UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

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THE HAIN CELESTIAL GROUP, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Notice of 2021 Annual Meeting of

Stockholders and Proxy Statement

Thursday, October 28, 2021

4:00 p.m. Eastern Time

Virtual Meeting Site

virtualshareholdermeeting.com/HAIN2021

THE HAIN CELESTIAL GROUP, INC.

1111 Marcus Avenue

Lake Success, NY 11042

516-587-5000

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of THE HAIN CELESTIAL GROUP, INC.:

The 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of The Hain Celestial Group, Inc. will be held on Thursday, October 28, 2021 at 4:00 p.m., Eastern Time. Due to the ongoing COVID-19 pandemic and to ensure the health and safety for our directors, members of management and stockholders, we are again hosting a virtual meeting this year. The live audio webcast will be available at virtualshareholdermeeting.com/HAIN2021.

We are holding the Annual Meeting for the following purposes:

 

1.

To elect the eight director nominees specified herein to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified;

 

2.

To approve, on an advisory basis, the compensation of our named executive officers for the fiscal year ended June 30, 2021, as set forth in the attached proxy statement;

 

3.

To ratify the appointment of Ernst & Young LLP as our registered independent accountants for the fiscal year ending June 30, 2022;

 

4.

To vote on a stockholder proposal to require an independent Board Chair, if the proposal is properly presented at the Annual Meeting; and

 

5.

To transact such other business as may properly come before the Annual Meeting (including any adjournments or postponements thereof).

These matters are more fully described in the attached proxy statement.

Only stockholders of record as of the close of business on September 7, 2021 are entitled to notice of, and to vote at, the Annual Meeting, or any adjournment or postponement thereof. A list of these stockholders will be available for inspection by any stockholder for any purpose germane to the Annual Meeting for a period of ten days prior to the Annual Meeting at our principal executive office located at 1111 Marcus Avenue, Lake Success, New York. The list will also be available during the Annual Meeting at virtualshareholdermeeting.com/HAIN2021.

 

Your vote is important. Whether or not you expect to attend the Annual Meeting virtually, please submit your vote as soon as possible. See page 6 in the accompanying proxy statement for a description of the ways by which you may cast your vote on the matters being considered at the Annual Meeting.

By order of the Board of Directors,

 

 

Kristy Meringolo

Executive Vice President, General Counsel, Corporate

Secretary and Chief Compliance Officer

Dated: September 17, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 28, 2021: A complete set of proxy materials relating to our Annual Meeting is available on the internet. These materials, consisting of this notice of annual meeting of stockholders, the accompanying proxy statement and our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, may be viewed at ir.hain.com/shareholder-information/proxy.

THE HAIN CELESTIAL GROUP, INC.

PROXY STATEMENT

TABLE OF CONTENTS

 

 

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					TOC

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					1

PROXY STATEMENT SUMMARY

 

 

2				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROXY STATEMENT SUMMARY

 

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					3

PROXY STATEMENT SUMMARY

 

 

4				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROXY STATEMENT SUMMARY

 

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					5

PROXY STATEMENT SUMMARY

 

 

6				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROXY STATEMENT SUMMARY

 

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					7

PROXY STATEMENT SUMMARY

 

 

8				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROXY STATEMENT SUMMARY

 

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					9

PROPOSAL NO. 1 ELECTION OF DIRECTORS

General

 

Our Board of Directors is currently composed of eight members, all of whom will stand for re-election at the Annual Meeting. It is proposed that the nominees standing for election be elected to hold office until the next annual meeting of stockholders and until their successors are elected and qualified.

The Board has nominated, and the proxies will vote to elect, unless otherwise directed, the following individuals as members of the Board of Directors to serve until the next annual meeting of stockholders and until their respective successors are duly elected and qualified: Richard A. Beck, Dr. Celeste A. Clark, Dean Hollis, Shervin J. Korangy, Mark L. Schiller, Michael B. Sims, Glenn W. Welling and Dawn M. Zier. Each nominee has consented to be nominated and to serve, if elected.

 

✓		The Board of Directors unanimously recommends that you vote “FOR” the election of each of the nominees.

 

10				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROPOSAL NO. 1 ELECTION OF DIRECTORS

 

The Director Nominees for Election at the Annual Meeting

 

 

Richard A. Beck, Director

 

Age: 63 Director Since: 2019		Hain Board Committees: •  Audit •  Corporate Governance and Nominating

Richard A. Beck has been a director since October 2019. Mr. Beck is the founder of Biltmoore Consulting, a consulting firm that advises clients in operations, supply chain optimization, logistics and general management. Prior to founding Biltmoore Consulting in 2016, Mr. Beck served as Senior Vice President, Global Operations of PepsiCo, Inc., one of the world’s leading food and beverage companies, from February 2011 to April 2016. In this role, Mr. Beck established the company’s global operations function and led various successful initiatives that improved productivity, drove automation, technology and global systems and improved environmental, health and safety metrics. Prior to this, Mr. Beck had served in other roles of increasing responsibility for PepsiCo from 1993 to 2011, including President/SVP of Gatorade, SVP, PepsiCo Chicago and SVP, Operations for Frito-Lay. In these roles, Mr. Beck oversaw the manufacturing and distribution of some of PepsiCo’s key brands and led various productivity, environmental and sustainability initiatives. Prior to joining PepsiCo, Mr. Beck served in positions of increasing responsibility at General Electric from 1981 to 1993. Since 2019, Mr. Beck has served on the board of directors of FleetPride, Inc., a privately held company and leading supplier of parts and maintenance to the commercial trucking industry. In 2021, Mr. Beck joined the board of directors of Truvant, a privately held company and leading contractor of packaging and services to the retail industry. Since 2017, he has served on the Executive Council for American Securities LLC, a leading U.S. private equity firm.

 

 

Key Attributes, Experience and Skills:

 

Mr. Beck brings extensive experience in the food and beverage industry. Through his various roles throughout his career, Mr. Beck has developed significant expertise in management, logistics and supply chain optimization, which make him a valuable contributor to the Board. Mr. Beck’s background is also critical as he helps oversee and support the Company’s global sustainability and corporate citizenship initiatives as part of his membership on the Corporate Governance and Nominating Committee.

 

Celeste A. Clark, Ph.D., Director

 

Age: 68 Director Since: 2017		Hain Board Committees: •  Compensation •  Corporate Governance and Nominating		Other Current Public Company Boards: •  Prestige Consumer Healthcare Inc. •  Wells Fargo & Company   Former Public Company Boards in Past Five Years: •  AdvancePierre Foods Holdings, Inc. •  Mead Johnson Nutrition Company •  Omega Protein Corporation

Celeste A. Clark, Ph.D. has been a director since September 2017. Dr. Clark has been the principal of Abraham Clark Consulting, LLC, a consulting firm, since November 2011 and consults on nutrition and health policy, regulatory affairs and leadership development. Dr. Clark is also an adjunct professor in the Department of Food Science and Human Nutrition at Michigan State University, where she has served in such position since January 2012. She previously served as Senior Vice President, Global Policy and External Affairs of Kellogg Company, a food manufacturing company, and was the Chief Sustainability Officer until she retired in 2011. She was a member of the Global Executive Management Team and had an accomplished career spanning nearly 35 years in the food industry. At Kellogg Company, she was responsible for the development and implementation of health, nutrition and regulatory science initiatives globally to ensure consistency in approach and implementation. In addition, she also led global corporate communications, public affairs, philanthropy and several administrative functions. Dr. Clark has served on the board of directors of Wells Fargo & Company since January 2018 and the board of directors of Prestige Consumer Healthcare Inc. since February 2021. She has served on the boards of several other public and privately held companies including Mead Johnson Nutrition Company, a pediatric nutrition company, beginning in 2011 until being acquired by Reckitt Benckiser plc in 2017; Diamond Foods, Inc., a leading branded snacks supplier, beginning in 2014 until being acquired by Snyder’s-Lance, Inc. in 2016; AdvancePierre Foods Holdings, Inc., a producer and distributor of ready-to-eat sandwiches, beginning in 2016 until being acquired by Tyson Foods, Inc. in 2017; and Omega Protein Corporation, a manufacturer of fish meal and fish oils, until being acquired by Cooke Inc. in 2017. Dr. Clark also serves as a trustee of the W.K. Kellogg Foundation.

 

 

Key Attributes, Experience and Skills:

 

Dr. Clark brings significant industry experience in various nutrition, consumer products, public policy, risk management and governance matters to our Board. She also brings extensive experience on ESG and sustainability matters to the Board and serves as a key resource for our Sustainability Department. Dr. Clark has served on a number of public company boards, which have provided her with a broad understanding of the governance, operational, financial and strategic issues facing public companies.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					11

PROPOSAL NO. 1 ELECTION OF DIRECTORS

 

Dean Hollis, Director and Chair of the Board

 

Age: 61 Director Since: 2017		Hain Board Committees: •  Corporate Governance and Nominating •  Strategy		Other Current Public Company Boards: •  SunOpta Inc.   Former Public Company Boards in Past Five Years: •  AdvancePierre Foods Holdings, Inc.

Dean Hollis has been a director since September 2017 and has been Chair of the Board since December 2018. He is a senior advisor for Oaktree Capital, a $100 billion worldwide private equity firm. Prior to 2008, Mr. Hollis was President and Chief Operating Officer, ConAgra Foods, Consumer Foods and International. In that role, Mr. Hollis developed and executed a worldwide business transformation strategy, while overseeing the largest part of the ConAgra Foods portfolio, including its $12 billion consumer and customer branded businesses, consisting of over 40 global brands in 110 countries. During his 21 years with ConAgra Foods, he held many executive level positions, including: Executive Vice President, Retail Products; President, Grocery Foods; President, Frozen Foods; President, Specialty Foods; and President, Gilardi Foods. Since October 2016, he has been a director and chair of the board of SunOpta Inc., a worldwide leader in healthy foods, specializing in non-GMO and organic products. From 2008 until its 2017 sale to Tyson Foods, Mr. Hollis served as chair of the board of AdvancePierre Foods Holdings, Inc., a producer and distributor of ready-to-eat sandwiches. Until its sale to Snyder’s-Lance Inc. in early 2016, he also served on the board of Diamond Foods, Inc., a leading branded snacks supplier. Also, until its sale to Pinnacle Foods Inc. in January of 2016, Mr. Hollis served as chair of the board of directors of Boulder Brands, Inc., a leader and innovator in health and wellness foods. Until October 2015, he also served on the board of Landec Corporation, a developer and marketer of patented polymer products for food, agriculture and licensed partner applications.

 

 

 

Key Attributes, Experience and Skills:

 

As a result of the various positions he has held in the food industry, Mr. Hollis brings relevant operational experience to our Board. In addition, he has served on a number of public company boards, which have provided him with a broad understanding of the operational, financial and strategic issues facing public companies.

 

Shervin J. Korangy, Director

 

Age: 46 Director Since: 2017		Hain Board Committees: •  Audit •  Strategy (Chair)		Other Current Public Company Boards: •  Motus GI Holdings, Inc.

Shervin J. Korangy has been a director since September 2017. Since May 2019, he has served as the President and Chief Executive Officer of BVI Medical, Inc., a Texas Pacific Group portfolio company that is a global developer, manufacturer and marketer of specialty products for ophthalmic surgery. Prior to being named President and Chief Executive Officer of BVI Medical, Mr. Korangy served as its Chief Financial Officer and Head of Strategy from April 2017 to May 2019. Prior to joining BVI Medical, Mr. Korangy served as a senior executive of Novartis Group AG, a diversified healthcare products company, from 2010 until March 2017. During his almost seven years at Novartis, he served in various international capacities spanning strategy, M&A, integrations, sales & marketing and general management including serving as the Global Head of Corporate Finance based in Switzerland. In 2011, Mr. Korangy co-founded Sight Sciences, Inc., a medical device company. Previously, he was a Managing Director at The Blackstone Group, an investment firm, which he joined in 1996. During his more than 14 years at Blackstone, he served both as an advisor in the Restructuring & Reorganization business and as an investor in the Private Equity business. Mr. Korangy has served on the board of directors of BVI Medical, a privately held company, since May 2019 and the board of directors of Motus GI Holdings, Inc., a manufacturer and marketer of medical device products for the gastroenterology field, since April 2017. Mr. Korangy’s previous corporate board experience includes having served as a director of Pelican Rouge Group, a consumer coffee manufacturer and distributor, from 2014 to 2017, Pinnacle Foods Inc., a manufacturer, marketer and distributor of high-quality branded food products, from 2007 to 2009, Bayview Financial, a mortgage finance company, from 2008 to 2009, Ultra Music, a worldwide music media entity, from 2005 to 2010, and as a board observer for Graham Packaging, a leading designer and manufacturer of custom blow-molded plastic containers for consumer products. Mr. Korangy has also served on the Wharton Leadership Advisory Board, established by the Center for Leadership and Change Management at The Wharton School of the University of Pennsylvania, since January 2019.

 

 

Key Attributes, Experience and Skills:

 

Mr. Korangy’s position as the President and Chief Executive Officer at a global company, together with his significant financial and consumer packaged goods business experience, makes him a valuable addition to our Board of Directors. In addition to his strong financial expertise, the Company values his competencies in strategy, mergers and acquisitions, integration and general management.

 

12				The Hain Celestial Group, Inc. 2021 Proxy Statement

								PROPOSAL NO. 1 ELECTION OF DIRECTORS

 

Mark L. Schiller, President and Chief Executive Officer and Director

 

Age: 59 Director Since: 2018				Other Current Public Company Boards: •  Kontoor Brands, Inc.

Mark L. Schiller has been our President and Chief Executive Officer since November 2018, and has been a director since December 2018. Prior to joining the Company, Mr. Schiller served as the Executive Vice President and Chief Commercial Officer for Pinnacle Foods Inc. from May 2017 to October 2018. In this role, Mr. Schiller led Pinnacle’s Grocery and Frozen segments and key commercial functions utilized across the entire organization, including sales, marketing strategy, innovation, product development, package design, commercialization, productivity, consumer insights and shopper marketing. Before he served as the Executive Vice President and Chief Commercial Officer, Mr. Schiller had served in other roles of increasing responsibility for Pinnacle including, from January 2015 to May 2017, he served as Executive Vice President and President North America Retail; from May 2013 to January 2015, he served as Executive Vice President and President Birds Eye Frozen Division; and from June 2010 to May 2013, he served as Executive Vice President and President Duncan Hines Grocery Division. Prior to joining Pinnacle, Mr. Schiller was employed by PepsiCo, Inc. from March 2002 to April 2010, where he served as the Senior Vice President of Frito Lay New Ventures, President of Quaker Foods and Snacks North America, and Senior Vice President and General Manager of Frito Lay Convenience Foods Division. From 1998 to 2002, Mr. Schiller was Chief Operating Officer and Co-President of Tutor Time Learning Systems, Inc., and, from 1996 to 1998, he served as president of Valley Recreation Products, Inc. Mr. Schiller began his career at the Quaker Oats Company in 1985 and served in various marketing, sales and supply chain roles. Since May 2021, Mr. Schiller has served as a member of the board of directors of Kontoor Brands, Inc., a global lifestyle apparel company.

 

 

Key Attributes, Experience and Skills:

 

Mr. Schiller brings significant experience in the consumer packaged goods industry to the Board given his tenure in the industry. Through his various roles throughout his career, he has developed extensive management leadership experience as well as strong competencies in sales, marketing strategy, innovation, product development, package design, commercialization, productivity, consumer insights and shopper marketing.

 

Michael B. Sims, Director

 

Age: 62 Director Since: 2019		Hain Board Committees: •  Audit (Chair) •  Compensation

Michael B. Sims has been a director since October 2019. Mr. Sims currently serves as Executive Vice President and Chief Financial Officer of Trugreen, a residential and commercial lawn care company. In this role, Mr. Sims is responsible for driving sustainable revenue and EBITDA growth through leadership of finance and supply chain management. Prior to joining Trugreen in February 2019, Mr. Sims served as Senior Vice President, Chief Financial Officer and Treasurer of AdvancePierre Foods Holdings, Inc., a producer and distributor of ready-to-eat sandwiches, from 2012 until its acquisition by Tyson Foods, Inc., in 2017. In this role, Mr. Sims was responsible for the company’s growth-driven, margin-expansion strategy. Prior to joining AdvancePierre Foods, Mr. Sims served in roles of increasing responsibility at Chiquita Brands International Inc., a leading international marketer and distributor of bananas, pineapples and packaged salads, from 1988 to 2012, most recently serving as the company’s Senior Vice President and Chief Financial Officer from 2009 to 2012, and developed expertise in global financial operations, planning and analysis, investor relations and capital markets. Prior to that, Mr. Sims held various positions with Arthur Young & Company (n/k/a Ernst & Young LLP).

 

 

Key Attributes, Experience and Skills:

 

Mr. Sims brings a broad understanding of the food industry and significant financial expertise to the Board, including through his experience as CFO of multiple consumer facing businesses. The Board also values Mr. Sims’ significant transactional experience, including with respect to acquisitions and divestitures.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					13

PROPOSAL NO. 1 ELECTION OF DIRECTORS

 

Glenn W. Welling, Director

 

Age: 51 Director Since: 2017		Hain Board Committees: •  Compensation (Chair) •  Strategy		Other Current Public Company Boards: •  SilverBox Engaged Merger Corp I   Former Public Company Boards in Past Five Years: •  Jamba, Inc. •  Medifast, Inc. •  TiVo Corporation

Glenn W. Welling has been a director since September 2017. Mr. Welling has been the founder and Chief Investment Officer of Engaged Capital, LLC since its founding in 2012. Prior to founding Engaged Capital, Mr. Welling was a Principal and Managing Director at Relational Investors, LLC, an investment fund, which he joined in July 2008, where he was responsible for managing the fund’s consumer, healthcare and utility investments. From February 2002 to May 2008, Mr. Welling was a Managing Director of Credit Suisse Group AG, an investment bank, where he also served as the Head of the Investment Banking Department’s Advisory Business. Since February 2021, Mr. Welling has served as a member of the board of directors of SilverBox Engaged Merger Corp I, a blank check company. From May 2015 to June 2020, Mr. Welling served as a member of the board of directors of TiVo Corporation, a provider of digital entertainment technology solutions. Mr. Welling served as a member of the board of directors of Jamba, Inc., a leading restaurant retailer of better-for-you food and beverage offerings, from January 2015 to September 2018. From 2015 to 2018, Mr. Welling served on the board of directors of Medifast, Inc., a manufacturer of medically based, proprietary healthy living and meal replacement products.

 

 

Key Attributes, Experience and Skills:

 

Mr. Welling brings significant finance, investment and consumer products experience to the Board, which makes him a valuable contributor. In addition, he has served on a number of public boards, which has provided him with a broad understanding of the operational, financial and strategic issues facing public companies.

 

Dawn M. Zier, Director

 

Age: 56 Director Since: 2017		Hain Board Committees: •  Corporate Governance and Nominating (Chair) •  Strategy		Other Current Public Company Boards: •  Prestige Consumer Healthcare Inc. •  Purple Innovation, Inc. •  Spirit Airlines, Inc.   Former Public Company Boards in Past Five Years: •  Nutrisystem, Inc. •  Tivity Health, Inc.

Dawn M. Zier has been a director since September 2017. Since February 2020, Ms. Zier has been the principal of Aurora Business Consulting, LLC, and advises public and private companies on business transformation, digital/marketing acceleration, and high-performance teams. Ms. Zier was formerly the President and CEO and a member of the board of directors of Nutrisystem, Inc., a leading provider of weight loss solutions and services, from November 2012 until its March 2019 acquisition by Tivity Health, Inc. Ms. Zier then continued with Tivity Health, a leading provider of nutrition, fitness, and social engagement solutions, serving as President/COO and a member of its board of directors, to help with the integration efforts through December 2019. From April 2011 until November 2012, Ms. Zier served as the President of International at Reader’s Digest Association, Inc., a global media and direct marketing company. In February 2013, RDA Holding Co., the holding company and parent of Reader’s Digest Association, filed voluntary petitions for reorganization relief pursuant to Chapter 11 of the United States Bankruptcy Code. Ms. Zier has served on the boards of directors of Spirit Airlines, Inc. since June 2015, Prestige Consumer Healthcare Inc. since May 2020, and Purple Innovation, Inc. since November 2020. Over the years, she has also previously served on boards and chaired committees for multiple marketing and media entities, including the Data and Marketing Association’s (DMA) board from 2008 to 2015, where she was a voting director and on the executive committee.

 

 

Key Attributes, Experience and Skills:

 

Ms. Zier is qualified to serve on our Board based on her extensive management leadership experience, which has provided her with significant knowledge of sound corporate governance practices, as well as her international experience and financial acumen. In addition, she has significant consumer product and marketing experience, including digital and e-commerce, as well as food industry expertise, which make her a valuable contributor to the Board.

 

14				The Hain Celestial Group, Inc. 2021 Proxy Statement

BOARD OF DIRECTORS

AND CORPORATE GOVERNANCE

The Board of Directors

 

On an annual basis, the stockholders of the Company elect the Board of Directors, whose primary responsibility is to foster the long-term health, overall success and financial condition of the Company, consistent with its fiduciary duty to our stockholders. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the stockholders. The Board oversees the members of senior management, who are charged by the Board with conducting the business of the Company. In addition, the Board has responsibility for establishing broad corporate policies and overseeing our strategy.

Director Independence

 

Seven of our eight director nominees, consisting of Richard A. Beck, Celeste A. Clark, Dean Hollis, Shervin J. Korangy, Michael B. Sims, Glenn W. Welling and Dawn M. Zier, are “independent directors” as defined in the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”). Mark L. Schiller was determined not to be independent because he is our President and CEO.

Board Meetings and Attendance

 

The Board typically holds regular meetings at least once every quarter and holds special meetings when necessary. During the 2021 fiscal year, the Board held fifteen meetings. We expect directors to attend Board meetings, each annual meeting of stockholders and meetings of the committees on which they serve. All directors standing for re-election who served during fiscal year 2021 attended at least 89% of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board of Directors on which each such director served during the fiscal year, with an average attendance rate of 98%. All of the directors standing for re-election who were also nominated for election at our last annual meeting of stockholders held on November 24, 2020 attended such annual meeting.

In addition to formal Board meetings, management holds monthly update conference calls for the benefit of the Board. While these regularly scheduled monthly update calls are not conducted as formal Board meetings, they allow the Board and management to remain in frequent contact regarding our financial performance, operations, the COVID-19 pandemic, and other important matters and initiatives.

Board Leadership Structure

 

The Board believes that decisions regarding its leadership structure and the allocation of oversight responsibility are of paramount importance to the Board’s effectiveness. As outlined in the Company’s Corporate Governance Guidelines, our Board of Directors believes that the separation of the roles of Chairman and Chief Executive Officer is best practice; however, the Board believes that stockholders are best served if the Board retains flexibility to decide what leadership structure works best for the Company, taking into consideration the Board’s business judgment and the contemporaneous facts and circumstances. Since December 2018, we have separated the roles of Chairman and Chief Executive Officer, and the Company has had and continues to have an independent Chair of the Board who is appointed annually by the independent members of the Board. Dean Hollis, an independent member of the Board, was appointed as Chair of the Board in December 2018 and continues to serve in that role.

The key responsibilities of the Chair include:

 

•

Calling meetings of the Board and independent directors;

 

•

Setting the agenda for Board meetings in consultation with other directors, the CEO and the Corporate Secretary;

 

•

Chairing meetings of the Board and executive sessions of the independent directors;

 

•

Engaging with stockholders;

 

•

Performing the other responsibilities as requested by the Board; and

 

•

Establishing and maintaining Board culture and fostering collegial discussion among all of the directors.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					15

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Our CEO has primary responsibility for the operational leadership and strategic direction of the Company, while the Chair of the Board facilitates the Board’s independent oversight of management, promotes communication between management and the Board, engages with stockholders and leads the Board’s consideration of key governance matters. The Board believes its current leadership structure is appropriate at this time because it effectively allocates authority, responsibility and oversight between management and the independent members of the Board.

Executive Sessions

 

Independent directors meet in executive session at regularly scheduled meetings of the Board of Directors without any members of management present. Mr. Hollis, as Chair of the Board, presides over meetings of independent directors.

Director Elections

 

All directors stand for election annually and are elected by a majority of the votes cast in the case of an uncontested election. Voting is not cumulative.

Director Nomination Process and Stockholder Nominations

 

Taking into account the recommendations of the Corporate Governance and Nominating Committee, the Board reviews Board composition and considers new director candidates as necessary throughout the fiscal year.

When considering potential director nominees, the Corporate Governance and Nominating Committee reviews desired experience, skills and other qualities to assure appropriate Board composition, taking into account the current Board members and the specific needs of the Company and the Board. In addition to these minimum requirements, the Corporate Governance and Nominating Committee evaluates director candidates based on a number of qualifications, including displayed ethical standards, integrity, sound business judgment and a willingness to devote adequate time to Board duties. Although we do not have a formal policy regarding Board diversity, the Corporate Governance and Nominating Committee seeks to include members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to the business of the Company. Consistent with past practices, the Board is committed to a strong and diverse membership and to a thorough process to identify those individuals who can best contribute to the Company’s continued success.

The Board of Directors and the Corporate Governance and Nominating Committee begin the process of identifying and evaluating director nominees by seeking recommendations from a wide variety of contacts, including current executive officers and directors, and industry, academic and community leaders. The Board or the Corporate Governance and Nominating Committee may retain a search firm to identify and screen candidates, conduct background checks, prepare biographies for review by the Corporate Governance and Nominating Committee and the Board and assist in scheduling interviews. The Corporate Governance and Nominating Committee and one or more of our other directors interview candidates.

The Corporate Governance and Nominating Committee’s charter provides that the Committee shall consider written proposals for director nominees from stockholders in accordance with our Corporate Governance Guidelines and our Amended and Restated By-Laws. The Corporate Governance and Nominating Committee will consider candidates recommended by stockholders, and a stockholder wishing to submit a recommendation should send a letter to our Corporate Secretary at The Hain Celestial Group, Inc., 1111 Marcus Avenue, Lake Success, NY 11042. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Director Nominee Recommendation” and, in order to be considered for the 2022 annual meeting of stockholders, must be received by us no later than May 20, 2022. The letter must identify the author as a stockholder, demonstrate evidence of ownership, provide a complete listing of the candidate’s qualifications to serve on the Board, the candidate’s current principal occupation, most recent five-year employment history, current directorships and a statement that the proposed nominee has consented to the nomination, as well as contact information for both the candidate and the author of the letter.

In addition, our Amended and Restated By-Laws permit stockholders who satisfy certain ownership, notice and informational requirements to submit director nominations for inclusion in the Company’s proxy statement. For more information regarding this process, stockholders should consult our Amended and Restated By-Laws as well as “Stockholder Proposals and Other Communications” below.

 

16				The Hain Celestial Group, Inc. 2021 Proxy Statement

								BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Diversity and Inclusion

 

Diversity and Inclusion remain key priorities for the Board and the Company. Under the leadership of our Corporate Governance and Nominating Committee, which has been tasked more broadly with formal review of the Company’s Human Capital Management program, including its Diversity and Inclusion initiatives, the Board is focused on recruiting and retaining a diverse management team and ensuring that diverse skills, backgrounds, attributes and experiences are reflected on the Board. This diversity enables the Board to provide meaningful oversight for key strategies and risks and enhances the Board’s ability to bring different insights and experiences to its decision making. It is also reflective of the Company’s consumer base and employee workforce that the Board endeavors to support. Of the eight director nominees, two are female, one of whom is racially diverse, and one is ethnically diverse.

We believe that the focus on diversity and inclusion positions the Company to deliver successful consumer innovation and meet the changing demands of consumers more holistically. During fiscal year 2020, the Board assisted the Company in recruiting and retaining a diverse management team, with the addition of three diverse recent hires to the Company’s senior management team. Of the non-administrative senior leaders that report to the CEO, 36% are female or ethnically diverse.

During fiscal year 2021, the Corporate Governance and Nominating Committee received regular updates from the Company on its diversity and inclusion initiatives, including the Company’s establishment of a Diversity and Inclusion Council. The Corporate Governance and Nominating Committee receives updates on Human Capital Management at every regularly scheduled meeting and intends to keep this as a standing agenda item in fiscal year 2022.

Director Skills, Experience and Qualifications

 

We seek directors with collective skills and experience to successfully guide the Company and oversee our long-term strategy. Our Corporate Governance and Nominating Committee is committed to identifying directors for nomination with the highest ethical values and integrity, mature judgment, unbiased perspective and the deep expertise necessary to achieve the long-term objectives of stockholders and provide the proper oversight and counsel to the Company. As part of this process and in consultation with the Board, the Corporate Governance and Nominating Committee has identified the following skills and experience it believes are necessary for the Board to fulfill its current and future obligations and support the Company’s unique long-term strategy.

 

Name

Executive Leadership Experience

Public Company Board

Industry Experience

International

Operational Experience

Financial and Accounting Expertise

Risk and Crisis Management

Marketing/ E-Commerce

M&A Experience

Human Capital/ Culture Management

Sustainability/ ESG

Richard A. Beck

✓

✓

✓

✓

✓

Celeste A. Clark

✓

✓

✓

✓

✓

✓

✓

Dean Hollis

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Shervin J. Korangy

✓

✓

✓

✓

✓

✓

✓

Mark L. Schiller

✓

✓

✓

✓

✓

✓

✓

✓

✓

Michael B. Sims

✓

✓

✓

✓

✓

✓

Glenn W. Welling

✓

✓

✓

✓

✓

✓

✓

✓

Dawn M. Zier

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

 

✓		=		director possesses the skill / experience / expertise
		=		area for which the Board particularly draws upon the director’s deep expertise

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					17

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Committees of the Board

 

The Board of Directors has four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Strategy Committee. All members of each of the standing committees are independent directors, as defined in the applicable listing rules for companies listed on Nasdaq. The Board of Directors has adopted a written charter for each committee, current copies of which are available on our website at hain.com under Investor Relations – Corporate Governance.

While the Chairperson and directors on each committee are accountable for carrying out the responsibilities for each committee, all directors are invited to attend the regularly scheduled committee meetings, at least on a quarterly basis.

The Audit Committee

The Audit Committee’s primary purpose is to assist the Board’s oversight of (1) the integrity of the Company’s financial statements, (2) the independent auditor’s qualifications, independence and performance and (3) the performance of the Company’s internal controls and procedures. In fulfilling its purpose, the Committee’s principal duties include appointing, retaining and terminating our independent auditor, overseeing the work of and evaluating the independence of the independent auditor, reviewing with the independent auditor their reports as well as oversight responsibilities with respect to our financial statements, disclosure practices, accounting policies and procedures.

Our Audit Committee is composed of Richard A. Beck, Shervin J. Korangy and Michael B. Sims, with Mr. Sims acting as chair. The Board has determined that each member of the Audit Committee (1) is “independent” as defined by applicable SEC rules and the listing rules of Nasdaq applicable to Board and committee service, (2) has not participated in the preparation of our financial statements or those of any of our current subsidiaries at any time during the past three years and (3) is able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. In addition, the Board has determined that each of Messrs. Korangy and Sims is an “audit committee financial expert” as defined by applicable SEC rules. Audit Committee members are not permitted to serve on the audit committees of more than two other public companies. During fiscal year 2021, the Audit Committee held eight meetings. See “Report of the Audit Committee.”

The Compensation Committee

The Compensation Committee reviews and approves all compensation arrangements for our CEO and our other executive officers, including employment agreements, base salaries, annual and long-term incentive arrangements, the form and amount of equity awards, and severance and change-in-control arrangements. The Compensation Committee’s duties include reviewing our compensation strategy on an annual basis to ensure that such strategy supports our objectives and stockholder interests and that executive officers are rewarded in a manner consistent with such strategy.

Our Compensation Committee is composed of Celeste A. Clark, Michael B. Sims and Glenn W. Welling, with Mr. Welling acting as chair. The Board has determined that each member of the Compensation Committee is “independent” as defined by the listing rules of Nasdaq applicable to Board and committee service. During fiscal year 2021, the Compensation Committee held six meetings.

Our Compensation Committee is authorized to engage an independent compensation consultant with respect to executive and director compensation matters. For fiscal year 2021, the Compensation Committee engaged ClearBridge Compensation Group, LLC (“ClearBridge”) as its independent compensation consultant. The Compensation Committee has assessed the independence of ClearBridge pursuant to the applicable Nasdaq rules and determined that its engagement does not raise any conflict of interest.

The Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee’s duties require the committee to, among other things, (1) identify individuals qualified to serve on the Board and to recommend that the Board select director nominees to be considered for election at our next annual meeting of stockholders or to be appointed by the Board to fill an existing or newly created vacancy on the Board, (2) identify members of the Board to serve on each Board committee and to serve as chair thereof and recommend each such member and chair to the Board, (3) develop and revise, as appropriate, our Corporate Governance Guidelines and recommend such guidelines or the revision of such guidelines to the Board, (4) oversee our strategy on global ESG and corporate citizenship, including evaluating the impact of our practices on communities and individuals, (5) oversee the evaluation by the

 

18				The Hain Celestial Group, Inc. 2021 Proxy Statement

								BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Board of itself and its committees, (6) review and assess the management succession plan for the CEO and the leadership team, and (7) review the Company’s Human Capital Management program, including its Diversity and Inclusion initiatives.

Our Corporate Governance and Nominating Committee is composed of Richard A. Beck, Celeste A. Clark, Dean Hollis and Dawn M. Zier, with Ms. Zier acting as chair. The Board has determined that each member of the Corporate Governance and Nominating Committee is “independent” as defined in the listing rules of Nasdaq applicable to Board and committee service. During fiscal year 2021, the Corporate Governance and Nominating Committee held seven meetings.

The Strategy Committee

The purpose of the Strategy Committee is to (1) continuously evaluate various strategic alternatives for the Company and its portfolio of brands and make recommendations to the Board of Directors regarding such alternatives and (2) provide input to the Company’s management in their development of the Company’s long-term corporate strategy.

Our Strategy Committee is composed of Dean Hollis, Shervin J. Korangy, Glenn W. Welling and Dawn M. Zier, with Mr. Korangy acting as chair. The Strategy Committee meets at least quarterly on a formal basis and generally meets weekly by conference call to discuss informal updates on the Company’s strategy and potential strategic transactions. During fiscal year 2021, the Strategy Committee held five formal meetings.

Committee Composition

The members and chairs of the committees as of the date of this proxy statement are summarized in the table below:

 

Director

Audit Committee

Compensation Committee

Corporate Governance and Nominating Committee

Strategy Committee

Richard A. Beck

Member

—

Member

—

Celeste A. Clark

—

Member

Member

—

Dean Hollis

—

—

Member

Member

Shervin J. Korangy

Member

—

—

Chair

Michael B. Sims

Chair

Member

—

—

Glenn W. Welling

—

Chair

—

Member

Dawn M. Zier

—

—

Chair

Member

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					19

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Board Role in Risk Oversight

 

The Board, its respective committees and management share in the responsibility of proving oversight over the Company’s operations and day to day business. A summary of the allocation of the risk oversight functions among the Board is as follows:

 

The Board of Directors
The Board’s role is to engage in informed oversight of, and provide direction with respect to, risk management. In its oversight role regarding risk management, the Board focuses on understanding the nature of our enterprise risks, including:   1.  Risks to global operations   2.  Overall financial risks   3.  Information and cyber security   4.  Strategic direction   The Board receives regular updates regarding the Company’s progress against its annual operating plan and reviews quarterly updates regarding the related risks and opportunities. The Board maintains control over significant transactions and decisions that require Board approval for certain corporate actions (including material acquisitions, divestitures and other material uses of the Company’s capital).
Committees of The Board of Directors   The Board has delegated certain risk management oversight responsibilities to the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee:
The Audit Committee   •  Oversees major financial risk exposures and the steps management has taken to monitor and control those exposures   •  Oversees financial reporting processes and internal controls   •  Oversees the Company’s compliance with information technology-related internal controls   •  Oversees the Company’s response to major litigation and other legal contingencies   •  Regularly reviews compliance matters and monitors compliance with the Code of Conduct   •  Oversees review of other enterprise risks as delegated by the full Board, which is ultimately responsible for the oversight of the enterprise risk management process				The Compensation Committee   •  Oversees risks relating to the Company’s compensation programs and policies   •  Engages an independent consultant to assist in reviewing compensation related risks to ensure that the Company’s compensation programs and policies are not likely to lead to excessive risk taking that could have a material adverse effect on the Company   •  Reviews third-party benchmarking to inform compensation related decision making   •  Reviews Company policies with respect to certain employee benefits				The Corporate Governance and Nominating Committee   •  Oversees risks relating to corporate governance and reviews the Company’s Corporate Governance Guidelines and their implementation   •  Oversees Board composition and assesses the need for succession planning   •  Oversees the succession planning for the executive leadership team   •  Oversees the Company’s Human Capital Management program, including issues relating to Diversity and Inclusion   •  Oversees the Company’s ESG Program and risks related to sustainability and the Company’s corporate responsibility initiatives

 

20				The Hain Celestial Group, Inc. 2021 Proxy Statement

								BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Information Security

 

Information security and cyber security are significant focus areas for our Board of Directors, and our directors are actively engaged in the oversight of management’s review of its information security program and risk mitigation actions. On a periodic basis, the Company’s Chief Information Officer, with oversight responsibility for the Company’s Information Security team, will meet with the Board of Directors to provide updates on the Company’s policies, procedures, training initiatives, and audits conducted to monitor the Company’s information security program. In addition, the Board of Directors receives updates regarding third party audits that are conducted to assess penetration testing and assess overall program maturity.

Board and Committee Self-Evaluations

 

Pursuant to our Corporate Governance Guidelines and committee charters, the Board and its committees annually conduct self-assessments. The Corporate Governance and Nominating Committee oversees the process and reviews the content and format of the evaluations to help ensure that the feedback solicited is relevant and appropriate. Self-evaluation topics generally include, among other matters, Board and committee composition and structure, effectiveness of the Board and committees, meeting agendas and governance and Board interaction with management. The results of these assessments are discussed with the full Board and each Committee respectively, and based on the results, the Board and the Committees implement enhancements and other modifications as appropriate. Individual feedback is provided to Board members by the Chair of the Board.

Management Succession Planning

 

Our Corporate Governance and Nominating Committee plays a strategic role in the oversight of talent management and succession planning for the Chief Executive Officer, other executive officer positions and senior leadership roles across the company. On at least an annual basis, the Corporate Governance and Nominating Committee reviews the Company’s succession plan, which includes a discussion regarding transition and succession in the case of an emergency or unplanned vacancy.

Director Orientation and Continuing Education

 

Our Corporate Governance Guidelines require the Company to maintain an orientation process to onboard new directors. As part of this process, the Company’s management conducts an orientation program for new directors, and each new director receives materials and briefings to permit such director to become familiar with the Company’s business, finances, corporate governance and compensation practices and policies. The Company also provides, on an ongoing basis, additional opportunities for directors to further familiarize themselves with the Company’s business, finances and operations, which may include, among other things, presentations from members of management of the Company and site visits to the Company’s operational sites.

In addition, directors are encouraged to attend a variety of external continuing education programs at the Company’s expense, including programs offered by the National Association of Corporate Directors. Directors participate in such educational opportunities to stay abreast of best practices in corporate governance and the latest trends on subject matters relevant to the Company and its business.

Website Access to Corporate Governance Documents

 

We have adopted a “Code of Ethics,” as defined in the regulations of the SEC, which applies to all of our directors and employees, including our principal executive officer and principal financial officer. Copies of the charters for committees of our Board, as well as our Corporate Governance Guidelines and Code of Business Conduct and Ethics, are available free of charge on our website at hain.com under Investor Relations – Corporate Governance or by writing to Investor Relations, The Hain Celestial Group, Inc., 1111 Marcus Avenue, Lake Success, NY 11042. If the Company ever were to amend or waive any provision of its Code of Business Conduct and Ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, the Company intends to satisfy its disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on its website set forth above rather than by filing a Current Report on Form 8-K. The information on our website is not, and shall not be deemed to be, a part of this proxy statement or incorporated into any of our other filings made with the SEC.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					21

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Compensation of Directors

 

Our compensation program for non-employee directors is designed to:

 

•

Attract and retain highly qualified non-employee directors;

 

•

Fairly compensate non-employee directors for work required in a company of our size and scope; and

 

•

Align the interests of non-employee directors with those of our stockholders by paying a portion of non-employee director compensation in the form of equity awards.

For each of the last three annual compensation cycles, all of our non-employee directors elected to forgo all cash components of their compensation and receive 100% of their compensation in Company equity awards. The Company has not paid any cash compensation for Board service since calendar year 2018.

Each year, the Compensation Committee and our Board review and determine compensation for our non-employee directors with the assistance of ClearBridge, the Compensation Committee’s independent compensation consultant. On a periodic basis, ClearBridge provides the Compensation Committee with an assessment of trends and developments in director compensation practices and benchmarks our director compensation program against our compensation peer group.

Annual non-employee director compensation covers the period of service between annual meetings of stockholders. With respect to the period from our 2020 annual meeting to the 2021 Annual Meeting, the Compensation Committee recommended, and the Board approved, keeping the prior year’s compensation levels in place with the exception of an increase in the annual fee for the Chair of the Corporate Governance and Nominating Committee from $10,000 to $15,000 in light of the committee’s increasing responsibilities and the implementation of a $20,000 annual fee for the Chair of the Strategy Committee with that committee now being chaired by a non-employee director. The resulting compensation program for the period from our 2020 annual meeting to the 2021 Annual Meeting is set forth below.

 

Compensation Component*		Amount ($)
Annual base retainer for all non-employee directors			53,000
Additional annual fee for Chair of the Board			100,000
Additional annual fee for Chairs of Audit Committee and Strategy Committee			20,000
Additional annual fee for Chairs of Compensation Committee and Corporate Governance and Nominating Committee			15,000
Additional annual fee for non-chair committee members			5,000
Annual base restricted stock unit award for all non-employee directors			170,000

 

*	All compensation was paid in the form of restricted stock units that are scheduled to vest on the earlier of November 24, 2021 or the date of the 2021 Annual Meeting.

 

22				The Hain Celestial Group, Inc. 2021 Proxy Statement

								BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Fiscal Year 2021 Director Compensation

The following table sets forth the compensation paid by us to our non-employee directors during the fiscal year ended June 30, 2021. All amounts in this table were paid in the form of Company equity awards, and the Company did not pay any Board compensation in cash. Under SEC rules, cash fees forgone at the election of a director are required to be included in the Fees Earned or Paid in Cash column.

 

Name 1		Fees Earned or Paid in Cash 2 ($)					Stock Awards 3, 4 ($)					Total            ($)
Richard A. Beck				63,000					170,000					233,000
Celeste A. Clark				63,000					170,000					233,000
Dean Hollis				163,000					170,000					333,000
Shervin J. Korangy				78,000					170,000					248,000
Michael B. Sims				70,500					170,000					240,500
Glenn W. Welling 5				73,000					170,000					243,000
Dawn M. Zier				70,500					170,000					240,500

 

1

Directors who are also employees of the Company receive no additional compensation for their service on our Board. Accordingly, Mark L. Schiller, our current President and CEO, did not receive any compensation for his service on the Board. Compensation paid to Mr. Schiller in connection with his employment is set forth in the Summary Compensation Table on page 36.

2	All amounts in this table were paid in the form of Company equity awards, and the Company did not pay any Board compensation in cash. Under SEC rules, cash fees forgone at the election of a director are required to be included in the Fees Earned or Paid in Cash column.

3

The amounts shown in the Stock Awards column represent the grant date fair value of stock awards granted during the fiscal year, calculated in accordance with ASC Topic 718. The assumptions used by the Company in calculating these amounts are included in Note 2 (under the heading “Stock-Based Compensation”) and Note 14 to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

The amounts shown in the Stock Awards column omit cash fees elected to be received in the form of Company equity awards, which are reported in the Fees Earned or Paid in Cash column under SEC rules. See footnote 2 above. Accordingly, the amounts shown in the Stock Awards column represent the grant date fair value of the annual base restricted stock unit award for non-employee directors.

4

The total number of shares underlying outstanding stock awards for each non-employee director as of June 30, 2021 was as follows: Richard A. Beck (6,232 shares), Celeste A. Clark (6,232 shares), Dean Hollis (8,907 shares), Shervin J. Korangy (6,633 shares), Michael B. Sims (6,633 shares), Glenn W. Welling (6,500 shares) and Dawn M. Zier (6,500 shares). All such awards are restricted stock units that are scheduled to vest on the earlier of November 24, 2021 or the date of the 2021 Annual Meeting.

5

On April 16, 2020, Mr. Welling donated 8,149 shares of restricted stock representing his remaining director compensation for calendar year 2020 to assist employees of the Company who have been adversely affected by the COVID-19 pandemic. Under SEC rules, the amounts shown for Mr. Welling’s fiscal year 2021 director compensation have not been reduced to reflect his donation and forfeiture of the shares. If his compensation had been reduced to reflect his donation, the amount shown in the Fees Earned or Paid in Cash column would have been reduced by $36,500, representing cash fees forgone for restricted stock that was subsequently donated.

Director Stock Ownership Guidelines

 

The Board strongly believes that the directors should have a meaningful ownership interest in the Company and, to that end, has implemented stock ownership guidelines for our directors. The ownership guidelines require directors to own, at a minimum, the value of five times the annual cash compensation (excluding additional cash compensation to committee chairs and members) in shares of Hain Celestial common stock within the later of five years after a director is first elected to the Board or five years after the implementation of the guidelines. All directors are currently in compliance with the guidelines or are expected to meet the stock ownership guidelines within the five-year period.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					23

MANAGEMENT

Executive Officers

 

The following information describes the background and business experience of our executive officers as of the date of this proxy statement:

 

Mark L. Schiller, President and Chief Executive Officer

 

Age: 59

A description of Mr. Schiller’s background and business experience is provided under “Proposal No. 1 Election of Directors” which begins on page 10.

 

Javier H. Idrovo, Executive Vice President and Chief Financial Officer

 

Age: 53

Mr. Idrovo has served as our Executive Vice President and Chief Financial Officer since December 2019. Prior to joining the Company, Mr. Idrovo served as Chief Accounting Officer of The Hershey Company, a global producer of chocolate, sweets, mints, gum and other snacks, from August 2015 to November 2019, with responsibilities including all aspects of the accounting, tax and treasury functions, including external reporting, operation of internal controls over financial reporting, and financial reporting. Prior to becoming Chief Accounting Officer, Mr. Idrovo served as Senior Vice President, Finance and Planning of The Hershey Company from 2011 to August 2015 and as Senior Vice President, Strategy and Business Development from 2008 to 2011. Prior to joining The Hershey Company, Mr. Idrovo served in various roles of increasing responsibility at Dole Food Company, a global producer and marketer of fruit and vegetables, from 2001 to 2008, most recently serving as President of Dole Packaged Foods from 2006 to 2008. Prior to that, Mr. Idrovo served in various roles of increasing responsibility at The Boston Consulting Group, Inc. from 1990 to 1993 and from 1995 to 2001.

 

Christopher J. Boever, Executive Vice President and Chief Commercial Officer

 

Age: 54

Mr. Boever has served as our Executive Vice President and Chief Commercial Officer since February 2020, and previously served as our Executive Vice President and Chief Customer Officer from January 2019 to February 2020. Mr. Boever oversees the Company’s commercial operations and sales and customer agenda in North America and is also responsible for helping ensure the Company transforms its innovation capabilities. Mr. Boever has more than 20 years of consumer packaged foods industry experience. From 2011 to January 2018, Mr. Boever was Executive Vice President, Chief Customer Officer and President of Foodservice of Pinnacle Foods Inc., where he was responsible for overseeing its multi-billion dollar businesses to reshape and reinvigorate growth. Prior to Pinnacle, Mr. Boever served in roles of increasing responsibility in strategic planning, operations management and sales at ConAgra Brands, Inc. from 2007 to 2011 and at Hormel Foods Corporation from 1991 to 2007.

 

Kristy Meringolo, Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer

 

Age: 40

Ms. Meringolo has served as our Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer since August 2021, and previously served as our Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer from May 2019 to August 2021, as Senior Vice President, General Counsel and Chief Compliance Officer from April 2018 to May 2019, and as Senior Vice President, Senior Litigation Counsel and Chief Compliance Officer from April 2017 to April 2018. Ms. Meringolo oversees all legal affairs of the Company and corporate compliance initiatives, and she serves as the executive sponsor for the Company’s corporate ESG program. Prior to joining the Company, from 2011 to April 2017, Ms. Meringolo worked at Avon Products, Inc. in a series of roles of increasing responsibility, with her most recent role as Vice President, Associate General Counsel, Litigation, Marketing and Intellectual Property where she oversaw legal responsibilities for a variety of matters including litigation, government investigations and providing counsel to the Ethics and Compliance team. Previously, Ms. Meringolo was an attorney at the law firm DLA Piper LLP (US), where she practiced litigation law and advised clients on corporate compliance initiatives.

 

24				The Hain Celestial Group, Inc. 2021 Proxy Statement

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

 

Introduction

This Compensation Discussion and Analysis (“CD&A”) explains our overall compensation philosophy and approach, describes the material components of our executive compensation programs and details the determinations made by the Compensation Committee for the compensation awarded with respect to the Company’s fiscal year ended June 30, 2021 to the following current and former executive officers (“named executive officers” or “NEOs”):

 

Executive		Position
Mark L. Schiller		President and Chief Executive Officer
Javier H. Idrovo		Executive Vice President and Chief Financial Officer
Christopher J. Boever		Executive Vice President and Chief Commercial Officer
Kristy Meringolo		Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
Jeryl Wolfe*		Former Executive Vice President and Chief Supply Chain Officer

 

*	Mr. Wolfe served as Executive Vice President and Chief Supply Chain Officer until July 2021.

Executive Overview

In fiscal year 2021, despite the unprecedented challenges as a result of the COVID-19 pandemic and other macroeconomic headwinds, the Company continued to execute on its transformational strategy designed to accelerate change and drive sustainable, profitable growth. The Company’s transformational strategy and the metrics it uses to measure its success continue to serve as the foundation for the Company’s executive compensation programs and support the Compensation Committee’s pay for performance philosophy. In fiscal year 2021, our executive compensation programs were consistent with the fiscal year 2020 programs and were designed to ensure that executive compensation was tied to the continued execution of the Company’s transformational strategy and strong financial performance, thereby continuing to align the executive management team with stockholder interests.

Stockholder Feedback on Compensation

Our Board, the Compensation Committee and our management team value stockholder perspectives on our executive compensation program and consider the outcome of the annual stockholder advisory vote on executive compensation – the “Say on Pay” vote. At our 2020 annual meeting of stockholders in November 2020, the compensation of our named executive officers was approved by over 96% of votes cast. We believe that outcome reflects stockholders’ strong support for the Company’s compensation program.

We believe we are uniquely situated with respect to having insight into stockholder perspectives on executive compensation. The Chair of our Compensation Committee, Glenn W. Welling, is the principal of Engaged Capital, LLC (“Engaged Capital”), which beneficially owns approximately 16.6% of our outstanding common stock and is our largest stockholder. Accordingly, we have the benefit of inherent alignment of our major compensation decisions with the interests of stockholders. In addition to the input we receive from Mr. Welling and Engaged Capital, members of our management team and Board engage with our institutional stockholders in meetings and calls throughout the year. During fiscal year 2021, we held meetings with 40 institutional stockholders who collectively held approximately 55% of our outstanding common stock, and we offered to meet with other institutional stockholders who together held over 10% our outstanding common stock.

The Compensation Committee considered the 2020 Say on Pay vote outcome and the feedback received from stockholders since the beginning of fiscal year 2019 and did not make any material structural changes to our compensation programs for fiscal year 2021.

 

The Hain Celestial Group, Inc. 2021 Proxy Statement					25

EXECUTIVE COMPENSATION

 

Executive Compensation Practices at a Glance

 

What We Do ✓

What We Do NOT Do O

✓

DO align annual incentive pay and performance by linking annual incentive compensation to the achievement of performance goals tied to Company strategic objectives

O

NO guaranteed cash incentives, equity compensation or salary increases for NEOs

✓

DO align long-term incentive pay and performance by linking long-term compensation to the achievement of rigorous TSR goals

O

NO single trigger acceleration of equity awards granted to NEOs

✓

DO cap payouts for annual incentive and LTIP awards

O

NO acceleration of performance-based equity awards without regard to performance goals, with any acceleration upon a qualifying termination of employment subject to proration as well as the attainment of performance goals measured through the date of the acceleration event

✓

DO maintain rigorous stock ownership guidelines (6x base salary for the CEO, 3x base salary for Executive Vice Presidents, 2x base salary for other executive officers and 5x annual cash compensation (excluding additional cash compensation to committee chairs and members) for non-employee directors)

O

NO executive pension or executive retirement plans for any of our NEOs

✓

DO maintain a clawback policy with respect to cash and equity incentive compensation

O

NO compensation or incentives that encourage unnecessary or excessive risk taking

✓

DO conduct annual compensation review and approval of our compensation philosophy and strategy

O

NO tax gross ups

✓

DO appoint a Compensation Committee comprised solely of independent directors

O

NO pledging of any of our securities by directors, executive officers or other employees

✓

DO use an independent compensation consultant engaged by our Compensation Committee

O

NO hedging or derivative transactions by directors, executive officers or other employees involving our securities

✓

DO have a majority of executive compensation at risk based on corporate performance

O

NO perquisites for NEOs

Compensation Philosophy and Objectives

Compensation Philosophy

We believe a majority of the compensation for our NEOs should be dependent on the success of our Company so that the interests of our NEOs are aligned with the long-term interests of our stockholders. Accordingly, a majority of executive compensation is designed to be “at risk” and dependent on achieving quantitative performance goals. The Compensation Committee reviews our compensation design and philosophy on at least an annual basis to ensure that our executive compensation program continues to support the Company’s strategy, objectives and stockholder interests.

Executive Compensation Program Objectives

We provide a competitive total compensation package to our executive management team through a combination of base salary, annual incentives, long-term incentives and other compensation, as well as severance and change-in-control arrangements.

The primary objectives of our executive compensation program are to:

 

•

Attract, motivate and retain key employees with outstanding talent and ability;

 

•

Align the interests of our executives with the interests of our stockholders;

 

26				The Hain Celestial Group, Inc. 2021 Proxy Statement

								EXECUTIVE COMPENSATION

 

•

Reward performance, with a meaningful portion of compensation tied to Company goals;

 

•

Promote the creation of long-term stockholder value; and

 

•

Structure executive compensation in a manner that promotes our strategic, financial and operating performance objectives, without encouraging unnecessary or excessive risk taking.

Our compensation elements are designed to achieve the objectives set forth above as follows:

 

•

Base salary and benefits are designed to attract and retain executives by providing regular and continued payments that are appropriate for their position, experience and responsibilities;

 

•

Annual performance-based awards are designed to focus our executives on objectives each year that are generally operational and drive specific performance needed to achieve short-term targets that are part of our long-term growth and profitability goals;

 

•

Long-term incentives are designed to align our executives’ interests with those of our stockholders and to motivate executives to generate value for our stockholders over the long term; and

 

•

Severance and change-in-control arrangements are designed to mitigate the distraction of our key executives when faced with a potential change in control or other possible termination situations and to facilitate our ability to attract and retain executives as we compete for talented individuals in a marketplace where such protections are commonly offered.

Compensation Mix

The following charts show the mix of fixed and at risk target annual compensation for our CEO and for our other NEOs as a group. Fixed compensation represents annual base salaries in effect for fiscal year 2021. At risk compensation is comprised of target annual bonuses under the Annual Incentive Plan and the annualized face value of the NEOs’ target awards under the 2019-2021 Long-Term Incentive Plan.

 

How Executive Pay is Established

Role of the Compensation Committee

The Compensation Committee reviews and approves all compensation arrangements for our CEO and our other executive officers, including employment agreements, base salaries, annual and long-term incentive arrangements, the form and amount of equity awards, and severance and change-in-control arrangements. The Compensation Committee’s duties include reviewing our compensation strategy on an annual basis to ensure that such strategy supports our objectives and stockholder interests and that executive officers are rewarded in a manner consistent with such strategy.

Our Compensation Committee is authorized to engage an independent compensation consultant to assist the Compensation Committee with its roles and responsibilities. For fiscal year 2021, the Compensation Committee engaged ClearBridge Compensation Group, LLC (“ClearBridge”) as its independent compensation consultant.

Role of Management

From time to time, members of our Human Resources, Finance and Legal departments work with our CEO to recommend certain terms of our compensation plans and programs to the Compensation Committee, to develop financial and other goals that are utilized under those programs and to prepare analyses to assist the Compensation Committee in making its decisions.

 

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EXECUTIVE COMPENSATION

 

Our CEO makes recommendations to the Compensation Committee regarding compensation determinations for other executive officers, but does not participate in compensation determinations regarding his own compensation. Our CEO is subject to the same Company performance goals as our other executive officers, all of which are determined and approved by the Compensation Committee.

Benchmarking / Peer Group

A key objective of our executive compensation program is to ensure that total direct compensation is competitive with the companies against which we compete for talent. The Compensation Committee uses compensation data from a peer group as general guidance and as one of many factors that inform its judgment of appropriate compensation parameters for target compensation levels. When using peer group data, the Compensation Committee references the 50^th percentile, recognizing that the specific positioning for each NEO is determined on a case-by-case basis considering multiple factors.

Each year, the Compensation Committee evaluates its previously-selected peer group and determines which companies best reflect the Company’s competitors for talent. At the beginning of fiscal year 2021, the Compensation Committee, with the assistance of ClearBridge, conducted its annual evaluation of the Company’s peer group to be used in connection with fiscal year 2021 compensation determinations. The Compensation Committee and ClearBridge evaluated existing peer group companies and potential new peer group companies. Based on this review, the Compensation Committee determined that the Company’s existing peer group continued to best reflect the Company’s competitors for talent, and our peer group for fiscal year 2021 remained the same as for fiscal year 2020, as reflected below:

 

•  B&G Foods, Inc.		•  Post Holdings, Inc.
•  Edgewell Personal Care Company		•  Prestige Consumer Healthcare Inc.
•  Flowers Foods, Inc.		•  Revlon, Inc.
•  Fresh Del Monte Produce Inc.		•  The Simply Good Foods Company
•  Hostess Brands, Inc.		•  SunOpta Inc.
•  J&J Snack Foods Corp.		•  TreeHouse Foods, Inc.
•  Lancaster Colony Corporation

Base Salary

The base salaries of our NEOs are reviewed on an annual basis by our Compensation Committee and our CEO (other than with respect to his own salary which is reviewed and determined by our Compensation Committee). This review is supplemented by market data, as well as assessments of the performance of our executive officers by our Compensation Committee. We pay base salaries to our NEOs to compensate them for their day-to-day services. The salaries typically are used to recognize the experience, skills, knowledge, past performance and responsibilities of each NEO.

For fiscal year 2021, the Compensation Committee determined to increase Ms. Meringolo’s base salary based on market comparisons for her role. The Compensation Committee did not make any other changes to NEO base salaries for fiscal year 2021. Following are the base salaries that were in effect for the NEOs for fiscal years 2020 and 2021.

 

Name		Fiscal Year 2020   Annual Base Salary   ($)					Fiscal Year 2021   Annual Base Salary   ($)
Mark L. Schiller				1,000,000					1,000,000
Javier H. Idrovo				550,000					550,000
Christopher J. Boever				532,513					532,513
Kristy Meringolo				406,900					425,007
Jeryl Wolfe				453,600					453,600

 

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Annual Incentive Plan

A key executive compensation objective is to have a majority of each NEO’s compensation be tied to the Company’s performance. To this end, the Company’s Annual Incentive Plan (“AIP”) is based on performance against key financial objectives designed to drive the specific performance needed to foster the Company’s growth and profitability.

Fiscal Year 2021 AIP Award Opportunities

Based on their target annual bonus percentages and the terms of the AIP for fiscal year 2021 (the “2021 AIP”), the NEOs had the opportunity to receive the awards shown below under the 2021 AIP.

 

Name		2021 AIP Threshold Award										2021 AIP Target Award										2021 AIP Maximum Award
		% of Base Salary					($)					% of Base Salary					($)					% of Base Salary					($)
Mark L. Schiller				62.5	%				625,000					125	%				1,250,000					250	%				2,500,000
Javier H. Idrovo				42.5	%				233,750					85	%				467,500					170	%				935,000
Christopher J. Boever				42.5	%				226,318					85	%				452,636					170	%				905,272
Kristy Meringolo				37.5	%				159,378					75	%				318,755					150	%				637,511
Jeryl Wolfe				37.5	%				170,100					75	%				340,200					150	%				680,400

Fiscal Year 2021 AIP Performance Metric and Goals

At the beginning of fiscal year 2021, the Board approved our fiscal year 2021 operating plan and budget. Similar to fiscal years 2019 and 2020, the Company’s primary focus for fiscal year 2021 was continuing to improve margins and establishing a path towards long-term profitable growth. As a result, in designing the 2021 AIP, the Compensation Committee again decided to utilize adjusted EBITDA¹ as the sole Company performance metric for the NEOs.

For purposes of the 2021 AIP, adjusted EBITDA is defined as adjusted EBITDA as reported in the Company’s fiscal year 2021 financial results, subject to a foreign currency rate limit.² As reported adjusted EBITDA is calculated as net income (loss) before income taxes, net interest expense, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency gains and losses, productivity and transformation costs, proceeds from an insurance claim, impairment of long-lived assets and intangibles, warehouse and manufacturing consolidation and other costs, gains or losses on sales of assets and businesses, litigation and related expenses, plant closure related costs, SKU rationalization and inventory write-downs and other adjustments.

 

1

Adjusted EBITDA is a non-GAAP financial measure. Additional information on adjusted EBITDA, including a reconciliation to Net (loss) income, can be found in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 under the heading “Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures.”

2

Solely for purposes of the 2021 AIP, there was a foreign currency rate limit of +/- $0.04 from the Company’s budgeted exchange rates for GBP/USD, EUR/USD and CAD/USD. The purpose of the rate limit was to align the incentive plan with results within management’s control and limit the impact of significant foreign exchange rate fluctuations in either direction.

 

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EXECUTIVE COMPENSATION

 

Based on the Company’s budget for fiscal year 2021 adjusted EBITDA, the Compensation Committee established a range of adjusted EBITDA goals and associated payout percentages with respect to the 2021 AIP. The Company subsequently sold its U.K.-based fruit and fruit juice business, Orchard House, in January 2021 and its Dream and WestSoy brands in April 2021. As contemplated by the 2021 AIP, the Compensation Committee made equitable adjustments to the range of adjusted EBITDA goals (for a $7.4 million total reduction to the target goal), solely to remove the remaining budgeted amounts of adjusted EBITDA for those businesses since the businesses would not be included in the Company’s future results. The resulting ranges of adjusted EBITDA goals and associated payout percentages are set forth below. The target adjusted EBITDA goal of $231.6 million would have represented growth of 15.8% compared to the Company’s fiscal year 2020 reported adjusted EBITDA of $200.0 million. For Company performance between specifically enumerated goals, the payout percentage is interpolated on a straight-line basis.

 

Payout Level		Fiscal Year 2021 Adjusted EBITDA Goal										Payout   (% of Target   Payout)
		% of Target Goal					Goal
Below Threshold				<85	%				<$196.8 million					0	%
Threshold				85	%				$196.8 million					50	%
Target				100	%				$231.6 million					100	%
Maximum				³115	%				³$266.3 million					200	%

Individual Performance Factor

After Company performance is measured against the performance goals, the Compensation Committee can increase or decrease payouts based on an individual performance factor of 0% to 150% of the calculated payout that is based on adjusted EBITDA performance (capped at the maximum payout of 200% of the NEO’s target award amount). Individual performance factors are determined considering each NEO’s performance against objectives for their role, including their leadership of their functional area, their contribution to the Company’s overall performance during the year and other factors. The individual performance factor includes the impact of net sales growth and cash flow targets within each NEO’s personal objectives for the fiscal year.

Fiscal Year 2021 AIP Payout Determinations

Current NEOs

On August 26, 2021, the Company reported adjusted EBITDA of $258.9 million for fiscal year 2021. After applying the foreign currency rate limit set forth in the 2021 AIP, adjusted EBITDA for purposes of the 2021 AIP was $257.5 million, resulting in a payout percentage of 174.4% of target based on Company performance. However, recognizing that the Company did not meet all of its objectives for the year despite its strong adjusted EBITDA results, Mr. Schiller recommended, and the Compensation Committee agreed, that the payout percentage for Company performance be reduced to 150% for all of the NEOs, prior to application of the individual performance factors.

The Compensation Committee determined that, as was the case for fiscal years 2019 and 2020, Mr. Schiller’s 2021 AIP payout would not be subject to an individual performance factor. Mr. Schiller’s 2021 AIP payout was therefore earned at 150% of his target bonus amount based on Company performance. The Compensation Committee, in consultation with Mr. Schiller, reviewed the fiscal year 2021 performance of the other NEOs and applied individual performance factors. In all cases, the final payout remained below the Company’s formulaic payout percentage of 174.4%. Based on the foregoing, the Compensation Committee approved the below payouts to the NEOs under the 2021 AIP.

 

Name		2021 AIP Payout ($)
Mark L. Schiller				1,875,000
Javier H. Idrovo				525,938
Christopher J. Boever				712,901
Kristy Meringolo				549,888

 

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Jeryl Wolfe

On May 25, 2021, the Company announced that Jeryl Wolfe, then Executive Vice President and Chief Supply Chain Officer, would be retiring from the Company. Mr. Wolfe remained with the Company through July 15, 2021 to assist with the transition of his responsibilities, and he remained eligible for an annual bonus under the 2021 AIP. The Compensation Committee, in consultation with Mr. Schiller, reviewed the performance against the Company and individual goals and targets established for Mr. Wolfe’s bonus opportunity and approved a payout of $170,100 to Mr. Wolfe under the 2021 AIP.

Long-Term Incentive Program

We believe that equity grants serve our compensation objectives by linking the compensation of our key employees to our long-term strategic plan and further align such employees with our stockholders since the value of equity awards will increase or decrease with the changes in the value of our common stock. Grants are generally made under a performance-based long-term incentive program (“LTIP”). Participants in the LTIP include our executive officers, including the NEOs, and other key employees. Prior to the 2019-2021 LTIP, LTIP awards were generally made annually with a three-year performance period. Our current NEOs have front-loaded LTIP awards under the 2019-2021 LTIP representing three years’ worth of long-term incentive value (two years’ worth of value for Mr. Idrovo who joined the Company during fiscal year 2020). All awards to the NEOs under the 2019-2021 LTIP were made prior to fiscal year 2021, and the NEOs did not receive any LTIP awards or other equity awards during fiscal year 2021.

2019-2021 LTIP – Three-Year Front-Loaded PSUs

Background

The 2019-2021 LTIP began with the granting of a three-year front-loaded PSU award (the “CEO PSU Award”) to Mr. Schiller in November 2018. The CEO PSU Award has rigorous performance goals for three-year compound annual Total Shareholder Return (“TSR”) over a performance period from November 6, 2018 to November 6, 2021 (the “PSU Performance Period”).

In the months following that grant, we received positive feedback on the design of the CEO PSU Award from stockholders, who viewed the rigorous TSR goals and other terms of the award as stockholder friendly. Based on this feedback, the Compensation Committee designed the 2019-2021 LTIP for our other NEOs to consist of PSU awards with performance goals, a PSU Performance Period and other terms and conditions that mirror the terms of the CEO PSU Award (together with the CEO PSU Award, the “LTIP PSU Awards”).

In January 2019, the Compensation Committee granted an LTIP PSU Award under the 2019-2021 LTIP to Ms. Meringolo. Messrs. Boever and Wolfe received LTIP PSU Awards under the 2019-2021 LTIP in February 2019 and April 2019, respectively, in connection with their joining the Company. Mr. Idrovo joined the Company in December 2019, approximately one year into the performance period, and received an LTIP PSU Award at that time representing two years’ worth of long-term incentive value.

In fiscal year 2020, the Company restructured certain aspects of its business, and both Messrs. Boever and Wolfe took on additional responsibilities for which they had not been compensated under their original 2019-2021 LTIP grants. In particular, subsequent to their initial hire, both individuals took on leadership and integration responsibilities for the Company’s Canadian business. Mr. Boever originally held the position of Executive Vice President and Chief Customer Officer and was elevated to Executive Vice President and Chief Commercial Officer in February of 2020. In the case of Mr. Wolfe, he assumed responsibility for the Company’s Information Technology organization after joining the Company. Accordingly, the Compensation Committee deemed it appropriate to provide them with incremental grants to recalibrate their overall participation under the 2019-2021 LTIP with their new roles and significantly increased responsibilities. Accordingly, in fiscal year 2020, the Compensation Committee granted each of Messrs. Boever and Wolfe 25,000 PSUs at target, with a grant date fair value of $350,250, and tied these grants to the same performance goals, performance period and other terms and conditions of the 2019-2021 LTIP to ensure continued alignment among the executive team towards the same goals.

The LTIP PSU Awards are front-loaded PSUs that represent multiple years’ worth of long-term incentive value through the end of fiscal year 2021. The structure of the awards aligns with the Company’s turnaround strategy, which involves a focus on longer-term, sustainable improvements that directly drive stockholder value. The Compensation Committee determined that multi-year awards were the most appropriate structure to align the NEOs with stockholders over the duration of the expected turnaround period.

 

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EXECUTIVE COMPENSATION

 

Award Amounts

The table below shows the target and maximum number of shares that can be earned under the LTIP PSU Awards. There is no threshold payout below the target payout. See “Terms of the LTIP PSU Awards” below for the performance goals and potential payouts between the target and maximum payouts. The table below excludes sign-on equity awards granted to Mr. Idrovo in fiscal year 2020 outside of the 2019-2021 LTIP.

 

Name		Target Payout (Number of Shares)					Maximum Payout   (Number of Shares)
Mark L. Schiller				350,000					1,050,000
Javier H. Idrovo				100,000					300,000
Christopher J. Boever 1				148,240					444,720
Kristy Meringolo				70,134					210,402
Jeryl Wolfe 1, 2				70,331					210,993

 

1

Includes original LTIP PSU Awards granted to Messrs. Boever and Wolfe in February 2019 and April 2019, respectively, as well as additional LTIP PSU Awards of 25,000 PSUs at target granted to each of Messrs. Boever and Wolfe in February 2020 to recalibrate their overall participation under the 2019-2021 LTIP with their new roles and significantly increased responsibilities.

2	Mr. Wolfe’s LTIP PSU Awards were forfeited upon his departure from the Company in July 2021.

Terms of the LTIP PSU Awards

The performance goals under the LTIP PSU Awards represent pre-established compound annual TSR levels. Compound annual TSR is determined by measuring the compound annual growth rate over the PSU Performance Period, expressed as a percentage, from the closing stock price on November 6, 2018 ($26.13) to the average closing share price over the final 60 trading days of the PSU Performance Period, plus reinvested dividends over the PSU Performance Period.

Total shares earned under the LTIP PSU Awards will range from 0% to 300% of the target award amount based on actual performance as follows (implied target share prices assume no dividends):

 

Compound Annual TSR Over   PSU Performance Period		Implied Target Share Price		Percentage of   Target Award   Amount Earned
Less than 15%		Less than $39.74			0%
At least 15% but below 20%		$39.74			100%
At least 20% but below 25%		$45.15			150%
At least 25% but below 30%		$51.04			200%
At least 30% but below 35%		$57.41			250%
At least 35%		$64.29			300%

Any shares earned by the NEOs under the LTIP PSU Awards (net of any shares withheld to satisfy tax withholding obligations) must be held until the earlier of twelve months after vesting, a qualifying termination of employment or a change in control of the Company.

Vesting of the LTIP PSU Awards may be accelerated upon certain qualifying terminations of employment, subject to proration as well as the attainment of the compound annual TSR goals measured through the date of the applicable acceleration event. See “Potential Payments upon Termination or Change in Control” beginning on page 40.

Rigor of Performance Goals

The Board and the Compensation Committee determined that utilizing compound annual TSR as the performance measure for the LTIP PSU Awards directly aligns the NEOs’ compensation with the returns achieved by our stockholders over a three-year period. The Compensation Committee sought to establish challenging goals for the LTIP PSU Awards that would only pay out if

 

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the Company achieves significant, sustained shareholder value creation. As context for setting the goals, the Compensation Committee, with the assistance of its independent compensation consultant, ClearBridge, evaluated the Company’s historical share price performance and analyzed historical TSR among the Company’s fiscal year 2019 peer group and other relevant industry and market indices. The Compensation Committee elected to establish a threshold and target three-year compound annual TSR goal of 15%, which significantly exceeds historical median three-year compound annual TSR for the Company’s fiscal year 2019 peer group, the S&P Food & Beverage Select Industry Index and the Russell 3000 Index for the three-year period ended November 6, 2018 (the grant date of the CEO PSU Award and the first day of the PSU Performance Period), as shown in the following table:

 

		Threshold and Target Three-Year TSR Goal Under LTIP PSU Awards		Median Historical Three-Year TSR*
Performance Measure				Fiscal Year 2019 Company Peer Group		S&P Food & Beverage Select Industry Index		Russell 3000   Index
Compound Annual Total Shareholder Return (TSR)		15%		-3.02%		4.96%		10.09%

 

*	Historical TSR for the three-year period ended November 6, 2018, according to Standard & Poor’s Capital IQ.

At the time of the grants, the Board and the Compensation Committee determined that there would be no payout for performance below the target, in order to ensure that the LTIP PSU Awards are only paid out if the Company achieves exceptional performance over the three-year PSU Performance Period. The Board and the Compensation Committee determined that providing potential payouts up to 300% of the target payouts provides an appropriate incentive to strive for TSR that exceeds even the exceptional performance required to achieve the target payout.

Messrs. Idrovo received his LTIP PSUs when he joined the Company approximately one year into the PSU Performance Period, and Messrs. Boever and Wolfe received their incremental LTIP PSUs over one year into the PSU Performance Period. The closing stock price on the grant date of Mr. Idrovo’s LTIP PSUs (December 2, 2019) was $24.99, requiring an even greater compound annual TSR of 27.1% through November 6, 2021 to result in any payout, versus the original 15% threshold goal. The closing stock price on the grant date of Messrs. Boever and Wolfe’s incremental LTIP PSUs (February 6, 2020) was $27.37, requiring an even greater 23.7% compound annual TSR through November 6, 2021 to result in any payout, versus the original 15% threshold goal. For these LTIP PSU Awards granted in December 2019 and February 2020, the Company’s TSR from the beginning of the performance period through the time of grant was tracking significantly below the threshold level of performance, underscoring the highly performance-based nature of the awards.

Other Compensation Elements

Other Bonuses and Equity Awards

The Compensation Committee recognizes that bonuses outside of the AIP and equity awards outside of the LTIP may be warranted to attract executives to the Company or under special circumstances. There were no such bonuses outside of the AIP paid to any of the NEOs with respect to fiscal year 2021, and there were no equity awards granted to the NEOs during fiscal year 2021.

Benefits

Our NEOs are eligible for the same level and offering of benefits that we make available to other employees, including our 401(k) plan, health care, dental and vision plans, life insurance plans and other employee benefit programs. We do not have any defined benefit pension plans or executive supplemental retirement programs.

Severance and Change-in-Control Arrangements

The Compensation Committee believes that severance and change-in-control benefits are important for attracting and retaining executive talent, helping to ensure that NEOs can remain focused during periods of uncertainty and neutralizing the potential conflict of our key executives when faced with a potential change in control. Our form of change-in-control agreement for all NEOs includes market-typical provisions. For a complete description of the severance and change-in-control benefits we have agreed to provide to the NEOs, see “Potential Payments upon Termination or Change in Control” beginning on page 40.

 

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