LONDON, Sept 7 (Reuters) – Proxy adviser ISS has urged Conagra Brands’ shareholders to vote against proposed changes to the U.S. packaged food maker’s executive compensation programme.
ISS cited concerns about declining financial performance and a lack of clarity around targets.
Conagra, owner of brands including Hunt’s ketchup, Slim Jim meat sticks and Swiss Miss hot cocoa, halved its annual dividend in July and is reviewing its non-core assets under new CEO John Brase after issuing a weak profit outlook.
Here are some details:
• ISS said that CEO pay increased as financial performance declined for the year in review.
• CEO Brase’s compensation package includes a $1.15 million base salary, an annual incentive target opportunity equal to 150% of his eligible base salary, and $7.3 million in annual long-term incentives, consisting of 60% performance shares and 40% restricted stock units (RSUs), Conagra said in a proxy statement on August 11.
• ISS said short-term target goals were set well below the previous year’s achievement levels for the second year running, “with no clear rationale disclosed in the proxy for the target setting”.
• ISS noted that the underlying number of shares for the CEO’s long-term incentive award increased substantially, as a result of the company’s negative stock price trajectory, a practice it said could insulate executives from poor stock price performance.
• Conagra did not immediately respond to a request for comment on Monday.
• ISS noted positive aspects of the pay programme, including short and long-term incentives being based mainly on objective goals. John Mulligan, chair of Conagra’s human resources committee, highlighted in Conagra’s proxy statement on August 11 that around 90% of Brase’s total direct compensation is tied to company performance and long-term shareholder value creation.
• Conagra shareholders have rejected executive pay packages in recent years and Mulligan said on August 11 that shareholder engagement was a priority.
• Conagra’s AGM is scheduled for September 23.
(Reporting by Alexander Marrow; Editing by Susan Fenton)
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