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

FLOWERS FOODS INC - DEF 14A - 20230411 - DIRECTOR_COMPENSATION

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

COMPENSATION COMMITTEE REPORT

The compensation and human capital committee is responsible for evaluating and approving the company’s compensation plans, policies and programs. The compensation and human capital committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with the company’s management and based on this review and discussion, recommended to the board of directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC and proxy statement for the 2023 annual meeting of shareholders.

The Compensation and Human Capital Committee of the Board of Directors:

Margaret G. Lewis, Chair

Edward J. Casey, Jr.

Thomas C. Chubb, III

Benjamin H. Griswold, IV

Melvin T. Stith, Ph.D.

 

 

 

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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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FISCAL 2022 SUMMARY COMPENSATION TABLE

The following table summarizes the compensation for the fiscal years ended December 31, 2022, January 1, 2022, and January 2, 2021 (as applicable) of the Named Executives, which consist of the chief executive officer, the chief financial officer and each of the three other most highly compensated executive officers of Flowers Foods who were serving as executive officers at the end of the 2022 fiscal year. For an explanation regarding the amount of salary and annual incentive awards in proportion to total compensation of the Named Executives, see the section above titled “Executive Compensation — Executive Compensation Generally — Mix of Compensation Opportunity.”

 

NAME AND PRINCIPAL

POSITION

   YEAR    

SALARY

($)(2)

    

STOCK

AWARDS

($)(3)

    

NON-EQUITY

INCENTIVE

PLAN
COMPENSATION

($)(4)

    

CHANGE IN PENSION
VALUE AND

NONQUALIFIED

DEFERRED
COMPENSATION

EARNINGS

($)(5)

    

ALL

OTHER

COMPENSATION

($)(6)

    

TOTAL

($)

  

A. Ryals McMullian

     2022       917,654       4,360,518       737,843       53,851       185,493       6,255,359  

President and

     2021       896,490       3,599,802       1,341,360       38,286       103,967       5,979,905  

Chief Executive Officer

     2020       726,452       2,600,146       1,674,293       31,380       54,499       5,086,770  

R. Steve Kinsey

     2022       632,787       1,145,409       325,689       31,974       120,908       2,256,767  

Chief Financial Officer and

     2021       615,146       1,117,469       611,497       29,174       66,236       2,439,522  

Chief Accounting Officer

     2020       611,760       1,090,444       979,268       34,806       45,450       2,761,728  

Bradley K. Alexander

     2022       590,511       1,068,731       303,930       78,883       174,779       2,216,835  

Former Chief Operating Officer

     2021       574,049       1,042,906       570,644       66,537       61,698       2,315,834  
      2020       570,889       1,017,530       913,846       71,583       41,996       2,615,844  

D. Keith Wheeler

     2022       504,325       789,363       227,125       7,737       87,571       1,616,122  

Chief Sales Officer

     2021       490,265       770,328       426,438       6,491       43,895       1,737,417  
      2020       487,563       751,579       682,904       6,938       35,352       1,964,336  

Stephanie B. Tillman (1)

     2022       443,635       594,994       173,344       4,139       41,787       1,257,899  

Chief Legal Counsel

                                                        

 

(1)

No information is provided with respect to the 2021 and 2020 fiscal years for Ms. Tillman, because she was not a Named Executive prior to the 2022 fiscal year.

(2)

Named Executives may elect to defer amounts into the 401(k) Plan (up to the U.S. Internal Revenue Service (“IRS”) limits) and into the EDCP. Amounts of salary deferred during fiscal 2022 were as follows:

 

NAME

    SALARY DEFERRALS INTO
401(K) PLAN
($)		      SALARY DEFERRALS
TO EDCP
($)		      TOTAL
($)		  

A. Ryals McMullian

      27,000        448,291        475,291  

R. Steve Kinsey

      27,000        44,295        71,295  

Bradley K. Alexander

      27,000        407,398        434,398  

D. Keith Wheeler

      27,000        50,432        77,432  

Stephanie B. Tillman

      27,000        14,846        41,846  

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

(3)

Grant date fair value of performance-contingent restricted stock (reported in the “Stock Awards” column) is determined in accordance with ASC 718 based on the probable outcome of the performance goals as of the grant date. See Note 2 and Note 18 to the company’s consolidated financial statements in our Annual Report on Form 10-K for fiscal year ended December 31, 2022, for a description of the assumptions made in the valuation of stock awards under ASC 718. Assuming the highest levels of performance conditions are achieved at a grant date stock price of $27.47, the aggregate value at the grant date of the ROIC-based and TSR-based performance-contingent restricted stock awards granted in 2022 would be as follows: Mr. McMullian, $6,549,397; Mr. Kinsey, $1,720,391; Mr. Alexander, $1,605,209; Mr. Wheeler $1,185,605; and Ms. Tillman, $893,682.

(4)

Non-equity incentive plan compensation includes all performance-based cash awards under the Omnibus Plan earned by the Named Executives during the fiscal year.

(5)

Amounts reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column for 2022 represent only the portion of earnings under the EDCP that are “above-market” for purposes of the applicable disclosure rules.

(6)

Amounts reported in the “All Other Compensation” column for 2022 are reported in the table below.

 

NAME

   

EMPLOYER

CONTRIBUTIONS TO

SECTION 401(K)
PLAN

($)

     

EMPLOYER

CONTRIBUTIONS

TO EDCP

($)

     

CONTINUED
HEALTH
PREMIUMS
UNDER
COBRA

($)

     

TOTAL

($)

  

A. Ryals McMullian

      18,300        167,193        —        185,493  

R. Steve Kinsey

      18,300        102,608        —        120,908  

Bradley K. Alexander

      18,300        86,479        70,000        174,779  

D. Keith Wheeler

      18,300        69,271        —        87,571  

Stephanie B. Tillman

      18,300        23,487        —        41,787  

FISCAL 2022 GRANTS OF PLAN-BASED AWARDS

The following table details grants made during the fiscal year ended December 31, 2022 pursuant to incentive plans in place at Flowers Foods as of that date:

 

           

ESTIMATED POSSIBLE PAYOUTS

UNDER NON-EQUITY

INCENTIVE PLAN

AWARDS(1)

    

ESTIMATED FUTURE PAYOUTS

UNDER EQUITY

INCENTIVE PLAN
AWARDS

    

ALL
OTHER
STOCK
AWARDS:
NUMBER
OF
SHARES
OF
STOCK
OR
UNITS
(#)

    

GRANT
DATE FAIR
VALUE OF
STOCK
AND
OPTION
AWARDS
($)(2)

  

NAME

   GRANT
DATE		     THRESHOLD
($)		     TARGET
($)		     MAXIMUM
($)		     THRESHOLD
(#)		     TARGET
(#)		     MAXIMUM
(#)		  

A. Ryals McMullian

                  

Non-Equity Incentive Plan Award

       344,250       1,147,500       2,295,000               —  

ROIC-Based Performance Contingent Restricted Stock Grant

     1/2/2022             36,680       73,360       91,700         2,015,199  

TSR-Based Performance Contingent Restricted Stock Grant

     1/2/2022                               36,680       73,360       146,720               2,345,319  

R. Steve Kinsey

                  

Non-Equity Incentive Plan Award

       153,069       510,230       1,020,460               —  

ROIC-Based Performance Contingent Restricted Stock Grant

     1/2/2022             9,635       19,270       24,088         529,347  

TSR-Based Performance Contingent Restricted Stock Grant

     1/2/2022                               9,635       19,270       38,540               616,062  

 

 

 

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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  
          LOGO           

 

           

ESTIMATED POSSIBLE PAYOUTS

UNDER NON-EQUITY

INCENTIVE PLAN

AWARDS(1)

    

ESTIMATED FUTURE PAYOUTS

UNDER EQUITY

INCENTIVE PLAN
AWARDS

    

ALL
OTHER
STOCK
AWARDS:
NUMBER
OF
SHARES
OF
STOCK
OR
UNITS
(#)

    

GRANT
DATE
FAIR
VALUE
OF
STOCK
AND
OPTION
AWARDS
($)(2)

  

NAME

   GRANT
DATE		     THRESHOLD
($)		     TARGET
($)		     MAXIMUM
($)		     THRESHOLD
(#)		     TARGET
(#)		     MAXIMUM
(#)		  

Bradley K. Alexander

                  

Non-Equity Incentive Plan Award

       142,843       476,142       952,284               —  

ROIC-Based Performance Contingent Restricted Stock Grant

     1/2/2022             8,990       17,980       22,475         493,911  

TSR-Based Performance Contingent Restricted Stock Grant

     1/2/2022                               8,990       17,980       35,960               574,821  

D. Keith Wheeler

                  

Non-Equity Incentive Plan Award

       106,745       355,818       711,636               —  

ROIC-Based Performance Contingent Restricted Stock Grant

     1/2/2022             6,640       13,280       16,600         364,802  

TSR-Based Performance Contingent Restricted Stock Grant

     1/2/2022                               6,640       13,280       26,560               424,562  

Stephanie B. Tillman

                  

Non-Equity Incentive Plan Award

       81,090       270,300       540,600            

ROIC-Based Performance Contingent Restricted Stock Grant

     1/2/2022             5,005       10,010       12,513         274,975  

TSR-Based Performance Contingent Restricted Stock Grant

     1/2/2022                               5,005       10,010       20,020               320,020  

 

(1)

Annual cash incentive awards are earned based on the achievement of a specified adjusted EBITDA goal. The Threshold amount is 30% and presents the lowest possible payout assuming the minimum level of achievement. Should the performance not meet the minimum level of achievement, the payout would be zero.

(2)

Grant date fair value of performance-contingent restricted stock compiled in accordance with ASC 718 based on the probable outcome of the performance goals as of the grant date.

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR END

The following table details all equity awards granted and outstanding as of December 31, 2022, the company’s most recent fiscal year end:

 

             

STOCK AWARDS

 

  

NAME AND GRANTS

    GRANT DATE
FOR EQUITY-
BASED
AWARDS(1)		      NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
(#)		      MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
($)		      EQUITY INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
(#)		      EQUITY INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
($)		  

A. Ryals McMullian

               

ROIC-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        73,360        2,108,366  

TSR-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        73,360        2,108,366  

ROIC-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        72,900        2,095,146  

TSR-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        72,900        2,095,146  

ROIC-Based Performance Contingent Restricted
Stock Grant(3)

      12/29/2019        69,537        1,998,493        —        —  

TSR-Based Performance Contingent Restricted
Stock Grants(3)

      12/29/2019        82,332        2,366,222        —        —  

Time-Based
Restricted Stock Units(4)

      5/23/2019        43,330        1,245,304        —        —  

 

 

 

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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  
          LOGO           

 

             

STOCK AWARDS

 

  

NAME AND GRANTS

    GRANT DATE
FOR EQUITY-
BASED
AWARDS(1)		      NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
(#)		      MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
($)		      EQUITY INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
(#)		      EQUITY INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
($)		  

R. Steve Kinsey

               

ROIC-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        19,270        553,820  

TSR-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        19,270        553,820  

ROIC-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        22,630        650,386  

TSR-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        22,630        650,386  

ROIC-Based Performance Contingent Restricted
Stock Grant(3)

      12/29/2019        29,162        838,116        —        —  

TSR-Based Performance Contingent Restricted
Stock Grants(3)

      12/29/2019        34,528        992,335        —        —  

Bradley K. Alexander

               

ROIC-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        5,993        172,239  

TSR-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        5,993        172,239  

ROIC-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        14,080        404,659  

TSR-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        14,080        404,659  

ROIC-Based Performance Contingent Restricted
Stock Grant(3)

      12/29/2019        27,212        782,073        —        —  

TSR-Based Performance Contingent Restricted
Stock Grants(3)

      12/29/2019        32,219        925,974        —        —  

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

             

STOCK AWARDS

 

  

NAME AND GRANTS

    GRANT DATE
FOR EQUITY-
BASED
AWARDS(1)		      NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
(#)		      MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
($)		      EQUITY INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
(#)		      EQUITY INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE OF
UNEARNED SHARES,
UNITS OR OTHER
RIGHTS THAT HAVE
NOT VESTED
($)		  

D. Keith Wheeler

               

ROIC-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        13,280        381,667  

TSR-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        13,280        381,667  

ROIC-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        15,600        448,344  

TSR-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        15,600        448,344  

ROIC-Based Performance Contingent Restricted
Stock Grant(3)

      12/29/2019        20,100        577,674        —        —  

TSR-Based Performance Contingent Restricted
Stock Grants(3)

      12/29/2019        23,798        683,955        —        —  

Stephanie B. Tillman

               

ROIC-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        10,010        287,687  

TSR-Based Performance Contingent Restricted
Stock Grants(1)

      1/2/2022        —        —        10,010        287,687  

ROIC-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        7,980        229,345  

TSR-Based Performance Contingent Restricted
Stock Grants(2)

      1/3/2021        —        —        7,980        229,345  

ROIC-Based Performance Contingent Restricted
Stock Grant(3)

      12/29/2019        8,987        258,286        —        —  

TSR-Based Performance Contingent Restricted
Stock Grants(3)

      12/29/2019        10,641        305,822        —        —  

 

(1)

The performance measurement periods for the 2022 ROIC-Based Performance-Contingent Restricted Stock awards and the 2022 TSR-Based Performance-Contingent Restricted Stock awards run from January 2, 2022 to December 28, 2024 and from January 1, 2022 to December 31, 2024, respectively, and both awards vest upon the filing of the Annual Report on Form 10-K for the company’s 2024 fiscal year. The 2022 ROIC-Based Performance-Contingent Restricted Stock is reported at the target level. The 2022 TSR-Based Performance-Contingent Restricted Stock is reported at the target level.

 

 

 

 

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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  
          LOGO           

 

(2)

The performance measurement periods for the 2021 ROIC-Based Performance-Contingent Restricted Stock awards and the 2021 TSR-Based Performance-Contingent Restricted Stock awards run from January 3, 2021 to December 30, 2023 and from January 1, 2021 to December 31, 2023, respectively, and both awards vest upon the filing of the Annual Report on Form 10-K for the company’s 2023 fiscal year. The 2021 ROIC-Based Performance-Contingent Restricted Stock is reported at the target level. The 2021 TSR-Based Performance-Contingent Restricted Stock is reported at the target level.

(3)

The performance measurement periods for the 2020 ROIC-Based Performance-Contingent Restricted Stock awards and the 2020 TSR-Based Performance-Contingent Restricted Stock awards ended on December 31, 2022, and both awards vested upon the filing of the Annual Report on Form 10-K for the company’s 2022 fiscal year. The amounts reported in the table represent the portions of the awards earned based on performance for the full performance periods. The ROIC-Based Performance-Contingent Restricted Stock award payout was 125%, and the TSR-Based Performance-Contingent Restricted Stock award payout was 148%.

(4)

Generally vests on the fourth anniversary of the grant date, subject to continuous employment.

OPTION EXERCISES AND STOCK VESTED IN FISCAL 2022

The following table details vesting of restricted awards during the fiscal year ended December 31, 2022.

 

      STOCK AWARDS  

NAME

    NUMBER OF SHARES
ACQUIRED ON
VESTING
(#)		      VALUE
REALIZED ON
VESTING
($)		  

A. Ryals McMullian

      97,542        2,777,021  

R. Steve Kinsey

      69,874        1,989,313  

Bradley K. Alexander

      56,749        1,615,644  

D. Keith Wheeler

      48,181        1,371,713  

Stephanie B. Tillman

      6,745        191,637  

FISCAL 2022 NONQUALIFIED DEFERRED COMPENSATION

 

NAME

   

EXECUTIVE

CONTRIBUTIONS

IN FY 2022

($)(1)

     

REGISTRANT

CONTRIBUTIONS

IN FY 2022

($)(2)

     

AGGREGATE

EARNINGS
IN FY 2022

($)(3)

     

AGGREGATE

WITHDRAWALS/

DISTRIBUTIONS

IN FY 2022

($)

     

AGGREGATE

BALANCE AT

12/31/2022

($)(4)

  

A. Ryals McMullian

      448,291        167,193        128,522        —        2,409,041  

R. Steve Kinsey

      44,295        102,608        75,715        —        1,398,272  

Bradley K. Alexander

      407,398        86,479        186,823        —        3,372,577  

D. Keith Wheeler

      50,432        69,271        18,942        —        410,979  

Stephanie B. Tillman

      14,846        23,487        9,922        —        195,134  

 

(1)

Amounts shown are deferrals of 2022 salary earned.

(2)

Amounts are included in “All Other Compensation” in the Summary Compensation Table for the 2022 fiscal year.

(3)

Above-market interest on nonqualified deferred compensation is included in the Summary Compensation Table for 2022 as “Nonqualified Deferred Compensation Earnings” for the 2022 fiscal year. Interest is above-market if earned at a rate which is 120% or more of the applicable federal long-term rate. Earnings in the EDCP are interest-based credits which exceed this threshold. The amount of above-market interest for each executive included in the Summary Compensation Table for 2022 is as follows: Mr. McMullian, $53,851; Mr. Kinsey, $31,974; Mr. Alexander, $78,883; Mr. Wheeler $7,737 and Ms. Tillman, $4,139.

(4)

The cumulative portion of the aggregate balance at December 31, 2022 reported in the Summary Compensation Table for all years prior to 2022 is as follows: Mr. McMullian, $1,665,035; Mr. Kinsey, $1,175,654; Mr. Alexander, $2,691,877; Mr. Wheeler, $272,334; and Ms. Tillman, $0.

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

Payments Made Upon Termination Following a Change of Control

The Change of Control Plan is designed to provide for stability and continuity of management and the company’s operations in the event of a change of control. The compensation and human capital committee may designate, in its sole discretion, additional executives that are eligible to participate in the Change of Control Plan. If the company experiences a change of control and, during the protection period, (i) an executive’s employment is terminated for any reason other than for Cause (as defined in the Change of Control Plan), death or disability, or (ii) the executive terminates his employment for Good Reason (as defined in the Change of Control Plan), the executive is/was entitled to the following payments:

 

  •  

an amount equal to three times (in the case of Mr. McMullian) and two times (in the case of Messrs. Kinsey, Alexander and Wheeler and Ms. Tillman) the executive’s annual base salary and target annual cash incentive award under the Omnibus Plan at the time of termination (subject to adjustment if base salary was reduced in connection with the change of control);

 

  •  

a lump sum amount equal to 18 times the monthly premium amount calculated as if the executive had continued participation in the company’s medical plan using the executive’s coverage election at the time of termination; and

 

  •  

up to $25,000 of outplacement services for up to one year following termination.

In the event that actual payments to an executive under the Change of Control Plan are determined in certain instances to be subject to excise taxes, the payments to be paid will be set to the “best net” amount, representing either (i) the largest portion of the payments that would result in no portion being subject to excise taxes, or (ii) the entire payments, whichever amount, after taking into account all applicable taxes, including excise taxes, results in the executive receiving, on an after tax basis, the greater amount of payments notwithstanding that all or a portion of the payments may be subject to excise taxes.

In 2015, the compensation and human capital committee adopted a policy that, without shareholder approval, future cash severance arrangements may not exceed 2.99 times salary and target annual cash incentive award.

The following events would constitute a change of control under the Change of Control Plan:

 

  •  

any person becomes the beneficial owner of securities representing 35% or more of the voting power of the company other than as a result of the following: (i) acquisitions from the company with prior approval of the board of directors, (ii) acquisitions by the company, a subsidiary or an employee benefit plan of the company or a subsidiary, (iii) acquisitions as a result of stock dividends, splits or similar transactions, (iv) a reduction in the number of shares outstanding pursuant to a board-approved transaction, or (v) acquisitions where the board of directors determines that beneficial ownership was acquired in good faith and the person promptly divests a number of shares necessary to reduce his beneficial ownership below 35%;

 

  •  

all or substantially all of the company’s assets are sold to another entity, or the company is merged or consolidated into or with another entity (other than a subsidiary of the company), with the result that upon the conclusion of the transaction the company’s shareholders immediately prior to the transaction will beneficially own less than 60% of the voting power of the surviving entity;

 

  •  

a majority of the board of directors are not directors who were (i) members of the board of directors on the effective date of the Change of Control Plan or (ii) nominated for election or elected to the board of directors by at least 2/3 of the directors who were members of the board of directors on the effective date of the Change of Control Plan plus previously qualified successors serving as directors at the time of such nomination or election; or

 

  •  

approval by the company’s shareholders of a complete liquidation or dissolution of the company.

For purposes of the Change of Control Plan, the protection period includes:

 

  •  

the period beginning on the date of the change of control and continuing until the second anniversary thereof; and

 

  •  

the six-month period prior to the date of the change of control if an executive is terminated without Cause or terminates for Good Reason and, in either case, the termination (i) was requested by the third party that effectuates the change of control, or (ii) occurs in connection with the change of control.

 

 

 

 

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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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The Change of Control Plan includes a one-year covenant not to compete with respect to the trade or business of the successor entity. The Change of Control Plan also includes, for all executives, non-disclosure covenants that do not expire, certain trade secret protections, two year non-solicitation covenants and non-disparagement covenants that do not expire. Payments under the Change of Control Plan are subject to the execution by the executive of a general release of the company.

Breach of the release or of any covenant may result in the forfeiture of any payments or benefits that the executive is entitled to under the Change of Control Plan.

Pursuant to the Change of Control Plan, the only event that triggers cash payments and the provision of other benefits is a change of control followed by (or in the limited circumstances described above, preceded by) the termination of an executive’s employment, other than for death, disability or for Cause or voluntary resignation other than for Good Reason, within the protection period. In addition, any undistributed amounts under the company’s deferred compensation plan will be distributed upon a change of control.

Payments Made Upon Death or Disability, Retirement or Change of Control

If a Named Executive dies, becomes permanently disabled or retires (at age 65 or after) he is generally entitled to the following items:

 

  •  

immediate vesting in all unvested stock options, of which currently there are none;

 

  •  

in the cases of death or disability, immediate vesting in the performance-contingent restricted stock award at target amount; and

 

  •  

in the case of retirement, for the performance-contingent restricted stock awards, at the normal vesting date a prorated award based upon the retirement date and actual performance (for purposes of the calculations that follow, if actual results are unknown, target values are used).

All equity awards granted under the Omnibus Plan include a double-trigger vesting mechanism upon a change of control.

Amounts shown in the table below represent estimated amounts payable (or realizable) by the company to each Named Executive upon death, disability, or retirement, a change of control without termination or termination in connection with a change of control. Amounts shown in the tables below are the estimated payment amounts assuming that the triggering event occurred on December 30, 2022, the last business day of fiscal 2022. Values in the tables for equity-based awards are calculated using the closing market price of $28.74 of the company’s common stock on December 30, 2022.

 

NAME

    DEATH/
DISABILITY
($)		      RETIREMENT
($)		      CHANGE OF
CONTROL
WITHOUT
TERMINATION
($)		      QUALIFYING
TERMINATION
FOLLOWING
CHANGE OF
CONTROL(1)
($)		  

A. Ryals McMullian

            

Cash Severance

      —        —        —        6,058,800  

Equity Vesting

      11,604,637        N/A        —        13,262,550  

Other Benefits(2)

     —        —        —        57,729  

TOTAL

      11,604,637        N/A        —        19,379,079  

R. Steve Kinsey

            

Cash Severance

      —        —        —        2,296,037  

Equity Vesting

      3,749,420        3,066,871        —        4,416,295  

Other Benefits(2)

      —        —        —        51,383  

TOTAL

      3,749,420        3,066,871        —        6,763,715  

Bradley K. Alexander

            

Cash Severance

      —        —        —        2,080,235  

Equity Vesting

      3,498,808        2,861,894        —        4,121,167  

Other Benefits(2)

      —        —        —        51,383  

TOTAL

      3,498,808        2,861,894        —        6,252,785  

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

NAME

    DEATH/
DISABILITY
($)		      RETIREMENT
($)		      CHANGE OF
CONTROL
WITHOUT
TERMINATION
($)		      QUALIFYING
TERMINATION
FOLLOWING
CHANGE OF
CONTROL(1)
($)		  

D. Keith Wheeler

            

Cash Severance

      —        —        —        1,728,257  

Equity Vesting

      2,584,301        2,113,877        —        3,044,003  

Other Benefits(2)

      —        —        —        49,823  

TOTAL

      2,584,301        2,113,877        —        4,822,083  

Stephanie B. Tillman

            

Cash Severance

      —        —        —        1,441,600  

Equity Vesting

      1,447,346        N/A        —        1,628,653  

Other Benefits(2)

      —        —        —        59,295  

TOTAL

      1,447,346        N/A        —        3,129,548  

 

(1)

In addition to amounts payable under the Change of Control Plan, each Named Executive is entitled to his pro rata share of any award earned under the Omnibus Plan in the year of termination.

(2)

Other Benefits includes the estimated cost of outplacement services and a lump sum amount representing 18 months of continued health and welfare benefits in accordance with the terms of the Change of Control Plan.

N/A - Not currently retirement eligible

Mr. Alexander retired from the company on December 31, 2022. In connection with such retirement, he received (i) a retirement payment of $70,000 for continued health care premiums under COBRA and (ii) eligibility for equity vesting as described in the narrative above, with an estimated value of $2,861,894 based on the stock price as of December 30, 2022 and assuming target performance.

PAY RATIO DISCLOSURE

 

YEAR

   

CEO TOTAL
COMPENSATION

($)

     

MEDIAN EMPLOYEE
TOTAL COMPENSATION

($)

      RATIO OF CEO TO
MEDIAN EMPLOYEE
TOTAL COMPENSATION		  

2022

      6,278,511        72,646        86.4  

Our chief executive officer’s annual total compensation is 86.4 times that of the median of the annual total compensation of all our employees other than the chief executive officer. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. We used the following methodology in calculating the pay ratio:

 

  1.

We included all employees active as of our determination date of December 31, 2022, with the exception of our current chief executive officer, to identify the median employee. We did not include any (i) employees with 2022 compensation who were no longer active as of December 31, 2022, (ii) contract labor employees, (iii) independent distributors, (iv) leased labor employees or (v) employees hired prior to December 31, 2022 without 2022 compensation. We do not have any employees located outside of the United States.

  2.

We found the median employee using 2022 gross compensation reported to the U.S. Internal Revenue Service on Form W-2 for the period of January 1, 2022 to December 31, 2022. Specifically, we used Form W-2, Gross Pay.

  3.

The annual total compensation reported for our chief executive officer consists of his total compensation as reported for 2022 in the Fiscal 2022 Summary Compensation Table on page 47 of this proxy statement, plus employer-provided health and wellness benefits. The total compensation reported for the median employee is the total amount of compensation paid to the median employee during the period of January 1, 2022 to December 31, 2022, calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, plus employer-provided health and wellness benefits.

 

 

 

 

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Table of Contents
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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
    
                  LOGO                     
 
PAY VERSUS PERFORMANCE
 
PAY VERSUS PERFORMANCE
(1)
  
FISCAL YEAR
 (a)
  
SUMMARY
COMPEN-
SATION TABLE
TOTAL FOR
PEO
(b)
    
COMPEN-
SATION
ACTUALLY
PAID TO PEO
1
(c)
(2)
    
AVERAGE
SUMMARY
COMPEN-
SATION TABLE
TOTAL FOR
NON-PEO

NAMED
EXECUTIVE
OFFICERS
(d)
    
AVERAGE
COMPEN-
SATION
ACTUALLY
PAID TO
NON-PEO

NAMED
EXECUTIVE
OFFICERS
(e)
(2)
    
VALUE OF INITIAL FIXED
$100 INVESTMENT
BASED ON:
 
    
NET
INCOME
(h)
(5)

($ IN THOUSANDS)
    
ADJUSTED
EBITDA
(i)
(6)

($ IN THOUSANDS)
  
 
COMPANY
TOTAL
SHARE-
HOLDER
RETURN
(f)
(3)
    
PEER
GROUP
TOTAL
SHARE-
HOLDER
RETURN
(g)
(4)
  
2022
  
$
6,255,359
 
  
$
8,123,687
 
  
$
1,836,906
 
  
$
2,359,595
 
  
$
146.14
 
  
$
129.46
 
  
$
228,394
 
  
$
502,030
 
2021
  
$
5,979,905
 
  
$
7,749,481
 
  
$
1,955,812
 
  
$
2,505,445
 
  
$
135.34
 
  
$
118.36
 
  
$
206,187
 
  
$
490,861
 
2020
  
$
5,086,770
 
  
$
5,109,271
 
  
$
2,189,017
 
  
$
2,154,414
 
  
$
107.73
 
  
$
104.67
 
  
$
152,318
 
  
$
521,690
 
 
(1)
Mr. McMullian was our principal executive officer (“PEO”) for the full year for each of fiscal years 2022, 2021 and 2020. For fiscal 2022, our
non-PEO
named executive officers were Messrs. Kinsey, Alexander and Wheeler and Ms. Tillman. For each of fiscal years 2021 and 2020, our
non-PEO
named executive officers were Messrs. Kinsey, Alexander, Wheeler and H. Mark Courtney.
 
(2)
For each of fiscal years 2022, 2021 and 2020 (each, a “Covered Year”), in determining both the compensation “a
c
tually paid” to our PEO(s) and the average compensation “actually paid” to our
non-PEO
named executive officers for purposes of this Pay Versus Performance table (“PVP Table”), we deducted from or added back to the total amounts of compensation reported in column (b) or column (d), as applicable, for such Covered Year the following amounts:
 
 
PEO
 
   
 
2022
 
    
 
2021
 
    
 
2020
 
  
Summary Compensation Table (SCT) Total for PEO
   
$
6,255,359
 
  
$
5,979,905
 
  
$
5,086,770
 
- change in actuarial present value of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
+ service cost of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
+ prior service cost of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
- SCT “Stock Awards” column value
   
($
4,360,518
) 
  
($
3,599,802
) 
  
($
2,600,146
) 
- SCT “Option Awards” column value
   
 
—
 
  
 
—
 
  
 
—
 
+ Covered
Year-end
fair value of outstanding equity awards granted in Covered Year
   
$
4,216,733
 
  
$
4,005,126
 
  
$
2,517,814
 
+/- change in fair value (from prior
year-end
to Covered
Year-end)
of equity awards outstanding at Covered
Year-end
that were granted in prior years
   
$
1,304,983
 
  
$
1,364,252
 
  
$
104,833
 
+ vesting date fair value of equity awards granted and vested in Covered Year
   
 
—
 
  
 
—
 
  
 
—
 
+/- change in fair value (from prior
year-end
to vest date in Covered Year) of prior-year equity awards vested in Covered Year
   
$
475,955
 
  
 
—
 
  
 
—
 
- prior
year-end
fair value of prior-year equity awards forfeited in Covered Year
   
 
—
 
  
 
—
 
  
 
—
 
+ includable dividends/earnings paid on equity awards during Covered Year
   
$
231,175
 
  
 
—
 
  
 
—
 
Compensation Actually Paid to PEO
   
$
8,123,687
 
  
$
7,749,481
 
  
$
5,109,271
 
 
 
 
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57

                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
 
AVERAGE FOR
NON-PEO
NAMED EXECUTIVE OFFICERS
   
2022
    
2021
    
2020
  
Average SCT Total for
Non-PEO
Named Executive Officers
   
$
1,836,906
 
  
$
1,955,812
 
  
$
2,189,017
 
- change in actuarial present value of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
+ service cost of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
+ prior service cost of pension benefits
   
 
—
 
  
 
—
 
  
 
—
 
- SCT “Stock Awards” column value
   
($
899,624
) 
  
($
855,632
) 
  
($
827,415
) 
- SCT “Option Awards” column value
   
 
—
 
  
 
—
 
  
 
—
 
+ Covered
Year-end
fair value of outstanding equity awards granted in Covered Year
   
$
869,892
 
  
$
951,973
 
  
$
769,705
 
+/- change in fair value (from prior
year-end
to Covered
Year-end)
of equity awards outstanding at Covered
Year-end
that were granted in prior years
   
$
329,921
 
  
$
462,255
 
  
$
32,071
 
+ vesting date fair value of equity awards granted and vested in Covered Year
   
 
—
 
  
 
—
 
  
 
—
 
+/- change in fair value (from prior
year-end
to vest date in Covered Year) of prior-year equity awards vested in Covered Year
   
$
211,626
 
  
($
9,281
) 
  
($
9,117
) 
- prior
year-end
fair value of prior-year equity awards forfeited in Covered Year
   
($
96,694
) 
  
 
—
 
  
 
—
 
+ includable dividends/earnings paid on equity awards during Covered Year
   
$
107,568
 
  
$
318
 
  
$
153
 
Average Compensation Actually Paid to
Non-PEO
Named Executive Officers
   
$
2,359,595
 
  
$
2,505,445
 
  
$
2,154,414
 
 
(3)
For each Covered Year, our total shareholder return was calculated as the yearly percentage change in our cumulative total shareholder return on our common stock, par value $0.01 per share, measured as the quotient of (a) the sum of (i) the cumulative amount of dividends for a period beginning with our closing price on NYSE on December 27, 2019 through and including the last day of the fiscal year covered (each
one-year,
two-year,
and three-year period, the “Measurement Period”), assuming dividend reinvestment, plus (ii) the difference between our closing stock price at the end versus the beginning of the Measurement Period, divided by (b) our closing share price at the beginning of the Measurement Period. Each of these yearly percentage changes was then applied to a deemed fixed investment of $100 at the beginning of each Measurement Period to produce the Covered
Year-end
values of such investment as of the end of 2022, 2021 and 2020, as applicable. Because Covered Years are presented in the table in reverse chronical order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time.
 
(4)
For purposes of this pay versus performance disclosure, our peer group is the S&P 500 Packaged Food/Meats Index (the “PVP Peer Group”). For each Covered Year, our PVP Peer Group cumulative total shareholder return was calculated based on a deemed fixed investment of $100 in the index through each Measurement Period, assuming dividend reinvestment.
 
(5)
Net income is calculated in accordance with GAAP.
 
(6)
Adjusted EBITDA is calculated as described in Appendix A.
 
 
 
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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
    
                  LOGO                     
 
The following
charts
provide, across the
Covered
Years, (1) a
comparison
between our cumulative
total
shareholder
return
and the cumulative total shareholder return of the PVP Peer Group, and (2) illustrations of the relationships between (A) the executive compensation actually paid to the PEO and the average of the executive compensation actually paid to our
non-PEO
named
executive officers (in each case as set forth in the PVP Table above) and (B) each of the performance measures set forth in columns (f), (h) and (i) of the PVP Table above.
 

 
 
 
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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
 


As shown above, the company has selected adjusted EBITDA as the company-selected measure for the pay versus performance disclosure as we believe it represents the most important financial performance measure we used to link compensation actually paid to the Named Executives in 2022 to the company’s performance. Adjusted EBITDA is the performance measure used to determine 2022 annual cash incentive award payouts. In 2020, the correlation between compensation actually paid and adjusted EBITDA was not as strong because of the impacts of COVID-19 on our operations. Additionally, Mr. McMullian’s base salary and target annual cash incentive award were lower in 2020 as it was his first full
 
 
 
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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
    
                  LOGO                     
 
year acting as chief executive officer. Increases in compensation actually paid over time were driven in part by increases in the value per share for unvested equity awards due to our stock price performance during the time period covered by the pay versus performance disclosure.
The following table lists the three financial performance measures that we believe represent the most important financial performance measures we used to link compensation actually paid to our Named Executives for fiscal 2022 to our performance:
 
Adjusted EBITDA
 
ROIC
Relative TSR Ranking
 
 
 

 
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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

DIRECTOR COMPENSATION

Based upon the recommendations of the nominating/corporate governance committee, the board of directors considers and establishes director compensation. An employee of the company who also serves as a director does not receive any additional compensation for serving as a director or as a member or chair of a board committee.

2022 Director Compensation Package

During 2022, the directors’ compensation package for non-employee directors was based on the following principles:

 

  •  

a significant portion of director compensation should be aligned with creating and sustaining shareholder value;

 

  •  

directors should have an equity interest in the company; and

 

  •  

total compensation should be structured to attract and retain a diverse and superior board of directors.

The nominating/corporate governance committee annually reviews the status of director compensation in relation to other comparable companies and other factors it deems appropriate. In 2022, that committee engaged Meridian, an independent compensation consultant, to assist it in its assessment of the competitiveness of director compensation. Meridian developed two peer groups of companies comparable to Flowers Foods in size – an industry-specific group and a general industry group – and provided details of the values and designs of the director pay programs at those companies. The nominating/corporate governance committee considered that data, the frequency of expected changes to director pay at Flowers Foods, the expected rate of change in that data and other relevant factors to determine the 2022 program shown below.

Meridian concluded that the average director compensation was positioned near the median relative to both peer groups and therefore did not recommend any changes for the 2022 director compensation package. The program, which is the same as the 2021 program, is described below.

Cash and Stock Compensation

Given the above principles and market data, the non-employee director compensation package consisted of the following:

 

COMPENSATION ELEMENT

   

2022

PROGRAM

  

Annual Cash Retainer

    $ 100,000 (1) 

Committee Chair Retainers:

   

• Audit Committee

    $ 22,500 (2) 

• Compensation and Human Capital Committee

    $ 20,000  

• Nominating/Corporate Governance Committee

    $ 15,000  

• Finance Committee

    $ 15,000  

Audit Committee Member Retainer

    $ 7,500  

Presiding Director Retainer

    $ 20,000  

Non-Executive Chairman Retainer

    $ 100,000 (3) 

Annual Stock Award

    $ 145,008 (4) 

 

(1)

Cash retainers may be deferred at the director’s option; see “ — Additional Compensation Program Details.”

(2)

Includes audit committee member retainer.

(3)

In addition to base annual cash retainer.

(4)

Vests one year from the date of grant. Shares at the grant date are computed by dividing $145,000 by the stock price on the grant date and rounding the shares up to the nearest 10 shares. The expense of the award is determined by multiplying the grant date fair value by the gross shares granted. In fiscal 2022 this resulted in expense of $145,008 per award.

Additional Compensation Program Details

Non-employee directors are eligible to participate in the Omnibus Plan and the EDCP.

Non-employee directors have the option to convert their annual cash board retainer fees into deferred stock equal in value to the cash payments they would otherwise have received. These deferred shares vest pro rata over a one-year period based on service. Accumulated dividends are paid upon the delivery of the vested shares.

 

 

 

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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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Non-employee directors may alternatively elect to defer all or any portion of their annual retainers and cash committee fees into an interest-bearing account in the EDCP. Generally, the deferral plus interest is paid to the director upon retirement or termination from the company’s board of directors.

Stock Ownership Guidelines

In order to align the economic interests of directors with those of shareholders, all directors are expected to hold shares of common stock in the company. A non-employee director must own shares of common stock with a value of at least six times the annual cash retainer paid to the non-employee directors. In addition, the non-executive chairman of the board of directors is required to hold six times his annual board retainer plus his additional cash retainer. All direct holdings of our common stock, certain indirect holdings, and all vested and unvested shares of deferred stock are included for purposes of determining compliance. Directors have five years to meet the required guidelines. All non-employee directors with at least five years of service were in compliance with the guidelines as of March 6, 2023.

Other Arrangements

We reimburse all directors for out-of-pocket expenses incurred in connection with attendance at board of directors’ meetings, or when traveling in connection with the performance of their services for the company. Individuals in their service as directors do not receive any additional retirement benefits. Any retirement benefits received are due to legacy participation in benefit programs when they were employees of the company.

FISCAL 2022 DIRECTOR COMPENSATION TABLE

The following table details compensation to non-employee members of the board of directors for the 2022 fiscal year:

 

NAME

    FEES EARNED OR
PAID IN CASH
($)(1)		     STOCK
AWARDS
($)(2)		      CHANGE IN
PENSION VALUE
AND
NONQUALIFIED
DEFERRED COMP.
EARNINGS
($)(3)		      ALL OTHER
COMP.
($)		      TOTAL
($)		  

George E. Deese

      200,000       145,008        —        —        345,008  

Edward J. Casey, Jr.

      103,125 (4)      145,008        —        —        248,133  

Thomas C. Chubb, III

      103,125 (4)      145,008        —        —        248,133  

Rhonda Gass

      107,500       145,008        12,976        —        265,484  

Benjamin H. Griswold, IV

      135,000       145,008        —        —        280,008  

Margaret G. Lewis

      120,000       145,008        8,018        —        273,026  

W. Jameson McFadden

      107,500       145,008        —        —        252,508  

James T. Spear

      122,500       145,008        —        —        267,508  

Melvin T. Stith, Ph.D.

      100,000       145,008        —        —        245,008  

Terry S. Thomas

      107,500       145,008        —        —        252,508  

C. Martin Wood III

      122,500       145,008        —        —        267,508  
(1)

Directors have the option under the Omnibus Plan to convert their annual board of directors’ retainer fees into deferred stock equal in value to the cash payments these directors would have otherwise received. Directors may also elect to defer all or a portion of their annual retainer and cash committee fees, if any, through the EDCP. In 2022, Ms. Gass elected to defer 100% of her committee chair retainer fees into the EDCP. In fiscal 2022, under the Omnibus Plan, Ms. Gass elected to convert 100% of her annual board of directors retainer fees to deferred stock equal in value to the cash payments she would have received. Ms. Gass received 3,640 shares as a result of this deferral election. Such deferred stock vests pro rata over one year from the date of grant and is delivered to the grantee along with accumulated dividends at a designated time selected by the grantee at the date of the grant. The deferred stock is accounted for in accordance with the provisions of Financial Accounting Standards Board (FASB) ASC Topic 718 (ASC 718).

(2)

The stock awards represent the grant date fair value computed in accordance with ASC 718 of deferred stock granted to each non-employee director under the Omnibus Plan in fiscal 2022 (excluding deferred stock received in connection with the deferral of annual retainer fees disclosed in footnote 1). Shares at the grant date are computed by dividing $145,000 by the stock price on the grant date and rounding the shares up to the nearest 10 shares. The expense of the award is determined by multiplying the grant date fair value by the gross shares granted. In fiscal 2022 this resulted in expense of $145,008 per award. Such deferred stock awards generally vest one year from the date of grant. The number of shares of deferred stock outstanding (vested and non-vested) and held by each non-employee director as of December 31, 2022 (including deferred stock received in connection with the deferral of annual retainer fees) are as follows:

 

 

 

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                      FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

 

NAME

    DEFERRED
STOCK
(#)		  

George E. Deese

      5,300  

Edward J. Casey, Jr.

      5,300  

Thomas C. Chubb, III

      5,300  

Rhonda Gass

      43,759  

Benjamin H. Griswold, IV

      5,300  

Margaret G. Lewis

      5,300  

W. Jameson McFadden

      5,300  

James T. Spear

      28,757  

Melvin T. Stith, Ph.D.

      97,599  

Terry S. Thomas

      5,300  

C. Martin Wood III

      5,300  
(3)

The Company transferred all benefit obligations under the pension plan to a highly rated insurance company on March 4, 2020 in the form of a group annuity contract which began paying benefits on May 1, 2020, and there were therefore no changes in pension value during fiscal 2022 for any of our non-employee directors. The amounts reported in this column represent the portion of earnings under the EDCP that are “above market” for purposes of the applicable disclosure rules.

(4)

Mr. Casey and Mr. Chubb served on the audit committee through May 26, 2022; therefore, amounts for such non-employee directors include pro-rated audit committee fees.

 

 

 

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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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AUDIT COMMITTEE REPORT

The audit committee oversees, among other things, the accounting and financial reporting processes of the company, the audit of the company’s consolidated financial statements, the company’s compliance with legal and regulatory requirements, the effectiveness of the company’s internal control over financial reporting, the qualifications, independence and performance of the company’s independent registered public accounting firm, and the performance of the company’s internal auditors.

The audit committee operates under a written charter adopted by the board of directors. It is available on the company’s website at https://www.flowersfoods.com/investors/corporate-governance/governance-documents. The charter, which was last amended effective August 19, 2022, is reviewed at least annually by the audit committee, and is amended by the board of directors, as appropriate, to reflect the evolving role of the audit committee.

In 2022, the audit committee held eight meetings. Meeting agendas are established by the chair of the audit committee, in consultation with the other committee members, the independent auditors and the appropriate officers of the company. The audit committee’s meetings include, whenever appropriate, executive sessions in which the audit committee meets as a committee and also separately with management, the internal auditors and the independent auditors.

The audit committee is comprised entirely of independent directors who meet the independence, experience, and other qualifications of the NYSE. The audit committee regularly provides resources and directs educational initiatives to help its members to continue developing skills and perspectives to enhance their contributions to the audit committee.

During 2022, the audit committee fulfilled its duties and responsibilities as outlined in the charter. Among other things, the audit committee:

 

  •  

Met with the senior members of the company’s financial management team at each regularly scheduled meeting;

 

  •  

Reviewed and discussed with management and the independent auditors the company’s earnings and other financial press releases and annual and quarterly reports on Form 10-K and Form 10-Q prior to filing with the SEC;

 

  •  

Received periodic updates from management regarding management’s process to assess the adequacy of the company’s internal control over financial reporting and management’s assessment of the effectiveness of the company’s internal control over financial reporting;

 

  •  

Reviewed and discussed with management, the internal auditors and the independent auditors management’s assessment of the effectiveness of the company’s internal control over financial reporting and the independent auditors’ opinion about the effectiveness of the company’s internal control over financial reporting;

 

  •  

Reviewed and discussed with management, the internal auditors and the independent auditors, as appropriate, the plans for, and the scope of, the company’s annual audit and other examinations;

 

  •  

Met in periodic executive sessions with certain members of management, the internal auditors and the independent auditors to discuss the results of their examinations, their assessments of the company’s internal control over financial reporting and the overall integrity of the company’s financial statements;

 

  •  

Reviewed the compensation of and services performed by the internal auditors;

 

  •  

Reviewed and discussed with management the company’s enterprise risk management program and the company’s major financial risk exposures, including risks related to information technology, cybersecurity and environmental and sustainability initiatives, and the steps management has taken to monitor and control these exposures;

 

 

 

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