Dear Fellow Shareowners,
On behalf of my fellow Compensation Committee members, I wanted personally to provide you with some additional insight into our Committee’s work this year. I encourage you to read the full Compensation Discussion & Analysis in the 2016 Proxy Statement but I also wanted to share some highlights in this blog, as I have done in prior years.
- We updated the annual incentive program to reflect the company’s increased focus on driving top-line and bottom-line growth. Net operating revenue and profit before tax growth were added as annual incentive metrics and weightings were adjusted to decrease emphasis on unit case volume.
- In keeping with the Equity Stewardship Guidelines announced in 2014, the mix of equity compensation was adjusted to use fewer stock options and more performance share units. The mix was adjusted to 50/50 in 2015 and was further adjusted in 2016 to 1/3 stock options and 2/3 performance share units. In 2015, the first year under these new guidelines, we significantly decreased the “burn rate” of shares and achieved our burn rate commitment of 0.4% – a full year early.
- Reflecting 2015 as a transition year for the company, we reduced the number and value of long-term incentive awards granted to Named Executive Officers.
The company, under Mr. Kent’s leadership, made significant progress and delivered solid financial results in 2015. We're confident that the company’s strategies and corresponding compensation practices will help The