Campbell Soup denied cash bonuses to most of its executive suite last year and cut former CEO Denise Morrison’s total compensation almost in half, awarding a performance rating of “0” to its top officers.
“Based on the Company’s disappointing fiscal 2018 financial results, performance against the other balanced scorecard objectives and its qualitative assessment of various aspects of our performance, the Committee determined that the total Company performance score should be 0, resulting in the AIP pool being funded at 0%. T
As a result of our disappointing net sales, EBIT and EPS performance, and our failure to achieve the other fiscal 2018 AIP scorecard goals described on page 45, the Committee funded the AIP pool at 0%. No payments were made to any NEO under the AIP for fiscal 2018.
The Committee sets a target percentage for each NEO based on competitive market data. The appropriate target percentage is applied to individual base salaries to calculate a target AIP award pool.
The score is determined by the Committee based on an assessment of the Company’s balanced scorecard results. The full range of possible scores is 0-175%.
The AIP intentionally provides an opportunity for the Committee to exercise judgment and discretion in determining the overall Company score in order to enable the Committee to holistically consider various internal and external factors, including financial performance compared to peers. Extraordinary items, such as major restructuring and accounting changes (whether positive or negative), are considered by the Committee in determining the approved total AIP pool.
Campbell awards its top executives performance based bonuses through its “annual incentive compensation” pool, or AIP pool.
For fiscal 2018, performance against the financial quadrant was the predominant factor in the Committee’s overall assessment, and net sales performance was the most important metric within the financial quadrant.
has set Nov. 29 as the date in which shareholders will meet to vote on the company’s board as it battles off a proxy war waged by activist fund Third Point.
Third Point earlier this year revealed a 5.65 percent stake in Campbell. In September, it announced its intention to try to replace the entire Campbell board, unhappy with the results of Campbell’s three-month critical review.
The review was sparked by Campbell’s disappointing earnings and surprise departure of its CEO. While Loeb has pushed for Campbell to sell itself as part of the review, Campbell announced in August that it plans to sell its international and fresh food businesses.
The soup company on Thursday reiterated its support for its own band of board nominees, which include three descendants of the company’s founder: Archbold van Beuren, Bennett Dorrance and Mary Alice Malone. Dorrance and Malone, together hold 33 percent of Campbell and have resisted past pressure to sell the company.
Of Third Point’s campaign, Campbell said in its letter to shareholders the “New York-based hedge fund that only recently became a Campbell shareholder and held material short positions in Campbell stock for most of 2017, is attempting to deprive shareholders of the future value potential of Campbell by forcing a sale of your Company while we are executing on our strategic plan to create value.”
It added that the board “strongly objects to Third Point’s aggressive and short-sighted tactics and urges shareholders to reject the hedge fund’s misguided efforts and ‘one-point’ agenda for Campbell.”
Third Point, meantime, made public Thursday its request for Campbell board records.
It also made public a letter to Campbell’s corporate secretary, in which it said the strategic review process was a “sham,” because the company did not contact potential acquirers of “all or a meaningful portion of the company” nor did it pursue a sale process.
“Shareholders plainly are entitled to records to determine why the company did not engage in a full and proper process – as they had publicly disclosed they would do.”