FLOWERS FOODS INC filed this DEF 14A on Apr 11, 2023

FLOWERS FOODS INC - DEF 14A - 20230411 - NOTICE_OF_ANNUAL_MEETING

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

May 25, 2023

11:00 a.m. Eastern Time

Live webcast at www.virtualshareholdermeeting.com/FLO2023

ITEMS OF BUSINESS

(1)

Elect as directors of the company the 11 nominees identified in this proxy statement, each to serve for a term of one year.

(2)

Vote on an advisory resolution to approve the compensation of the company’s named executive officers, commonly referred to as a “Say on Pay” vote.

(3)

Vote on an advisory resolution to approve the frequency of future advisory votes to approve the compensation of the company’s named executive officers, commonly referred to as a “Say on Frequency” vote.

(4)

Vote to approve the amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan.

(5)

Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for Flowers Foods, Inc. for the fiscal year ending December 30, 2023.

(6)

Transact any other business properly brought before the annual meeting.

WHO MAY VOTE

Only record holders of issued and outstanding shares of our common stock at the close of business on March 21, 2023 are entitled to notice of, and to vote at, the annual meeting. A list of such shareholders will be available at our principal executive offices in Thomasville, Georgia until the annual meeting, and during the annual meeting on the meeting website.

The proxy statement and the accompanying form of proxy are being furnished to the shareholders of Flowers Foods, Inc. on or about April 11, 2023 in connection with the solicitation of proxies by the board of directors for use at the annual meeting.

April 11, 2023

1919 Flowers Circle

Thomasville, Georgia 31757

By order of the Board of Directors,

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STEPHANIE B. TILLMAN

Chief Legal Counsel and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 25, 2023

Flowers Foods, Inc.’s 2023 proxy statement and 2022 annual report are available at www.proxyvote.com.

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

TABLE OF CONTENTS


PROXY SUMMARY			1

ANNUAL MEETING AND VOTING INFORMATION			8

DIRECTORS AND CORPORATE GOVERNANCE			14
DIRECTORS			14
CORPORATE GOVERNANCE			18
Overview			18
Board Leadership Structure			19
Director Nomination Process			20
Determination of Independence			20
Risk Management Oversight			21
ESG Oversight			21
The Board of Directors and Committees of the Board of Directors			23
Relationships Among Certain Directors			27
Attendance at Annual Meetings			27
Communicating with the Board			27
Transactions with Management and Others			28

SHARE OWNERSHIP			29
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			29
Principal Shareholders			29
Share Ownership of Certain Executive Officers and Directors			29
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			31
Delinquent Section 16(a) Reports			31

EXECUTIVE COMPENSATION			32
COMPENSATION DISCUSSION AND ANALYSIS			32
2022 Named Executive Officers			32
2022 In Brief			33
Key Elements of 2022 Named Executive Officer Compensation			34
Consideration of 2022 Say on Pay Vote			34
Summary of Our Compensation Practices			35
EXECUTIVE COMPENSATION GENERALLY			36
Objectives of Executive Compensation			36
Mix of Compensation Opportunity			37
How Compensation Decisions are Made			37
CASH COMPENSATION			39
Base Salary			39
Annual Executive Cash Incentive Awards			39
LONG-TERM INCENTIVE COMPENSATION			40
Equity and Performance Compensation Awards			41
Recoupment (“Clawback”) Provision			43
Anti-Hedging Policy			44
RETIREMENT & OTHER POST-EMPLOYMENT BENEFITS			44
Executive Deferred Compensation Plan			44
Change of Control Severance			45
Executive Share Ownership Guidelines			45
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			45
COMPENSATION COMMITTEE REPORT			46
FISCAL 2022 SUMMARY COMPENSATION TABLE			47
FISCAL 2022 GRANTS OF PLAN-BASED AWARDS			48
OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR END			50
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2022			53
FISCAL 2022 NONQUALIFIED DEFERRED COMPENSATION			53

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT


POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL			54
Payments Made Upon Termination Following a Change of Control			54
Payments Made Upon Death or Disability, Retirement or Change of Control			55
PAY RATIO DISCLOSURE			56
PAY VERSUS PERFORMANCE			57
DIRECTOR COMPENSATION			62
2022 Director Compensation Package			62
Cash and Stock Compensation			62
Additional Compensation Program Details			62
Stock Ownership Guidelines			63
Other Arrangements			63
FISCAL 2022 DIRECTOR COMPENSATION TABLE			63

AUDIT COMMITTEE REPORT			65

ITEMS TO BE VOTED ON			68
OVERVIEW OF PROPOSALS			68
PROPOSAL I ELECTION OF DIRECTORS			68
PROPOSAL II ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION			69
PROPOSAL III ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION			70
PROPOSAL IV VOTE TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE FLOWERS FOODS, INC. 2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN			71
PROPOSAL V RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			83

ADDITIONAL INFORMATION			84
2024 SHAREHOLDER PROPOSALS			84
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS			84

APPENDICES
APPENDIX A (NON-GAAP FINANCIAL MEASURES)			A-1
APPENDIX B (FLOWERS FOODS, INC. 2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN (AMENDED AND RESTATED EFFECTIVE MAY 25, 2023))			B-1

This proxy statement contains information that may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our future financial condition and results of operations and are often identified by the use of words and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “is likely to,” “is expected to” or “will continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ, possibly materially, from the expectations or estimates reflected in such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent filings with the Securities and Exchange Commission (“SEC”). We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects.

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

PROXY SUMMARY

This summary highlights certain information in this proxy statement. We recommend that you carefully review the entire proxy statement before voting.

2023 ANNUAL MEETING OF SHAREHOLDERS

•

Date and Time: Thursday, May 25, 2023 at 11:00 a.m., Eastern Time

•

Location: www.virtualshareholdermeeting.com/FLO2023

•

Record Date: March 21, 2023

VOTING MATTERS AND BOARD RECOMMENDATIONS


PROPOSAL	BOARD RECOMMENDATION	PAGE REFERENCE (FOR MORE DETAIL)
Election of 11 Director-Nominees	FOR each Director-Nominee		68
Advisory Vote to Approve Named Executive Officer (“Named Executive”) Compensation	FOR		69
Advisory Vote on Frequency of Future Advisory Votes to Approve Named Executive Compensation	1 YEAR		70
Vote to Approve the Amendment and Restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan	FOR		71
Ratification of Appointment of Independent Registered Public Accounting Firm	FOR		83

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

BUSINESS HIGHLIGHTS

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

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CORPORATE RESPONSIBILITY

At Flowers Foods, we recognize our responsibility to uphold the company’s founding values, which for more than 100 years have centered on working ethically, responsibly, and with integrity. We actively seek opportunities to make a positive difference for our team, consumers, environment, and the communities we serve.

Our most recent Corporate Responsibility Report provides details about our efforts and is available at www.flowersfoods.com/corporateresponsibility.

We continued to build on our accomplishments in 2022 with additional worker safety programs, the expansion of environmental initiatives through new capital projects, a revised and more comprehensive commitment to animal welfare, and new diversity, equity, and inclusion training that is additive to existing anti-harassment and anti-discrimination training, among other important projects.

Additionally, to guide future endeavors, we embarked on a materiality assessment to prioritize environmental, social, and governance (ESG) topics that impact our business and stakeholders and to focus our Corporate Responsibility strategy and reporting.

In 2022, the board of directors implemented a new ESG oversight structure. Under this structure, the board of directors retains ultimate oversight of the company’s ESG and Corporate Responsibility-related risks and priorities and delegates to its committees oversight of various ESG-related topics, as reflected in the committee charters.

In connection with our strong founding values, management – at the direction and subject to the oversight of our board of directors and its committees – oversees the prioritization of ESG topics that impact our business and stakeholders and the focus of our Corporate Responsibility strategy and reporting. For more information relating to ESG oversight, please see “Directors and Corporate Governance – Corporate Governance – ESG Oversight.”

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

CORPORATE GOVERNANCE HIGHLIGHTS


Independence		∎ 10 of 11 director-nominees are independent
		∎ Independent presiding director
		∎ Fully independent board committees
Board Accountability		∎ Annual election of directors
		∎ Majority voting standard in uncontested election of directors
		∎ Shareholder ability to act by written consent and call special meeting
Board Evaluation and Effectiveness		∎ Annual board and committee self-evaluations
Board Evaluation and Effectiveness		∎ Annual independent director evaluation of the CEO
Board Refreshment		∎ Balance of new and experienced directors, with tenure of independent director-nominees averaging 9.4 years
Board Refreshment		∎ Added 4 new independent directors since the beginning of 2020
		∎ Average age of independent director-nominees is 64.6 years
Director Engagement		∎ Corporate governance guidelines limit director membership on other public company boards
		∎ Shareholder ability to contact directors
Director Access		∎ Significant interaction with senior management team through regular business reviews and board presentations
		∎ Directors have access to senior management and other employees
		∎ Directors have the ability to hire outside experts and consultants as they deem necessary
Clawback and Anti-Hedging Policies		∎ Clawback policy for incentive compensation
Clawback and Anti-Hedging Policies		∎ Anti-hedging policy for executives and outside directors
Share Ownership		∎ Robust stock ownership guidelines for directors and executive officers
		∎ CEO required to hold shares equivalent to 6x base salary
		∎ Other executive officers are required to hold shares equivalent to 3x to 1x base salary based on salary grade
		∎ Non-employee directors required to hold shares equivalent to 6x the annual board retainer

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

DIRECTOR-NOMINEES

NAME

AGE

DIRECTOR
SINCE

EXPERIENCE

INDEPENDENT

COMMITTEE
MEMBERSHIPS

OTHER BOARD
SERVICE

George E. Deese

2004

Retired Chairman and Chief Executive Officer of Flowers Foods, Inc.

Yes

—

Edward J. Casey, Jr.

2020

Executive Chairman of J&J Worldwide Services, Inc.

Yes

NCG, CHC

J&J Worldwide Services, Inc.^
Tyto Athene, LLC^

Thomas C. Chubb, III

2020

Chairman, Chief Executive Officer and President of Oxford Industries, Inc.

Yes

NCG, CHC

Oxford Industries, Inc.*

Rhonda Gass

2016

Vice President and Chief Information Officer of Stanley Black & Decker, Inc.

Yes

A, F

—

Margaret G. Lewis

2014

Former President of Hospital Corporation of America’s Capital Division

Yes

NCG,

CHC (Chair)

W.P. Carey Inc.*

W. Jameson McFadden

2021

CEO and Senior Portfolio Manager of Wellington Shields & Co.

Yes

A, F

—

A. Ryals McMullian

2019

President and Chief Executive Officer of Flowers Foods, Inc.

—

James T. Spear

2015

Retired Executive Vice President and Chief Financial Officer of Cadence Health

Yes

A (Chair), F

—

Melvin T. Stith, Ph.D.

2004

Former Interim President, Norfolk State University; former Dean Emeritus, Whitman School of Management, Syracuse University

Yes

NCG, CHC

—

Terry S. Thomas

2020

Global Chief Customer Officer of the Unilever Group

Yes

A, F

—

C. Martin Wood III

2001

Partner of Wood Associates; retired Senior Vice President and Chief Financial Officer of Flowers Foods, Inc.

Yes

A, F (Chair)

Archbold Medical Center#; Archbold Foundation#

A	Audit Committee

CHC	Compensation and Human Capital Committee

F	Finance Committee

NCG	Nominating/Corporate Governance Committee

*	Public company

^	Private company

Nonprofit

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

2022 EXECUTIVE COMPENSATION

Summary of Our Compensation Practices

Practices We Have Adopted

Practices We Do Not Engage In

✔ Pay evaluated with reference to a reasonable range around the size-adjusted 50th percentile of market data

✔ Long-term incentives that are entirely performance-based for Named Executives

✔ Multiple performance measures used in incentive plans

✔ Capped incentive payouts

✔ Clawback policy

✔ Stock ownership guidelines for executives and outside directors and share retention requirements for executives

✔ Moderate change of control severance arrangements

✔ Double-trigger equity vesting upon a change of control

✔ Annual review of tally sheets by the compensation and human capital committee

✔ Incentives that are risk-mitigated through plan design and administration

✔ Compensation and human capital committee comprised solely of independent directors

✔ Independent compensation consultant who reports directly to the compensation and human capital committee

✔ Anti-hedging policy for executives and outside directors

✗ Employment agreements

✗ Dividend equivalents on unearned performance shares

✗ Income tax gross-ups

✗ Excise tax gross-ups on change of control severance

✗ Backdating or repricing of stock options

✗ Pension credited service for years not worked

✗ Employee/director perquisites

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FLOWERS FOODS INC filed this DEF 14A on Apr 11, 2023

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