275,000. The program permits executives to save for retirement in atax-efficient way at minimal administrative cost to the company. Executives who participate in the program are not entitled to above-market (as defined by the SEC) or guaranteed rates of return on their deferred funds.
We include contributions made by the company to the named executive officers’ 401(k) plan and voluntary deferred compensation accounts in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2018. We provide a complete description of these retirement programs under the headings “Pension Benefits – Fiscal 2018” and “Nonqualified Deferred Compensation – Fiscal 2018” below.
Security Policy
The Committee has determined that it is appropriate to cover Mr. Connolly by our security policy. As a result, Mr. Connolly is required to take corporate aircraft for all business and personal air transportation. To offset a portion of the incremental cost to the company of his personal use of corporate aircraft, we entered into an aircraft time share agreement with Mr. Connolly. Under the agreement, Mr. Connolly is responsible for reimbursing us, in cash, certain amounts to help offset a portion of our incremental costs of personal flights, consisting of the cost of fuel and incidentals such as landing and parking fees, airport taxes and catering costs for such flights. We do not charge for the fixed costs that would be incurred in any event to operate company aircraft (for example, aircraft purchase costs, maintenance, insurance and flight crew salaries). Mr. Connolly’s reimbursement obligation to the company begins once the incremental cost of his personal flights exceeds $150,000 in a fiscal year. The incremental cost to us of providing these benefits in fiscal 2018, if any, is included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal 2018.
A copy of the Conagra Brands, Inc. Aircraft Use Policy is available to any shareholder who requests it from the Corporate Secretary at 222 Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
Compensation Discussion and Analysis
Agreements with Named Executive Officers
Agreement with Mr. Connolly
We entered into an employment agreement with Mr. Connolly in February 2015 as a part of his hiring as our Chief Executive Officer. The agreement expired on August 1, 2018. The agreement generally described Mr. Connolly’s duties and responsibilities as CEO, and, for its term, provided for a minimum base salary of $1.1 million and a customary vacation allowance. The employment agreement also outlined Mr. Connolly’s participation in our incentive compensation programs during its term. Regarding the annual incentive program, the agreement provided that Mr. Connolly’s target opportunity would be at least 150% of his base salary. With respect to long-term incentives, commencing with fiscal 2016, Mr. Connolly was entitled, each year during the term of the agreement, to receive a targeted long-term award opportunity with a value of at least $6.25 million for any ensuing three-year performance period.
The agreement subjected Mr. Connolly to our stock ownership guidelines and aone-year post-employmentnon-competition restriction. It also required Mr. Connolly to execute our standard confidentiality andnon-solicitation agreement.
The employment agreement also provided Mr. Connolly with certain other benefits, including indemnification. The agreement entitled Mr. Connolly to use corporate aircraft, as further described above and under “Executive Compensation — Summary Compensation Table – Fiscal 2018” below.
The employment agreement provided for severance, termination and change of control benefits further described below under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
The agreement also entitled Mr. Connolly to participate in benefit plans and programs that are made available to senior executives generally. For information about the terms of Mr. Connolly’s participation in our retirement plans and deferred compensation plans, see “Executive Compensation — Nonqualified Deferred Compensation – Fiscal 2018” below.
Given Mr. Connolly’s strong, results-oriented leadership during the first three years of his tenure, and the Board’s desire to retain Mr. Connolly as Conagra Brands’ CEO for the foreseeable future, on August 2, 2018, after the end of fiscal 2018, we entered into a new letter agreement with Mr. Connolly. The agreement includes terms that are materially consistent with those described above. The key features of the new letter agreement that differ from the expired employment agreement are as follows: (1) no set expiration date; (2) a minimum base salary of $1.2 million; (3) a minimum targeted long-term award opportunity with a value equal to at least $7.5 million for any ensuing three-year performance period; (4) eligibility for payment of monthly COBRA premiums for up to 24 months following a termination without cause or for good reason; and (5) modified retirement treatment with respect to Mr. Connolly’s equity awards (specifically, a reduction in age requirements coupled with continued vesting, rather than immediate vesting). Under the new letter agreement, we also agreed to pay Mr. Connolly for professional fees incurred in the negotiation and preparation of the new letter agreement (and related documents). Mr. Connolly’s new agreement will be described in greater detail in next year’s proxy statement.
Change of Control / Severance Benefits
We have agreements with our named executive officers that are designed to promote stability and continuity of senior management in the event of a change of control. The Committee routinely evaluates participation in this program and its benefit levels to ensure their reasonableness. Since fiscal 2012, individuals promoted or hired into positions that, in the Committee’s view, are appropriate for change of control program participation have not been entitled to any excise taxgross-up protection. Although the Committee continues to believe in the importance of maintaining a change of control
Compensation Discussion and Analysis
program, it believes that offering excise taxgross-ups to new participants is inappropriate relative to best executive pay practices. We provide a complete description of the amounts potentially payable to our named executive officers under these agreements under the heading “Executive Compensation — Potential Payments Upon Termination or Change of Control.”
We have also adopted a broad severance plan applicable to most salaried employees, including the named executive officers. In some circumstances, as part of negotiations during the hiring or recruiting process, we have supplemented this plan with specific severance arrangements.
Additional Information on Compensation Practices
Committee’s Views on Executive Stock Ownership
The Committee has adopted stock ownership guidelines applicable to approximately 80 of our senior employees, including our named executive officers. These guidelines, which are represented as a percentage of salary, increase with level of responsibility within the company. The Committee has adopted these guidelines because it believes that management stock ownership promotes alignment with shareholder interests. The named executive officers are expected to reach their respective ownership requirement within a reasonable period of time after appointment. Shares personally acquired by the executive through open market purchases or through our employee benefit plans (for example, our employee stock purchase plan), as well as restricted stock, RSUs and shares acquired upon the deferral of earned bonuses, are counted toward the ownership requirement. Neither unexercised stock options nor unearned performance shares are counted. If a named executive officer’s ownership position is below the applicable ownership requirement, the named executive officer is required to hold 75% of the net sharesreceived from equity compensation awards.
The following table reflects ownership as of July 31, 2018 for our continuing named executive officers.
Named Executive Officer | Stock Ownership Guideline | Actual Ownership | ||
Mr. Connolly
| 600%
| 1,189%
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Mr. Marberger
| 400%
| 263%
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Ms. Batcheler
| 400%
| 1,425%
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Mr. McGough
| 400%
| 1,022%
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Mr. Serrao
| 300%
| 478%
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Use of Adjustments in Compensation Decisions
Our goal is to pay incentives based on the same underlying business trends and results that our investors are using to measure company performance. To incent management to make decisions that have positive long-term impacts, even at the expense of shorter term results, and to preventone-time gains and losses from having too great of an impact on incentive payouts, the Committee designed its programs to exclude certain items impacting comparability from results in the fiscal 2018 AIP and the fiscal 2016 to 2018 cycle of the PSP. The overarching metric for the fiscal 2018 AIP and the fiscal 2016 to 2018 cycle of the PSP was adjusted EPS. The underlying metrics for the fiscal 2018 AIP were fiscal 2018 EBIT and net sales growth. The underlying metrics for the fiscal 2016 to 2018 cycle of the PSP were EBITDA Return on Capital and EPS CAGR.
In both the fiscal 2018 AIP and the fiscal 2016 to 2018 cycle of the PSP, the Committee approved adjustments that are generally consistent with the adjustments presented to investors in our discussions of comparable earnings results
Compensation Discussion and Analysis
including, in the fiscal 2016 to 2018 cycle of the PSP, an adjustment to eliminate the impact of the TCJA on our adjusted EPS. In addition, in the fiscal 2018 AIP, the Committee approved an approximately $14 million adjustment to net sales results in light of management’s decision to shift brand investments from advertising and promotion expense to retailer marketing investments, as discussed above. On an unadjusted basis, the company’s fiscal 2018 net sales were approximately $1.1 million below the level otherwise required to earn the net sales “kicker.”
Committee’s Practices Regarding the Timing of Equity Grants
We do not backdate stock options or grant equity retroactively. We do not coordinate grants of equity with disclosures of positive or negative information. Most equity is granted in the ordinary course at an annual Committee meeting each July.
As discussed above, theThe Committee decided to eliminateeliminated the granting of stock options from its executive compensation program in fiscal 2018 and forward.2018. However, historically, stock options have beenwere granted with an exercise price equal to the closing market price of our common stock on the NYSE on the date of grant. And, ifIf a stock option grant was made other than during the routine July Committee meeting, the company would require that the grant be made on the first trading day of the month on or following the grantee’s date of hire.
Additional Information on the Committee’s Compensation Consultant
The Committee engaged FW Cook directly to assist it in obtaining and reviewing information relevant to its compensation decisions. The independence and performance of FW Cook are of the utmost importance to the Committee. As a result, Committee policy prevents management from directly engaging the consultant without the prior approval of the Committee’s Chair. For fiscal 2018,2021, FW Cook did not provide any additional services to us or our affiliates. In addition, the Committee reviews the types of services provided by the consultant and all fees paid for those services on a regular basis and conducts a formal evaluation of the consultant on an annual basis. The Committee assessed the independence of FW Cook, as required under NYSE listing rules. The Committee has also considered and assessed all relevant factors, including those required by the SEC that could give rise to a potential conflict of interest with respect to FW Cook during fiscal 2018.2021. Based on this review, the Committee did not identify any conflict of interest raised by the work performed by FW Cook.
Tax and Accounting Implications of the Committee’s Compensation Decisions
U.S. federal income tax law prohibits us from taking a tax deduction for certain compensation paid in excess of $1 million to certain executive officers (and, beginning in 2018, certain former executive officers). Historically, compensation that qualified as “performance-based compensation” under Section 162(m) of the Code could be excluded from this $1 million limit. This exception was repealed for our programs with the TCJA, effective for taxable years beginning after December 31, 2017, unless certain transition relief is available. The Committee’s general intent prior to implementation of the TCJA was to structure our executive compensation programs so that payments could qualify as “performance-based compensation.” However, the Committee may have decided from time to time to grant compensation that would not (or could not) be able to qualify as “performance-based compensation” if appropriate to achieve the objectives of the compensation program.2017.
With the repeal of the “performance-based compensation” provisions of Section 162(m) of the Code, compensation granted by the Committee may, more frequently, benon-deductible. The Committee believes that the tax deduction
2021 PROXY STATEMENT 66
limitation should not be permitted to compromise its ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that in certain cases is not deductible for federal income tax purposes,purposes.
Use of Adjustments in Incentive Programs
Our goal is to pay incentives based on the same underlying business trends and it is possibleresults that awards intendedour investors are using to qualify as “performance-based compensation” may
Compensation Discussionmeasure company performance. To incent management to make decisions that have positive long-term impacts, even at the expense of shorter term results, and Analysis
not so qualify. Moreover, even ifto prevent one-time gains and losses from having too great of an impact on incentive payouts, the Committee intendeddesigned its programs to grant compensation that qualifies as “qualified performance-based compensation” for purposes of Section 162(m)exclude certain items impacting comparability from results in the FY21 AIP and the fiscal 2019 to 2021 cycle of the Code,PSP. The metrics for the company cannot guarantee that such compensation ultimately will be deductible.FY21 AIP were fiscal 2021 operating income, net sales, and free cash flow. The metric for the fiscal 2019 to 2021 cycle of the PSP was adjusted diluted EPS CAGR.
ForIn both the FY21 AIP and the fiscal 2018, all annual incentive and performance share awards2019 to covered employees were subject to, and made in accordance with, performance-based compensation arrangements that were then intended to qualify as tax deductible. To that end,2021 cycle of the PSP, the Committee approved adjustments that are generally consistent with the adjustments presented to investors in our discussions of comparable earnings results.
Adjustments included the following types of unplanned events, which can either negatively or positively impact our performance versus incentive plan targets in a frameworkmanner that is not indicative of underlying business performance:
| • | Restructuring charges |
| • | Expenses associated with M&A and integration-related activities |
| • | Material changes in business, operations, corporate or capital structure |
| • | Impairments on intangible assets |
| • | Results of discontinued operations |
| • | Foreign exchange or hedge-related gains and losses |
| • | Non-operating/non-cash gains and losses |
| • | Litigation or claim adjudication, judgments, or settlements |
| • | Adjustments to prior year tax liabilities |
| • | The cumulative effects of accounting charges |
Mitigating Risk in which (1) maximum awards under these incentive programs would be authorized upon attainmentOur Compensation Program
While the primary goal of adjusted EPS of: $0.10 for the fiscal 2018 AIP; $0.10 per year for theConagra’s executive compensation program is to align management and shareholder interests and encourage strong financial performance, period for the fiscal 2016 to 2018 cycle of the PSP; $0.10 per year for the performance period for the fiscal 2017 to 2019 cycle of the PSP; and $0.10 per year for the performance period for the fiscal 2018 to 2020 cycle of the PSP; and (2) negative discretion would be applied by the Committee is attuned to decrease authorized awards based upon the fact that poorly constructed compensation programs can have unintended consequences. As such, the Committee designs Conagra’s program frameworks described above.thoughtfully to help mitigate the risk that employees will take unnecessary and excessive risks that threaten the long-term health and viability of our company. With the assistance of Human Resources and Legal department personnel, the Committee undertook a risk review of our fiscal 2021 compensation programs for all employees. Based on the review, we believe our compensation policies and practices are balanced and aligned with creating shareholder value and do not create risks that are reasonably likely to have a material adverse effect on our company.
67 CONAGRA BRANDS
Compensation Committee Report
What We DO |
| Focus employees on both short- and long-term goals. |
| Generally require a “double-trigger” for accelerated vesting to occur in equity awards in connection with a change of control. | ||||
| Consider a mix of financial and non-financial goals to prevent over-emphasis on any single metric. |
| Provide for the clawback of amounts paid to any of our most senior officers in certain circumstances. | |||||
| Allow for some subjective evaluation in the determination of incentive payouts, to ensure linkage between payouts and the “quality” of performance. |
| Use a range of strong processes and controls, including Committee oversight, in our compensation practices. | |||||
| Employ a greater portion of variable pay (i.e., incentives) at more senior levels of the organization. |
| Engage an independent compensation consultant for the Committee; consultant performs no other work for our company. | |||||
| Require stock ownership for more than 92 of our most senior employees, as of fiscal year end. |
| Pay incentive compensation only after our financial results have been finalized and certified by the Committee. | |||||
What We DON’T DO |
| No director or executive officer may pledge or hedge their ownership of company stock. |
| Since fiscal 2012, no change in control agreements have been executed with excise tax “gross-up” protection. | ||||
| No excessive perquisites are provided to executives. |
| No additional years of credited service are provided to named executive officers in pension programs. | |||||
| No backdating or re-pricing of options may occur without shareholder approval. |
| No compensation programs that encourage unreasonable risk taking will be implemented. | |||||
2021 PROXY STATEMENT 68
The Human Resources Committee has reviewed and discussed the above section of this Proxy Statement entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Human Resources Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in the company’s Annual Report onForm 10-K for the fiscal year ended May 27, 2018.30, 2021.
Conagra Brands, Inc. Human Resources Committee
| Richard H. Lenny | ||||||
| Ruth Ann Marshall, Chair | Scott Ostfeld | |||||
Executive Compensation
Summary Compensation Table – Fiscal 20182021
The table below presents compensation information for individuals who served as our Chief Executive Officer and Chief Financial Officer during fiscal 20182021 and for each of the other three most highly-compensatedhighly compensated individuals who were serving as executive officers at the end of fiscal 2018. Mr. Marberger was not a named executive officer in fiscal 2016; as such, information about his compensation for fiscal 2016 is omitted. Mr. Serrao was not a named executive officer in fiscal 2017 or 2016; as such, information about his compensation for fiscal years 2017 and 2016 is similarly omitted.2021.
The amounts in the following Summary Compensation Table for Mr. Connolly are based in part on his employmentletter agreement. For more information about the material terms of the employmentletter agreement with Mr. Connolly and the change of control agreements we have entered into with each of our named executive officers, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above and “Potential Payments Upon Termination or Change of Control” below.
For more information about our named executive officers’ mix of base salary and annual incentive compensation to their total compensation, see the discussion under “Compensation Discussion and Analysis — Elements ofOur Fiscal 20182021 Executive Compensation”Compensation Program” above.
Please note that all share amounts and (if applicable) exercise prices included in the tables in this “Executive Compensation” section for awards granted prior to November 9, 2016 reflect the equitable adjustments to the company’s outstanding equity awards that were made in connection with the spin-off of Lamb Weston. For additional information about such equitable adjustments, please see “Compensation Discussion and Analysis – Special–Special Note on the Treatment of Equity Awards in the Spinoff” in our 2017 proxy statement.
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) | Non-Equity Plan | Change in qualified | All Other Compen- sation ($) (4) | Total ($) | |||||||||||||||||||||||||||
Sean Connolly
|
|
2018
|
|
|
1,142,308
|
|
|
-
|
|
|
6,676,835
|
|
|
-
|
|
|
2,250,000
|
|
|
-
|
|
|
404,128
|
|
|
10,473,271
|
| |||||||||
CEO and President
|
|
2017
|
|
|
1,100,000
|
|
|
-
|
|
|
4,628,385
|
|
|
1,246,952
|
|
|
2,314,950
|
|
|
-
|
|
|
477,990
|
|
|
9,768,277
|
| |||||||||
|
2016
|
|
|
1,100,000
|
|
|
-
|
|
|
4,396,589
|
|
|
1,032,499
|
|
|
3,258,750
|
|
|
-
|
|
|
157,972
|
|
|
9,945,810
|
| ||||||||||
David Marberger
|
|
2018
|
|
|
639,231
|
|
|
-
|
|
|
1,582,062
|
|
|
-
|
|
|
715,107
|
|
|
-
|
|
|
91,029
|
|
|
3,027,429
|
| |||||||||
Chief Financial Officer
|
|
2017
|
|
|
423,846
|
|
|
200,000
|
|
|
1,631,211
|
|
|
299,447
|
|
|
471,588
|
|
|
-
|
|
|
22,754
|
|
|
3,048,846
|
| |||||||||
Colleen Batcheler
|
|
2018
|
|
|
540,750
|
|
|
-
|
|
|
1,582,062
|
|
|
-
|
|
|
672,152
|
|
|
10,449
|
|
|
109,850
|
|
|
2,915,263
|
| |||||||||
General Counsel
|
|
2017
|
|
|
538,630
|
|
|
-
|
|
|
1,184,861
|
|
|
319,214
|
|
|
749,126
|
|
|
25,118
|
|
|
267,098
|
|
|
3,084,047
|
| |||||||||
|
2016
|
|
|
521,635
|
|
|
-
|
|
|
2,895,365
|
|
|
264,335
|
|
|
989,019
|
|
|
39,296
|
|
|
97,807
|
|
|
4,807,457
|
| ||||||||||
Tom McGough
|
|
2018
|
|
|
669,500
|
|
|
-
|
|
|
1,582,062
|
|
|
-
|
|
|
832,189
|
|
|
15,987
|
|
|
137,007
|
|
|
3,236,745
|
| |||||||||
President,
|
|
2017
|
|
|
666,875
|
|
|
-
|
|
|
1,184,861
|
|
|
319,214
|
|
|
878,675
|
|
|
35,360
|
|
|
150,550
|
|
|
3,235,535
|
| |||||||||
Operating Segments
|
|
2016
|
|
|
636,538
|
|
|
-
|
|
|
2,895,365
|
|
|
264,335
|
|
|
1,156,589
|
|
|
48,895
|
|
|
57,867
|
|
|
5,059,589
|
| |||||||||
Darren Serrao
|
|
2018
|
|
|
496,797
|
|
|
-
|
|
|
1,186,587
|
|
|
-
|
|
|
581,029
|
|
|
-
|
|
|
84,580
|
|
|
2,348,993
|
| |||||||||
Chief Growth Officer
| ||||||||||||||||||||||||||||||||||||
69 CONAGRA BRANDS
Name and Principal Position
| Fiscal
| Salary
| Bonus
| Stock
| Option
| Non-Equity
| Change in
| All Other
| Total
| |||||||||||
Sean Connolly President and Chief Executive Officer |
|
2021
|
| 1,230,462 | - | 7,722,276 | - | 2,357,319 | - | 459,966 | 11,770,023 | |||||||||
|
2020
|
| 1,246,154 | - | 7,630,602 | - | 2,649,635 | - | 356,441 | 11,882,832 | ||||||||||
|
2019
|
| 1,192,308 | - | 11,173,754 | - | 1,611,404 | - | 415,282 | 14,392,748 | ||||||||||
David Marberger Executive Vice President and Chief Financial Officer |
|
2021
|
| 733,392 | - | 1,594,274 | - | 906,473 | - | 159,998 | 3,394,137 | |||||||||
|
2020
|
| 738,677 | - | 1,587,822 | - | 997,214 | - | 123,791 | 3,447,504 | ||||||||||
|
2019
|
| 683,000 | - | 2,201,192 | - | 615,383 | - | 132,486 | 3,632,061 | ||||||||||
Colleen Batcheler Executive Vice President, General Counsel and Corporate Secretary |
|
2021
|
| 540,750 | - | 1,594,274 | - | 668,367 | 2,479 | 117,779 | 2,923,649 | |||||||||
|
2020
|
| 561,548 | - | 1,587,822 | - | 795,995 | 88,823 | 95,431 | 3,129,619 | ||||||||||
|
2019
|
| 540,750 | - | 2,201,192 | - | 487,216 | 28,863 | 107,178 | 3,365,199 | ||||||||||
Tom McGough Executive Vice President and Co-Chief Operating Officer |
|
2021
|
| 714,385 | - | 1,594,274 | - | 882,980 | 4,923 | 129,543 | 3,326,105 | |||||||||
|
2020
|
| 695,250 | - | 1,587,822 | - | 938,588 | 76,391 | 108,005 | 3,406,056 | ||||||||||
|
2019
|
| 669,500 | - | 2,201,192 | - | 603,220 | 28,693 | 134,058 | 3,636,663 | ||||||||||
Darren Serrao Executive Vice President and Co-Chief Operating Officer |
|
2021
|
| 610,000 | - | 1,594,274 | - | 678,564 | - | 122,854 | 3,005,692 | |||||||||
|
2020
|
| 633,462 | - | 1,587,822 | - | 769,656 | - | 95,684 | 3,086,624 | ||||||||||
| 2019 | 575,062 | - | 1,805,401 | - | 466,317 | - | 109,880 | 2,956,660 | ||||||||||||
| 1. | For fiscal 2020, there was one extra pay period. |
| 2. | Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the stock awards granted during the reported fiscal years. For the performance shares awarded in fiscal |
Executive Compensation
| reported represent only the FY21 measurement period and are based on the probable outcome of the relevant performance conditions for such measurement period as of the grant date. Assuming the highest level of performance is achieved for the FY21 measurement period for the performance shares awarded in fiscal |
For fiscal |
The measurement date for pension value for fiscal |
2021 PROXY STATEMENT 70
The components of fiscal |
| Perquisites and Personal Benefits (a) |
Perquisites and Personal Benefits(a) | (Column 3) Company Contribution to $(c)
| ||||||||||
Named Executive Officer | (Column 1) $ | (Column 2) $ | (Column 3) $ (c) | (Column 1) Personal Use of Aircraft $ | (Column 2) Matching Gifts $ | |||||||
Mr. Connolly | 106,841 | - | 297,287 |
117,090
|
(b)
|
335,376
| ||||||
Mr. Marberger | - | (b) | 85,029 |
-
|
(b)
|
152,498
| ||||||
Ms. Batcheler | - | (b) | 108,350 |
-
|
-
|
117,779
| ||||||
Mr. McGough | - | (b) | 135,507 |
-
|
-
|
129,543
| ||||||
Mr. Serrao | - | (b) | 78,080 |
-
|
(b)
|
121,854
| ||||||
| (a) | All amounts shown are valued at the incremental cost to us of providing the benefit. For Column 1, also includes the incremental cost of repositioning flights associated with personal use by the named executive officer. With respect to Mr. Connolly’s use of company aircraft (Column 1), Mr. Connolly is a party to an aircraft time share agreement with us. Under this agreement, Mr. Connolly reimburses us in cash for a portion of our incremental costs of personal flights |
| (b) | For Columns 1 and 2, inclusive, a (b) notation in lieu of a dollar amount indicates that the named executive officer received the benefit but at an incremental cost to us of less than $25,000. |
| (c) | Reflects the qualified |
Named Executive Officer
| Company
| Company
| ||
Mr. Connolly | 20,759 | 314,617 | ||
Mr. Marberger | 26,250 | 126,248 | ||
Ms. Batcheler | 25,346 | 92,433 | ||
Mr. McGough | 12,312 | 117,231 | ||
Mr. Serrao | 25,650 | 96,204 | ||
71 CONAGRA BRANDS
Executive Compensation
Grants of Plan-Based Awards – Fiscal 20182021
The following table presents information about grants of plan-based awards (equity andnon-equity) made during fiscal 20182021 to the named executive officers. All equity-based grants were made under the shareholder approved Conagra Brands, Inc. 2014 Stock Plan, which we refer to as the 2014 Stock Plan.
| Name | Grant Date |
Estimated Possible Payouts |
Estimated Future Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (3) | |||||||||||||||||
| Committee Action Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||
Mr. | - | - | 1,713,462 | 3,769,616 | - | - | - | - | - | |||||||||||||
Connolly | 7/20/2017 | 7/19/2017 | - | - | - | - | 151,128 | 302,256 | - | 5,100,570 | ||||||||||||
| 7/20/2017 | 7/19/2017 | - | - | - | - | - | - | 50,376 | 1,576,265 | |||||||||||||
Mr. | - | - | 575,308 | 1,265,678 | - | - | - | - | - | |||||||||||||
Marberger | 7/19/2017 | 7/19/2017 | - | - | - | - | 35,710 | 71,420 | - | 1,208,784 | ||||||||||||
| 7/19/2017 | 7/19/2017 | - | - | - | - | - | - | 11,903 | 373,278 | |||||||||||||
Ms. | - | - | 540,750 | 1,189,650 | - | - | - | - | - | |||||||||||||
Batcheler | 7/19/2017 | 7/19/2017 | - | - | - | - | 35,710 | 71,420 | - | 1,208,784 | ||||||||||||
| 7/19/2017 | 7/19/2017 | - | - | - | - | - | - | 11,903 | 373,278 | |||||||||||||
Mr. | - | - | 669,500 | 1,472,900 | - | - | - | - | - | |||||||||||||
McGough | 7/19/2017 | 7/19/2017 | - | - | - | - | 35,710 | 71,420 | - | 1,208,784 | ||||||||||||
| 7/19/2017 | 7/19/2017 | - | - | - | - | - | - | 11,903 | 373,278 | |||||||||||||
Mr. | - | - | 447,117 | 983,657 | - | - | - | - | - | |||||||||||||
Serrao | 7/19/2017 | 7/19/2017 | - | - | - | - | 26,783 | 53,566 | - | 906,605 | ||||||||||||
| 7/19/2017 | 7/19/2017 | - | - | - | - | - | - | 8,928 | 279,982 | |||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive
| Estimated Future Payouts Under
| All Other
| Grant Date
| |||||||||||||||||||
Name
| Grant Date
|
Threshold
| Target
| Maximum
| Threshold
| Target
| Maximum
| |||||||||||||||
Mr. Connolly | - | - | 1,907,216 | 3,814,431 | - | - | - | - | - | |||||||||||||
| 7/23/2020 | - | - | - | - | 160,058 | 320,116 | - | 5,893,336 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 53,353 | 1,828,941 | ||||||||||||||
Mr. Marberger | - | - | 733,392 | 1,466,785 | - | - | - | - | - | |||||||||||||
7/23/2020 | - | - | - | - | 33,044 | 66,088 | - | 1,216,680 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 11,015 | 377,594 | ||||||||||||||
Ms. Batcheler | - | - | 540,750 | 1,081,500 | - | - | - | - | - | |||||||||||||
7/23/2020 | - | - | - | - | 33,044 | 66,088 | - | 1,216,680 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 11,015 | 377,594 | ||||||||||||||
Mr. McGough | - | - | 714,385 | 1,428,769 | - | - | - | - | - | |||||||||||||
7/23/2020 | - | - | - | - | 33,044 | 66,088 | - | 1,216,680 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 11,015 | 377,594 | ||||||||||||||
Mr. Serrao | - | - | 549,000 | 1,098,000 | - | - | - | - | - | |||||||||||||
7/23/2020 | - | - | - | - | 33,044 | 66,088 | - | 1,216,680 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 11,015 | 377,594 | ||||||||||||||
| 1. | Amounts reflect grants made under the |
| 2. | Amounts reflect the performance |
| 3. | The grant date fair value of performance shares granted under our long-term incentive program for the FY21 measurement period under the fiscal |
2021 PROXY STATEMENT 72
Executive Compensation
Outstanding Equity Awards at FiscalYear-End – Fiscal 20182021
The following table lists all stock options, performance shares, RSUs, and RSUPBRSU awards outstanding as of May 27, 201830, 2021 for the named executive officers.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Stock That Have | Equity Incentive (#) (6) | Equity Incentive Plan or Payout Value of Unearned Shares, Units or ($) (5) | |||||||||||||||||||||||||||||||
Mr. | 4/1/2015 | 806,150 | - | 27.44 | 3/31/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
Connolly | 8/28/2015 | 188,740 | 94,371 | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 7/11/2016 | 91,103 | 182,206 | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||
| 8/28/2015 | - | - | - | - | 47,185 | 1,765,191 | - | - | ||||||||||||||||||||||||||||||||
| 7/11/2016 | - | - | - | - | 45,551 | 1,704,063 | - | - | ||||||||||||||||||||||||||||||||
| 7/20/2017 | - | - | - | - | 50,376 | 1,884,566 | - | - | ||||||||||||||||||||||||||||||||
| 8/19/2016 | - | - | - | - | - | - | 184,669 | 6,908,467 | ||||||||||||||||||||||||||||||||
| 7/20/2017 | - | - | - | - | - | - | 309,517 | 11,579,031 | ||||||||||||||||||||||||||||||||
Mr. | 9/1/2016 | 23,082 | 46,166 | 34.26 | 8/31/2026 | - | - | - | - | |||||||||||||||||||||||||||||||
Marberger | 9/1/2016 | - | - | - | - | 11,541 | 431,749 | - | - | |||||||||||||||||||||||||||||||
| 9/1/2016 | - | - | - | - | 7,144 | (3) | 267,257 | - | - | |||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | 11,903 | 445,291 | - | - | ||||||||||||||||||||||||||||||||
| 8/19/2016 | - | - | - | - | - | - | 47,275 | 1,768,558 | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | - | - | 73,136 | 2,736,018 | ||||||||||||||||||||||||||||||||
Ms. | 7/15/2013 | 187,607 | - | 27.46 | 7/14/2023 | - | - | - | - | |||||||||||||||||||||||||||||||
Batcheler | 8/28/2015 | 48,320 | 24,160 | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 7/11/2016 | 23,321 | 46,644 | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||
| 7/17/2015 | - | - | - | - | 53,508 | 2,001,734 | - | - | ||||||||||||||||||||||||||||||||
| 8/28/2015 | - | - | - | - | 12,080 | 451,913 | - | - | ||||||||||||||||||||||||||||||||
| 7/11/2016 | - | - | - | - | 11,660 | 436,201 | - | - | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | 11,903 | 445,291 | - | - | ||||||||||||||||||||||||||||||||
| 8/19/2016 | - | - | - | - | - | - | 47,275 | 1,768,558 | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | - | - | 73,136 | 2,736,018 | ||||||||||||||||||||||||||||||||
Mr. | 7/16/2012 | 80,615 | - | 18.42 | 7/15/2022 | - | - | - | - | |||||||||||||||||||||||||||||||
McGough | 7/15/2013 | 187,607 | - | 27.46 | 7/14/2023 | - | - | - | - | |||||||||||||||||||||||||||||||
| 7/14/2014 | 205,951 | - | 23.00 | 7/13/2024 | - | - | - | - | ||||||||||||||||||||||||||||||||
| 8/28/2015 | 48,320 | 24,160 | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||||||||||||||||||||
| 7/11/2016 | 23,321 | 46,644 | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||||||||||||||||||||
| 7/17/2015 | - | - | - | - | 53,508 | 2,001,734 | - | - | ||||||||||||||||||||||||||||||||
| 8/28/2015 | - | - | - | - | 12,080 | 451,913 | - | - | ||||||||||||||||||||||||||||||||
| 7/11/2016 | - | - | - | - | 11,660 | 436,201 | - | - | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | 11,903 | 445,291 | - | - | ||||||||||||||||||||||||||||||||
| 8/19/2016 | - | - | - | - | - | - | 47,275 | 1,768,558 | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | - | - | 73,136 | 2,736,018 | ||||||||||||||||||||||||||||||||
Mr. | 8/28/2015 | 36,238 | 18,120 | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
Serrao | 7/11/2016 | 17,490 | 34,982 | 35.81 | 7/10/2026 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/28/2015 | - | - | - | - | 9,059 | 338,897 | - | - | ||||||||||||||||||||||||||||||||
| 9/1/2015 | - | - | - | - | 4,346 | (4) | 162,584 | - | - | |||||||||||||||||||||||||||||||
| 7/11/2016 | - | - | - | - | 8,745 | 327,150 | - | - | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | 8,928 | 333,996 | - | - | ||||||||||||||||||||||||||||||||
| 8/19/2016 | - | - | - | - | - | - | 35,455 | 1,326,372 | ||||||||||||||||||||||||||||||||
| 7/19/2017 | - | - | - | - | - | - | 54,853 | 2,052,051 | ||||||||||||||||||||||||||||||||
Option Awards
|
Stock Awards
| |||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity Incentive (#)
| Equity ($)(2)
| |||||||||||||
Mr. Connolly | 4/1/2015 | 806,150 | - | 27.44 | 3/31/2025 | - | - | - | - | |||||||||||||
8/28/2015 | 283,111 | - | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||
7/11/2016 | 273,309 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||
7/18/2018 | - | - | - | - | 52,109 | 1,985,353 | - | - | ||||||||||||||
7/17/2019 | - | - | - | - | 67,313 | 2,564,625 | - | - | ||||||||||||||
7/23/2020 | - | - | - | - | 53,353 | 2,032,749 | - | - | ||||||||||||||
4/15/2019 | - | - | - | - | - | - | 97,856(3) | 3,728,314 | ||||||||||||||
7/17/2019 | - | - | - | - | - | - | 212,310(4) | 8,089,011 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 323,566(4) | 12,327,865 | ||||||||||||||
Mr. Marberger | 9/1/2016 | 69,248 | - | 34.26 | 8/31/2026 | - | - | - | - | |||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 424,815 | - | - | ||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 549,554 | - | - | ||||||||||||||
7/23/2020 | - | - | - | - | 11,015 | 419,672 | - | - | ||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,657(3) | 596,532 | ||||||||||||||
7/16/2019 | - | - | - | - | - | - | 45,495(4) | 1,733,360 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 66,800(4) | 2,545,080 | ||||||||||||||
Ms. Batcheler | 8/28/2015 | 72,480 | - | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||
7/11/2016 | 69,965 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 424,815 | - | - | ||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 549,554 | - | - | ||||||||||||||
7/23/2020 | - | - | - | - | 11,015 | 419,672 | - | - | ||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,657(3) | 596,532 | ||||||||||||||
7/16/2019 | - | - | - | - | - | - | 45,495(4) | 1,733,360 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 66,800(4) | 2,545,080 | ||||||||||||||
73 CONAGRA BRANDS
Executive Compensation
Option Awards
|
Stock Awards
| |||||||||||||||||||||
Name
| Grant
| Number of
| Number of
| Option
| Option
| Number
| Market Value
| Equity Incentive (#)
| Equity ($)(2)
| |||||||||||||
Mr. McGough | 7/15/2013 | 137,607 | - | 27.46 | 7/14/2023 | - | - | - | - | |||||||||||||
7/14/2014 | 135,951 | - | 23.00 | 7/13/2024 | - | - | - | - | ||||||||||||||
8/28/2015 | 72,480 | - | 31.06 | 8/27/2025 | - | - | - | - | ||||||||||||||
7/11/2016 | 69,965 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||
7/17/2018 | - | - | - | - | 11,150 | 424,815 | - | - | ||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 549,554 | - | - | ||||||||||||||
7/23/2020 | - | - | - | - | 11,015 | 419,672 | - | - | ||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,657(3) | 596,532 | ||||||||||||||
7/16/2019 | - | - | - | - | - | - | 45,495(4) | 1,733,360 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 66,800(4) | 2,545,080 | ||||||||||||||
Mr. Serrao | 8/28/2015 | 54,358 | - | 31.06 | 8/27/2025 | - | - | - | - | |||||||||||||
7/11/2016 | 52,472 | - | 35.81 | 7/10/2026 | - | - | - | - | ||||||||||||||
7/17/2018 | - | - | - | - | 8,363 | 318,630 | - | - | ||||||||||||||
7/16/2019 | - | - | - | - | 14,424 | 549,554 | - | - | ||||||||||||||
7/23/2020 | - | - | - | - | 11,015 | 419,672 | - | - | ||||||||||||||
4/15/2019 | - | - | - | - | - | - | 15,657(3) | 596,532 | ||||||||||||||
7/16/2019 | - | - | - | - | - | - | 45,495(4) | 1,733,360 | ||||||||||||||
7/23/2020 | - | - | - | - | - | - | 66,800(4) | 2,546,080 | ||||||||||||||
| 1. |
|
| Unexercisable at FYE | Vesting Schedule | Unexercisable at FYE | Vesting Schedule | |||||||||||||||||
| # of Shares | Vesting Date | # of Shares | Vesting Date | |||||||||||||||||
Mr. Connolly | 94,371 | 94,371 | 8/28/18 | Mr. McGough | 24,160 | 24,160 | 8/28/18 | |||||||||||||
| 182,206 | 91,103 | 7/11/18 | 46,644 | 23,322 | 7/11/18 | |||||||||||||||
| 91,103 | 7/11/19 | 23,322 | 7/11/19 | |||||||||||||||||
Mr. Marberger | 46,166 | 23,083 | 9/1/18 | Mr. Serrao | 18,120 | 18,120 | 8/28/18 | |||||||||||||
| 23,083 | 9/1/19 | 34,982 | 17,491 | 7/11/18 | ||||||||||||||||
| 17,491 | 7/11/19 | |||||||||||||||||||
Ms. Batcheler | 24,160 | 24,160 | 8/28/18 | |||||||||||||||||
| 46,644 | 23,322 | 7/11/18 | ||||||||||||||||||
| 23,322 | 7/11/19 | |||||||||||||||||||
|
|
|
The market value of unvested or unearned RSUs and unearned shares and PBRSUs is calculated using |
Reflects, as of May 30, 2021, the target number of shares that could be earned under the PBRSUs, plus accrued dividend equivalents. Generally, the PBRSUs are only earned to the extent we achieve the performance targets with respect to such awards. Shares earned under the PBRSU awards, plus dividend equivalents, will be distributed, if earned, following fiscal 2022. Based on the design of the award, the maximum is subject to a maximum value cap (value greater than 8.6 times the grant value of each grantee’s PBRSU award) and 500% of the granted value. |
| 4. | Reflects, on separate lines, as of May |
2021 PROXY STATEMENT 74
Option Exercises and Stock Vested – Fiscal 20182021
The following table summarizes the RSUs vested and the option awards exercised during fiscal 20182021 for each of the named executive officers as well as the performance shares that were earned by and paid out to the named executive officers for the fiscal 20162019 to 20182021 cycle of the PSP.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($) | Number of Shares
| Value Realized on
| Number of Shares
| Value Realized on
| ||||||||||||||||||||
Mr. Connolly | - | - | 225,939(2) | 8,417,195 | — | — | 334,005 | 11,537,904 | ||||||||||||||||||||
Mr. Marberger | - | - | 7,143(3) | 234,862 | — | — | 72,592 | 2,514,010 | ||||||||||||||||||||
Ms. Batcheler | 254,320 | 3,477,847 | 40,845 | 1,528,011 | 187,607 | 1,602,657 | 72,592 | 2,514,010 | ||||||||||||||||||||
Mr. McGough | - | - | 40,845 | 1,528,011 | 200,615 | 2,856,851 | 72,592 | 2,514,010 | ||||||||||||||||||||
Mr. Serrao | - | - | 34,980(4) | 1,288,914 | — | — | 54,446 | 1,885,578 | ||||||||||||||||||||
| 1. | Pursuant to the terms of the PSP, dividend equivalents on earned shares, paid in additional shares of common stock, were also distributed to the named executive officers. The shares distributed to the named executive officers through this dividend equivalent feature (and included in this table) were: |
Executive Compensation
|
|
|
Pension Benefits – Fiscal 20182021
Conagra Brands has historicallypreviously maintained anon-contributory defined benefit pension plan for eligible employees, which we refer to as the Qualified Pension. The Qualified Pension was closed to new participants who joined the company on or after August 1, 2013. As a result, Messrs. Connolly, Marberger, and Serrao are not eligible to participate. Of the named executive officers, only Ms. Batcheler and Mr. McGough participate.
In the Qualified Pension, the pension benefit formula for the named executive officer participants is determined by adding two components:
A multiple – 0.9% — of Average Monthly Earnings (up to the integration level) multiplied by years of credited service (up to 35 years of credited service).service.
A multiple – 1.3% — of Average Monthly Earnings (over the integration level) multiplied by years of credited service (up to 35 years of credited service).service.
“Average Monthly Earnings” is the monthly average of the executive’s annual compensation from the company, up to the IRS limit, for the highest five consecutive years of the final ten years of his or her service. Only salary and annual incentive payments (reported in the“Non-Equity Incentive Plan Compensation” column of the summary compensation table year to year) are considered for the named executive officers in computing Average Monthly Earnings. The integration level is calculated by the IRS by averaging the last 35 years of Social Security taxable wages, up to and including the year in which the executive’s employment ends.
75 CONAGRA BRANDS
Participants are vested in the pension benefit once they have five years of vesting service with the company; each of Ms. Batcheler and Mr. McGough are vested. Pension benefits become payable at age 65 for normal retirement, or at age 55 with 10 years of service for early retirement. There is no difference in the benefit formula upon an early retirement, and there is no payment election option that would impact the amount of annual benefits any of the named executive officers would receive. The Qualified Pension was frozen effective December 31, 2017. Credited service and Average Monthly Earnings were frozen as of such date.
| Name | Plan Name (1) | Number of Years Credited Service (#) (2) | Present Value of Accumulated Benefit ($) (3) | Plan Name(1)
| Number of Years
|
Present Value of
| ||||||||||
Mr. Connolly (4) | Qualified Pension | - | - | Qualified Pension | - | - | ||||||||||
Mr. Marberger (4) | Qualified Pension | - | - | Qualified Pension | - | - | ||||||||||
Ms. Batcheler | Qualified Pension | 11.5 | 224,762 | Qualified Pension | 11.5 | 344,927 | ||||||||||
Mr. McGough | Qualified Pension | 10.9 | 292,390 | Qualified Pension | 10.9 | 402,397 | ||||||||||
Mr. Serrao (4) | Qualified Pension | - | - | Qualified Pension | - | - |
| 1. | Qualified Pension refers to the Conagra Brands, Inc. Pension |
| 2. | The number of years of credited service set forth above is calculated as of |
| 3. | The valuation methodology and all material assumptions applied in quantifying the present value of the accumulated benefit are presented in footnote |
| 4. | Messrs. Connolly, Marberger, and Serrao are not eligible to participate in the Qualified Pension. |
Executive Compensation
Nonqualified Deferred Compensation – Fiscal 20182021
The table following this summary shows the nonqualified deferred compensation activity for each named executive officer during fiscal 2018.2021. The amounts shown include amounts deferred under the Conagra Brands Retirement Income Savings Plan, or Qualified CRISP, which is our qualified 401(k) plan, and the Conagra Brands, Inc. Voluntary Deferred Compensation Plan, as amended and restated, or Voluntary Deferred Comp Plan.
Under our Qualified CRISP, which is a broad-based plan for employees, the company will match 100% of the first 6% of salary and bonus the employee contributes to the plan and make an additional contribution of 3% of salary and annual incentive. This formula was in effect for all of fiscal 2018 for Mr. Connolly, Mr. Marberger and Mr. Serrao. For Ms. Batcheler and Mr. McGough, who participated in the Qualified Pension during fiscal 2018 until it was frozen on December 31, 2017, this formula went into effect on January 1, 2018. Previously, the company matched only 66 2⁄3% of the first 6% of salary and bonus contributed to the plan. Participants are provided a wide-arraywide array of investment alternatives for their account balances.
Our Voluntary Deferred Comp Plan allows certain domestic management-level employees whose salary is $125,000 or more per year to defer receipt of 5%between 6% to 50% of their salary, up to 90% of their annual incentive payment, or up to 90% of their salary plus annual incentive payment in excess of $275,000.the IRS limit ($290,000 for calendar year 2021). The investment alternatives for deferred amounts mirror those available under our Qualified CRISP. An election to participate in the plan must be timely filed with the company in accordance with IRS requirements.
Our Voluntary Deferred Comp Plan also provides nonqualified matching contribution benefits. The plan provides for company matching contributions and companynon-elective contributions for eligible participants associated with amounts of eligible compensation above IRS limits. The matching contribution is a dollar for dollar match, limited to 6% of eligible compensation earned by the participant and paid by the company in excess of the IRS limit. Eligible participants are allowed to defer no more than 50% of their base salary and no more than 90% of their annual incentive payment that exceeds the IRS limit. Thenon-elective contribution is equal to 3% of an eligible participant’s eligible compensation in excess of the IRS limit. Matching contributions andnon-elective contributions are credited on or about December 31st of each year if the eligible participant earns in excess of the IRS limit and the participant is actively employed at the end of the calendar year.
2021 PROXY STATEMENT 76
The Voluntary Deferred Comp Plan also provides that, unless the company determines otherwise with respect to a participant, the interest of each participant in his or her matching contributions andnon-elective contributions will be immediately 100% vested.
With respect to distributions from the Voluntary Deferred Comp Plan, in general, amounts will be distributed in cash in a lump sum in January following the individual’s separation from service. Participants may also elect to receive their balances at certain other times, including in the January of the calendar year specified by the participant or 18 months following the occurrence of a change of control. Elections regarding the time and form of payment are intended to comply with Section 409A of the Code, and certain payments to executives meeting the definition of a “specified employee” under Section 409A will be delayed for six months after the date of the separation from service. Executives may make hardship withdrawals from the Voluntary Deferred Comp Plan under certain circumstances, but no hardship withdrawals were requested by executives during fiscal 2018.2021.
| Name | Plan (1) | Executive Contributions in Last FY ($)(2) | Registrant Contributions in Last FY ($)(3) | Aggregate ($)(4) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(5) | ||||||||||||||||
Mr. Connolly | Voluntary Def Comp Plan | 187,039 | 278,422 | 67,654 | - | 1,402,740 | ||||||||||||||||
Mr. Marberger | Voluntary Def Comp Plan | 421,477 | 71,529 | 11,307 | - | 762,625 | ||||||||||||||||
Ms. Batcheler | Voluntary Def Comp Plan | 56,574 | 89,632 | 23,886 | (154,292) | 305,206 | ||||||||||||||||
Mr. McGough | Voluntary Def Comp Plan | 148,798 | 112,332 | 98,440 | (11,182) | 1,076,621 | ||||||||||||||||
Mr. Serrao | Voluntary Def Comp Plan | 47,681 | 60,599 | 13,335 | - | 255,109 | ||||||||||||||||
Executive Compensation
Name
| Plan(1)
| Executive
| Registrant
| Aggregate ($)(4)
| Aggregate
| Aggregate
| ||||||||
Mr. Connolly | Voluntary Def Comp Plan | 197,867 | 314,617 | 396,075 | - | 3,328,117 | ||||||||
Mr. Marberger | Voluntary Def Comp Plan | 80,992 | 126,248 | 17,190 | - | 1,395,052 | ||||||||
Ms. Batcheler | Voluntary Def Comp Plan | 55,447 | 92,433 | 73,346 | (161,957) | 397,614 | ||||||||
Mr. McGough | Voluntary Def Comp Plan | 188,300 | 117,231 | 655,572 | (15,992) | 2,688,384 | ||||||||
Mr. Serrao | Voluntary Def Comp Plan | 60,214 | 96,204 | 108,835 | 798,409 | |||||||||
| 1. | Voluntary Def Comp Plan refers to the Conagra Brands, Inc. |
| 2. | The amounts reported are included in the “Salary” column of the Summary Compensation Table – Fiscal |
| 3. | The amounts reported are included in the “All Other Compensation” column of the Summary Compensation Table – Fiscal |
| 4. | Our Voluntary Def Comp Plan does not offer above market earnings (as defined by SEC rules). As a result, none of these earnings are included in the Summary Compensation Table – Fiscal |
| 5. | The following amounts from this column were reported in Summary Compensation Tables for prior fiscal years: Mr. Connolly, |
77 CONAGRA BRANDS
Termination or Change of Control
Our named executive officers’ employment may be terminated under several possible scenarios. In some of these scenarios, our plans, agreements, and arrangements would provide severance benefits in varying amounts to the executive. Further, our plans, agreements, and arrangements would provide for certain benefits (or for the acceleration of certain benefits) upon a change of control. Severance and other benefits that are payable upon a termination of employment or upon a change of control are described below.
The tables following the narrative discussion summarize amounts payable upon termination or a change of control under varying circumstances, assuming that the change of control occurred on, or that the executive’s employment terminated on, May 25, 2018, the last business day of fiscal 2018. Other key assumptions used in compiling the tables are set forth immediately preceding each table. In the event of an actual triggering event under any of the plans, agreements, and arrangements discussed in this section, all benefits would be paid to the executive in accordance with, and at times permitted by, Section 409A of the Code.
Plan Summaries
Severance Pay Plan.Plan
We maintain a severance pay plan that provides severance guidelines for all salaried employees. Any benefits payable under the program are at the sole and absolute discretion of Conagra Brands; for any particular employee, we may elect to provide severance as suggested by the plan or to provide benefits equal to, greater than or less than those provided in the guidelines. Ms. Batcheler and Messrs. Marberger, McGough, and Serrao are potentially covered by the plan. UntilAs described further below, Mr. Connolly’s employmentConnolly is party to a letter agreement with us expired on August 1, 2018, Mr. Connolly’s severance benefits were to be paid in accordance with that agreement, as further described below, rather than the severance pay plan. On August 2, 2018, we entered into a new letter agreement with Mr. Connolly that, among other things, addresses his severance benefits from and after August 2, 2018.benefits. For information regarding the new letter agreement with Mr. Connolly, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above.
Under the severance pay plan, the severance guideline for individuals above a certain pay grade, including that of our named executive officers, is 52 weeks of salary continuation, plus one additional week of salary continuation for each year of continuous service prior to separation. The guidelines also provide that upon notice that the former employee has obtained new employment, we will provide him or her with a lump sum payment equal to 50% of the severance pay remaining; the other 50% would be forfeited. In addition, the guidelines provide for the provision during this period of the same type and level of health plan coverage that was in effect immediately prior to the named executive officer’s termination of employment, up to a maximum of 18 months.
If a named executive officer is entitled to receive a severance payment under a change of control agreement (described below), we are not required to make payments to him or her under the severance pay plan.
Agreement with Mr. Connolly. As of May 25, 2018, we were Connolly
We are party to an employmenta letter agreement with Mr. Connolly that addressedaddresses matters such as his salary, participation in our annual and long-term incentive plans, and participation in
Executive Compensation
health and welfare benefit plans and other benefit programs and arrangements. The letter agreement also addressedaddresses certain of Mr. Connolly’s severance benefits and right to participate in our change of control benefit program.benefits. For information regarding the new letter agreement with Mr. Connolly, see “Compensation Discussion and Analysis — Agreements with Named Executive Officers” above.
A summary of Mr. Connolly’s severance benefits is provided below. Generally, any payments made under the employmentletter agreement upon disability or as a result of a termination without cause or for good reason (other than certain benefits required by law) would be conditioned on Mr. Connolly first signing a release agreement in a form approved by us.
2021 PROXY STATEMENT 78
We have excludedincluded retirement as a hypothetical scenario in the table below because Mr. Connolly would not have beenbecame eligible for early retirement at any timefor purposes of certain awards during fiscal 2018.2021.
Salary, AIP, Stock Options, and Health and Welfare Benefits | ||||||||||||
| Involuntary Termination with Cause | Involuntary | Voluntary Termination without Good Reason | Death or Disability | Retirement(1) | ||||||||
Salary | • Paid through month of termination | • Paid through month of termination • Also paid a lump sum equal to 2x annual salary
|
• Paid through month of termination |
• Paid through month of event |
• Paid through month of termination | |||||||
Annual Incentive Plan |
| |||||||||||
| •Not eligible for payment |
| •Paid no less than a prorated award for year of termination based on actual results, plus a lump sum equal to 2x target for year of termination | • Not eligible for payment | • Paid no less than a prorated award for the year of event based on actual results | ||||||||
• Paid a prorated award for the year of retirement based on actual results | ||||||||||||
Health and Welfare Benefits | • Paid in accordance with plan provisions | • Company will pay monthly COBRA premium for up to 24 months after termination of employment • Other benefits paid in accordance with plan provisions | • Paid in accordance with plan provisions | • Paid in accordance with plan provisions | • Paid in accordance with plan provisions | |||||||
Stock Options | •Options terminate
•Unexercised options | •Sign-on options remain exercisable
•Other
|
• Unvested options are forfeited | • Vested options, including vested sign-on options, remain exercisable for 90 days (or until earlier expiration date) •Unvested options are forfeited | • Death: Options fully vest and remain exercisable for 3 years after event (or until earlier expiration date)
• Disability: Options vest on a prorated basis | • Vested options remain exercisable for 3 years after retirement (or until earlier expiration date) | ||||||
79 CONAGRA BRANDS
PSP Awards, PBRSUs, RSUs: Retirement (In all other scenarios, these awards are paid in accordance with plan provisions described below) | ||||||||||
PSP Awards, PBRSU Awards and RSUs |
| |||||||||
| (1) |
|
Executive Compensation
In addition, uponUpon any of the hypothetical termination scenarios described above, Mr. Connolly would be paid his balance under our Voluntary Deferred Comp Plan based on his advance elections, and would be eligible for health and welfare benefits in accordance with applicable plan provisions.
Mr. Connolly’s agreement provides that all cash payments are generally payable in a lump sum thesixty-first day following termination of employment, unless otherwise provided in an applicable plan. Payments under the annual incentive plan and thelong-term incentive plan are payable following the end of the fiscal year or other performance period at the same time such payments are made to the other senior executive officers. If Mr. Connolly is a “specified employee” within the meaning of Section 409A of the Code at the time of his separation, certain payments would be delayed for six months after the date of the separation from service.elections.
We currently maintain a separate change of control program, as discussed below. Mr. Connolly’s agreement provides him the right to participateConnolly currently participates in our change of control program as modified from time to time.program.
Either party to Mr. Connolly’s employment agreement could terminate the agreement at any time. Mr. Connolly has agreed tonon-competition restrictions extending one year after termination and to our standard confidentiality andtwo-yearnon-solicitation agreements.
Annual Incentive Plan (the “AIP”).
The following terms of the AIP govern the impact of specific separation events not covered by an individual agreement:
| • | Involuntary termination due to position elimination: If a participant’s position is involuntarily eliminated such that the employee is eligible for severance, he or she |
| • | Termination due to retirement: If a participant retires during a fiscal year after reaching age 65, |
| • | Termination due to death: Any |
Except as might otherwise be required by law, in the absence of one of the foregoing events (or a specific agreement with us), a participant would forfeitforfeits his or her AIP award if he or she failedfails to be an active employee at the end of the fiscal year.
Any prorated award made to a former participant is based on actual performance forpaid after the end of the fiscal year and is payable after the end of such fiscal year when payments are made to other participants.
The change of control agreements, described below, govern the payment of annual incentive awards in the event of a change of control.
Long-Term Incentive Plan – Performance Shares.Shares and PBRSUs
The following terms of the PSP would have governedand PBRSUs govern the impact of a May 25, 2018specific separation from us on the performance shares granted under the fiscal 2016 to 2018, fiscal 2017 to 2019 and fiscal 2018 to 2020 cycles of the PSP:events:
| • | Involuntary termination: If a participant experiences an involuntary termination of employment that results in severance or supplemental unemployment payments from us, the participant’s awards will vest based on actual performance for the full performance period, and be paid on a prorated basis, based on the days of service completed during the performance period. |
| • | Termination due to disability: If a participant experiences a termination due to disability, the participant will receive a pro rata share of the award that would have been earned for the full performance period at the “target” level. The proration calculation will be based on the days served as of the participant’s termination date. |
2021 PROXY STATEMENT 80
| • | Termination due to retirement: If a participant terminates his or her employment via normal retirement or early retirement (as each term is defined in the award or an individual agreement with the participant), the participant’s awards will vest based on actual performance for the full performance period (but, in the case of early retirement, the award will be prorated based on days of service during the performance period). |
| • | Termination due to death: The award will vest in full at the target level. |
| • | Change of Control: In the event of a change of control (as defined in the PSP or PBRSU, as applicable), the earned portion of a participant’s award will be determined as of the change of control, using a share valuation methodology further described in the award and based on the greater of target performance and actual performance through either: |
| - | For Performance Shares: the end of our fiscal period that ends immediately prior to the change of control (the “PSP Change of Control Value”); and |
| - | For PBRSUs: the date immediately prior to the date of the change of control (the “PBRSU Change of Control Value”). |
If no replacement award meeting the requirements set forth in the PSP is provided following a change of control, a participant will vest in a cash payment equal to the PSP Change of Control Value. If a qualifying replacement award is provided, it will generally take the form of a time-based, stock-settled award with a value equal to the PSP Change of Control Value and will vest, subject to continued employment, at the end of the performance period applicable to the original performance share award. Following a change of control, a replacement award will also vest in full if the participant dies or, within two years of the change of control, terminates employment due to normal or early retirement, is terminated without cause (as defined in the PSP) or resigns for good reason (as defined in the PSP), or is terminated due to disability.
The PBRSU Change of Control Value will generally be paid to the participant if the participant terminates employment on the date of the change of control, continues employment through the end of the performance period, or dies prior to the end of the performance period. The PBRSU Change of Control Value will also be paid to the participant if, within two years after the change of control, the participant experiences a termination of employment without cause or for good reason (as each such term is defined in the applicable award agreement), terminates employment due to retirement, or experiences a termination of employment due to disability.
| • | Termination |
| - | PSP: The participant forfeits all performance shares granted that |
Executive Compensation
|
|
|
|
|
|
|
In the event of a change of control (as defined in the PSP), the earned portion of a participant’s award will be determined as of the change of control, using a share valuation methodology further described in the PSP and based on the greater of target performance and actual performance through the end of our fiscal period that ends immediately prior to the change of control (the “Change of Control Value”). If no replacement award meeting the requirements set forth in the PSP is provided, a participant will vest in a cash payment equal to the Change of Control Value. If a qualifying replacement award is provided, it will generally take the form of a time-based, stock-settled award with a value equal to the Change of Control Value and will generally vest, subject to continued employment, at the end of the performance period applicable to the original performance share award. Following a change of control, a replacement award will also vest in full if the participant dies or, within two years of the change of control, becomes retirement eligible (only for awards granted prior to July 19, 2017) or terminates employment due to normal or early retirement (only for awards granted on or after July 19, 2017), is terminated without cause (as defined in the PSP) or resigns for good reason (as defined in the PSP), or is terminated due to disability.
Long-Term Incentive Plan – Stock Options. The following terms generally govern the impact of a separation from us on outstanding stock options: RSUs
|
Executive Compensation
|
|
|
|
Each of the agreements evidencing outstanding awards of stock options that were entered into prior to October 2014 provide that the vesting of the award will accelerate upon a change of control. Award agreements entered into after October 2014 provide for double-trigger vesting, requiring both a change of control event and a qualifying termination of employment (or a failure of the surviving entity to provide a replacement award) to trigger vesting.
Long-Term Incentive Plan – RSUs.The following terms generally govern the impact of a separation from us on outstanding RSUs:
| • |
|
| • | Termination due to disability or early retirement: On termination due to disability or early retirement (as defined in the award agreement), all unvested RSUs vest pro rata based on days of service completed during the vesting period. For participants other than Mr. Connolly, RSUs are accelerated. For Mr. Connolly’s awards granted |
81 CONAGRA BRANDS
| • | Termination due to normal retirement: On termination |
| • | Termination due to death: All unvested RSUs |
| • | Change of Control: Each of the agreements evidencing outstanding awards of RSUs provide for double-trigger vesting, requiring both a change of control event and a qualifying termination of employment (or a failure of the surviving company to provide a replacement award) to trigger vesting. |
| • | Termination |
Each of the agreements evidencing outstanding awards of RSUs provide for double-trigger vesting, requiring both a change of control event and a qualifying termination of employment (or a failure of the surviving company to provide a replacement award) to trigger vesting.Retirement Benefits
The treatment of Mr. Connolly’s equity awards upon a termination without “Cause” or a resignation for “Good Reason” is further governed by his agreement with us.
Retirement Benefits.Each of our Qualified Pension and Voluntary Deferred Comp Plan contains provisions relating to the termination of the participant’s employment. These payments are described more fully in the disclosure provided in connection with the “Pension Benefits –— Fiscal 2018”2021” and “Nonqualified Deferred Compensation –— Fiscal 2018”2021” sections of this proxy statement.Proxy Statement.
Change of Control Program.Program
The change of control program for senior executives is designed to encourage management to continue performing its responsibilities in the event of a pending or potential change of control. During fiscal 2018,2021, this program covered each of the named executive officers.
Executive Compensation
Generally, a change of control under these agreements occurs if one of the following events occurs:
| • | Individuals who constitute the Board, which, for these purposes, we refer to as the Incumbent Board, cease for any reason to constitute at least a majority of the Board. Anyone who becomes a director and whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board is considered a member of the Incumbent Board. |
| • | Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were our shareholders immediately prior to the transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged, or consolidated company. |
| • | A liquidation or dissolution of Conagra Brands or the sale of all or substantially all of our assets. |
The change of the Board. Anyone who becomes a director and whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board is considered a member of the Incumbent Board.
Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were our shareholders immediately prior to the transaction do not, immediately thereafter, own more than fifty percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company.
A liquidation or dissolution of Conagra Brands or the sale of all or substantially all of our assets.
Thecontrol agreements provide that upon a change of control, we may (at the sole and absolute discretion of the Board or Committee) pay each named executive officer all or a prorated portion of the executive’s short and/or long-term incentive for the year in which the change of control occurs.
The terms of our stock plan and award agreements govern the treatment of equity awards upon a change of control.
With respect to severance, the change of control agreements are double-trigger arrangements, requiring both a change of control event and a qualifying termination of employment to trigger benefits. A qualifying termination event occurs if, within three years after a change of control, (1) the executive’s employment is involuntarily terminated without “cause” or (2) the executive terminates his or her employment for “good reason.”
Executives entitled to severance benefits under a change of control agreement forfeit any severance compensation and benefits under our severance pay plan guidelines and receive the following (subject to execution of a release of claims in favor of us):
a lump sum cash payment equal to a multiple of the executive’s base salary and annual bonus (calculated using the executive’s highest annual bonus for the three fiscal years preceding the change of control or the executive’s target bonus percentage as of the date the change of control agreement is executed, whichever is greater). The multiples range from two to three (three for Mr. Connolly and Ms. Batcheler and two for Messrs. Marberger, McGough, and Serrao).
| • | a lump sum cash payment equal to a multiple of the executive’s base salary and annual bonus (calculated using the executive’s highest annual bonus for the three fiscal years preceding the change of control or the executive’s target bonus percentage as of the date the change of control agreement is executed, whichever is greater). The multiples are three for Mr. Connolly and Ms. Batcheler and two for Messrs. Marberger, McGough, and Serrao. |
continuation for three years (for agreements in place prior to July 2011) or two years (for agreements in place after July 2011) of medical, dental, disability, basic and supplemental life insurance to the extent such benefits remain in effect for other executives, with premiums paid by the executive at the rate required of other executive employees (or, for medical and dental benefits, the COBRA rate). Conagra Brands must pay the executive a single lump sum payment equal to an amount to offset taxes (for agreements in place prior to July 2011) plus the executive’s estimated cost to participate in the medical and dental plans.
2021 PROXY STATEMENT 82
a supplemental benefit under our Voluntary Deferred Comp Plan equal to three times (for agreements in place prior to July 2011) or one time (for agreements in place after July 2011) the maximum company contribution that the executive could have received under the Qualified CRISP and Voluntary Deferred Comp Plan in the year in which the change of control occurs.
| • | continuation for three years (for agreements in place prior to July 2011) or two years (for agreements in place after July 2011) of medical, dental, disability, basic and supplemental life insurance to the extent such benefits remain in effect for other executives, with premiums paid by the executive at the rate required of other executive employees (or, for medical and dental benefits, the COBRA rate). Conagra Brands must pay the executive a single lump sum payment equal to an amount to offset taxes (for agreements in place prior to July 2011) plus the executive’s estimated cost to participate in the medical and dental plans. |
| • | a supplemental benefit under our Voluntary Deferred Comp Plan equal to three times (for agreements in place prior to July 2011) or one time (for agreements in place after July 2011) the maximum company contribution that the executive could have received under the Qualified CRISP and Voluntary Deferred Comp Plan in the year in which the change of control occurs. |
outplacement assistance not exceeding $30,000.
| • | outplacement assistance not exceeding $30,000. |
Generally, a termination for “cause” under the agreement requires (as further described in the change of control agreements) (1) the willful and continued failure by the executive to substantially perform his or her duties, (2) the willful engaging by the executive in conduct that is demonstrably and materially injurious to us or (3) the executive’s conviction of a felony or misdemeanor that impairs his or her ability substantially to perform duties for us.
A right of the executive to terminate with “good reason” following a change of control is generally triggered by (1) any failure of Conagra Brands to comply with and satisfy the terms of the change of control agreement, (2) a significant involuntary reduction of the authority, duties, or responsibilities held by the executive immediately prior to the change of control, (3) any involuntary
Executive Compensation
removal of the executive from an officer position held by the executive immediately prior to the change of control, except in connection with promotions, (4) any involuntary reduction in the aggregate compensation level of the executive, (5) requiring the executive to become based at a new location, or (6) requiring the executive to undertake substantially greater amounts of business travel.
Certain payments to a “specified employee” within the meaning of Section 409A of the Code will be delayed for six months after the date of the separation from service.
For agreements in place prior to July 2011, the agreements also entitle each executive to an additional payment, if necessary, to make the executive whole as a result of any excise and related taxes imposed by the Code on any change of control benefits received. If the safe harbor amount at which the excise tax is imposed is not exceeded by more than 10%, the benefits will instead be reduced to avoid the excise tax.
Following a review of market practices in July 2011, the Committee adopted a policy that any future change of control benefits should be structured without any excise taxgross-up protection. Mr. Connolly’s, Mr. McGough’s, Mr. Marberger’s and Mr. Serrao’s agreements do not contain an excise taxgross-ups.gross-up. Although the Committee continues to believe in the importance of maintaining a change of control program, it believes that offering excise taxgross-ups in the future is inappropriate relative to best executive pay practices.
Each change of control agreement terminates, in the absence of a change of control, when the executive’s employment as our full-time employee is terminated or the executive enters into a written separation agreement with us. In addition, we may unilaterally terminate each agreement prior to a change of control following six months prior written notice to the executive.
Summary of Possible Benefits.Benefits
In the disclosure below, the first table summarizes estimated incremental amounts payable upon termination under various hypothetical scenarios. A second table summarizes estimated incremental amounts payable upon a hypothetical change of control and upon termination following a change of control.
We have not included amounts payable regardless of the occurrence of the relevant triggering event. For example, we excluded accumulated balances in retirement plans when a terminating event would do nothing more than create a right to a payment of the balance. We also excluded death benefits where the executive would pay the premium.
83 CONAGRA BRANDS
The data in the tables assumes the following:
each triggering event occurred on May 25, 2018 (the last trading day of fiscal 2018), and the per share price of our common stock was $37.41 (the closing price of our stock on the NYSE on May 25, 2018);
| • | each triggering event occurred on May 28, 2021 (the last business day of fiscal 2021), and the per share price of our common stock was $38.10(the closing price of our stock on the NYSE on May 28, 2021); |
with respect to salary continuation, if an executive did not have a right to salary continuation under a stand-alone agreement with us, the severance pay plan guidelines applied;
| • | with respect to salary continuation, if an executive did not have a right to salary continuation under a stand-alone agreement with us, the severance pay plan guidelines applied; |
with respect to the AIP, awards were earned at target levels, and where the Committee had discretionary authority to award a payout, except in the cases of involuntary termination with cause and voluntary termination without good reason, it exercised that authority (including in the change of control scenario);
| • | with respect to the AIP, awards were earned at target levels, and where the HR Committee had discretionary authority to award a payout, except in the cases of involuntary termination with cause and voluntary termination without good reason, it exercised that authority (including in the change of control scenario); |
with respect to the AIP and equity awards, in the case of an involuntary termination not for cause without a change of control, the termination was due to a position elimination on the last business day of fiscal 2018;
| • | with respect to the AIP and equity awards, in the case of an involuntary termination not for cause without a change of control, the termination was due to a position elimination or another termination event on the last business day of fiscal 2021 that would have resulted in severance compensation; |
with respect to performance shares, awards were earned at target levels (these amounts also include a cash value of dividend equivalents on the number of shares assumed to have been earned);
| • | with respect to performance shares and PBRSUs, awards were earned at target levels (these amounts also include a cash value of dividend equivalents on the number of shares assumed to have been earned); |
with respect to equity awards in the change of control scenario, a replacement award was provided;
| • | with respect to equity awards other than PBRSUs in the change of control scenario, a replacement award was provided; |
with respect to performance shares in the change of control scenario, the Committee exercised any applicable discretionary authority to award a pro rata payout and did so at target levels; and
| • | with respect to performance shares in the change of control scenario, the HR Committee exercised any applicable discretionary authority to award a pro rata payout and did so at target levels; and |
| • | in the disability scenarios, the disabling event lasted one year into the future. |
Involuntary w/ Cause or Voluntary w/o Good Reason $
| Involuntary w/o Cause or Voluntary w/Good Reason $
| Death $
| Disability $
| Retirement $
| ||||||||||||||||
Mr. Connolly | ||||||||||||||||||||
Lump Sum Severance |
| - |
|
| 6,303,600 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 1,915,800 |
|
| 1,915,800 |
|
| 1,915,800 |
|
| 1,915,800 |
| |||||
Performance Shares |
| - |
|
| 14,323,519 |
|
| 20,914,100 |
|
| 14,323,519 |
|
| 14,323,519 |
| |||||
PBRSUs |
| - |
|
| 2,638,447 |
|
| 3,754,689 |
|
| 2,638,447 |
|
| 2,638,447 |
| |||||
Restricted Stock Units |
| - |
|
| 4,072,128 |
|
| 6,582,728 |
|
| 4,072,128 |
|
| 4,072,128 |
| |||||
Benefits Continuation |
| - |
|
| 45,552 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 693,000 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
| 29,306,545 |
|
| 34,167,317 |
|
| 23,642,894 |
|
| 22,949,894 |
| ||||||
Mr. Marberger | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 793,369 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 736,700 |
|
| 736,700 |
|
| 736,700 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 3,049,941 |
|
| 4,430,419 |
|
| 3,049,941 |
|
| - |
| |||||
PBRSUs |
| - |
|
| 422,155 |
|
| 600,755 |
|
| 422,155 |
|
| - |
| |||||
Restricted Stock Units |
| - |
|
| 868,375 |
|
| 1,394,041 |
|
| 868,375 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 19,145 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
|
| - |
|
| - |
|
| 443,350 |
|
| - |
| |||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
|
| 5,897,185 |
|
| 8,161,915 |
|
| 5,520,521 |
|
| - |
| |||||
2021 PROXY STATEMENT 84
Executive Compensation
We have excluded retirement as a hypothetical scenario for the named executive officers in the table below because none of the named executive officers were eligible for either early retirement (age 55 and 10 years of service) or normal retirement (age 65 or, for RSUs granted in fiscal 2018, age 60 with five years of service) treatment as of May 25, 2018.
Involuntary w/ Cause or Voluntary w/o Good Reason $
| Involuntary w/o Cause or Voluntary w/Good Reason $
| Death $
| Disability $
| Retirement $
| ||||||||||||||||
Ms. Batcheler | ||||||||||||||||||||
Salary Continuation |
| - |
|
| 686,337 |
|
| - |
|
| - |
|
| - |
| |||||
Annual Incentive Plan |
| - |
|
| 540,750 |
|
| 540,750 |
|
| 540,750 |
|
| - |
| |||||
Performance Shares |
| - |
|
| 3,049,941 |
|
| 4,430,419 |
|
| 3,049,941 |
|
| - |
| |||||
PBRSUs |
| - |
|
| 422,155 |
|
| 600,755 |
|
| 422,155 |
|
| - |
| |||||
Restricted Stock Units |
| - |
|
| 868,375 |
|
| 1,394,041 |
|
| 868,375 |
|
| - |
| |||||
Benefits Continuation |
| - |
|
| 22,564 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
|
| 1,000,000 |
|
| - |
|
| - |
| |||||
Disability Benefits |
| - |
| - |
|
| - |
|
| 345,375 |
|
| - |
| ||||||
Outplacement |
| - |
|
| 7,500 |
|
| - |
|
| - |
|
| - |
| |||||
Total |
| - |
|
| 5,597,622 |
|
| 7,965,965 |
|
| 5,226,596 |
|
| - |
| |||||
Mr. McGough | ||||||||||||||||||||
Salary Continuation |
| - |
| 951,923 |
| - |
|
| - |
| - | |||||||||
Annual Incentive Plan |
| - |
| 750,000 | 750,000 | 750,000 | 750,000 | |||||||||||||
Performance Shares |
| - |
| 3,049,941 | 4,430,419 | 3,049,941 | 3,049,941 | |||||||||||||
PBRSUs |
| - |
| 422,155 | 600,755 | 422,155 | 422,155 | |||||||||||||
Restricted Stock Units |
| - |
|
| 868,375 |
|
| 1,394,041 |
|
| 868,375 |
|
| 868,375 |
| |||||
Benefits Continuation |
| - |
|
| 22,564 |
|
| - |
|
| - |
|
| - |
| |||||
Death Benefits |
| - |
|
| - |
| 1,000,000 |
| - |
|
| - |
| |||||||
Disability Benefits |
| - |
|
| - |
|
| - |
| 450,000 |
| - |
| |||||||
Outplacement |
| - |
| 7,500 |
| - |
|
| - |
|
| - |
| |||||||
Total |
| - |
| 6,072,458 | 8,175,215 | 5,540,471 |
| 5,090,471 |
| |||||||||||
Mr. Serrao | ||||||||||||||||||||
Salary Continuation | - | 668,654 | - | - | - | |||||||||||||||
Annual Incentive Plan | - | 549,000 | 549,000 | 549,000 | - | |||||||||||||||
Performance Shares | - | 2,702,569 | 4,083,047 | 2,702,569 | - | |||||||||||||||
PBRSUs | - | 422,155 | 600,755 | 422,155 | - | |||||||||||||||
Restricted Stock Units | - | 766,839 | 1,287,856 | 766,839 | - | |||||||||||||||
Benefits Continuation | - | 19,487 | - | - | - | |||||||||||||||
Death Benefits | - | - | 1,000,000 | - | - | |||||||||||||||
Disability Benefits | - | - | - | 380,000 | - | |||||||||||||||
Outplacement | - | 7,500 | - | - | - | |||||||||||||||
Total | - | 5,136,204 | 7,520,658 | 4,820,563 | - | |||||||||||||||
Involuntary w/ $
| Involuntary w/o $
| Death $
| Disability $
| |||||||||||||||||
Mr. Connolly
| ||||||||||||||||||||
Lump Sum Severance
|
|
-
|
|
|
5,750,000
|
|
|
-
|
|
|
-
|
| ||||||||
Annual Incentive Plan
|
|
-
|
|
|
1,725,000
|
|
|
1,725,000
|
|
|
1,725,000
|
| ||||||||
Performance Shares
|
|
-
|
|
|
2,013,394
|
|
|
11,899,223
|
|
|
8,126,699
|
| ||||||||
Accelerated Stock Options
|
|
-
|
|
|
570,422
|
|
|
890,785
|
|
|
570,422
|
| ||||||||
Accelerated Restricted Stock Units
|
|
-
|
|
|
3,206,411
|
|
|
5,353,820
|
|
|
3,206,411
|
| ||||||||
Benefits Continuation
|
|
-
|
|
|
14,257
|
|
|
-
|
|
|
-
|
| ||||||||
Death Benefits
|
|
-
|
|
|
-
|
|
|
1,000,000
|
|
|
-
|
| ||||||||
Disability Benefits
|
|
-
|
|
|
-
|
|
|
-
|
|
|
650,000
|
| ||||||||
Outplacement
|
|
-
|
|
|
5,200
|
|
|
-
|
|
|
-
|
| ||||||||
Total
|
|
-
|
|
|
13,284,684
|
|
|
20,868,828
|
|
|
14,278,532
|
| ||||||||
|
|
|
|
|
|
|
| |||||||||||||
Mr. Marberger
| ||||||||||||||||||||
Salary Continuation
|
|
-
|
|
|
662,500
|
|
|
-
|
|
|
-
|
| ||||||||
Annual Incentive Plan
|
|
-
|
|
|
585,000
|
|
|
585,000
|
|
|
585,000
|
| ||||||||
Performance Shares
|
|
-
|
|
|
475,731
|
|
|
1,969,188
|
|
|
1,077,857
|
| ||||||||
Accelerated Stock Options
|
|
-
|
|
|
52,992
|
|
|
145,423
|
|
|
52,992
|
| ||||||||
Accelerated Restricted Stock Units
|
|
-
|
|
|
642,030
|
|
|
1,144,297
|
|
|
569,530
|
| ||||||||
Benefits Continuation
|
|
-
|
|
|
13,739
|
|
|
-
|
|
|
-
|
| ||||||||
Death Benefits
|
|
-
|
|
|
-
|
|
|
1,000,000
|
|
|
-
|
| ||||||||
Disability Benefits
|
|
-
|
|
|
-
|
|
|
-
|
|
|
400,000
|
| ||||||||
Outplacement
|
|
-
|
|
|
5,200
|
|
|
-
|
|
|
-
|
| ||||||||
Total
|
|
-
|
|
|
2,437,192
|
|
|
4,843,908
|
|
|
2,685,379
|
| ||||||||
|
|
|
|
|
|
|
| |||||||||||||
Ms. Batcheler
| ||||||||||||||||||||
Salary Continuation
|
|
-
|
|
|
655,139
|
|
|
-
|
|
|
-
|
| ||||||||
Annual Incentive Plan
|
|
-
|
|
|
540,750
|
|
|
540,750
|
|
|
540,750
|
| ||||||||
Performance Shares
|
|
-
|
|
|
475,731
|
|
|
2,932,009
|
|
|
2,040,678
|
| ||||||||
Accelerated Stock Options
|
|
-
|
|
|
146,036
|
|
|
228,046
|
|
|
146,036
|
| ||||||||
Accelerated Restricted Stock Units
|
|
-
|
|
|
2,812,521
|
|
|
3,335,139
|
|
|
2,715,704
|
| ||||||||
Benefits Continuation
|
|
-
|
|
|
16,331
|
|
|
-
|
|
|
-
|
| ||||||||
Death Benefits
|
|
-
|
|
|
-
|
|
|
1,000,000
|
|
|
-
|
| ||||||||
Disability Benefits
|
|
-
|
|
|
-
|
|
|
-
|
|
|
345,375
|
| ||||||||
Outplacement
|
|
-
|
|
|
5,200
|
|
|
-
|
|
|
-
|
| ||||||||
Total
|
|
-
|
|
|
4,651,708
|
|
|
8,035,944
|
|
|
5,788,543
|
| ||||||||
|
|
|
|
|
|
|
| |||||||||||||
85 CONAGRA BRANDS
Executive Compensation
Involuntary w/ $
| Involuntary w/o $
| Death $
| Disability $
| |||||||||||||||||
Mr. McGough
| ||||||||||||||||||||
Salary Continuation
|
|
-
|
|
|
811,125
|
|
|
-
|
|
|
-
|
| ||||||||
Annual Incentive Plan
|
|
-
|
|
|
669,500
|
|
|
669,500
|
|
|
669,500
|
| ||||||||
Performance Shares
|
|
-
|
|
|
475,731
|
|
|
2,932,009
|
|
|
2,040,678
|
| ||||||||
Accelerated Stock Options
|
|
-
|
|
|
146,036
|
|
|
228,046
|
|
|
146,036
|
| ||||||||
Accelerated Restricted Stock Units
|
|
-
|
|
|
2,812,521
|
|
|
3,335,139
|
|
|
2,715,704
|
| ||||||||
Benefits Continuation
|
|
-
|
|
|
16,331
|
|
|
-
|
|
|
-
|
| ||||||||
Death Benefits
|
|
-
|
|
|
-
|
|
|
1,000,000
|
|
|
-
|
| ||||||||
Disability Benefits
|
|
-
|
|
|
-
|
|
|
-
|
|
|
409,750
|
| ||||||||
Outplacement
|
|
-
|
|
|
5,200
|
|
|
-
|
|
|
-
|
| ||||||||
Total
|
|
-
|
|
|
4,936,444
|
|
|
8,164,694
|
|
|
5,981,668
|
| ||||||||
|
|
|
|
|
|
|
| |||||||||||||
Mr. Serrao
| ||||||||||||||||||||
Salary Continuation
|
|
-
|
|
|
524,423
|
|
|
-
|
|
|
-
|
| ||||||||
Annual Incentive Plan
|
|
-
|
|
|
454,500
|
|
|
454,500
|
|
|
454,500
|
| ||||||||
Performance Shares
|
|
-
|
|
|
356,817
|
|
|
2,199,035
|
|
|
1,530,543
|
| ||||||||
Accelerated Stock Options
|
|
-
|
|
|
109,523
|
|
|
171,033
|
|
|
109,523
|
| ||||||||
Accelerated Restricted Stock Units
|
|
-
|
|
|
726,540
|
|
|
1,162,628
|
|
|
726,540
|
| ||||||||
Benefits Continuation
|
|
-
|
|
|
13,998
|
|
|
-
|
|
|
-
|
| ||||||||
Death Benefits
|
|
-
|
|
|
-
|
|
|
1,000,000
|
|
|
-
|
| ||||||||
Disability Benefits
|
|
-
|
|
|
-
|
|
|
-
|
|
|
327,500
|
| ||||||||
Outplacement
|
|
-
|
|
|
5,200
|
|
|
-
|
|
|
-
|
| ||||||||
Total | - | 2,191,001 | 4,987,196 | 3,148,606 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Executive Compensation
In the table that follows, if, following a change of control, any of Ms. Batcheler or Messrs. Marberger, McGough, or Serrao was terminated for “Cause” or voluntarily terminated employment without “Good Reason,” the individual would not receive any benefits incremental to those shown in the “No Termination” column. Mr. Connolly would be entitled to salary continuation through the end of the month of the event.
| Change of Control and: | No Termination ($) | Involuntary w/o Cause or Voluntary w/Good Reason ($) | ||||||||||||
No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/Good Reason ($) | |||||||||||||
Mr. Connolly | ||||||||||||||
Lump Sum Salary | - | 3,450,000 | - | 3,708,000 | ||||||||||
Annual Incentive Plan | 1,725,000 | 9,776,250 | 1,915,800 | 7,948,905 | ||||||||||
Performance Shares | - | 13,329,557 | - | 21,523,399 | ||||||||||
Accelerated Stock Options | - | 890,785 | ||||||||||||
Accelerated Restricted Stock Units | - | 5,353,820 | ||||||||||||
Voluntary Deferred Compensation Plan | - | 305,308 | ||||||||||||
PBRSUs | - | 3,864,271 | ||||||||||||
Restricted Stock Units | - | 6,582,728 | ||||||||||||
Qualified and Non-Qualified Benefit | - | 322,900 | ||||||||||||
Benefits Continuation | - | 35,150 | - | 45,552 | ||||||||||
Death/Disability Benefit | - | 6,084 | - | 5,843 | ||||||||||
Outplacement | - | 30,000 | - | 30,000 | ||||||||||
Total | 1,725,000 | 33,176,954 | 1,915,800 | 44,031,598 | ||||||||||
|
| |||||||||||||
Mr. Marberger | ||||||||||||||
Lump Sum Salary | - | 1,300,000 | - | 1,473,400 | ||||||||||
Annual Incentive Plan | 585,000 | 1,170,000 | 736,700 | 1,994,428 | ||||||||||
Performance Shares | - | 2,330,419 | - | 4,558,073 | ||||||||||
Accelerated Stock Options | - | 145,423 | ||||||||||||
Accelerated Restricted Stock Units | - | 1,144,297 | ||||||||||||
Voluntary Deferred Compensation Plan | - | 121,890 | ||||||||||||
PBRSUs | - | 618,288 | ||||||||||||
Restricted Stock Units | - | 1,394,041 | ||||||||||||
Qualified and Non-Qualified Benefit | - | 147,588 | ||||||||||||
Benefits Continuation | - | 35,150 | - | 45,552 | ||||||||||
Death/Disability Benefit | - | 6,084 | - | 5,843 | ||||||||||
Outplacement | - | 30,000 | - | 30,000 | ||||||||||
Total | 585,000 | 6,283,263 | 736,700 | 10,267,213 | ||||||||||
|
| |||||||||||||
Ms. Batcheler | ||||||||||||||
Ms. Batcheler | ||||||||||||||
Lump Sum Salary | - | 1,622,250 | - | 1,622,250 | ||||||||||
Annual Incentive Plan | 540,750 | 2,967,057 | 540,750 | 2,387,984 | ||||||||||
Performance Shares | - | 3,293,240 | - | 4,558,073 | ||||||||||
Accelerated Stock Options | - | 228,046 | ||||||||||||
Accelerated Restricted Stock Units | - | 3,335,139 | ||||||||||||
Voluntary Deferred Compensation Plan | - | 327,484 | ||||||||||||
PBRSUs | - | 618,288 | ||||||||||||
Restricted Stock Units | - | 1,394,041 | ||||||||||||
Qualified and Non-Qualified Benefit | - | 326,462 | ||||||||||||
Benefits Continuation | - | 51,996 | - | 67,504 | ||||||||||
Death/Disability Benefit | - | 9,126 | - | 8,764 | ||||||||||
Outplacement | - | 30,000 | - | 30,000 | ||||||||||
Total | 540,750 | 11,864,338 | 540,750 | 11,013,366 | ||||||||||
|
| |||||||||||||
2021 PROXY STATEMENT 86
Executive Compensation
| Change of Control and: | No Termination ($) | Involuntary w/o Cause or Voluntary w/Good Reason ($) | ||||||||
No Termination ($) | Change of Control and: Involuntary w/o Cause or Voluntary w/Good Reason ($) | |||||||||
Mr. McGough | ||||||||||
Lump Sum Salary | - | 1,339,000 | - | 1,500,000 | ||||||
Annual Incentive Plan | 669,500 | 2,313,178 | 750,000 | 1,877,175 | ||||||
Performance Shares | - | 3,293,240 | - | 4,558,073 | ||||||
Accelerated Stock Options | - | 228,046 | ||||||||
Accelerated Restricted Stock Units | - | 3,335,139 | ||||||||
Voluntary Deferred Compensation Plan | - | 135,152 | ||||||||
PBRSUs | - | 618,288 | ||||||||
Restricted Stock Units | - | 1,394,041 | ||||||||
Qualified and Non-Qualified Benefit | - | 143,763 | ||||||||
Benefits Continuation | - | 35,150 | - | 45,552 | ||||||
Death/Disability Benefit | - | 6,084 | - | 5,843 | ||||||
Outplacement | - | 30,000 | - | 30,000 | ||||||
Total | 669,500 | 10,714,989 | 750,000 | 10,172,735 | ||||||
|
| |||||||||
Mr. Serrao | ||||||||||
Lump Sum Salary | - | 1,010,000 | - | 1,220,000 | ||||||
Annual Incentive Plan | 454,500 | 966,473 | 549,000 | 1,539,312 | ||||||
Performance Shares | - | 2,469,920 | - | 4,210,700 | ||||||
Accelerated Stock Options | - | 171,033 | ||||||||
Accelerated Restricted Stock Units | - | 1,162,628 | ||||||||
Voluntary Deferred Compensation Plan | - | 97,004 | ||||||||
PBRSUs | - | 618,288 | ||||||||
Restricted Stock Units | - | 1,287,856 | ||||||||
Qualified and Non-Qualified Benefit | - | 115,971 | ||||||||
Benefits Continuation | - | 35,150 | - | 45,552 | ||||||
Death/Disability Benefit | - | 6,084 | - | 5,843 | ||||||
Outplacement | - | 30,000 | - | 30,000 | ||||||
Total | 454,500 | 5,948,292 | 549,000 | 9,073,522 | ||||||
|
| |||||||||
87 CONAGRA BRANDS
CEO Pay Ratio
For fiscal 2018,2021, the ratio of the annual total compensation of Mr. Connolly, our CEOPresident and Chief Executive Officer (referred to as CEO Compensation), to the median of the annual total compensation of all of our employees and those of our consolidated subsidiariessubsidiary-employees other than Mr. Connolly (referred to as Median Annual Compensation), was 290234 to 1. For purposes of this pay ratio disclosure, CEO Compensation was determined to be $10,473,271,$11,770,023, which represents the total compensation reported for Mr. Connolly under the “Summary Compensation Table – Fiscal 2018.2021.” Median Annual Compensation for the identified median employee was determined to be $36,143.$50,360.
BasisMedian Employee Methodology
Solely for the purpose of Analysis
To identify the median employee,this disclosure, we examinedidentified our “median employee” by examining our total employee population as of March 9, 20182021 (the Determination Date). We included all U.S. andnon-U.S. full-time, part-time, seasonal, and temporary employees of Conagra and our consolidated subsidiaries. We excluded independent contractors and “leased” workers. Our analysis identified 12,891 19,169individuals.
The median employee at Conagra is employed in a manufacturing facility in the United States and has a job function of Operator.
Additional information on the employee population at Conagra includes the following (as of the March 9, 2021 Determination Date):
| • | 89.5% employed in the United States; 10.5% in international locations |
| • | 96.4% employed full time, 0.2% employed part time, 3.4% employed seasonally/temporarily |
| • | 83.7% based in manufacturing facilities |
We believe that there has been no change in our employee population or employee compensation arrangements during fiscal year 2021 that resulted in a significant year-over-year change to our CEO Pay Ratio disclosure.
Median Annual Compensation Methodology
To determine Median Annual Compensation, we generally reviewed compensation for the period beginning on March 10, 20172020 and ending on the Determination Date. However, for 487 of our employees (including our employees in Mexico and employees employed by one of our joint ventures), we measured compensation for the full months of March 2017 through February 2018, due to different payroll schedules applicable to these employees.9, 2021. As permitted by applicable SECrules,SEC rules, we excluded from the compensation measurement under the “de minimis” exemption the compensation of 519551 individuals (all of the individuals in each of Colombia (one individual), Italy (53China (3 individuals), India (458(540 individuals), Panama (five(5 individuals), and the Philippines (two(3 individuals)).
We measured Median Annual Compensation by totaling, for each employee other than Mr. Connolly, base earnings (salary, hourly wages and overtime, as applicable) and annual cash incentives paid during the measurement period. We did not use any statistical sampling orcost-of-living adjustments for purposes of this pay ratio disclosure. A portion of our employee workforce (full-time and part-time) worked for less than the full fiscal year (due to start dates, disability status, or similar factors). In determining the Median Annual Compensation, we generally annualized the total compensation for such individuals other than seasonal employees (but avoided creating full-time equivalencies) based on reasonable assumptions and estimates relating to our employee compensation program.
Due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this pay ratio disclosure is a reasonable estimate.
2021 PROXY STATEMENT 88
Information on Stock Ownership
Information on Stock Ownership
Voting Securities of Directors, Officers, and Greater Than 5% Owners
The table below shows the shares of Conagra Brands common stock beneficially owned as of July 31, 201826, 2021 by (1) beneficial owners of more than 5% of our outstanding common stock, (2) our current directors, (3) our named executive officers, and (4) all current directors and executive officers as a group.
As discussed elsewhere in this Proxy Statement, our directors and executive officers are committed to owning stock in Conagra Brands. Both groups have stock ownership requirements that preclude them from selling any Conagra Brands common stock in the market (other than to cover the cost of theany stock option exercise price and, in the case of executive officers, minimum statutory tax withholding) until they have enough shares to meet and maintain their stock ownership guidelinespre- and post-sale.
To better show the financial stake of our directors in the company, we have included a “Share Units” column in the table. The column, which is not required under SEC rules, shows share units earned by thenon-employee directors and deferred through the Conagra Brands, Inc. Directors’ Deferred Compensation Plan. Although these share units will ultimately be settled in shares of common stock, they currently have no voting rights and will not be settled within 60 days of July 31, 2018.26, 2021. None of our executive officers has any deferred share units deferred.units.
| Name | Number of Shares Owned (1) | Right to Acquire (2) | Percent of Class (3) | Share Units | Number of Shares of Common Stock Owned(1) | Right to Acquire Shares of Common Stock(2) | Percent of Class(3) | Share Units | ||||||||
The Vanguard Group (4)
|
46,272,871
|
-
|
11.81%
|
N/A
| ||||||||||||
BlackRock, Inc. (5)
|
27,823,099
|
-
|
7.10%
|
N/A
| ||||||||||||
Bradley A. Alford
|
26,500
|
2,020
|
*
|
21,012
| ||||||||||||
Capital World Investors(4) | 59,877,551 | - | 12.3% | N/A | ||||||||||||
The Vanguard Group(5) | 55,338,299 | - | 11.33% | N/A | ||||||||||||
BlackRock, Inc.(6) | 33,602,893 | - | 6.9% | N/A | ||||||||||||
Anil Arora
|
-
|
-
|
*
|
-
| 19,847 | 2,183 | * | 6,607 | ||||||||
Thomas K. Brown
|
19,385
|
2,020
|
*
|
-
| ||||||||||||
Stephen G. Butler
|
75,695(6)
|
2,020
|
*
|
65,263
| ||||||||||||
Sean Connolly
|
1,354,237
|
141,556
|
*
|
N/A
| ||||||||||||
Thomas W. Dickson
|
-
|
2,020
|
*
|
9,975
| ||||||||||||
Steven F. Goldstone
|
448,998
|
2,020
|
*
|
146,133
| ||||||||||||
Tony Brown | 22,082 | 2,183 | * | - | ||||||||||||
Manny Chirico | - | 3,284 | * | - | ||||||||||||
Sean M. Connolly | 728,324 | 1,436,224 | * | N/A | ||||||||||||
Joie A. Gregor
|
37,775
|
2,020
|
*
|
16,569
| 60,686 | 2,183 | * | 13,350 | ||||||||
Rajive Johri
|
4,270
|
2,020
|
*
|
54,891
| 78,455 | 2,183 | * | 74,185 | ||||||||
Richard H. Lenny
|
53,826
|
5,722
|
*
|
21,864
| 107,013 | 5,624 | * | 23,839 | ||||||||
Melissa Lora | 12,963 | 2,183 | * | 12,963 | ||||||||||||
Ruth Ann Marshall
|
23,288
|
2,020
|
*
|
87,382
| 123,415 | 2,183 | * | 120,066 | ||||||||
Craig P. Omtvedt
|
5,868
|
2,020
|
*
|
-
| 84,809 | 2,183 | * | - | ||||||||
Scott Ostfeld(8) | 8,051,132 | 2,183 | * | - | ||||||||||||
David S. Marberger
|
27,917
|
30,227
|
*
|
N/A
| 129,315 | 69,248 | * | N/A | ||||||||
Colleen Batcheler
|
445,715
|
36,240
|
*
|
N/A
| 193,747 | 142,445 | * | N/A | ||||||||
Thomas M. McGough
|
708,677(6)
|
36,240
|
*
|
N/A
| 208,653(7) | 431,718 | * | N/A | ||||||||
Darren C. Serrao | 123,678 | 106,830 | * | N/A | ||||||||||||
All Directors and Current Executive Officers as a Group (18 people) |
10,104,487 |
2,366,743 |
* |
250,470 | ||||||||||||
89 CONAGRA BRANDS
Information on Stock Ownership
| Name | Number of Shares Owned (1) | Right to Acquire (2) | Percent of Class (3) | Share Units | ||||
Darren C. Serrao
|
97,601
|
31,525
|
*
|
N/A
| ||||
All Directors and Current Executive Officers as a Group (19 people)
| 3,611,882
| 331,046
| *
| 423,089
|
| * | Represents less than 1% of common stock outstanding. |
| 1. | For executive officers and directors, reflects shares that have been acquired through one or more of the following: (a) open market purchases, (b) vesting or exercise of share-based awards, and (c) crediting to defined contribution plan accounts. |
| 2. | Reflects shares that the individual has the right to acquire within 60 days of July |
| 3. | Based on |
| 4. | Based on a Schedule 13G/A filed by Capital World Investors with the SEC on February 16, 2021, which Schedule 13G/A specifies that Capital World Investors has sole voting power with respect to 59,819,725 shares and sole dispositive power with respect to 59,877,551 shares. Capital World Investors’ address is listed on the Schedule 13G/A as: 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. |
| 5. | Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February |
Based on a Schedule 13G/A filed by BlackRock, Inc., or BlackRock, with the SEC on January 29, |
For Mr. |
Section 16(a) Beneficial Ownership Reporting Compliance
| 8. | Scott Ostfeld’s stock ownership also reflects shares of Conagra Brands common stock owned by JANA Partners LLC, or JANA, as a result of Mr. Ostfeld assigning all RSUs that he receives as a director to JANA. JANA may be deemed to be a director by deputization by virtue of the fact that Mr. Ostfeld currently serves on Conagra’s board of directors. |
Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers, and persons who own more than 10% of a registered class of our equity securities file with the SEC reports of ownership and changes in beneficial ownership of our common stock. Directors, executive officers, and greater than 10% owners are required to furnish us with copies of all reports they file on Section 16(a) forms. Based solely on a review of copies of these reports furnished to us or written representations that no other reports were required, we believe that during fiscal 2018 all required reports were filed on a timely basis.2021 PROXY STATEMENT 90
Additional Information
Additional Information About the Meeting
Information aboutVirtual Meeting Format
We have decided to hold the 2018 Annual Meeting virtually again this year due to the ongoing COVID-19 pandemic. There will not be a physical location for the Annual Meeting and you will not be able to attend in person. In addition to supporting the health and well-being of our shareholders, Board members, employees, and their families, we believe that hosting a virtual annual meeting enables shareholders to attend and participate fully and equally, improves meeting efficiency and our ability to effectively communicate and engage with our shareholders, regardless of their holdings, resources, or physical location, and provides for cost savings.
We have designed the virtual Annual Meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. Shareholders will be able to attend and participate online and submit questions during the 2021 Annual Meeting by visiting Revokingwww.virtualshareholdermeeting.com/CAG2021.
To attend and participate in the 2021 Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. The Annual Meeting will begin promptly at 2:00 p.m. CDT. We encourage you to access the 2021 Annual Meeting prior to the start time. Online access will begin at 1:45 p.m. CDT.
The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Shareholders should ensure that they have a Proxystrong internet connection if they intend to attend and/or participate in the 2021 Annual Meeting. Attendees should allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the 2021 Annual Meeting.
You can revoke your proxyIf you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting login page for assistance. Technical support will be available beginning at 1:45 p.m. CDT on September 15, 2021 through the conclusion of the 2021 Annual Meeting.
Voting
Shareholders of record as of the close of business on July 26, 2021, the record date, are entitled to attend, participate in, and to vote at the Annual Meeting and at any time beforepostponements or adjournments of the Annual Meeting. On July 26, 2021, there were 480,333,560 voting shares of common stock, par value $5.00 per share, of Conagra Brands, issued and outstanding. Each share of common stock is entitled to one vote for each director to be elected and one vote for each of the other matters to be voted on.
Your vote is very important. Even if you plan to attend and participate in the Annual Meeting, please promptly vote your shares are voted if you (1) arein advance.
Voting Before the record owner of your shares and submit a written revocation to our Corporate Secretary at or before the 20182021 Annual Meeting (mail to: Conagra Brands, Inc., Attn: Corporate Secretary, 222 Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654), (2) submit a timely later-dated proxy (or voting instruction card if
If you hold shares throughof common stock of Conagra Brands in your own name (known as ownership “of record”) on the books of our transfer agent, you are a registered shareholder. If a broker, bank, or nominee)other nominee holds your shares (also known as ownership in “street name”), or (3) provide timely subsequent Internet or telephone voting instructions. You may also attend the 2018 Annual Meeting and vote in person, subject to the legal proxy requirement noted on page 1 for street name owners.you are a beneficial owner. Registered shareholders (including those who hold
Conagra Brands Employee Stock Purchase Plan and TreeHouse Private Brands Retirement Income Savings Plan
If you hold 91 CONAGRA BRANDS
shares in the Conagra Brands Employee Stock Purchase Plan, or ESPP) and beneficial owners may vote their shares in advance of the TreeHouse Private Brands Retirement Income Savings Plan,Annual Meeting using one of the following methods:
| • | By Mail: If you received paper copies of our proxy materials, by completing, signing, dating and returning (in the postage-paid envelope provided) the enclosed proxy card or voting instruction form; |
| • | By Internet: Go to www.proxyvote.com and follow the instructions – you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form; or |
| • | By Telephone: Call (800) 690-6903 (registered shareholders and ESPP participants) or (800) 454-8683 (beneficial owners) and follow the recorded instructions – you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. |
Internet and telephone voting are available through 11:59 p.m. Eastern Time on September 14,2021 for registered shareholders, beneficial owners, and shares held in the ESPP.
If you hold shares in the ESPP, your proxy card serves as voting instruction card coversinstructions for the shares credited to your plan account.account and such shares must be voted prior to the Annual Meeting. The trustee for the Conagra Brands Employee Stock Purchase Plan or the TreeHouse Private Brands Retirement Income Savings Plan, as applicable,ESPP must receive your voting instructions by 11:59 p.m. Eastern Time on Tuesday, September 18, 2018.14, 2021. If the respective plan trustee does not receive your instructions by that time, the trustee will vote the shares held by the Conagra Brands Employee Stock Purchase Plan or the TreeHouse Private Brands Retirement Income Savings Plan, as applicable,ESPP in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received.
Revoking a Proxy Solicitation
We have engaged Innisfree M&A Incorporated asYou can revoke your proxy at any time before your shares are voted if you (1) are the owner of “record” of your shares and submit a written revocation to our proxy solicitor forCorporate Secretary at or before the 2018 Annual Meeting at an estimated cost of approximately $12,000plus disbursements. Our directors, officers,(mail to: Conagra Brands, Inc., Attn: Corporate Secretary, 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654), (2) submit a timely later-dated proxy (or voting instruction form if you hold shares through a broker, bank, or nominee), or (3) provide timely subsequent internet or telephone voting instructions.
Voting During the 2021 Annual Meeting
Registered shareholders (other than those who hold shares in the ESPP) and other employeesbeneficial owners may also solicit proxiesvote online during the Annual Meeting. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form to log in to the virtual meeting platform at www.virtualshareholdermeeting.com/CAG2021. Voting electronically online during the Annual Meeting will replace any previous votes.
Participants in the ordinary course of their employment. Conagra BrandsESPP may attend and participate in the Annual Meeting but will bearnot be able to vote shares held in the costESPP electronically online during the Annual Meeting. ESPP participants must vote in advance of the solicitation,2021 Annual Meeting using one of the methods described above.
Presenting Questions During the Virtual Meeting
Shareholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CAG2021, typing your question into the “Ask a Question” field, and clicking “Submit.”
Questions pertinent to the Annual Meeting that comply with the meeting Rules of Conduct will be answered during the Annual Meeting, subject to time constraints. Questions regarding personal matters, including, but not limited to, those related to employment or product issues, are not pertinent to Annual Meeting matters and therefore will be answered only at the costdiscretion of reimbursing brokerage housesthe meeting’s Chair. Any questions that cannot be answered during the Annual Meeting due to time constraints will be posted and other custodians for their expenses in sending proxy materialsanswered on our Investor Relations website, www.conagrabrands.com/investor-relations, as soon as practical after the Annual Meeting.
2021 PROXY STATEMENT 92
Additional information regarding the ability of shareholders to you.
ask questions during the Annual Meeting and related Rules of Conduct will be available at Quorumwww.virtualshareholdermeeting.com/CAG2021.
AVote Requirements
Quorum: Shares Necessary to Conduct the Business of the Meeting
To conduct the business of the Annual Meeting, a majority of the shares of common stock outstanding and entitled to vote on the record date must be present in person or by proxy at the meeting to constitute a quorum. 2021 Annual Meeting.
The inspectorsinspector of election intendelections intends to treat properly executed proxies marked “abstain” as “present” for purposes of determining whether a quorum has been achieved. The inspectorsinspector will also treat proxies held in “street name” by brokers where the broker indicates that it does not have authority to vote on one or more of the proposals coming before the meeting (“brokernon-votes”) as “present” for purposes of determining whether a quorum has been achieved.
Vote Requirements and Manner ofRequired to Approve Voting ProxiesItems
If a quorum is present:
We will hold an election of directors.Each outstanding share of common stock of Conagra Brands is entitled to cast one vote for each director seat. In an uncontested election, a director will be elected if he or she receives the affirmative vote of a majority of the votes cast in the election. An incumbent director nominee who does not receive the affirmative vote of a majority of the votes cast in the election is required promptly to tender his or her resignation to the Board, and the resignation will be accepted or rejected by the Board as more fully described in the “Our Corporate Governance Practices”“How We Govern” section of this Proxy Statement. Abstentions and brokernon-votes are not treated as votes cast and, therefore, will not affect the outcome of the election of directors.
We will vote on ratification ofto ratify the appointment of theKPMG LLP as our independent auditor for fiscal 2019.2022. The appointment of theour independent auditor for fiscal 20192022 will be ratified if approved by a majority of the votes cast.
Additional Information
Abstentions are not treated as votes cast and therefore will not affect the outcome |
We will vote, on an advisory basis, to approve our named executive officer compensation.The advisory resolution to approve our named executive officer compensation, as described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement, will be considered adopted if approved by a majority of the votes cast. Abstentions and brokernon-votes are not treated as votes cast and, therefore, will not affect the outcome of the votes on this matter.
We will vote on a shareholder proposal. The shareholder proposal will be considered adopted if approved by a majority of the votes cast. Abstentions and broker non-votes are not treated as votes cast and, therefore, will not affect the outcome of the votes on this matter.
The shares represented by valid proxies received by Internet,internet, by telephone, or by mail and not properly revoked will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted: “FOR” the election of alleach of the director nominees for director named in this Proxy Statement; “FOR” the ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2019; and2021; “FOR” the resolution to approve our named executive officer compensation.compensation; and “AGAINST” the shareholder proposal regarding shareholder action by written consent. If any matter not described above is properly presented at the meeting,2021 Annual Meeting, the proxy gives authority to the persons named on the proxy card to vote as recommended by the Board on such other matters.
93 CONAGRA BRANDS
Proxy Solicitation
We have engaged Innisfree M&A Incorporated as our proxy solicitor for the Annual Meeting at an estimated cost of approximately $17,500 plus disbursements. Our directors, officers, and other employees may also solicit proxies in the ordinary course of their employment. Conagra Brands will bear the cost of the solicitation, including the cost of reimbursing brokerage houses and other custodians for their expenses in sending proxy materials to you.
Multiple Shareholders Sharing an Address
Pursuant to SEC rules, only one copy of the Notice of Internet Availability of Proxy Materials, Annual Report, and Proxy Statement is being delivered to shareholders residing at the same address, unless the shareholders have notified us of their desire to receive multiple copies. We are allowedbelieve these rules benefit everyone by eliminating duplicate mailings that shareholders living at the same address receive, and by reducing our printing and mailing costs. Shareholders living at the same address will continue to receive individual proxy cards for each registered account. We will promptly deliver, upon oral or written request, a singleseparate copy of the Notice of Internet Availability of Proxy Materials, Annual Report, and Proxy Statement to a householdany shareholder residing at an address to which two or more shareholders reside when we believe those shareholders are members of the same family. We believe this rule benefits everyone. It eliminates duplicate mailings that shareholders living at the same address receive, and it reduces our printing and mailing costs. You will continue to receive individual proxy cards for each registered account.only one copy was mailed. If you receive a single set of proxy materials but prefer to receive separate copies for each registered account in your household for the 2021 Annual Meeting or for future meetings, please contact our agent, Broadridge, by telephone at (866)540-7095 or in writing at Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Broadridge will remove you from the householding program within 30 days after it receives your request, at which point you will begin receiving an individual copy of the proxy materials for each registered account. You can also contact Broadridge at the telephone number or address above if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future.
Our 2022 Annual Meeting of Shareholders
Shareholder Proposals to be Included in our 20192022 Proxy Statement
To be considered for inclusion in next year’s Proxy Statement, shareholder proposals submitted in accordance with SEC Rule 14a-8 must be received at our principal executive offices no later than the close of business on April 12, 2019.Address8, 2022.
If an eligible shareholder, or a group of up to 20 eligible shareholders, desires to have a candidate for election as a director included in the proxy materials (a proxy access nominee) for the 2022 Annual Meeting, such nomination shall conform to the applicable requirements set forth in our Bylaws and any applicable SEC regulations concerning the submission and content of proxy access nominations, and must be submitted not earlier than March 9, 2022 and not later than the close of business on April 8, 2022. Such requirements include, without limitation, providing information about the proposed director nominee and the nominating shareholder that is required to be included in a proxy statement under SEC and NYSE rules, any statement by the nominating shareholder about the proposed director nominee to be included in the proxy statement, and any other information that Conagra Brands or the Board requests and determines to include in the proxy statement relating to the proposed director nominee.
Address any proposals to the Corporate Secretary, Conagra Brands, Inc., 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
Other Shareholder Proposals to be Presented at our 20192022 Annual Meeting
Ourby-laws Bylaws provide that any shareholder proposal, including the nomination of directors, that is sought to be presented directly at the 20192022 Annual Meeting but not submitted for inclusion in the Proxy Statement for the 20192022 Annual Meeting must be received in writing at our principal executive office not lessoffices no earlier than 90May 18, 2022, nor morelater than 120 days prior to the first anniversary of the 2018 Annual Meeting.June 17, 2022. If the date of the 20192022 Annual Meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the 2021 meeting, then the notice must be received not earlier than the 120th day prior to the 2022 Annual Meeting and not later than the close of business on the later of the 90th day prior to the meeting day2022 Annual Meeting or the tenth day following the first public announcement of the meeting2022 Annual Meeting date. Ourby-laws Bylaws also specify the information that must accompany the notice.
2021 PROXY STATEMENT 94
Address proposals to the Corporate Secretary, Conagra Brands, Inc., 222 W. Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
The proxy card for the 20192022 Annual Meeting will give us discretionary authority with respect to all shareholder proposals properly brought before the 20192022 Annual Meeting that are not included in the Proxy Statement for the 20192022 Annual Meeting. Address proposals to the Corporate Secretary, Conagra Brands, Inc., 222 Merchandise Mart Plaza, Suite 1300, Chicago, Illinois 60654.
Appendix A
95 CONAGRA BRANDS
Reconciliation of GAAP andNon-GAAP Information
This Proxy Statement contains certainnon-GAAP financial measures, including organic net sales, adjusted diluted earnings per share from continuing operations, net leverage ratio and adjusted operating margin. Management considers GAAP financial measures as well asnon-GAAP financial measures in its evaluation of the company’s financial statements and believes thesenon-GAAP measures provide useful supplemental information to assess the company’s operating performance and financial position. These measures should be viewed in addition to, and not in lieu of, the company’s diluted earnings per share, operating performance, and financial measures as calculated in accordance with GAAP. Please see our Annual Report onForm 10-K for the fiscal year ended May 27, 201830, 2021 for a reporting of our financial results in accordance with GAAP.
Certain of these non-GAAP measures, such as net leverage ratio, are forward-looking. Historically, the Company has excluded the impact of certain items impacting comparability, such as, but not limited to, restructuring expenses, the impact of the extinguishment of debt, the impact of foreign exchange, the impact of acquisitions and divestitures, hedging gains and losses, impairment charges, the impact of legacy legal contingencies, and the impact of unusual tax items, from the non-GAAP financial measures it presents. Reconciliations of these forward-looking non-GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significant of the unavailable information, which could be material to future results.
The following information is provided to reconcile thenon-GAAP financial measures disclosed in this Proxy Statement to their most directly comparable GAAP measures.
Organic Net SalesConagra Brands, Inc.
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
(in millions)
| FY21 | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Total Conagra Brands | |||||||||||||||||
| FY18 | FY17 | % Change | ||||||||||||||||||||
Net Sales | $ | 7,938.3 | $ | 7,826.9 | 1.4 | % | $4,637.5 | $4,774.6 | $938.6 | $834.0 | $11,184.7 | |||||||||||
Impact of foreign exchange | (27.9) | — | - | - | 1.4 | - | 1.4 | |||||||||||||||
Net sales from acquired businesses | (169.1) | — | ||||||||||||||||||||
Net sales from divested businesses | — | (71.1) | (38.3) | (40.8) | (1.6) | (2.1) | (82.8) | |||||||||||||||
Organic Net Sales | $ | 7,741.3 | $ | 7,755.8 | (0.2 | )% | $4,599.2 | $4,733.8 | $938.4 | $831.9 | $11,103.3 | |||||||||||
Year-over-year change – Net Sales | 0.4% | 4.7% | 1.4% | (12.4)% | 1.2% | |||||||||||||||||
Impact of foreign exchange (pp) | - | - | 0.2 | - | - | |||||||||||||||||
Impact of 53rd week (pp) | 2.0 | 2.1 | 1.8 | 1.2 | 1.9 | |||||||||||||||||
Net sales from divested businesses (pp) | 3.7 | 0.7 | 0.4 | 1.5 | 2.0 | |||||||||||||||||
Organic Net Sales | 6.1% | 7.5% | 3.8% | (9.7)% | 5.1% | |||||||||||||||||
Volume (Organic) | 3.6% | 3.8% | (0.5)% | (13.1)% | 2.0% | |||||||||||||||||
Price/Mix | 2.5% | 3.7% | 4.3% | 3.4% | 3.1% | |||||||||||||||||
2021 PROXY STATEMENT A-1
Appendix A
Adjusted Operating Margin & Adjusted Diluted EPS from Continuing Operations
| FY20 | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Total Conagra Brands | |||||
Net Sales | $4,617.1 | $4,559.6 | $925.3 | $952.4 | $11,054.4 | |||||
Impact of 53rd week2 | (89.4) | (90.0) | (15.9) | (13.0) | (208.3) | |||||
Net sales from divested businesses1 | (191.1) | (64.2) | (5.6) | (17.7) | (278.6) | |||||
Organic Net Sales | $4,336.6 | $4,405.4 | $903.8 | $921.7 | $10,567.5 | |||||
| FY18 | Operating profit | Diluted EPS from continuing operations | ||||||
Reported
|
$
|
1,033.5
|
|
$
|
1.95
|
| ||
% of Net Sales
|
|
13.0%
|
| |||||
Restructuring plans
|
|
38.0
|
|
|
0.07
|
| ||
Acquisitions and divestitures
|
|
15.7
|
|
|
0.03
|
| ||
Corporate hedging losses (gains)
|
|
(6.2)
|
|
|
(0.01)
|
| ||
Pension settlement and valuation adjustment
|
|
5.4
|
|
|
0.01
|
| ||
Intangible impairment charges
|
|
4.8
|
|
|
0.01
|
| ||
Early exit of an unfavorable lease contract by purchasing the building
|
|
34.9
|
|
|
0.06
|
| ||
Gain on substantial liquidation of an international joint venture
|
|
—
|
|
|
(0.01)
|
| ||
Legal matters
|
|
151.0
|
|
|
0.28
|
| ||
Wesson valuation allowance adjustment
|
|
—
|
|
|
0.19
|
| ||
Tax reform adjustments
|
|
—
|
|
|
(0.57)
|
| ||
Unusual tax items
|
|
—
|
|
|
0.10
|
| ||
Adjusted
|
$
|
1,277.1
|
|
$
|
2.11
|
| ||
% of Net Sales (Margin)
|
|
16.1%
|
| |||||
Year-over-year change – reported
|
|
56.0%
|
| |||||
Year-over-year change – adjusted
|
|
21.3%
|
| |||||
FY17
| ||||||||
Reported
|
$
|
925.0
|
|
$
|
1.25
|
| ||
% of Net Sales
|
|
11.8%
|
| |||||
Gain on sale of Spicetec and J.M. Swank businesses
|
|
(197.4)
|
|
|
(0.16)
|
| ||
Restructuring plans
|
|
63.6
|
|
|
0.09
|
| ||
Acquisitions and divestitures
|
|
31.4
|
|
|
0.05
|
| ||
Corporate hedging losses (gains)
|
|
5.1
|
|
|
0.01
|
| ||
Goodwill and intangible impairment charges
|
|
304.2
|
|
|
0.59
|
| ||
Early extinguishment of debt
|
|
93.3
|
|
|
0.14
|
| ||
Salaried pension plan lump sum settlement
|
|
13.8
|
|
|
0.02
|
| ||
Legal matters
|
|
(5.7)
|
|
|
(0.01)
|
| ||
Tax adjustment of valuation allowance
|
|
—
|
|
|
(0.21)
|
| ||
Unusual tax items
|
|
—
|
|
|
(0.03)
|
| ||
Income from discontinued operations, net of noncontrolling interests
|
|
—
|
|
|
—
|
| ||
Adjusted
|
$
|
1,233.3
|
|
$
|
1.74
|
| ||
% of Net Sales (Margin) | 15.8% | |||||||
| 1 | A portion of our Net sales from divested businesses relates to our private label peanut butter business, which we exited in the third quarter of fiscal 2020. This exit occurred in waves and continued to produce net sales through the end of fiscal 2020. |
| 2 | Organic net sales growth excludes the impact of fiscal 2020’s 53rd week, which was calculated as one-sixth of our last month’s net sales (which included a total of six weeks). One-sixth of our last month’s net sales from businesses divested during fiscal 2021 are now being reflected within Net sales from divested businesses. |
 | Operating profit1 | |
Reported | $1,776.2 | |
% of Net Sales | 15.9% | |
Restructuring plans | 77.9 | |
Acquisitions and divestitures | 5.7 | |
Corporate hedging derivative gains | (15.6) | |
Net gain on divestiture of businesses | (58.4) | |
Brand impairment charges | 90.9 | |
Early extinguishment of debt | 68.7 | |
Consulting fees on tax matters | 7.2 | |
Legal matters | 2.6 | |
Adjusted | $1,955.2 | |
% of Net Sales | 17.5% | |
| 1 | Operating profit is derived from taking Income from continuing operations before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement non-service income. |
| Q4FY21 | ||
Notes payable | $707.4 | |
Current installments of long-term debt | 23.1 | |
Senior long-term debt, excluding current installments | 8,275.2 | |
Total Debt | $9,005.7 | |
Less: Cash | 79.2 | |
Net Debt | $8,926.5 | |
A-2 CONAGRA BRANDS
| FY21 | ||
Net Debt | $8,926.5 | |
Net income attributable to Conagra Brands, Inc. | $1,298.8 | |
Add Back: Income tax expense | 193.8 | |
Income tax expense attributable to noncontrolling interests | (0.8) | |
Interest expense, net | 420.4 | |
Depreciation | 328.0 | |
Amortization | 59.7 | |
Earnings before interest, taxes, depreciation, and amortization (EBITDA) | $2,299.9 | |
Restructuring plans1 | 45.0 | |
Acquisitions and divestitures | 5.7 | |
Corporate hedging derivative gains | (15.6) | |
Consulting fees on tax matters | 7.2 | |
Net gain on divestiture of businesses | (58.4) | |
Legal matters | 2.6 | |
Early extinguishment of debt | 68.7 | |
Brand impairment charges | 90.9 | |
Adjusted EBITDA | $2,446.0 | |
Net Debt to Adjusted EBITDA | 3.6 | |
| 1 | Excludes comparability items related to depreciation |
2021 PROXY STATEMENT A-3
ESG Quick Summary
| Board Governance | ||
# of Director Nominees | 12 | |
Nominee Independence | 92% | |
Average Nominee Age | 63 | |
Average Nominee Tenure | 7 | |
Racial/Ethnic Diversity of Nominees | 27% | |
Gender Diversity of Nominees | 33% | |
Total Diversity of Nominees | 58% | |
Independent Board Chair | Yes | |
Director Voting Standard | Majority standard; plurality voting in contested elections | |
Frequency of Director Elections | Annual | |
Resignation Policy (if director fails to receive majority vote) | Yes | |
Classified Board | No | |
Mandatory Retirement Age | 72 | |
Term Limits | No | |
At Least 75% Attendance at Required Meetings | All | |
Overboarded Directors | None | |
Annual Board Self-Evaluation Process | Yes | |
Executive Sessions of Independent Directors | Yes, at each regularly- scheduled Board meeting | |
| Board Governance | ||
Year-Round Shareholder Engagement | Yes | |
Robust Stock Ownership Guidelines | Yes, for our Board and more than 90 senior employees | |
Code of Conduct for Directors and Employees | Yes | |
Director Onboarding and Continuing Education | Yes | |
Related Party Transactions with Directors | None | |
Political Contributions | Publicly disclosed | |
Independent Auditor | KPMG LLP | |
| Shareholder Rights | ||
One Share, One Vote Policy | Yes | |
Dual-Class Common Stock | No | |
Cumulative Voting | No | |
Vote Standard for Charter/Bylaw Amendment | Majority standard | |
Shareholder Right to Call Special Meeting | No | |
Shareholder Right to Act by Written Consent | No | |
Board Authorized to Issue Blank-Check Preferred Stock | Yes | |
Poison Pill | No | |
Proxy Access Bylaw | Yes | |
Exclusive Forum Bylaw | Yes | |
B-1 CONAGRA BRANDS
| Compensation Practices | ||
Employ Greater Portion of Variable Pay (i.e. Incentives) for Most Senior Employees | Yes | |
Frequency of Say-on-Pay Advisory Vote | Annual | |
Employment Agreements with Executive Officers Other Than CEO | No | |
Excessive Perquisites to Executives | No | |
Financial and Non-Financial Goals in Executive Compensation | Yes | |
Independent Compensation Consultant | Frederic W. Cook & Co, Inc. | |
Clawback Policy | Yes | |
Incentive Plans Encourage Excessive Risk-Taking | No | |
Double-Trigger Change of Control Provisions | Yes | |
Backdating or Repricing of Stock Options Without Shareholder Approval | No | |
Shares Pledged or Hedged by Directors or Executives | No | |
CEO Pay Ratio | 234 to 1 | |
| Environmental Practices | ||
Board Oversight of ESG Practices and Strategies | Yes | |
Climate Change Goals | Yes 2030 targets validated by | |
| Environmental Practices | ||
Sustainable Agriculture Program | Decade of Ag Vision and Birds Eye Good Agricultural Practices Program | |
Sustainable Ingredient and Sourcing Practices | Supplier Excellence Program | |
Sustainable Packaging Target | Publicly disclosed | |
Sustainability Accounting Standards Board (SASB) Disclosure | Publicly disclosed | |
Water Risk Management Program | Yes | |
Zero Waste Approach | Yes | |
Animal Welfare Policies | Publicly disclosed | |
| Social Engagement | ||
Supplier Code of Conduct | Yes | |
Statement of Human Rights | Yes | |
Diversity and Inclusion Initiatives | • CEO Action for Diversity and Inclusion Pledge • 100% score on Human Rights Campaign’s Corporate Equality Index • Supplier Diversity Program • D&I Leadership Council • Inclusive Leadership Program | |
Representation and Retention Goals for People of Color and Women in Management Roles | Publicly disclosed | |
Corporate Philanthropy | Conagra Brands Foundation and Corporate and Employee Actions | |
2021 PROXY STATEMENT B-2
OUR BRANDS | Hungry-Man® | |
ACT II® | Hunt’s® | |
Alexia® | Jiffy Pop® | |
Andy Capp’s® | Kid Cuisine® | |
Angie’s BOOMCHICKAPOP® | La Choy® | |
Armour Star® | Libby’s® | |
Aunt Jemima® | Log Cabin® | |
Banquet® | Manwich® | |
Bernstein’s® | Marie Callender’s® | |
Bertolli® | Mrs. Butterworth’s® | |
BIGS® | Mrs. Paul’s® | |
Birds Eye® | Nalley® | |
Birds Eye® C&W | Odom’s Tennessee Pride® | |
Birds Eye® Voila | Open Pit® | |
Blake’s® | Orville Redenbacher’s® | |
Blue Bonnet® | P.F. Chang’s Home Menu™ | |
Brooks® | PAM® | |
Celeste® Pizza for One™ | Parkay® | |
Chef Boyardee® | Penrose® | |
Crunch ‘n Munch® | Poppycock® | |
DAVID® Seeds | Ranch Style® Beans | |
Dennison’s® | Reddi-wip® | |
Duke’s® | RO*TEL® | |
Duncan Hines® | Rosarita® | |
Duncan Hines® Comstock® | Sandwich Bros. of Wisconsin® | |
and Wilderness® | Slim Jim® | |
Earth Balance® | Smart Balance® | |
EVOL® | Snack Pack® | |
Fiddle Faddle® | Swiss Miss® | |
Fleischmann’s® | Udi’s® Gluten Free | |
Frontera® | Van Camp’s® | |
Gardein™ | Van De Kamps® | |
Glutino® | Vlasic® | |
Gulden’s® | Wish-Bone® | |
Healthy Choice® | Wolf® Brand Chili | |
Hebrew National® | ||
 | Our Notice of Annual Meeting, Proxy Statement and Annual Report for the fiscal year ended May 30, 2021 are available at http://www.conagrabrands.com/investor-relations/financial-reports/annual-reports |
222 Merchandise Mart Plaza Suite 1300 Chicago, Illinois 60654 | VOTE BY INTERNET Before The Meeting- Go to www.proxyvote.com 1. Read the accompanying Proxy Statement and this proxy card. 2. Go to the Website www.proxyvote.com. 3. Follow the instructions.
During The Meeting - Go to www.virtualshareholdermeeting.com/CAG2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 | |
| 1. Read the accompanying Proxy Statement and this proxy card. | |
| 2. Call toll free at 1-800-690-6903. | |
| 3. Follow the recorded instructions. | |
| VOTE BY MAIL | ||
1. Read the accompanying Proxy Statement and this proxy card. | ||
2. Complete, sign, and date your proxy card. | ||
3. Return your proxy card in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
If you vote by Phone or Internet, please do not mail this | ||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| KEEP THIS PORTION FOR YOUR RECORDS | |
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||
DETACH AND RETURN THIS PORTION ONLY
| ||||||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||
CONAGRA BRANDS, INC.
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the following nominees for director: | ||||||||||||||||||||||||||||||||||||||||
1. |
Election of directors |
☐ |
☐ |
☐ |
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| 01) | Anil Arora | 06) | Rajive Johri | |||||||||||||||||||||||||||||||||||||
| 02) | Thomas K. Brown | 07) | Richard H. Lenny | |||||||||||||||||||||||||||||||||||||
| 03) | Stephen G. Butler | 08) | Ruth Ann Marshall | |||||||||||||||||||||||||||||||||||||
| 04) | Sean M. Connolly | 09) | Craig P. Omtvedt | |||||||||||||||||||||||||||||||||||||
| 05) | Joie A. Gregor | |||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||
| 2. | Ratification of the appointment of independent auditor for fiscal 2019 | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||
| 3. | Advisory approval of the Company’s named executive officer compensation | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
| NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this proxy card. | ||||||||||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting. | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||
| Yes | No | |||||||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||||
CONAGRA BRANDS, INC. | ||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR each of the following nominees for director: | ||||||||||||||||||||||||||||||||||
1. | Election of Directors | For | Against | Abstain | ||||||||||||||||||||||||||||||
| 1a. | Anil Arora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||
| 1b. | Thomas K. Brown | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||
| 1c. | Emanuel Chirico | ☐ | ☐ | ☐ | 2. | Ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2022 | ☐ | ☐ | ☐ | |||||||||||||||||||||||||
| 1d. | Sean M. Connolly | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||
| 1e. | Joie A. Gregor | ☐ | ☐ | ☐ | 3. | Advisory approval of our named executive officer compensation | ☐ | ☐ | ☐ | |||||||||||||||||||||||||
| 1f. | Fran Horowitz | ☐ | ☐ | ☐ | The Board of Directors recommends a vote AGAINST the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||||
| 1g. | Rajive Johri | ☐ | ☐ | ☐ | 4. | A shareholder prosposal regarding written consent. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||
| 1h. | Richard H. Lenny | ☐ | ☐ | ☐ | NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this proxy card. | |||||||||||||||||||||||||||||
| 1i. | Melissa Lora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||
| 1j. | Ruth Ann Marshall | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||
| 1k. | Craig P. Omtvedt | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||
| 1l. | Scott Ostfeld | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||||
ADMISSION TICKET
Conagra Brands, Inc. 20182021 Annual Meeting of Shareholders
Friday,Wednesday, September 21, 201815, 2021
8:30 a.m.2:00 p.m. CDT
The Gwen Hotel, Floor 11www.virtualshareholdermeeting.com/CAG2021
The Grand Salon Room
521 North Rush Street
Chicago, Illinois 60611
You must present this admission ticket, along with one form of government-issued photo identification (such as a valid driver’s license or passport), in order to gain admittance to the Annual Meeting of Shareholders on September 21, 2018. This ticket is not transferable and admits only the shareholder(s) listed on the reverse side and one guest. Cameras, recording devices, and large packages/containers will not be permitted at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
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E50133-P12300D58345-P59477
PROXY - CONAGRA BRANDS, INC.
Please vote and sign on reverse side.
This Proxy is Solicited by the Board of Directors for the
September 21, 201815, 2021 Annual Meeting of Shareholders.
The undersigned appoints each of Sean M. Connolly and Richard H. Lenny as proxies, with full power of substitution, to vote all shares of common stock of Conagra Brands, Inc. that the undersigned would be entitled to vote at the Annual Meeting of Shareholders and any adjournmentadjournments or postponements thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS PROXY. IF YOU SIGN AND RETURN YOUR PROXY BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE PROXIES WILL VOTE THE SHARESFOR ALL NOMINEESEACH NOMINEE LISTED IN ITEM 1,FOR ITEMS 2 AND 3,AGAINST ITEM 4 AND AS RECOMMENDED BY THE BOARD OF DIRECTORS UPONIN CONNECTION WITH SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF SHAREHOLDERS.
If you wish to vote by mailing this proxy card, please mark the boxes accordingly, indicate the date, sign your name exactly as it appears on this card, and return it in the enclosed envelope. When signing as attorney, executor, administrator, trustee, guardian, or officer of a corporation, please give your full title as such. Information on telephonic and Internet voting is on the reverse side of this proxy card.
You may also vote via telephone or the Internet. Please see the reverse side of this card for information about telephonic or Internet voting. Your telephone or Internet vote authorizes the named proxies to vote these shares in the same manner as if you marked, signed, and returned your proxy card. Telephone and Internet voting are available until 11:59 p.m. (ET) on September 20, 2018.14, 2021.
Continued and to be signed on reverse side
222 Merchandise Mart Plaza Suite 1300 Chicago, Illinois 60654 | VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com 1. Read the accompanying Proxy Statement and this voting instruction card. 2. Go to the Website www.proxyvote.com. 3. Follow the instructions.
During The Meeting - Go to www.virtualshareholdermeeting.com/CAG2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 | |
| 1. Read the accompanying Proxy Statement and this voting instruction card. | |
| 2. Call toll free at 1-800-690-6903. | |
| 3. Follow the recorded instructions. | |
| VOTE BY MAIL | ||
1. Read the accompanying Proxy Statement and this voting instruction card. | ||
2. Complete, sign, and date your voting instruction card. | ||
3. Return your voting instruction card in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||
If you vote by Phone or Internet, please do not mail this Voting Instruction Card. | ||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
| KEEP THIS PORTION FOR YOUR RECORDS | |
| — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||
DETACH AND RETURN THIS PORTION ONLY
| ||||||
| THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||||||
CONAGRA BRANDS, INC.
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends you vote FOR the following: |
☐ |
☐ |
☐ | |||||||||||||||||||||||||||||||||||||
1. |
Election of directors. |
| ||||||||||||||||||||||||||||||||||||||
| 01) | Anil Arora | 06) | Rajive Johri | |||||||||||||||||||||||||||||||||||||
| 02) | Thomas K. Brown | 07) | Richard H. Lenny | |||||||||||||||||||||||||||||||||||||
| 03) | Stephen G. Butler | 08) | Ruth Ann Marshall | |||||||||||||||||||||||||||||||||||||
| 04) | Sean M. Connolly | 09) | Craig P. Omtvedt | |||||||||||||||||||||||||||||||||||||
| 05) | Joie A. Gregor | |||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||
| 2. | Ratification of the appointment of independent auditor for fiscal 2019 | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||
| 3. | Advisory approval of the Company’s named executive officer compensation | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
| NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this voting instruction card. | ||||||||||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||
| Yes | No | |||||||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||||
CONAGRA BRANDS, INC. | ||||||||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR each of the following nominees for director: | ||||||||||||||||||||||||||||||||
1. | Election of Directors | For | Against | Abstain | ||||||||||||||||||||||||||||
| 1a. | Anil Arora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1b. | Thomas K. Brown | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||
| 1c. | Emanuel Chirico | ☐ | ☐ | ☐ | 2. | Ratification of the appointment of KPMG LLP as our independent auditor for fiscal 2022 | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 1d. | Sean M. Connolly | ☐ | ☐ | ☐ | The Board of Directors recommends a vote FOR the following proposal: | For | Against | Abstain | ||||||||||||||||||||||||
| 1e. | Joie A. Gregor | ☐ | ☐ | ☐ | 3. | Advisory approval of our named executive officer compensation | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 1f. | Fran Horowitz | ☐ | ☐ | ☐ | The Board of Directors recommends a vote AGAINST the following proposal: | |||||||||||||||||||||||||||
| 1g. | Rajive Johri | ☐ | ☐ | ☐ | 4. | A shareholder proposal regarding written consent | ||||||||||||||||||||||||||
| 1h. | Richard H. Lenny | ☐ | ☐ | ☐ | NOTE: The shares will be voted as directed, or if no direction is indicated, as described on the reverse side of this voting instruction card. | |||||||||||||||||||||||||||
| 1i. | Melissa Lora | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1j. | Ruth Ann Marshall | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| 1k. | Craig P. Omtvedt | |||||||||||||||||||||||||||||||
| 1l. | Scott Ostfeld | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||||
ADMISSION TICKET
Conagra Brands, Inc. 20182021 Annual Meeting of Shareholders
Friday,Wednesday, September 21, 201815, 2021
8:30 a.m.2:00 p.m. CDT
The Gwen Hotel, Floor 11www.virtualshareholdermeeting.com/CAG2021
The Grand Salon Room
521 North Rush Street
Chicago, Illinois 60611
You must present this admission ticket, along with one form of government-issued photo identification (such as a valid driver’s license or passport), in order to gain admittance to the Annual Meeting of Shareholders on September 21, 2018. This ticket is not transferable and admits only the shareholder(s) listed on the reverse side and one guest. Cameras, recording devices, and large packages/containers will not be permitted at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E50135-P12300 D58347-P59477
VOTING INSTRUCTION CARD - CONAGRA BRANDS, INC.
Please vote and sign on reverse side.
This Voting Instruction Card is Solicited by the Board of Directors for the
September 21, 201815, 2021 Annual Meeting of Shareholders.
As a participant in the Conagra Brands Employee Stock Purchase Plan (the "ESPP"“ESPP”), I hereby direct Computershare, as Trustee, to vote all shares of common stock I hold in this plan account in accordance with the instructions set forth on the reverse side.
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS CARD. IF YOU SIGN AND RETURN YOUR INSTRUCTION CARD BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE TRUSTEE WILL VOTE THE SHARESFOR ALL NOMINEESEACH NOMINEE LISTED IN ITEM 1, ANDFOR ITEMS 2 AND 3.3, AND AGAINST ITEM 4.
If you wish to vote using this voting instruction card, please mark the boxes accordingly, sign your name exactly as it appears on this card, indicate the date, and return this card in the enclosed envelope. If you are a current or former employee ofConagra Brands, Inc. and have an interest in the ESPP, your proportionate interest as of July 31, 201826, 2021 is shown on this voting instruction card and the instructions you provide will determine how the Trustee will vote. If you do not vote, the Trustee will vote the shares in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received, unless contrary to applicable law.
You may also vote via telephone or the Internet. Please see the reverse side of this card for information about telephonic or Internet voting. Your telephone or Internet voting instruction authorizes Computershare to vote these shares in the same manner as if you marked, signed, and returned this voting instruction card. Whether you vote by mail, telephone, or via the Internet, your vote must be returned by 11:59 p.m. (ET) on September 18, 2018.14, 2021.
Continued and to be signed on reverse side
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED.
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ADMISSION TICKET
Conagra Brands, Inc. 2018 Annual Meeting of Shareholders
Friday, September 21, 2018
8:30 a.m. CDT
The Gwen Hotel, Floor 11
The Grand Salon Room
521 North Rush Street
Chicago, Illinois 60611
You must present this admission ticket, along with one form of government-issued photo identification (such as a valid driver’s license or passport), in order to gain admittance to the Annual Meeting of Shareholders on September 21, 2018. This ticket is not transferable and admits only the shareholder(s) listed on the reverse side and one guest. Cameras, recording devices, and large packages/containers will not be permitted at the meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E50137-P12300
VOTING INSTRUCTION CARD - CONAGRA BRANDS, INC.
Please vote and sign on reverse side.
This Voting Instruction Card is Solicited by the Board of Directors for the
September 21, 2018 Annual Meeting of Shareholders.
As a participant in the TreeHouse Private Brands Retirement Income Savings Plan, I hereby direct T. Rowe Price, as Trustee, to vote all shares held in this plan account as I instruct in the instructions listed below.
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED IN ACCORDANCE WITH YOUR SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS CARD. IF YOU SIGN AND RETURN YOUR INSTRUCTION CARD BUT DO NOT CHECK THE APPROPRIATE BOX FOR A PARTICULAR ITEM, THE TRUSTEE WILL VOTE THE SHARESFOR ALL NOMINEES LISTED IN ITEM 1 ANDFOR ITEMS 2 AND 3.
If you wish to vote using this voting instruction card, please mark the boxes accordingly, sign your name exactly as it appears on this card, indicate the date and return the card in the enclosed envelope. If you are a current or former employee ofConagra Brands, Inc. and have an interest in TreeHouse Private Brands Retirement Income Savings Plan, your proportionate interest as of July 31, 2018 is shown on this voting instruction card and the instructions you provide on this card will determine how the Trustee will vote. If you do not vote, the Trustee will vote the shares in a single block in accordance with the instructions received with respect to a majority of the shares for which instructions are received, unless contrary to applicable law.
You may also vote via telephone or the Internet. Please see the reverse side of this card for information about telephonic or Internet voting. Your telephone or Internet voting instruction authorizes T. Rowe Price to vote these shares in the same manner as if you marked, signed, and returned this voting instruction card. Whether you vote by mail, telephone or via the Internet, your vote must be returned by 11:59 p.m. (ET) on September 18, 2018.
Continued and to be signed on reverse side
