Washington, D.C. 20549
It is my pleasure to invite you
to attend our 2022 Annual Meeting of Stockholders on Wednesday, May 18, 2022, at 3:00 p.m. ET at our Samuel Adams Boston Taproom,
located at 60 State Street in Boston, Massachusetts. At the Annual Meeting you will be asked to elect three Class A Directors and
cast an advisory vote on executive compensation. As the holder of the voting rights of the Company’s Class B Common Stock,
I will elect six Class B Directors and cast a vote to ratify the selection of our independent registered public accounting firm.
As requested elsewhere in the accompanying materials, please submit your proxy as soon as possible.
As you may have read in our Annual
Report and will read in this Proxy Statement, 2021 was a year of both successes and challenges for Boston Beer. We grew our depletions
approximately 22% for the year, delivering more than 42% of the total industry volume growth, by far the highest of all brewers.
We have a broad portfolio of healthy brands, including some new innovations, which we believe will continue to drive our growth
in 2022.
Despite these
ongoing strengths, we experienced large unanticipated costs because of the unexpected slowing of growth of the hard seltzer
category in 2021. Based on our projections, we moved aggressively to build inventory early in the year to try to avoid the
out-of-stocks that we experienced in prior years and to the secure production capacity needed for the projected future
growth. Unfortunately, the hard seltzer category didn’t grow as much as we expected, and so we faced significant
temporary costs over the second half of the year. For 2022, we have adjusted our projections and believe that the hard
seltzer category will remain a very important beer industry segment going forward and that Truly Hard Seltzer will continue
to blaze its own path as a category leader. Meanwhile, in 2022 we will focus on growing our depletions through a balanced
approach among our existing brands and new innovations.
Our Board of Directors plays
an integral role in strategically guiding us through these successes and challenges. In this Proxy Statement you will find information
about our nine incumbent Directors, including Class A Directors Meghan Joyce, Michael Spillane, and Jean-Michel Valette, and Class
B Directors Dave Burwick, Sam Calagione, Cynthia Fisher, Jim Koch, Michael Lynton, and Julio Nemeth. Each of us are candidates
for reelection this year.
At the Annual Meeting each year,
it is always a pleasure for me to share Company news with you and, of course, samples of the products that we believe will support
our long-term growth. More importantly, the meeting is an opportunity for you to ask questions and express opinions about the Company,
regardless of the number of shares that you own. I am especially excited about holding this meeting at the Samuel Adams Boston
Taproom, after meeting virtually over the last two years for safety reasons. Please note that the City of Boston may require proof
of vaccination for admittance to the Taproom. Additionally, we strongly encourage the use of public transportation due to parking
limitations in the Faneuil Hall area.
The Proxy Statement and Boston
Beer’s Annual Report for the fiscal year ended December 25, 2021 are available at www.bostonbeer.com. On behalf of the Board
of Directors and Boston Beer’s Executive Leadership Team, I thank you for your continued confidence and support of Boston
Beer and our products.
Notice
of the 2022 Annual Meeting of Stockholders
Meeting Information
MAY 18, 2022,
3:00 p.m. ET
Samuel Adams Boston Taproom
Faneuil Hall, 60 State Street,
Boston, Massachusetts
To our Stockholders:
The 2022 Annual Meeting of the
Stockholders (the “Annual Meeting”) of The Boston Beer Company, Inc. (“Boston Beer,” the “Company,”
“we,” or “us”) will be held at the Samuel Adams Boston Taproom, Faneuil Hall, 60 State Street, Boston,
Massachusetts at 3:00 p.m. ET on Wednesday, May 18, 2022.
The Class A Stockholders
will meet for the following purposes:
1. |
For the election of three (3) Class A Directors, each to serve for a term of one (1) year; |
2. |
To conduct an advisory vote regarding the compensation of our Named Executive Officers; and |
3. |
To consider and act upon any other business that may properly come before the meeting. |
The Class B Stockholder
will attend for the following purposes:
1. | For the election of six (6) Class B Directors, each to serve for a term of one (1)
year; |
2. | To ratify the selection of Deloitte & Touche LLP as our independent registered
public accounting firm for the 53-week fiscal year ending December 31, 2022 (“Fiscal Year 2022”); and |
3. | To consider and act upon any other business that may properly come before the meeting. |
These items of business are more
fully described in the Proxy Statement accompanying this Notice. The Board of Directors fixed the close of business on March 21,
2022 as the Record Date for the meeting. Only Stockholders of Record on the Record Date are entitled to notice of and to vote at
the meeting.
YOUR VOTE IS VERY
IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE.
You may submit your proxy: (1)
by mail using a traditional proxy card; (2) by calling the toll-free number listed on your proxy card; or (3) through the internet,
as described in the enclosed materials. If you receive more than one proxy because you own shares registered in different names
or addresses, each proxy should be voted. This Proxy Statement and the accompanying proxy are being distributed on or about April
7, 2022.
By order of the Board of Directors,
MICHAEL G. ANDREWS
Associate General Counsel & Corporate Secretary
April 7, 2022
Important Notice Regarding
the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 18, 2022
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BY INTERNET
You may vote your shares via the
internet by following the instructions provided in the Notice. To vote by the internet, go to www.envisionreports/sam and follow
the steps outlined on the secured website. |
BY TELEPHONE
You may vote your shares by telephone
by following the instructions provided in the Notice. To vote by telephone, call toll free at 1-800-652-8683. |
BY MAIL
If you received printed copies
of the Proxy Materials, you may vote by completing, signing, and dating the Proxy Card and returning it in the prepaid envelope. |
AT THE ANNUAL
MEETING
You may vote in person at the
Annual Meeting. If you voted via proxy before the meeting, you must revoke it in order to vote in person. If you need to revoke
your proxy, please consult with a Boston Beer representative upon admission to the Annual Meeting. |
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The Notice of Annual
Meeting, Proxy Statement, and the Annual Report to Stockholders (the “Proxy Materials”) are available at www.bostonbeer.com.
YOUR VOTE IS IMPORTANT!
Whether or not you are able to attend our Annual Meeting,
please vote as soon as reasonably possible. Under New York Stock Exchange rules, your broker will NOT be able to vote your shares
unless they receive specific instructions from you. We strongly encourage you to vote.
We continue to be advised and a number
of our stockholders have experienced that many states are strictly enforcing escheatment laws and requiring shares held in “inactive”
accounts to be escheated to the state in which the stockholder was last known to reside. One way that you can ensure that your
account remains “active” is to vote your shares.
We encourage you to vote via the internet or by telephone.
It is convenient for you and saves the Company significant postage and processing costs. To vote via the internet, go to http://www.envisionreports/sam
and follow the steps outlined on the secured website. To vote by telephone, call toll free at 1-800-652-8683. Internet and
telephone voting for Stockholders of Record will be available 24 hours a day and will close at 11:59 p.m. ET on May 17, 2022.
Proxy Summary
This summary highlights information contained elsewhere
in this Proxy Statement, but does not contain all of the information that you should consider regarding the proposals for this
Annual Meeting. We recommend that you read the entire Proxy Statement before casting your vote.
Online Availability of Proxy Materials
Your proxy is being solicited for the 2022 Annual
Meeting of Stockholders of the Boston Beer Company, Inc. A Notice of the Online Availability of Proxy Materials has been mailed
to all Stockholders of Record advising that they can: (1) view all Proxy Materials online; and (2) request a paper or email copy
of the Proxy Materials free of charge. We encourage stockholders to access their Proxy Materials online to reduce the environmental
impact and cost of our proxy solicitation.
Eligibility to Vote
Only Stockholders of Record are eligible to vote at
the Annual Meeting. You can vote if you held shares of Class A or Class B Common Stock as of the close of business on Monday, March
21, 2022. Each outstanding share of Boston Beer’s Class A and Class B Common Stock entitles the stockholder to one (1) vote
on each matter properly brought before the respective class.
Note Regarding Forward-Looking Statements
This Proxy Statement contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this Proxy Statement,
including but not limited to the Compensation Discussion and Analysis, or the “CD&A.” These forward-looking statements
generally are identified by the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,”
“may,” “should,” “will,” “would,” “will be,” “will continue,”
“will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties
that could cause actual results and events to differ materially in our Forms 10-K and 10-Q filed with the Securities and Exchange
Commission (“SEC”). We undertake no obligation to update or revise publicly any forward-looking statements, whether
because of new information, future events, or otherwise.
2021 Business Results
Most of the Company’s beverages, including hard
seltzers, beers, and hard ciders, are primarily positioned in the market for “High End” beer occasions. The Company
and the alcohol industry at large is forecasting significant growth in a newly defined category named “Beyond Beer”
that includes hard seltzer, flavored malt beverages, cider, ready-to-drink spirits beverages, and other emerging beverages. The
Company’s business goal is to become the leading supplier in the High End and Beyond Beer categories by creating and offering
high quality alcohol beverages. With the support of a large, well-trained sales organization and world-class brewers, the Company
strives to achieve this goal by offering consumer-responsive hard seltzers, beers, hard ciders, and ready-to-drink spirits beverages,
and by increasing brand availability and awareness through traditional media and digital advertising, point-of-sale, promotional
programs, and drinker education and engagement.
During the Company’s 52-week fiscal period ended
December 25, 2021 (“Fiscal Year 2021”), the market for hard seltzer products experienced decelerating growth trends,
which resulted in the annual volume growth rate declining from 158% in 2020 to 13% in 2021. The slowdown in growth trends greatly
impacted the Company's volume of production and shipments, as well as its earnings and projections for the future. The volume reduction
resulted in several supply chain related costs recorded during the second half of the year. These costs include provisions for
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excess and obsolete inventories, property, plant and
equipment impairments, write-offs of third-party production prepayments, and provisions for costs associated with the termination
of various third-party production contracts.
Our business results for Fiscal Year 2021 were as
follows.
• |
Depletions (sales by our wholesalers to retailers) increased by approximately 22% from the
52-week fiscal period ended December 26, 2020 (“Fiscal Year 2020”), following 37% depletions growth in Fiscal
Year 2020 |
• |
Net revenue of approximately $2.06 billion, an increase of 18.5% from Fiscal Year 2020 |
• |
Earnings per diluted share of $1.17, a decrease from $15.53 in Fiscal Year 2020 |
• |
Shipments (our sales to our wholesalers) of approximately 8.5 million barrels, a 15.4% increase
over Fiscal Year 2020 |
• |
Cash and cash equivalents on hand as of the end of Fiscal Year 2021 totaled $66.3 million,
down from $163.3 million as of the end of Fiscal Year 2020 |
• |
Capital investments in Fiscal Year 2021 totaled approximately $147.9
million, as compared to $140.0 million during Fiscal Year 2020, primarily consisting of improvements to the Company’s
breweries intended to increase production capacity, drive efficiencies and cost reductions, and support product innovation
and future growth |
Voting Matters and Board Recommendations
Item # |
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Voting Matters |
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Board Recommendation |
Item 1 |
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The election of each of the three (3) nominees for Class A Director, to be decided by plurality vote of the holders of Class A Common Stock present in person or represented by proxy. |
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FOR each Director Nominee |
Item 2 |
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The non-binding advisory “Say-on-Pay” vote to approve the compensation of our
Named Executive Officers, to be voted on by the holders of Class A Common Stock present in person or by proxy. |
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FOR |
Item 3 |
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The election of each of the six (6) nominees for Class B Director, to be decided by the affirmative vote of the holder of the outstanding shares of Class B Common Stock. |
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FOR each Director Nominee |
Item 4 |
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The ratification of Deloitte & Touche LLP (“Deloitte”) as our independent
registered public accounting firm for Fiscal Year 2022, to be decided by the affirmative vote of the holder of the outstanding shares of Class B Common Stock. |
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FOR |
Board Nominees
CLASS A DIRECTOR NOMINEES
Name |
|
Age |
|
Director
Since |
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Principal
Occupation |
|
Current
Committee Assignments |
Meghan V. Joyce |
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38 |
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2019 |
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Chief Operating Officer of Oscar Health |
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NomGov (Chair), Audit |
Michael Spillane |
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62 |
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2016 |
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President of Consumer Creation of Nike, Inc. |
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Comp (chair), NomGov |
Jean-Michel Valette* |
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61 |
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2003 |
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Chairman of Sleep Number Corporation |
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Audit (chair), NomGov |
CLASS B DIRECTOR NOMINEES
Name |
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Age |
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Director
Since |
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Principal
Occupation |
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Current
Committee Assignments |
David A. Burwick |
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60 |
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2005 |
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President and CEO of Boston Beer |
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- |
Samuel A. Calagione, III |
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52 |
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2020 |
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Founder and Brewer of Dogfish Head Brewery |
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- |
Cynthia A. Fisher |
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62 |
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2012 |
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Founder and Managing Director of WaterRev, LLC |
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- |
C. James Koch |
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72 |
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1995 |
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Founder and Chairman of Boston Beer |
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- |
Michael M. Lynton |
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61 |
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2020 |
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Chairman of Snap Inc. |
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Comp, NomGov |
Julio
N. Nemeth |
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61 |
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2020 |
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Chief Product Supply Officer of Procter &
Gamble |
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Audit, Comp |
Abbreviations:
Audit=Audit Committee; Comp=Compensation Committee; NomGov=Nominating/Governance Committee
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Named Executive Officers
For Fiscal Year 2021, Boston Beer’s “Named
Executive Officers,” or “NEOs,” were President and Chief Executive Officer David A. Burwick, Treasurer and Chief
Financial Officer Frank H. Smalla, and the next three most-highly compensated Executive Officers, namely Chief Sales Officer John
C. Geist, Senior Vice President, Supply Chain Quincy B. Troupe, and Chief Marketing Officer Lesya Lysyj. Mr. Troupe stepped down
from his position with the Company effective as of April 1, 2022.
Executive Compensation
Boston Beer’s executive compensation program
seeks to attract, develop, engage, and reward highly talented executives with an overall compensation package that provides strong
performers the opportunity to earn competitive compensation over the long term through a combination of base salary, cash incentives,
and equity awards. The program focuses on “pay for performance” through bonuses linked to company performance targets
and equity awards with both performance-based vesting tied to net revenue growth and time-based vesting linked to continued active
employment. We believe that executive compensation should be aligned with achieving the Company’s strategic goals and delivering
strong Company performance, both in terms of growth and long-term stockholder value.
Boston Beer is dedicated to having effective corporate
governance standards in place around our executive compensation program. Some highlights of those standards include:
• |
Independent
oversight over executive compensation by the Compensation Committee; |
• |
Competitive benchmarking
of executive compensation against a peer group; |
• |
Bonus program for Executive
Officers based primarily on Company performance (depletions growth, EBIT, and cost savings); |
• |
Discretion to reduce individual
bonus payouts down to zero for non-performance; |
• |
Long-term equity program
with a mix of performance and time-based vesting criteria; |
• |
Annual advisory Say-on-Pay
vote; |
• |
Policy banning hedging
and pledging of stock by Directors, Officers, and other designated employees; and |
• |
Robust equity ownership guidelines applicable
to our Chairman and CEO. |
2021 Compensation of President & CEO
David A. Burwick
Mr. Burwick’s compensation in 2021 included
a base salary, two annual equity grants awarded pursuant to the Company’s long-term equity program, and two special equity
grants awarded for the purposes of retaining Mr. Burwick to provide leadership stability and to align his total compensation with
the market compared to similarly sized companies. The mix of his total compensation for 2021 is set forth below:
President & CEO David
A. Burwick
2021 Total Compensation Mix
Annual Compensation | |
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Base Salary Received | |
$ | 826,278 |
Performance Bonus | |
$ | 0 |
March 1, 2021 Annual Stock Option Award | |
$ | 2,000,369 |
March 1, 2021 Annual Restricted Stock Unit Award | |
$ | 2,000,841 |
Other Compensation | |
$ | 12,898 |
Annual Compensation Subtotal | |
$ | 4,840,386 |
Special Equity Awards | |
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March 1, 2021 Special Stock Option Award | |
$ | 5,000,011 |
March 1, 2021 Special Restricted Stock Unit Award | |
$ | 5,000,559 |
Special Equity Award Subtotal | |
$ | 10,000,570 |
2021 TOTAL COMPENSATION | |
$ | 14,840,956 |
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Base Salary: Mr. Burwick’s annual base salary of $835,459 was approved by the Compensation Committee and the Board of Directors in February 2021, representing a 5% increase of his 2020 base salary of $795,675. The merit increase was effective on March 21, 2021, the same effective date as other coworkers. |
• |
Performance
Bonus: The Company’s bonus scale is described in more detail in the Compensation Discussion and Analysis, or “CD&A,”
section of this Proxy Statement under the heading “Cash Incentive Bonuses.” As noted in that section, the Company
achieved 22% depletions growth under Mr. Burwick’s guidance in Fiscal Year 2021, which was below the Company’s projected
growth targets for the year. As described under the “Cash Incentive Bonuses” heading, the Compensation Committee reviewed
Fiscal Year 2021 Company performance against the bonus scale and determined that the Company achieved 4% on the bonus scale, which
would have made Mr. Burwick eligible for a 4% bonus. Regardless, he opted not to be considered for a bonus award for Fiscal Year
2021, but instead asked that the Compensation Committee take any such funds that he would have been eligible for in the bonus
pool and allot those funds to other Company coworkers, not inclusive of other Executive Officers. |
• |
Performance-Based
Stock Option Award: On March 1, 2021, the Company granted Mr. Burwick a performance-based stock option award for a total of
4,446 shares, valued at $2,000,369 on the grant date. As described in more detail in the CD&A section of this Proxy Statement
under the heading “Stock Option Awards,” the option shares have an exercise price of $1,028.71, are contingent upon
net revenue growth in Fiscal Year 2022 over Fiscal Year 2020, have a three-year vesting schedule from March 2023 to March 2025
should the performance criteria be achieved, and are contingent on continued employment on the applicable vesting dates. The stock
option award structure is identical in nature to the stock option awards granted to the other NEOs on March 1, 2021. |
• |
Restricted
Stock Units: On March 1, 2021, the Company granted Mr. Burwick an award of 1,945 Restricted Stock Units (“RSUs”),
valued at $2,000,841 on the grant date. As described in more detail in the CD&A section of this Proxy Statement under the
heading “Restricted Stock Units,” the RSUs vest over a four-year period and are contingent upon continued employment
on the applicable vesting dates. The RSU award structure is identical in nature to the annual RSUs granted to the other NEOs on
March 1, 2021. |
• |
Special
One-Time Equity Awards: Over the course of 2019 and 2020, the Compensation Committee retained Frederic W. Cook &
Co., Inc. (“FW Cook”), an independent executive compensation consulting firm, to review the total compensation of
our Executive Officers compared to executive officers at other similarly sized companies. FW Cook’s analysis determined
that Mr. Burwick’s total target compensation was below the 25th percentile for total target compensation for
chief executive officers at similarly sized companies. The Compensation Committee and the Company’s Chairman and Founder
agreed that based on the Company’s growth rates during Mr. Burwick’s tenure, he should be compensated between the
median and the 75th percentile of the market compared to similarly sized companies. Based on that analysis, the Committee
determined that there was an annual gap of total compensation of approximately $3.6 million, or approximately $18 million over
five years. Rather than significantly increasing Mr. Burwick’s base salary and performance bonus targets, the Compensation
Committee opted to close the gap through moderate cash increases over time and through two special one-time equity awards valued
at approximately $10 million in the aggregate. Accordingly, the Committee approved a special stock option grant (the “Burwick
Option”) and a special RSU grant (the “Burwick RSU”) for Mr. Burwick in addition to his annual grants. The Committee
believes there are several advantages to this strategy, including: (1) aligning CEO compensation with total shareholder return;
(2) providing strong retention incentives; and (3) leveraging the simple-to-understand structure of the company’s existing
equity vehicles. The special awards were disclosed in a Current Report on Form 8-K (a “Form 8-K”) filed with the SEC
on February 12, 2021. |
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• |
Burwick
Option: The Burwick Option was granted on March 1, 2021, for a total of 10,935 shares, valued at $5,000,011 on the grant
date. The Burwick Option has an exercise price of $1,028.71 and will vest 25% on March 1, 2024, 25% on March 1, 2025, and 50%
on March 1, 2026, contingent on continued employment on the applicable vesting dates and subject to accelerated vesting upon the
occurrence of certain specified events. |
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• |
Burwick
RSU: The Burwick RSU was granted on March 1, 2021 for a total of 4,861 restricted share units, valued at $5,000,559 on
the grant date. The Shares will vest 25% on March 1, 2024, 25% on March 1, 2025, and 50% on March 1, 2026, contingent on continued
employment on the applicable vesting dates and subject to accelerated vesting upon the occurrence of certain specified events.
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• |
Other Compensation: “Other Compensation” includes $11,600 in matching contributions to the Company’s 401(k) plan and $1,298 in Company contributions to annual group life insurance, accidental death and dismemberment insurance, and short-term and long-term disability. Mr. Burwick was eligible for the same level and offering of those benefits as other Company coworkers. |
Each of the categories of Mr. Burwick’s compensation
mix are described in detail in the CD&A section of this Proxy Statement under the heading “Compensation of David A. Burwick,
President & Chief Executive Officer.” Included in that discussion are the establishment of Mr. Burwick’s base
salary, his election not to be considered for a performance bonus for 2021, and the grant of his annual and special equity awards,
all of which were approved by the Compensation Committee and the full Board of Directors.
Following the grant of the special one-time equity
awards, the Compensation Committee believes that Mr. Burwick’s compensation package is structured in a way that provides
him with appropriate incentives and rewards for superior performance and increasing stockholder value.
Mr. Burwick’s compensation was a topic of discussion
with stockholders following our 2021 non-binding Say-on-Pay resolution, which received a favorable vote of 98.7% of the votes cast.
Our stockholder outreach and engagement efforts prior to and following that result are discussed in detail under the heading “Stockholder
Engagement” below.
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Other Named Executive Officer 2021 Compensation
Mix
The mix of 2021 potential compensation of our other
Named Executive Officers was also consistent with the goals of our executive compensation program. For example, as shown in the
adjacent chart, variable compensation, in the form of equity awards and performance-based bonus potential, provided approximately
60% of the total potential compensation, in the aggregate, of our other Named Executive Officers.
OTHER NEO TARGET COMPENSATION MIX IN 2021
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The actual compensation paid to each of our Named
Executive Officers in 2021 is discussed in the CD&A. Of the total compensation of our other Named Executive Officers for 2021,
base salary constituted 36% to 40%, performance bonus potential based on 2021 performance constituted 20% to 27%, and equity compensation
constituted 36% to 39%. As further discussed in the CD&A, the Named Executive Officers were eligible to earn a 4% bonus, but
each NEO elected not to be considered for a bonus for Fiscal Year 2021 and instead asked the Compensation Committee to allot any
such funds in the bonus pool to other Company coworkers.
Nominees for
Board of Directors
The nominees for election to our Board of Directors
at the Annual Meeting are identified below. They are being nominated as Class A or Class B Directors, as noted, to serve for a
one-year term ending at the close of the 2023 Annual Meeting. Each has been nominated in accordance with our Articles of Organization,
By-Laws, and Corporate Governance Guidelines. The composition of the proposed Board meets the independence requirements of the New
York Stock Exchange (“NYSE”). As discussed in more detail below, each nominee has extensive business and senior management
experience, and together they collectively represent a group of individuals with diverse skills and experience in the areas that
we consider to be the most critical to our business, including the alcohol beverage industry, marketing and brand development,
operations and supply chain management, finance, sales, corporate governance, entrepreneurship, and general enterprise management.
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Nominees for Class A Director
We recommend that the Class A Stockholders vote “FOR
ALL” nominees.
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MEGHAN V. JOYCE
Age 38
Director since: 2019
INDEPENDENT CLASS A DIRECTOR NOMINEE
Ms. Joyce is Chief Operating
Officer and EVP of Platform for Oscar Health, Inc., a publicly traded technology-focused health insurance company based in New
York, New York, a position she has held since September 2019. In this role, she oversees Oscar’s operations, technology,
marketing, and clinical operations, as well as its technology and services solutions. Prior to that, she worked for Uber Technologies,
Inc., a tech company headquartered in San Francisco, from 2013 to 2019. From 2017 to 2019, she served as Regional General Manager
for Uber US & Canada Cities, responsible for business outcomes and rider and driver experience in communities across the United
States and Canada. Ms. Joyce served as Uber’s East Coast General Manager from 2015 to 2017 and Boston General Manager from
2013 to 2015. Prior to that, she served as a Senior Policy Advisor for the United States Department of the Treasury in Washington,
D.C. from 2011 to 2012. Ms. Joyce previously worked as an investor for Bain Capital and a consultant for Bain & Company. In
August 2021, Ms. Joyce was appointed to the Board of Directors of Guardant Health, Inc., an oncology-focused health company based
in Redwood City, CA. She serves on Guardant’s Audit Committee and Compensation Committee.
Committees:
Nominating/Governance Committee (Chair), Audit Committee
Other
Public Company Directorships: Guardant Health, Inc.
Specific
qualifications and experience of particular relevance to Boston Beer
Ms. Joyce has extensive experience
in business strategy, managing growth, financial modeling, modern consumer recruitment and engagement, digital marketing and implementation
of new technologies, and management and retention of diverse employee groups. She was appointed Chair of our Nominating/Governance
Committee in May 2020 after having served on the Committee since May 2019. She has served on the Audit Committee since May 2019
and served on the Compensation Committee from May 2019 to May 2020. |
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MICHAEL SPILLANE
Age 62
Director since: 2016
INDEPENDENT CLASS A DIRECTOR NOMINEE
Mr. Spillane currently serves
as President of Consumer Creation at Nike, Inc., a publicly traded manufacturer and marketer of athletic footwear, apparel, and
equipment, a position he has held since May 2020. Prior to that, Mr. Spillane held a variety of roles with Nike dating back to
May 2007, including President of Categories and Product from May 2017 to May 2020, President of Product and Merchandising from
April 2016 to May 2017, Vice President and General Manager of Global Footwear from May 2015 to April 2016, and General Manager
and Vice President, Greater China from May 2013 to May 2015. From June 2011 to May 2013, he held the position of Chief Executive
Officer at Umbro International, a Nike subsidiary based in England. From September 2009 to June 2011, Mr. Spillane was the Chief
Executive Officer of Converse, a Nike subsidiary based in Massachusetts. From 2007 to 2009, he held the position of President,
North America and Global Product at Nike. Prior to joining Nike, Mr. Spillane held senior management roles at various apparel and
textile companies, including Malden Mills, Tommy Hilfiger USA, Jockey International, and Missbrenner, Inc.
Committees:
Compensation Committee (Chair), Nominating/Governance Committee
Other Public
Company Directorships: None
Specific
qualifications and experience of particular relevance to Boston Beer
Mr. Spillane has extensive
experience in the marketing of consumer goods, including digital marketing, social media, consumer insight, planning, and merchandising.
He also has significant senior corporate governance experience at consumer goods companies, both public and private. He has served
as Chair of our Compensation Committee since May 2016 and as a member of our Nominating/Governance Committee since May 2018. |
www.bostonbeer.com |
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JEAN-MICHEL VALETTE
Age 61
Director since: 2003; Lead Director since 2013
INDEPENDENT CLASS A DIRECTOR NOMINEE
Mr. Valette currently serves
as an independent advisor to select branded consumer companies. He has been on Boston Beer’s Board of Directors since May
2003. He is also Chairman of the Board of Sleep Number Corporation, a publicly traded sleep technology company based in Minneapolis,
Minnesota. Additionally, he is a director and Audit Committee chairman of Intertek Group plc, a publicly traded global quality
assurance and testing company active across a broad range of sectors and geographies, based in London, England. Until November
2012, he was Chairman of the Board and a member of the Audit and Nominating/Governance Committees of Peet’s Coffee &
Tea Inc., a California-based specialty coffee company. Peet’s went private in 2012; since that time Mr. Valette has served
as a Director and Chairman of its Audit and Valuation Committees. Peet’s parent company, JDE Peet's N.V., went public in
May 2020; Mr. Valette does not serve on that Board. Until October 2006, he was Chairman of Robert Mondavi Winery, a California
wine company. Prior to assuming that position, he had served as President and Managing Director of Robert Mondavi Winery from October
2004 to January 2005.
Committees:
Audit Committee (Chair), Compensation Committee
Other Public
Company Directorships: Sleep Number Corporation, Intertek Group plc
Specific
qualifications and experience of particular relevance to Boston Beer
Mr. Valette has more than thirty
years of experience in management, public company corporate governance, strategic planning, and finance, with extensive experience
in the alcohol beverage industry. He also serves as a director of several private companies. Mr. Valette has served on our Nominating/Governance
Committee since May 2004. He has also served as a member of our Audit Committee since May 2003, and the Committee’s Chair
since January 2019. He served on our Compensation Committee from May 2018 to May 2020. He was named Boston Beer’s Lead Director
in May 2013. |
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Nominees for Class B Director
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DAVID A. BURWICK
Age 60
Director since: 2005
CLASS B DIRECTOR NOMINEE
Mr. Burwick has served on Boston
Beer’s Board of Directors since May 2005 and was appointed President and Chief Executive Officer in April 2018. Prior to
that, he served as President and Chief Executive Officer of Peet’s Coffee & Tea, Inc., a specialty coffee and tea company
based in Emeryville, California, since December 2012. From April 2010 to December 2012, Mr. Burwick served as President, North
America of WW International, Inc., formerly Weight Watchers International, Inc., a leading provider of weight management services
based in New York, New York. Prior to that, Mr. Burwick held numerous positions with PepsiCo, Inc., headquartered in Purchase,
New York, including Chief Marketing Officer, PepsiCo Americas Beverages from August 2008 to August 2009; Executive Vice President,
Marketing, Sales and R&D, PepsiCo International from April 2008 to July 2008; President, Pepsi-QTG Canada from January 2006
to March 2008; Chief Marketing Officer, Pepsi-Cola North America from June 2002 to December 2005; and various marketing roles from
1989 to 2002. In September 2021, Mr. Burwick joined the Board of Directors of Deckers Outdoor Corporation, a publicly traded footwear
designer and distributor based in Goleta, California. He currently serves on Decker’s Compensation Committee.
Committees:
None
Other Public
Company Directorships: Deckers Outdoor Corporation
Specific
qualifications and experience of particular relevance to Boston Beer
Mr. Burwick has extensive experience
leading consumer products organizations. His significant experience in the beverage industry has also been integral in helping
shape our overall brand development strategies during his time on the Company’s Board of Directors. Prior to accepting the
position of President and Chief Executive Officer in April 2018, he served on our Compensation Committee since May 2005, including
as Chair from May 2006 to May 2013, and on our Nominating/Governance Committee since May 2005, including as Chair since May 2013. |
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SAMUEL A. CALAGIONE, III
Age 52
Director since: 2020
CLASS B DIRECTOR NOMINEE
Mr. Calagione is Founder and
Brewer of Dogfish Head Brewery with overall responsibility for managing the Dogfish Head brand and providing insight into all of
the company’s brands. He founded Dogfish Head with his wife Mariah Calagione in June 1995 and served as CEO until the merger
with Boston Beer in July 2019. He joined the Company’s Board of Directors in October 2020. His innovative style has earned
him a James Beard Award for Outstanding Wine, Spirits, or Beer Professional and a reputation as one of the country’s most
adventurous brewers; he has been featured in The Wall Street Journal, USA Today, People, Forbes, Bon Appetit, and many other magazines
and newspapers. He is also the author of five books, including Brewing Up a Business (2011), Off-Centered Leadership (2016), and
The Dogfish Head Book: 25 Off-Centered Years (2021).
Committees:
None
Other Public
Company Directorships: None
Specific
qualifications and experience of particular relevance to Boston Beer
During his twenty-seven years
at the helm of Dogfish Head, he grew the company from a small brewpub in Rehoboth, Delaware to an award-winning nationally-recognized
brand and destination. Mr. Calagione’s skills in brewing, innovation, marketing, consumer engagement, media relations, management,
distributor relations, and entrepreneurship are an invaluable asset to Boston Beer’s leadership team and the Board. |
www.bostonbeer.com |
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CYNTHIA A. FISHER
Age 61
Director since: 2012
CLASS B DIRECTOR NOMINEE
Ms. Fisher is an independent investor and advisor.
She founded WaterRev, LLC, an investment company located in Newton, Massachusetts, focused on innovative technology companies that
enable sustainable practices of water use. Ms. Fisher is Founder and Chairman of PatientRightsAdvocate.org, a nonprofit, non-partisan
organization seeking systemwide healthcare price transparency, empowering American consumers and employers to know actual quality
and prices of care and coverage upfront, creating a functional marketplace in healthcare to lower costs, improve quality, and broaden
affordable access through competition and choice. Ms. Fisher also is a Director of Easterly Government Properties, Inc., a publicly
traded real estate investment trust based in Washington, D.C. In 1992, Ms. Fisher founded ViaCord, Inc., a cord blood stem cell
banking company, and served as its Founder, Chairman, and CEO from 1993 to 2000. In 2000, she co-founded ViaCell, Inc., a cellular
medicines company, and served as President and on the Board of Directors. ViaCell, the successor to ViaCord, went public in 2005
and was subsequently sold to PerkinElmer in 2007. Ms. Fisher also co-founded and is Chairman of Fitmoney.org, which provides curriculum
for K-12 financial literacy. She serves on the board of the National Park Foundation and previously served on the Board of Directors
of Water.org.
Committees:
None
Other Public
Company Directorships: Easterly Government Properties, Inc.
Specific
qualifications and experience of particular relevance to Boston Beer
She brings significant entrepreneurial experience,
as well as insight in business strategy, operations, and consumer marketing to the Board’s overall business perspective.
Ms. Fisher is the spouse of C. James Koch, Boston Beer’s Founder and Chairman. |
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C. JAMES KOCH
Age 72
Director since: 1995
CLASS B DIRECTOR NOMINEE
Jim Koch founded Boston Beer in 1984 and currently
serves as its Chairman. Until January 2001, Mr. Koch also served as the Company’s Chief Executive Officer. Prior to starting
Boston Beer, he had worked as a consultant for an international consulting firm with a focus on manufacturing.
Committees:
None
Other Public
Company Directorships: None
Specific
qualifications and experience of particular relevance to Boston Beer
His thirty-eight years at the helm of Boston Beer,
during which it has grown from a small start-up company to its current position as a leading craft brewer, are a testament to his
skill in brewing, strategy, brand development, and industry leadership. |
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MICHAEL M. LYNTON
Age 62
Director since: 2020
CLASS B DIRECTOR NOMINEE
Mr. Lynton is Chairman of Snap Inc., a social media
and camera technology company based in Santa Monica, California. He has held the position since September 2016 and has served on
the Snap Board of Directors since April 2013. He currently serves on Snap’s Audit, Compensation, and Nominating and Corporate
Governance Committees. Previously, he served as CEO or co-CEO of Sony Entertainment Inc. from April 2012 until February 2017, overseeing
Sony’s global entertainment businesses. He also served as Chairman and CEO of Sony Pictures Entertainment Inc. from January
2004 to May 2017, where he managed the studio’s overall global operations, and as CEO of Sony Corporation of America from
March 2012 to August 2017. Prior to joining Sony, he worked for Time Warner from 2000 to 2004, during which time he served as CEO
of AOL Europe, President of AOL International, and President of Time Warner International. From 1996 to 2000, Mr. Lynton served
as Chairman and CEO of Penguin Group, a publishing company based in New York, New York, and a division of Pearson plc. From 1992
to 1996, he served as President of Disney’s Hollywood Pictures, a division of The Walt Disney Company. Mr. Lynton had joined
The Walt Disney Company in 1987 and started Disney Publishing.
He has served as a member of the Board of Directors
of Ares Management, L.P., a publicly traded alternative asset management company based in Los Angeles, California, since 2014.
He has served as Chairman of Warner Music Group, a multinational record label company based in New York, New York since February
2019. He has served as Chairman of Schrödinger, Inc., an American life sciences and materials science company based in New
York, New York since October 2018. Mr. Lynton also served on the Board of Pearson plc from February 2018 to September 2020, where
he was a member of the Audit and Reputation & Responsibility Committees. He has also served as Chairman of Warner Music Group
Corp., a privately held global entertainment company based in Los Angeles, California, since February 2019. He served as a member
of the Board of Directors of Pandora Media, Inc., a streaming music company based in Oakland, California, from August 2017 until
February 2019. Pandora is a subsidiary of SiriusXM.
Committees:
Compensation Committee, Nominating/Governance Committee
Other
Public Company Directorships: Snap Inc.; Ares Management, L.P.; Warner Music Group Corp.; Schrödinger, Inc.
Specific
qualifications and experience of particular relevance to Boston Beer
Mr. Lynton has more than thirty years of senior-level
management experience, including extensive experience in consumer marketing, traditional and digital media, and the adoption of
new technologies. He also has broad public company governance experience. His significant experience in these areas helps shape
our overall marketing, business, and governance strategies. |
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JULIO N. NEMETH
Age 61
Director since: 2020
CLASS B DIRECTOR NOMINEE
Mr. Nemeth is the Chief Product Supply Officer at
The Procter & Gamble Company, a consumer goods company headquartered in Cincinnati, Ohio, a position he has held since May
2019. He also serves as the Executive Sponsor of the Hispanic Leadership Team and the People with Disabilities Network at P&G.
He has held numerous senior roles with P&G since 1990, including President, Global Business Services from January 2015 to April
2019 and Senior Vice President, Product Supply, Global Operations from July 2013 to December 2014. Prior to his time at P&G,
he served as a Project Engineer for Union Carbide Corporation in Brazil from 1987 to 1990 and as a Design Engineer for Fabirnor
Argentina from 1984 to 1987. He was appointed to Boston Beer’s Board of Directors in January 2020.
Committees:
Audit Committee, Compensation Committee
Other Public
Company Directorships: None
Specific
qualifications and experience of particular relevance to Boston Beer
Mr. Nemeth has more than thirty-five years of operations,
engineering, procurement, manufacturing, customer service, quality, distribution, innovation, and general management experience
in the consumer goods industry, with significant experience in supply chain management. He currently leads P&G’s global
Product Supply organization, which includes 58,000 employees, over 100 manufacturing plants, and roughly 200 distribution centers
around the world focused on bringing superior products to the world’s consumers. |
www.bostonbeer.com |
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Board of
Directors
Board Governance
We are committed to having effective corporate governance
and the highest ethical standards, because we believe that these values support our long-term performance. Our Articles of Organization,
By-Laws, Corporate Governance Guidelines, the charters of the Board’s committees, and our Code of Business Conduct and Ethics
provide the framework of our corporate governance standards. These documents are available on the Governance Documents tab of the
Investor Relations section of our website, www.bostonbeer.com, and are also available in print by request. Requests should be directed
to the attention of Investor Relations, The Boston Beer Company, Inc., One Design Center Place, Suite 850, Boston, Massachusetts
02210.
Director Independence
A majority of our Board of Directors is independent
as determined in accordance with the director independence standards of the NYSE and the SEC. More specifically, all three Class
A Director Nominees – Ms. Joyce, Mr. Spillane, and Mr. Valette – and two of the six Class B Director Nominees –
Mr. Lynton and Mr. Nemeth –have no material relationship with Boston Beer, either directly or indirectly as a partner,
stockholder, or officer of an organization that has a relationship with the Company.
Only independent Directors may serve as members of
our Audit, Compensation, and Nominating/Governance Committees or as Lead Director.
Board Leadership Structure
Since 2001, Boston Beer has separated the roles of
CEO and Chairman. We believe that this strengthens the Company by allowing the CEO to focus on the day-to-day management of the
business and the Chairman to focus on leadership of the Board of Directors, issues of product quality and innovation, overall brand
strategy, production capacity, and supply chain operations. The Chairman continues to be active on a daily basis in our business,
but with more focus in critical areas of the business and outreach, including participation in industry trade associations. Both
the Chairman and the CEO participate fully in deliberations of the Board of Directors.
In May 2013, the non-employee members of the Board
of Directors voted to establish the position of Lead Director and adopted a charter for the position. The non-employee members
of the Board of Directors then appointed Mr. Valette as the Lead Director. The role of the Lead Director is to serve in a leadership
capacity to coordinate the activities of the other non-employee Directors, including but not limited to: (i) presiding at meetings
of the Board in the absence of, or upon the request of, the Chairman; (ii) presiding over all executive session meetings of non-employee
Directors; (iii) reviewing Board agendas and recommending matters for the Board to consider; (iv) serving as a liaison between
Directors and the Chairman and CEO without inhibiting direct communications among the Chairman, CEO, and other Directors; and (v)
advising the Board concerning the retention of advisors and consultants who report directly to the Board.
Executive Sessions of the Board
The Directors meet in executive sessions as part
of each regularly scheduled Board meeting. A portion of each executive session includes the CEO, the Chairman, but not other members
of management. Portions of each executive session include all Directors other than the CEO and, on occasion, include only the independent
Directors and exclude the Chairman, Ms. Fisher and Mr. Calagione, who are not independent. The Lead Director leads these sessions
and reports back to the Chairman and the CEO regarding these executive session discussions. More recently, the Chair of the Nominating/Governance
Committee has joined the Lead Director in reporting back to the Chairman and the CEO. The independent Directors met formally in
executive sessions four times during Fiscal Year 2021.
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Board Risk Oversight
The Board as a whole has ultimate responsibility
for risk oversight. It exercises this oversight function through its standing committees, each of which has primary risk oversight
accountability with respect to all matters within the scope of its responsibilities, as set forth in its charter. As further described
below under the headings “Audit Committee”, “Compensation Committee”, and “Nominating/Governance
Committee”, the Audit Committee and management regularly discuss Boston Beer’s risk assessment and risk management
programs and processes, the Compensation Committee reviews the risks associated with our compensation practices, and the Nominating/Governance
Committee reviews risks associated with our governance practices.
Board Meetings and Attendance
We believe that all members of the Board of Directors
should attend and actively participate in meetings of the Board and of its committees. Directors are also strongly encouraged to
attend the annual meetings of stockholders.
During Fiscal Year 2021, there were four regular
meetings and one special telephonic meetings of the Board of Directors. Each Director attended at least 75% of the aggregate of
the meetings of the Board of Directors and the meetings of the committees on which they served, during the period for which they
served as a director. All Directors also attended the 2021 Annual Meeting of Stockholders, which was held virtually on May 19,
2021.
Communications with the Board
Stockholders and other interested parties may communicate
with the Board of Directors or any individual Director by submitting an email to the Company’s Board at bod@bostonbeer.com.
Communications that are intended specifically for the independent Directors should be sent to the email address above to the attention
of the Lead Director.
Board Committees
Committee Structure
There are three standing committees of the Board
of Directors: the Audit Committee, the Compensation Committee, and the Nominating/ Governance Committee. The membership of these
committees is limited to independent Directors. Membership of the committees as of the mailing of this Proxy Statement is outlined
in the below chart.
Director |
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Audit |
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Compensation |
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Nom/Gov |
Meghan V. Joyce |
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Chair |
Michael M. Lynton |
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Julio N. Nemeth |
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Michael Spillane |
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Chair |
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Jean-Michel Valette |
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Chair |
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Committee assignments to take effect immediately
following the 2022 Annual Meeting of Stockholders will be determined by the Nominating/Governance Committee at that time. Mr. Burwick,
Mr. Calagione, Ms. Fisher, and Mr. Koch are not independent Directors and therefore are not eligible to serve on any of the Board’s
committees.
Each of the committees operates under a written charter
adopted by the Board, reviews its charter annually, and makes recommendations for revisions to the Board as appropriate. Additionally,
each year the Nominating/Governance Committee formally reviews its performance as well as the adequacy of our Corporate Governance
Guidelines, recommending any necessary changes to the full Board for approval. The Nominating/ Governance Committee also oversees
the annual self-evaluation process for the full Board and each of the standing committees. Copies of the Corporate Governance Guidelines
and respective charters, as amended and currently in effect, are available on the Governance Documents tab of the Investor Relations
section of our website, www.bostonbeer.com. The function of each committee is described below.
www.bostonbeer.com |
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Audit Committee
In accordance with its charter,
the Audit Committee assists the Board in fulfilling its responsibility to oversee management’s conduct of Boston Beer’s
financial reporting process, including overseeing the financial reports and other financial information provided by the Company’s
internal accounting and financial control systems and the annual independent audit of the Company’s financial statements.
The Audit Committee also appoints, evaluates, and determines the compensation of the Company’s independent registered public
accounting firm; reviews and approves the scope of the annual audits of the Company’s financial statements and its internal
controls over financial reporting; pre-approves all other audit and non-audit services provided to the Company by the independent
auditors; reviews the Company’s disclosure controls and procedures; reviews other risks that may have a significant impact
on the Company’s financial statements; and is responsible for oversight of the Company’s response to the COVID-19 pandemic.
Each year, the Audit Committee issues an annual report for inclusion in the Proxy Statement in cooperation with the Corporate Secretary.
The Audit Committee is also
responsible for the oversight of operational, governance, and other risks that could adversely affect Boston Beer’s business
such as business continuity and cybersecurity. To fulfill these oversight responsibilities, at each of its regular meetings, the
Audit Committee reviews and discusses potential material risks to the Company with Boston Beer’s Director of Internal Audit
and with representatives of the Company’s independent registered public accounting firm. During those meetings, the Audit
Committee also asks for and receives regular updates on steps taken to address those risks. Areas of focus in 2021 included contract
production, supply chain management, production capacity, inventory, project prioritization, business continuity, cybersecurity,
brand reputation, talent acquisition, culture, corporate sustainability, and COVID-19 response. The Audit Committee reports any
risks that it believes could have a material adverse impact on the Company to the full Board.
The Audit Committee also
reviews and approves Rule 10b5-1 Plans related to the Company’s repurchase of its shares of Class A Common Stock (“Class
A Shares”). In the event that an Audit Committee member has an individual Rule 10b5-1 Plan in place or the intent to sell
Boston Beer stock during a corresponding time period, that member recuses themselves from discussions regarding the pricing parameters
under the proposed Company 10b5-1 Plan.
The Board has determined
that two current members of the Audit Committee, independent Directors Ms. Joyce and Mr. Valette, are “audit committee financial
experts” as defined under SEC rules. The Audit Committee met four times in 2021. The Chairman, CEO, CFO, and Chief Accounting
Officer attended each of the meetings but recused themselves when the Audit Committee met in executive sessions with the Director
of Internal Audit or with representatives of the Company’s independent registered public accounting firm.
The Audit Committee Report
is included in the Audit Information section of this Proxy Statement.
Compensation Committee
The Compensation Committee’s
responsibility is to carry out the Board’s oversight of the compensation of our Directors and Executive Officers by evaluating
and approving the Company’s compensation programs and policies for those positions. The Compensation Committee provides general
oversight of our compensation structure, including the Company’s equity compensation plans; reviews and makes recommendations
to the Board concerning policies or guidelines with respect to compensatory arrangements involving Directors and Executive Officers
and their respective participation in the Company’s equity plans; reviews and approves Company goals and objectives relevant
to the compensation of the Chairman, CEO, and other Executive Officers; evaluates performance against those goals; approves cash
bonuses and sets salaries for the Chairman, CEO, and other Executive Officers, and determines the total compensation level and
mix for the Chairman, CEO, and other Executive Officers.
In cooperation with the independent
Directors, members of the Compensation Committee perform regular evaluations of the performance of the Chairman and the CEO, including
obtaining feedback from other Executive Officers and a select group of senior managers.
The Compensation Committee
also considers areas of risk that may arise from Boston Beer’s compensation practices, not only relating to Executive Officer
compensation, but with respect to the Company’s overall compensation practices. In carrying out its responsibilities, the
Compensation Committee reports to the full Board on a regular basis. In cooperation with the Corporate Secretary, the Compensation
Committee also issues an annual report and approves the CD&A for inclusion in the Company’s proxy statement.
During Fiscal Year 2021,
there were three regular meetings of the Compensation Committee.
In 2020, The Compensation
Committee retained FW Cook, a nationally recognized executive compensation consulting firm, to provide competitive compensation
information and analysis for our Executive Officers as compared to other similarly sized companies. As part of this retention,
FW Cook prepared recommendations regarding Mr. Burwick’s compensation. Those recommendations resulted in the Committee approving
certain changes to Mr. Burwick’s compensation structure in 2021, all of which are outlined in a Form 8-K filed with the SEC
on February 12, 2021 and further detailed in the CD&A under the heading “Compensation of David A. Burwick, President &
Chief Executive Officer.”
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The Compensation Committee
is also responsible for providing guidance to the full Board of Directors and management on topics such as people and culture,
development and training, succession planning, coworker engagement, and diversity, equity, and inclusion. The Company’s approach
to these topics is discussed in detail under the heading “Environmental, Social, and Governance” below.
Nominating/Governance Committee
The Nominating/Governance
Committee assists the Board by recommending nominees for election as Directors and nominees for each Board committee, evaluating
the Board’s leadership structure, developing and recommending to the Board a set of corporate governance principles, overseeing
an annual evaluation of the Board, and planning for Board succession.
The Committee, acting independently,
but also in concert with Mr. Koch, who holds the voting rights to all shares of Class B Common Stock (“Class B Shares”),
which entitle him to elect a majority of Board members under our By-Laws, regularly assesses the size and composition of the Board,
including the experience, qualifications, attributes, and skills represented by current Board members and those that could enhance
the overall breadth and strength of the Board. In order to help ensure the adequacy of our corporate governance policies, the Committee
also reviews Director independence and any potential conflicts of interest; examines and discusses the analyses of Boston Beer’s
corporate governance standards by proxy advisory firms; considers votes cast by stockholders; reviews communications with stockholders;
and makes recommendations to management and/or the Board for improvements.
The Committee is also responsible
for providing guidance to management on the Company’s social responsibility, and sustainability efforts. The Company’s
approach to these topics is discussed in detail under the headings “Environmental, Social, and Governance” below.
During Fiscal Year 2021,
there were four regular meetings of the Nominating/Governance Committee.
Consideration of Nominees for Director
The Nominating/Governance
Committee employs a variety of methods for identifying and evaluating nominees for Director. The Nominating/Governance Committee
identifies those attributes, qualifications, skills, and experiences that its members believe should be reflected on the Board
as a whole. The Nominating/Governance Committee also reviews the characteristics of the then-current Board and seeks to identify
any particular perceived weakness or imbalance. In doing so, the Nominating/Governance Committee takes into consideration the results
of skills gap analyses and the annual self-assessments performed by the Board and each of the standing committees and seeks input
from the other Directors on opportunities to strengthen the Board. The Nominating/ Governance Committee also meets with Mr. Koch
as the holder of all voting rights to the Class B Shares.
Candidates may come to the
attention of the Nominating/ Governance Committee through a number of sources, including current Board members, professional search
firms, stockholders, or other persons. Candidates are evaluated by the Nominating/ Governance Committee and may be considered at
any point during the year.
The Nominating/Governance
Committee has discussed the issue of term limits and concluded that establishing formal term limits for Directors is not in the
best interests of the Company at this time. The Committee has noted that a majority of the current Directors have served for five
or fewer years, with four Directors joining the Board in 2019 or 2020, reflecting a healthy level of turnover. The Committee believes
that any additional benefit of bringing “fresh eyes” to the Board would create a potential disadvantage of losing valuable
contributions by Directors who have developed expansive knowledge of the Company and its operations, which the Committee believes
has historically resulted in a higher level of overall Board effectiveness. The Nominating/Governance Committee uses the Board’s
annual self-evaluation process and regularly discusses on the topic of term limits to ensure that this policy and the Board are
properly serving the Company.
The Nominating/Governance
Committee considers diversity to be a critical factor in selecting Director nominees, and remains committed to providing equal
opportunities for all Directors, nominees, and qualified candidates regardless of race, color, religion, creed, gender, gender
identity, sexual orientation, marital status, national origin, ancestry, age, disability, pregnancy, military service status or
any other characteristic protected by state or federal law or local ordinance. The Nominating/Governance Committee views diversity
broadly, taking gender, ethnicity, experience, skills, judgment, differences of viewpoint, location, education, and professional
and industry experience into account, all in the context of the perceived needs of the Board at the relevant time. The Board believes
that a diversity of perspectives results in more thoughtful deliberations. Additionally, as discussed in more detail under the
heading “Environmental, Social, and Governance” below, the Board believes that it is important that the composition
of the Board, the Company’s Executive Leadership Team (“ELT”), and the Company’s coworker base represent
the Company’s current and potential consumer base in the areas where we market and sell our products.
Since April 2018, the Nominating/Governance
Committee has identified and recommended nominees to fill three Director vacancies. Upon commencing its search to fill the initial
vacancy, the Committee believed that it was critical to focus
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on a candidate who would
bring specific experience in modern consumer recruitment and engagement, with a perspective believed to be different from that
then prevalent on the Board. More specifically, the Committee asked its external search firm to place a heavy emphasis on the nomination
of a candidate who would bring such a diverse perspective to the Board. While the firm brought forth an array of well-qualified
candidates, the Committee did not believe that an ideal fit existed among that initial pool of candidates. The Committee challenged
the search firm to present only candidates who would add to the Board’s diversity in the subsequent round. The Committee
believes that this challenge resulted in the firm thinking “outside the box,” which resulted in another array of even-more
qualified candidates. After a nearly yearlong search, the Committee filled the Class A Director vacancy by appointing Ms. Joyce
to the Board as a Class A Director in March 2019. As the Committee anticipated, Ms. Joyce’s significant experience in business
strategy, managing growth, modern consumer recruitment and engagement, digital marketing, and new technologies has broadened the
Board’s overall business perspective and diversity. The Board also believes that Ms. Joyce’s generational diversity
provides additional perspective to boardroom discussions.
For the second vacancy, the
Committee sought a candidate who would bring a new perspective on the supply chain management challenges facing the Company. Following
another yearlong search, the Board appointed Mr. Nemeth as a Class B Director. As the Committee expected, Mr. Nemeth immediately
became an integral asset to the Board, both due to his background and his thirty-five years of operations and supply chain management.
For example, Mr. Nemeth visited our Pennsylvania brewery and met with our operations team in March 2020 to provide invaluable insights
learned from his experience dealing with the COVID-19 pandemic at P&G’s operational facilities in China. Since that time,
he has continued to provide invaluable guidance to our supply chain operations team.
After yet another search,
the Committee nominated Mr. Lynton to fill the third vacancy. When commencing the search to fill this vacancy, the Committee sought
to find a candidate with significant experience in governance leadership, consumer marketing, traditional and digital media, and
the adoption of new technologies. Mr. Lynton was appointed to the Board in October 2020 and has proven to be an asset in the boardroom,
particularly due to his background and extensive board experience in the areas of corporate governance and strategic planning.
Stockholder Nominees
The policy of the Nominating/Governance
Committee is to consider properly submitted stockholder nominations for candidates for membership on the Board, as described in
the above section. The same process is used for evaluating a director candidate submitted by a stockholder as is used in the case
of any other potential nominee. Any stockholder nominations proposed for consideration by the Nominating/Governance Committee should
include the nominee’s name and qualifications for Board membership and should be addressed to:
Chair, Nominating/Governance Committee
c/o Corporate Secretary
The Boston Beer Company, Inc.
One Design Center Place, Suite 850
Boston, Massachusetts 02210
If Boston Beer receives a
communication from a stockholder nominating a candidate that is not submitted as described above, it will forward such communication
to the Chair of the Nominating/Governance Committee.
Stockholder Engagement
We believe it is crucial
to engage actively with and receive feedback from our non-affiliated stockholders, particularly as it relates to matters of corporate
governance, executive compensation, social responsibility, and other topics of importance to them. In recent years, we have reached
out to our top stockholders to attempt to receive this type of feedback.
Since May 2018, we have generally
reached out to our top institutional stockholders in May and September each year. Following that outreach, we hold in-person, telephonic,
or video meetings with representatives from these stockholders. On the Boston Beer side, we generally make available for such meetings
a director, an executive officer, our Corporate Secretary, and occasionally a subject matter expert. Topics of discussion range
broadly, but often largely focus on executive compensation and environment, social, and governance (“ESG”) issues.
Material non-public information such as undisclosed company performance is not discussed. Summaries of these discussions are then
shared with our Nominating/Governance Committee and/or the full Board of Directors.
In May 2021, the Company
continued its stockholder outreach, reaching out to its top fifteen institutional stockholders, who then held approximately 60.4%
of the Company’s outstanding Class A Shares. In September 2021, we reached out to our top twenty institutional stockholders,
who then held approximately 66.5% of the Company’s outstanding Class A Shares. Over the course of 2021, we held eight virtual
meetings with stockholders, covering
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topics such as executive
compensation, diversity, human capital, sustainability, ESG disclosure, and the annual stockholder’s meeting. The results
were reported to the Nominating Governance Committee. The feedback we received, and our responses thereto included:
• |
Board oversight of ESG. A majority
of stockholders expressed the desire to discuss ESG, particularly the Board’s approach to oversight of ESG topics such
as diversity, equity, and inclusion, succession planning and talent management, environment and sustainability, culture, social
responsibility, and the Company’s response to the COVID-19 pandemic. More specifically, many stockholders suggested
that the Company formally assign oversight of these topics to the Board or its standing committees. Partially as a result
of the feedback received at stockholder meetings in recent years, it was determined in 2021 that the full Board is responsible
for oversight of succession planning and talent management; the Compensation Committee is responsible for the oversight of
diversity, equity, and inclusion and other human capital issues; the Audit Committee, reporting to the full Board, is responsible
for oversight of the Company’s COVID-19 response; and that the Nominating/Governance Committee is responsible for oversight
of the Company’s efforts in the areas of environment, sustainability, and social responsibility. |
• |
ESG Disclosures. While nearly all stockholders
we spoke with indicated that they were pleased with the progress we made in our 2021 Proxy Statement with respect to ESG disclosures,
they also indicated a preference for even further expanded reporting in the future, such as “standalone” reporting
outside of the proxy statement, including quantifiable data as available, on topics such as diversity, water usage, energy
usage, emissions, recycling, safety, workforce culture and engagement, and social impact initiatives. In response to these
discussions, in August 2021 we commenced a search for a vendor to complete a materiality assessment of the Company’s
ESG efforts and progress. As discussed in more detail in the Environmental, Social, and Governance section of this Proxy Statement,
the project was kicked off in January 2022 with the goal of determining which metrics are the most important to the Company’s
Board, management, workforce, stockholders, potential job seekers, and the community at large. Ultimately the Company aspires
to move towards standalone ESG reporting. |
• |
Diversity, Equity, and Inclusion. Almost all stockholders
indicated that diversity is vital in the makeup of boards and management teams. The stockholders also relayed that Boards
and management teams should seek to represent the company’s coworkers and customer base. We agree with this premise.
In each of the stockholder meetings in 2021, the Company shared the Company’s ongoing efforts towards progress in these
areas, which efforts are outlined in more detail under the headings “Consideration of Nominees for Director” above
and “Diversity, Equity, and Inclusion” below. |
• |
Succession Planning and Talent Management. In recent
years, stockholders have relayed their belief that CEO and executive succession planning should be a regular agenda item on
the annual Board calendar. Since Mr. Burwick joined as CEO in 2018, we have improved our focus on internal executive succession
planning, holding discussions and meetings on the topic annually. The Company’s succession planning efforts are discussed
in more detail below under the heading “Succession Planning.” |
• |
Sustainability. Almost all stockholders relayed
a general preference that boards have regular conversations with management about sustainable practices, especially when it
is beneficial to the company’s bottom line over the long term. The Company’s ongoing sustainability efforts
are discussed in more detail below under the heading “Sustainability.” |
• |
Culture. Several stockholders discussed culture
as a vital retention and recruiting tool in today’s employment environment and expressed the belief that boards should
be discussing culture with management regularly. In response, we discussed the Company’s historical and ongoing efforts
related to culture, which are outlined in more detail under the headings “People” and “Culture” below.
The Company firmly believes that its culture is an area of strength. |
• |
CEO Compensation. The stockholders we met with
in 2020 and 2021 did not express material concerns with the Company’s executive compensation structure. However, we
recognize that in the past stockholders have expressed concerns about significant one-time equity grants awarded to executive
officers -- such as the Burwick Option and Burwick RSU granted to the CEO in 2021. The Compensation Committee considered
the feedback from stockholders when granting those awards and implementing its compensation practices and procedures. As discussed
in more detail under the heading “Compensation of David A. Burwick, President & Chief Executive Officer”,
the purpose of those grants was to bring Mr. Burwick’s total target compensation from below the 25th percentile
for total target compensation for chief executive officers at similarly-sized companies to between the median and the 75th
percentile of the market compared to similarly-sized companies – a gap determined to be approximately $18 million
over five years by an independent executive compensation consulting firm. Rather than significantly increasing Mr. Burwick’s
cash compensation, the Compensation Committee opted to attempt to close that gap through moderate cash increases over time
and through those two special one-time equity awards valued at approximately $10 million in the aggregate. The Committee believes
there are several advantages to this strategy, including: (1) aligning CEO compensation with total shareholder return; (2)
providing strong retention incentives; and (3) leveraging the simple-to-understand structure of the company’s existing
equity vehicles. |
At the 2022 Annual Meeting,
we will hold an advisory Say-on-Pay vote on the compensation of our Named Executive Officers, as we have done on an annual basis
since 2011. The Compensation Committee will continue to consider the results of these advisory votes, as well as the valued feedback
of stockholders, in evaluating our executive compensation and other policies.
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Board Review of Related Party Transactions
Under our Code of Business
Conduct and Ethics, our Directors, Executive Officers, and other coworkers are required to report any proposed related party transactions
to our General Counsel’s Office, who will bring those concerns to the attention of the Audit Committee.
In 2017, the Board of Directors
adopted a written Related Party Transactions Policy on the recommendation of the Audit Committee. The policy is intended to
enable the Audit Committee to consider the approval and reporting of transactions between the Company and any of its Directors,
Director Nominees, Executive Officers, or 5% Stockholders, or certain entities or persons related to them (each, a “Related
Party”). The policy requires Directors, Director Nominees, and Executive Officers to report any potential material related
party transaction between the Company on one hand and a Related Party on the other hand to the Company’s General Counsel,
who will in turn refer the transaction to the Audit Committee for review. In considering whether to approve the transaction, the
Audit Committee will weigh a number of factors, including but not limited to: (i) whether the terms of the transaction are fair
to the Company and would be acceptable if the same transaction did not involve a Related Party; (ii) the nature of alternative
transactions; (iii) Director independence; (iv) timely compliance with the approval process; (v) the potential for conflicts of
interest; and (vi) the size and ongoing nature of the proposed transaction.
Since January 1, 2021, we
have not entered into any material transaction with any Related Parties, nor do we currently have any proposed transactions in
which Boston Beer is or was a participant and in which any such Related Party had or will have a direct or indirect material interest.
However, as outlined below, in prior years we have entered into material agreements with Related Parties, some of which remained
active agreements in 2021.
Mr. Calagione’s wife,
Mariah Calagione (“Ms. Calagione”) is a coworker and at-will employee at Boston Beer. In accordance with her employment
agreement dated July 3, 2019, Ms. Calagione received total compensation of $220,335 in 2021, which included $217,835 earned in
base salary and $2,500 in bonus for services provided in 2021, which bonus was paid in March 2022. She did not receive any equity
awards in 2021, and was eligible for the same benefits as other coworkers. In 2022, her base salary is $224,545.
Mr. and Ms. Calagione own
Red Wagon LLC, which owns the land on which two Company-owned retail establishments in Delaware are located. The Company is party
to two leases with Red Wagon LLC for these premises. Both leases commenced on July 1, 2019 with an expiration date of June 30,
2029. The combined monthly rent for the two leases is $29,043. The total amount paid by the Company to Red Wagon LLC in 2021 under
these lease agreements was $348,516.
Mr. and Ms. Calagione also
own Super Suite, LLC, which owns property and a cottage in Lewes, Delaware, near the Company-owned Dogfish Inn. The cottage is
rented out to the public in a similar fashion as a hotel suite. The Company is party to a property management services agreement
with Super Suite, LLC, under which the Dogfish Inn manages reservations and cleaning, and coordinates maintenance of the cottage.
The agreement commenced on June 11, 2018 and runs for a term of one year, automatically renewable for subsequent one-year terms.
There is no set fee for the services, but the Company retains 40% of the revenue from the rental of the cottage and passes 60%
of the revenue, less expenses paid, to Super Suite, LLC. The total amount paid by the Company to Super Suite, LLC in 2021 was approximately
$43,00.
Ms. Calagione is a part owner
of Loblolly LLC, which owns property in Milton, Delaware that includes an advertising billboard structure. The Company is a party
to an outdoor advertising agreement, whereby it rents advertising space on the billboard for $1,352 per month. The agreement has
an effective date of October 1, 2019 and a termination date of September 30, 2022. The total amount paid by the Company to Loblolly
LLC in 2021 was less than $16,000.
All related party transactions
were disclosed to, reviewed by, and approved by the Company’s Audit Committee and Board of Directors prior to the completion
of the Company’s merger with Dogfish Head. The Board believes that payments under each of these agreements represent fair
market value for the respective services or property received, and that for each transaction the financial and other terms are
comparable to what the Company would have obtained in a negotiated arm’s-length transaction with an unrelated third party.
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Director Compensation
Compensation Summary
A summary of the elements of compensation for
non-employee Directors is set forth below:
Applies
to |
|
Payment
For |
|
Compensation |
|
Payable |
All Non-Employee Directors |
|
One-time Award |
|
Option for shares of Class A Common
Stock valued at approximately $115,000 as of the date
of grant |
|
Upon first-time election or appointment to the
Board |
All Non-Employee Directors |
|
Annual Award |
|
Option for shares of Class A Common Stock
valued at approximately $115,000 as of the date
of grant |
|
Upon each election to the Board |
All Non-Employee Directors |
|
Annual Retainer |
|
$30,000 |
|
Upon election to the Board |
Lead Director |
|
Annual Retainer |
|
$10,000 |
|
Upon appointment |
Chair, Audit Committee |
|
Annual Retainer |
|
$15,000 |
|
Upon appointment |
Chair, Compensation Committee |
|
Annual Retainer |
|
$10,000 |
|
Upon appointment |
Chair, Nominating/Governance Committee |
|
Annual Retainer |
|
$9,000 |
|
Upon appointment |
Members of Audit Committee (other than
Chair) |
|
Annual Retainer |
|
$10,000 |
|
Upon appointment to the Audit Committee |
Members of Other Standing Committees (other
than Chair) |
|
Annual Retainer |
|
$2,000 |
|
Upon appointment to a standing committee other
than the Audit Committee |
All option awards to non-employee
Directors are granted under our Restated 1996 Stock Option Plan for Non-Employee Directors, or the “Director Option Plan.”
As provided in the Director Option Plan, options carry an exercise price equal to the closing price on the last trading day prior
to the grant date, are immediately fully vested, and expire ten (10) years after the date of grant or three (3) years after the
grantee ceases to be a Director of the Company, whichever occurs sooner. The number of Class A Shares registered under the Director
Option Plan is 550,000 shares, with 61,592 remaining shares available for issuance as of the end of the 2021 Fiscal Year. The number
of shares of Class A Common Stock granted under each option is the greatest number of whole shares that results in a value of $115,000
as computed using the trinomial option-pricing model and the closing price on the last trading day prior to the grant date as the
fair market value of the underlying shares.
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Director Compensation for Fiscal Year 2021
The following table sets forth certain information
concerning the 2021 compensation of our non-employee Directors.
Name | |
Fees Earned or Paid in Cash | |
Option
Awards | (1)(2) |
Total |
Cynthia A. Fisher | |
$ | 30,000 | |
$ | 114,906 | |
$ | 144,906 |
Michael M. Lynton | |
$ | 34,000 | |
$ | 114,906 | |
$ | 148,906 |
Meghan V. Joyce | |
$ | 49,000 | |
$ | 114,906 | |
$ | 163,906 |
Julio N. Nemeth | |
$ | 42,000 | |
$ | 114,906 | |
$ | 156,906 |
Michael Spillane | |
$ | 42,000 | |
$ | 114,906 | |
$ | 156,906 |
Jean-Michel Valette | |
$ | 57,000 | |
$ | 114,906 | |
$ | 171,906 |
(1) |
Reflects the dollar amount of the aggregate
grant date fair value of awards granted during Fiscal Year 2020, as computed in accordance with Accounting Standards Codification
718, Compensation-Stock Compensation (“ASC 718”). The methods and assumptions used in valuing the stock option
awards in accordance with ASC 718 are described in the audited financial statements for Fiscal Year 2021 included in Boston
Beer’s Annual Report on Form 10-K filed with the SEC on February 22, 2022. |
(2) |
On May 19, 2021, upon election to the Board of Directors,
each non-employee Director was granted an option under the Director Option Plan to purchase 237 Class A Shares at an exercise
price of $1,061.71, the closing price on the last trading day before the grant date. All options are fully vested as of the
grant date. As of the end of the 2021 Fiscal Year, the aggregate number of shares subject to stock options held by non-employee
Directors is shown below: |
|
Name | |
Number
of Option Shares |
|
Cynthia A. Fisher | |
| 8,181 |
|
Michael M. Lynton | |
| 769 |
|
Meghan V. Joyce | |
| 2,448 |
|
Julio N. Nemeth | |
| 1,795 |
|
Michael Spillane | |
| 7,438 |
|
Jean-Michel
Valette | |
| 3,560 |
The following table sets
forth certain information concerning the 2021 compensation of our employee Directors, except for Mr. Burwick. Information regarding
the compensation of Mr. Burwick, who is an NEO, may be found under the CD&A and Executive Compensation sections of this Proxy
Statement.
Name | |
Base Salary | |
2021 Bonus Paid in 2022 | |
All
Other Compensation(1) | |
Total |
Samuel A. Calagione, III | |
$ | 450,434 | |
$ | 0 | |
$ | 12,898 | |
$ | 463,332 |
C. James Koch | |
$ | 450,434 | |
$ | 0 | |
$ | 12,898 | |
$ | 463,332 |
(1) |
Includes annual group life insurance premium,
short-term and long-term disability, Company matching contributions under the Company’s 401(k) plan paid in the respective
year, Company health savings contributions under the Company’s medical plan paid in the respective year. |
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Executive Officers
Information about our Executive
Officers is set forth below. Our Executive Officers are elected annually by the Board of Directors, or upon joining Boston Beer
at other times during the year, and hold office until their successors are elected and qualified or until their earlier resignation
or removal.
C. James Koch, 72,
currently serves as our Chairman. Mr. Koch founded Boston Beer in 1984 and was our Chief Executive Officer from that time until
January 2001.
David A. Burwick,
60, has served on Boston Beer’s Board of Directors since May 2005 and was appointed President and Chief Executive Officer
in April 2018. Prior to that, he served as President and Chief Executive Officer of Peet’s Coffee & Tea, Inc., a
specialty coffee and tea company based in Emeryville, California, since December 2012. From April 2010 to December 2012, Mr. Burwick
served as President, North America of WW International, Inc., formerly Weight Watchers International, Inc., a leading provider
of weight management services based in New York City. Prior to that, Mr. Burwick held numerous positions with PepsiCo, Inc., headquartered
in Purchase, New York, including Chief Marketing Officer, PepsiCo Americas Beverages from August 2008 to August 2009; Executive
Vice President, Marketing, Sales and R&D, PepsiCo International from April 2008 to July 2008; President, Pepsi-QTG Canada from
January 2006 to March 2008; Chief Marketing Officer, Pepsi-Cola North America from June 2002 to December 2005; and various marketing
roles from 1989 to 2002. In September 2021, Mr. Burwick joined the Board of Directors of Deckers Outdoor Corporation, a publicly
traded footwear designer and distributor based in Goleta, California. He currently serves on Decker’s Compensation Committee.
Samuel A. Calagione, III,
52, is Founder and Brewer of Dogfish Head Brewery with overall responsibility for managing the Dogfish Head brand and providing
insight into all of the company’s brands. He founded Dogfish Head with his wife Mariah Calagione in June 1995 and served
as CEO until the merger with Boston Beer in July 2019. He joined the Company’s Board of Directors in October 2020. His innovative
style has earned him a James Beard Award for Outstanding Wine, Spirits, or Beer Professional and a reputation as one of the country’s
most adventurous brewers; he has been featured in The Wall Street Journal, USA Today, People, Forbes, Bon Appetit, and many other
magazines and newspapers. He is also the author of five books, including Brewing Up a Business (2011), Off-Centered Leadership
(2016), and The Dogfish Head Book: 25 Off-Centered Years (2021).
John C. Geist, 62,
was appointed Boston Beer’s Chief Sales Officer in January 2016, after serving as our Vice President of Sales from 2007 to
2015 and National Sales Manager from 1998 to 2007. Mr. Geist joined the Company in 1997 from a large alcohol beverage distributor
where he had been a sales manager.
David L. Grinnell,
64, was appointed Boston Beer’s Vice President, Brewing effective January 2008, after serving as the Company’s Director
of Quality and Brewing since 2001. Mr. Grinnell joined Boston Beer in 1988 from New Amsterdam Brewing Company, where he was a founding
member.
Tara L. Heath, 47,
was appointed Vice President, Legal & Deputy General Counsel of Boston Beer in July 2016. She joined the Company in 1997
and has held various positions during that time, including Senior Corporate Counsel, Director of Regulatory Affairs from 2013 to
2016 and Senior Manager & Attorney for Regulatory Affairs from 2009 to 2013.
Lesya Lysyj, 59, joined
the Company as Chief Marketing Officer in April 2019. Ms. Lysyj has over 30 years of marketing experience in the food and beverage
industry. Prior to joining Boston Beer, she served as President U.S. (Sales and Marketing) for Welch’s Foods, based in Concord,
Massachusetts from September 2017 to April 2019. From 2013 to 2015, she served as President North America of Weight Watchers International.
She was Chief Marketing Officer for Heineken USA, headquartered in New York City, from 2011 to 2013. Prior to that, she held a
number of positions with Kraft Foods from 1990 to 2011, including positions as Vice President Marketing, Confectionary and Executive
Vice President of Marketing, Cadbury.
Matthew D. Murphy,
53, was appointed Chief Accounting Officer of Boston Beer in August 2015. Prior to the appointment, Mr. Murphy held the position
of Corporate Controller at Boston Beer since September 2006. Prior to joining Boston Beer, he was Chief Financial Officer of Opodo,
a leading European online travel agency, from 2004 to 2006.
Carolyn L. O’Boyle,
43, joined the Company as Chief People Officer in March 2020. She has extensive experience in talent strategy and operations, including
expertise in recruiting, total rewards, operational transformation, immigration, people analytics, business partners, and shared
services. Prior to joining Boston Beer, she was a Managing Director at Deloitte Services LP in Boston, MA from August 2013 to February
2020, serving as the National Managing Director for Talent Operations and Chief Operating Officer for Talent. Prior to that, she
served in various senior roles at Deloitte from September 2005 to August 2013, and as an Operations Manager at Diageo North America,
a wine and spirits company based in Norwalk, CT, in 2004.
Frank H. Smalla, 56,
was named Treasurer and Chief Financial Officer of Boston Beer in February 2016, after serving in the interim position of Senior
Vice President, Finance in January 2016. Mr. Smalla previously worked in various senior financial roles for Kraft Foods Group,
Inc. of Northfield, Illinois from 1995 through 2015, most recently as Senior Vice President, Finance of U.S. Business Units, U.S.
Sales, Integrated Supply Chain, RDQ and Marketing Services. He held the positions of Senior Vice President of Finance from 2012
to 2015 and Vice President of Finance from 2010 to 2012. Mr. Smalla is also an independent director of G&L Holdings, Inc.,
a privately held holding company of leading food ingredient manufacturers based in Rome, GA.
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Compensation Discussion
and Analysis
In this section of the Proxy
Statement, which we sometimes refer to as the CD&A, we will describe the important components of our executive compensation
program for our Named Executive Officers. In 2021, our Named Executive Officers were:
DAVID A. BURWICK |
President and Chief Executive Officer |
FRANK H. SMALLA |
Treasurer and Chief Financial Officer |
JOHN C. GEIST |
Chief Sales Officer |
QUINCY B. TROUPE |
Senior Vice President, Supply Chain |
LESYA LYSYJ |
Chief Marketing Officer |
Mr. Troupe stepped down from
his position with the Company effective as of April 1, 2022. In addition to providing an overview of our executive compensation
program, this section also explains how the Compensation Committee determined the specific compensation policies and decisions
involving our Named Executive Officers.
Role of the Compensation Committee
The Compensation Committee
has overall responsibility for evaluating and approving Boston Beer’s compensation programs and policies relating to Directors
and Executive Officers. This includes reviewing the competitiveness of executive compensation programs, evaluating the performance
of our Executive Officers, and approving their annual compensation and equity awards. The Committee reviews and approves corporate
goals and objectives relevant to the compensation of our Chairman, CEO, and other Executive Officers; evaluates the achievement
of those goals, taking into consideration the recommendations of the CEO; and sets compensation levels based on this evaluation.
The Committee also reviews and approves, on an advisory basis, the overall bonus structure and scale for all other coworkers.
Compensation Philosophy and Objectives
Boston Beer’s executive
compensation program is designed to attract, develop, engage, and retain highly talented executives, with a focus on pay for performance
through bonuses linked to Company and individual performance and equity awards with performance-based vesting linked to Company
performance and time-based vesting linked to retention. Overall, Boston Beer believes it should provide competitive pay to its
Executive Officers and align compensation with achievement of the Company’s goals and delivering strong company performance,
in terms of both growth and long-term stockholder value. These compensation packages are designed to:
• |
provide executives with competitive cash and equity compensation
with a significant portion of total compensation contingent on Company performance, thereby increasing stockholder value; |
• |
provide higher compensation to high-value contributors and high performers in the
most critical areas of the Company’s business; and |
• |
encourage executives to act as owners with an equity stake in the Company, while reducing
risk from its compensation practices that would be reasonably likely to have a material adverse effect on the Company, by
basing variable compensation on a range of performance criteria that have a mix of short-term and long-term implications. |
In keeping with these objectives,
the structure of our executive compensation program is described in the section below.
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Response to Recent Advisory Say-on-Pay Votes
In establishing the Company’s
compensation practices, the Board and the Compensation Committee considered the results of the advisory Say-on-Pay votes in 2019,
2020, and 2021, as well as our discussions with stockholders which are discussed in detail under the heading “Stockholder
Engagement” above. At our 2021 Annual Meeting of Stockholders, approximately 99% of the votes cast on our Say-on-Pay proposal
were cast in support of the compensation of our NEOs. Given this positive endorsement of our executive compensation decisions,
the Compensation Committee did not make changes to the structure of our programs or policies as a result of that Say-on-Pay vote.
Components of Executive Compensation and Compensation
Mix
The total potential compensation
mix of our Named Executive Officers balances: (1) competitive base salaries; (2) cash incentive bonuses contingent primarily on
Company performance; (3) option awards generally contingent solely on multi-year Company performance; and (4) restricted stock
unit awards generally contingent on continued employment. These pillars of our executive compensation program are described in
more detail below. For other Executive Officers and senior managers of the Company, the proportion of compensation provided by
equity and other variable, performance-based compensation, increases with the individual’s level of responsibility and ability
to have an impact on the Company’s business.
Base Salary
Base salaries are determined
by a variety of factors, including the executive’s scope of responsibilities, experience, performance, and a comparison of
salaries paid to peers within the Company and to those with similar roles at other companies of similar size, scale, and complexity.
Base salaries are set at levels that allow us to attract and retain superior leaders and that will enable us to deliver on our
business goals. Salaries are reviewed annually and may be adjusted after considering the above factors.
The Compensation Committee
determines the base salaries of the Chairman and the CEO, considering individual and Company performance, individual responsibilities,
and market data regarding peer group compensation. The Chairman makes a recommendation to the Compensation Committee for the base
salary of the CEO. The CEO, in turn, makes recommendations to the Compensation Committee for base salaries of each Executive Officer,
other than the Chairman and the CEO. When setting the base salaries of each of these Executive Officers, the Compensation Committee,
while considering the recommendations of the CEO and the Chairman, makes the final determination based on the factors listed above
and its assessment of each Executive Officer’s performance during the previous year.
The Compensation Committee
met on February 9, 2021 and reviewed the proposed 2021 compensation packages of our Executive Officers. During the meeting, the
Committee approved the following 2021 base salaries for our Named Executive Officers: $835,459 for Mr. Burwick, a 5% increase from
his 2020 base salary; $579,272 for Mr. Smalla, a 3% increase from his 2020 base salary; $579,272 for Mr. Geist, a 3% increase
from his 2020 base salary; $515,000 for Mr. Troupe, a 3% increase from his 2020 base salary, and $503,928 for Ms. Lysyj, a 3% increase
from her 2020 base salary. These salaries took effect on March 21, 2021.
Cash Incentive Bonuses
Bonuses payable to our Executive
Officers are based primarily on Company performance against certain “Company Goals” in accordance with a “Bonus
Scale,” subject to limited adjustment by the Compensation Committee, in its discretion, as noted below. In recent years,
the Company Goals have consisted of pre-established depletions growth, Earnings Before Interest & Tax (“EBIT”),
and resource efficiency (focused cost savings) targets. For the purposes of the Bonus Scale, EBIT is equivalent to Operating Income
on the Income Statement in the Company’s Annual Report on Form 10-K for Fiscal Year 2021.
As reported in a Form 8-K
filed by the Company on February 12, 2021, at its meeting on February 9, 2021, the Compensation Committee approved: (1) company-wide
goals for Fiscal Year 2021 (the “2021 Company Goals”); (2) the 2021 bonus target for each Executive Officer, as a percentage
of their base salary (“2021 Bonus Target “); and (3) a bonus funding scale ranging from 0% to 250% (the “2021
Bonus Scale”) for determining bonus payouts as a percentage of each Executive Officer’s respective 2021 Bonus Target,
based on the Committee’s determination of the Company’s ultimate achievement of the 2021 Company Goals.
The target parameters of
the 2021 Company Goals were based on the Company’s 2021 Financial Plan. The 2021 Company Goals consisted of achieving: (1)
certain depletions targets over 2020 (“2021 Depletions Growth”), which are weighted as 60% of the
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goals; (2) certain EBIT targets,
which are weighted as 20% of the goals; and (3) the generation of certain resource efficiency (focused cost savings) targets, which
are weighted as 20% of the goals.
The 2021 Bonus Target for
each NEO was as follows:
• |
Mr. Burwick: 100% of base salary; |
• |
Mr. Smalla 75% of base salary; |
• |
Mr. Geist: 75% of base salary; |
• |
Mr. Troupe: 60% of base salary; and |
• |
Ms. Lysyj, 60% of base salary. |
The foregoing percentages
for Mr. Burwick and Mr. Smalla were unchanged from 2020. Mr. Geist’s Bonus Target was increased from 60% to 75% of his base
salary; Mr. Troupe’s Bonus Target was increased from 50% to 60% of his base salary; and Ms. Lysyj’s Bonus Target was
increased from 50% to 60% of her base salary. The increases were in recognition of increased responsibilities managing growing
teams.
As reported in the February
12, 2021 Form 8-K, the bonus of each Executive Officer for Fiscal Year 2021 was to be determined by the Compensation Committee
before March 1, 2022, based on a three-step process, which process was finalized on February 9, 2022. First, the Committee was
tasked with determining the Company’s achievement of the 2021 Company Goals against the 2021 Bonus Scale (the “2021
Achievement”).
Second, the Committee established
an aggregate bonus pool for the Company’s Executive Officers, including the NEOs, by applying the 2021 Achievement against
each Officer’s 2021 Bonus Target.
Third, the Compensation Committee
was tasked with considering any potential adjustments to any of the Executive Officers’ final 2021 bonus payout based on
the Committee’s assessment of each Executive Officer’s overall job performance, key competencies, and the achievement
of relevant objectives and key results in 2021. The Committee had retained the discretion to increase or decrease an Officer’s
bonus payout by 10% from the baseline bonus funding if the Officer was deemed to have performed “successfully” in 2021,
and by 30% if the Officer was deemed to have performed “exceptionally.” The Committee had also retained the discretion
to decrease an Officer’s 2021 bonus payout to as low as $0 if the Officer was deemed to have performed “unsatisfactorily”
in 2021.
The 2021 Bonus Scale, as
detailed in the chart below, was a sliding scale of target points for each of the depletions, EBIT, and resource efficiency (focused
cost savings) goals. For example, the potential payouts for achievement relative to the 2021 Depletions Growth target would have
been: 0% of the target if 2021 Depletions Growth was 20.0% or less; 100% of the target if 2021 Depletions Growth was 40.0%; or
250% of the target if 2021 Depletions Growth was 60.0% or greater. For the EBIT target, potential payouts would have been, for
example: 0% of the target if the Company’s 2021 EBIT was $321 million or less; 100% of the target if 2021 EBIT was $383 million;
or 250% of the target if 2021 EBIT was $446 million or higher. For the resource efficiency (focused cost savings) target, potential
payouts would have been, for example: 0% of the target if the Company recognized $51 million or less in resource efficiencies;
100% of the target if the Company recognized $59 million in resource efficiencies; or 250% of the target if the Company recognized
$64 million or more in resource efficiencies.
2021 Bonus Scale |
Resource Efficiencies (millions $) | |
$ | 51 | | |
$ | 53 | | |
$ | 55 | | |
$ | 57 | | |
$ | 59 | | |
$ | 60 | | |
$ | 61 | | |
$ | 62 | | |
$ | 63 | | |
$ | 64 | |
EBIT (millions $) | |
$ | 321 | | |
$ | 344 | | |
$ | 364 | | |
$ | 375 | | |
$ | 383 | | |
$ | 397 | | |
$ | 406 | | |
$ | 419 | | |
$ | 430 | | |
$ | 446 | |
Depletions Growth % | |
| 20 | % | |
| 26 | % | |
| 32 | % | |
| 36 | % | |
| 40 | % | |
| 44 | % | |
| 48 | % | |
| 52 | % | |
| 56 | % | |
| 60 | % |
FUNDING % | |
| 0 | % | |
| 25 | % | |
| 50 | % | |
| 75 | % | |
| 100 | % | |
| 125 | % | |
| 150 | % | |
| 175 | % | |
| 200 | % | |
| 250 | % |
In February 2022, the Compensation
Committee reviewed the Company’s performance against the 2021 Bonus Scale. The Company achieved 22% depletions growth in
Fiscal Year 2021, partially achieving the depletions growth targets. However, the Company did not achieve any of the EBIT or resource
efficiency target. As illustrated in the chart below, the Committee determined that the Company achieved 4% of target for 2021
Depletions Growth; 0% of target for EBIT; and 0% of target for resource efficiency. Considering those results, the Committee determined
that the Company ultimately achieved 4% on the Bonus Scale. The Company’s achievement of the 2021 targets was as follows:
2021 Achievement |
|
% Achievement on
2021 Bonus Scale |
$32 million in Resource Efficiencies
(focused cost savings) |
|
0% |
$8 million in EBIT |
|
0% |
22% Depletions Growth |
|
7% |
PAYOUT % |
|
4% |
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While the Committee would
have been entitled to award 2021 bonuses commensurate with achievement of 4% on the Bonus Scale for our Named Executive Officers,
each of Mr. Burwick, Mr. Smalla, Mr. Geist, Mr. Troupe, and Ms. Lysyj opted not to be considered to receive 2021 bonuses, but instead
asked the Compensation Committee to allot any such funds in the bonus pool to other Company coworkers.
Long-Term Equity Awards
Long-Term Equity Awards (“LTE
Awards”) are designed to provide Executive Officers and other select coworkers a reward for delivering long-term stockholder
value and to align the interests of our key coworkers with the interests of our stockholders. LTE Awards are also an effective
tool for attracting and retaining executives and other key coworkers. Our LTE Awards program is governed by our Employee Equity
Incentive Plan, or “EEIP,” which was last amended on December 20, 2018. A copy of the EEIP was attached as Exhibit
10.1 to a Form 8-K filed by the Company on December 22, 2018. The primary components of our LTE Awards program – stock option
awards, restricted stock units, and investment shares – are described in detail below.
Stock Option Awards
Under our EEIP, certain coworkers
are eligible to receive stock option awards. While generally granted on an annual basis in March, all option grants are discretionary
and may be granted by the Board upon the recommendation of the Compensation Committee at any time. For example, options may be
granted at other times during the year under certain circumstances, such as the hiring of a new Executive Officer, as part of a
performance review, in connection with a promotion or mid-year compensation adjustment, or to address potential retention issues.
Such option awards may have vesting and performance criteria that differ from the annual grants.
The Compensation Committee
believes that stock option awards are an effective way to reward Executive Officers and align their interests with the interests
of Boston Beer’s stockholders, as they provide significant equity compensation only if the value of the Company’s stock
increases. In addition, through the use of performance-based vesting, the Committee endeavors to assure that receipt of significant
equity-based compensation requires that the Company’s performance exceeds appropriate benchmarks. Through the use of vesting
over a number of years, the Committee endeavors to create an incentive for retention. The Compensation Committee has also granted
time-based vesting options in the past to certain Executive Officers to encourage retention or to provide appropriate incentives
to attract new executives. The Compensation Committee reviews any employment offers made to new Executive Officers that contain
equity grants; any such grant is conditioned on approval of the Compensation Committee and the full Board of Directors. In assessing
these offers, the Compensation Committee evaluates historical compensation for the individual, the value of the role, and compensation
for peers within the Company or comparable roles within the Company’s peer group, to the extent such data is available to
the Committee.
At its meeting on February
10, 2021, the Board of Directors approved, upon the recommendation of the Compensation Committee, grants of performance-based stock
option awards to seven Executive Officers, to be effective in March 2021, for a total of 7,618 shares. All of the awards were issued
on March 1, 2021. The March 2021 option grants included the following awards to our Named Executive Officers: 4,446 option shares
to Mr. Burwick, valued at $2,000,369 on the grant date; 625 option shares to Mr. Smalla, valued at $281,203 on the grant date;
625 option shares to Mr. Geist, valued at $281,203 on the grant date; 556 shares to Mr. Troupe, valued at $250,159 on the grant
date, and 544 shares to Ms. Lysyj, valued at $244,759 on the grant date.
Each of the 2021 option awards
has an exercise price of $1,028.71 per share, which was the closing price of Class A Shares on the last business day before the
grant. The extent to which all of these option awards may become exercisable is dependent upon the Company achieving certain compounded
annual growth rate targets based on net revenue growth in Fiscal Year 2022 over Fiscal Year 2020. The determination of the vesting
of these stock option awards will be made by the Compensation Committee before March 1, 2023. If the compounded annual growth rate
of the Company’s net revenue in Fiscal Year 2022 over Fiscal Year 2020 is equal to or greater than 3.5%, the options will
vest as to one-third of the underlying shares on March 1, 2023, one-third on March 1, 2024, and one-third on March 1, 2025, contingent
on continued employment on the applicable vesting dates and subject to accelerated vesting upon the occurrence of certain specified
events. If the compounded annual growth rate of the Company’s net revenue in Fiscal Year 2022 over Fiscal Year 2020 is equal
to or greater than 2% but less than 3.5%, the options will vest as to one-sixth of the underlying shares on March 1, 2023, one-sixth
on March 1, 2024, and one-sixth on March 1, 2025, contingent on continued employment on the applicable vesting dates and subject
to accelerated vesting upon the occurrence of certain specified events. The options will lapse to the extent that the compounded
annual growth rate is less than 2%.
Each of these option awards
granted to the Company’s Executive Officers in Fiscal Year 2021 includes a double-trigger Change in Control clause which
provides that the option shall become immediately exercisable in the event that a Change in Control results in the termination
of the employment of the optionee without cause or good reason within 12 months of the Change in Control. For the purposes of the
Company’s equity grants, the term “Change in Control” means if Chairman C. James Koch and/or members of his family
cease to control a majority of the Company’s Class B Shares.
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Restricted Stock Units
Restricted stock units or
“RSUs” are granted by the Board of Directors upon the recommendation of the Compensation Committee. In making its recommendations,
the Committee considers recommendations from the CEO. RSUs are generally granted on an annual basis on March 1, valued at the fair
market value as of the award date. These shares of restricted stock generally vest over a four-year period, at the rate of 25%
per year. On occasion, RSU grants are made at other times during the year, such as upon the hiring of a new executive or senior
manager. Prior to 2019, the Board granted “Restricted Stock Awards” or “RSAs” as opposed to RSUs. Certain
RSAs still remain effective and subject to vesting. RSUs are valued in terms of Class A Shares, except participants do not actually
receive the underlying shares until the vesting contingencies are met. This differs from RSAs, where participants received and
could vote the underlying restricted Class A Shares.
Boston Beer believes that
RSUs serve as an important retention tool because: (1) for most coworkers, RSUs are easier to understand and value than stock option
awards; (2) RSUs have value even if the share price decreases after the date of the award; and (3) RSUs encourage coworkers to
think and act like owners of the Company. That said, the Company believes in striking a proper balance between stock option awards
and RSUs for its Executive Officers.
In March 2021, the Board
of Directors, upon the recommendation of the Compensation Committee, granted an aggregate of 3,628 RSUs to nine Executive Officers.
Other than the special RSU to Mr. Burwick outlined below, (1) each of the RSUs granted to the Company’s Executive Officers
and other coworkers in 2021 included a double-trigger Change in Control clause; and (2) all shares vest 25% per year over a four-year
period, contingent on continued employment on the applicable vesting dates.
These RSU awards included
the following awards to our Named Executive Officers: 1,945 shares to Mr. Burwick, valued at $2,000,841 on the grant date, 274
shares to Mr. Smalla, valued at $281,867 on the grant date; 274 shares to Mr. Geist, valued at $281,867 on the grant date; 244
shares to Mr. Troupe, valued at $251,005 on the grant date; and 238 shares to Ms. Lysyj, valued at $244,833 on the grant date.
Special LTE Awards to
Mr. Burwick
In addition to the LTE Awards
outlined above, the Board, upon the recommendation of the Compensation Committee, granted special LTE Awards to Mr. Burwick, including
a stock option award and an RSU award, valued at approximately $10 million in aggregate on the grant date. Both awards include
a similar double-trigger Change in Control provision as included in the annual LTE Awards, except that the term “Change in
Control” with respect to these grants is defined to mean if Mr. Koch ceases to be Chairman of the Company. These special
LTE Awards are described in detail below in the CD&A under the heading “Compensation of David A. Burwick, President &
Chief Executive Officer.”
Investment Shares
Eligible Boston Beer coworkers,
including Executive Officers other than the Chairman and CEO, may also participate in the Company’s Investment Share Program,
or the “ISP,” where our stock may be purchased at a discount based on tenure, encouraging equity ownership in the Company.
Eligible Boston Beer coworkers, referred to in this Proxy Statement as “ISP Eligible Coworkers,” generally must have:
(1) been employed by Boston Beer for at least one year; and (2) entered into an employment agreement with Boston Beer.
Under our Investment Share
Program, ISP Eligible Coworkers may annually purchase such number of Class A Shares that have a value of no greater than 10% of
their annual base salary and bonus received in the immediately preceding year, up to a maximum annual investment of $17,500 (“Investment
Shares”). After two full years of service with the Company, Investment Shares may be purchased at a discount. The amount
of the discount is tied to years of service; the maximum discount is 40% after four full years of service. ISP Eligible Coworkers
have the opportunity to purchase Investment Shares on an annual basis on March 1 each year with the purchase price based on the
fair market value of the shares as of the purchase date. Investment Shares vest at the rate of 20% per year over the five-year
period commencing on the effective date of purchase, contingent on continued employment with the Company on the applicable vesting
dates. While the Chairman and the CEO are precluded from participating in the ISP, other Executive Officers are permitted to participate.
In 2021, Boston Beer coworkers
purchased a total of 9,127 Investment Shares under the ISP, of which 87 shares were purchased by three Executive Officers. Of our
NEOs, Mr. Smalla and Mr. Troupe each purchased 29 Investment Shares effective March 1, 2021.
Executive Benefits
In 2021, the
Company’s Executive Officers were eligible for the same level and offering of benefits, including annual life insurance
premiums, Company matching contributions under the Company’s 401(k) plan, car allowances where applicable, Company
health savings contributions under the Company’s medical plan, wellness plan reimbursements, and other benefit
programs, as were made available to other coworkers. The Company provides no additional benefits to its Executive Officers.
However, certain coworkers are eligible for the reimbursement of relocation, commuting, and living expenses
(“Relocation Assistance”) upon hiring and for a limited period thereafter. No Executive Officers received
Relocation Assistance in 2021. Additionally, all coworkers are eligible for a financial advisor benefit; the benefit is
available in tiers based on the complexity of the coworker’s advisory needs. Of our NEOs, Mr. Troupe and Ms. Lysyj took
advantage of this benefit, valued at $12,206 for Mr. Troupe and $6,370 for Ms. Lysyj.
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How Executive Pay Levels Are Determined
As noted above, the Compensation
Committee considers a number of factors in determining executive compensation, including but not limited to individual performance,
responsibility level, role within the Company, tenure, a comparison of salaries paid to peers within the Company and to those with
similar roles at other similarly sized companies, and data collected in interviewing and hiring external candidates for executive
positions. It also reviews the historical compensation for each Officer, including salary, bonus, and equity grants.
Each year, the Compensation
Committee, taking into consideration the recommendations of the CEO and the Chairman, determines the appropriate level of compensation
for each Executive Officer. The Company emphasizes differentiation in executive compensation, focusing on high performers and individuals
who significantly impact, or who have the potential to significantly impact, Boston Beer’s business.
Executive Compensation Analysis Timeline
While the Compensation Committee
does not follow a strict calendar for establishing the parameters of executive compensation each year, it generally follows the
following timeline. During and leading up to the October Compensation Committee meeting, the Committee, CEO, CFO, Chief People
Officer, and the Director of Total Rewards review the Company’s peer group (if applicable), evaluate expected performance
and vesting of outstanding equity grants, and review the projections for the then-current fiscal year bonus payouts. Then, at its
December meeting, the Committee reviews benchmarking data, has preliminary discussions about the following year’s LTE Award
recommendations and bonus scale, and tentatively establishes an aggregate pool for the following year’s executive officer
LTE Awards. Next, in February, the Committee meets to review management’s report on Executive Officer performance and compensation;
evaluates the status of the vesting criteria of any outstanding performance-based LTE Awards; reviews and approves the achievement
of the previous year’s Executive Officer bonus targets; establishes the total compensation targets for Executive Officers
for the then-current fiscal year; reviews and approves the bonus scale for the then-current fiscal year; and reviews and approves
the LTE Awards to be awarded in the current fiscal year, including performance criteria. LTE Awards are generally granted on March
1, bonuses are typically paid in early March, and merit increases are generally effective in March or April. Merit increases, bonus
awards, equity awards, and other compensation changes may occur at other times during the year on occasion.
Compensation Assessments
The Compensation Committee
has the authority to select, retain, and compensate outside executive compensation consultants and other experts as it determines
is necessary to carry out its responsibilities. As one element in its assessment of the competitiveness of executive compensation
packages established for Fiscal Year 2021, the Compensation Committee applied knowledge gained through an executive compensation
competitive assessment relating to certain selected Executive Officers prepared by Frederic W. Cook & Co., Inc., or FW
Cook, a nationally recognized executive compensation consulting firm, presented in October 2019 (the “FW Cook Assessment”).
At that time, the Compensation Committee assessed the independence of FW Cook and determined that FW Cook was independent and that
no conflicts of interest existed. FW Cook reported directly to the Compensation Committee and did not provide services to, or on
behalf of, any other part of our business. The Committee’s retention of FW Cook continued into early 2020 and helped inform
the Compensation Committee’s recommendations on the 2020 executive compensation structure.
FW Cook’s task was
to analyze Boston Beer’s compensation programs and compensation strategies, confirm the appropriateness of the strategies,
develop an updated peer group for use as a competitive frame of reference, and provide the Committee with external benchmarking
information for Boston Beer’s Executive Officers. The Compensation Committee reviewed the peer group suggested by FW Cook,
considering criteria such as financial similarity (primarily revenue and market capitalization), industry similarity, and number
of employees. After discussion, the Committee approved the following companies as Boston Beer’s peer group:
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Boston Beer 2019 Peer Group
Calavo Growers Inc. |
J&J Snack Foods Corp. |
Steve Madden, Ltd. |
Cal-Maine Foods Inc. |
John B. Sanfilippo & Son, Inc. |
The Hain Celestial Group, Inc. |
Columbia Sportswear Company |
Lancaster Colony Corp. |
Tootsie Roll Industries, Inc. |
Flower Foods |
National Beverage Corp. |
Vector Group Ltd. |
Hostess Brands, Inc. |
Oxford Industries, Inc. |
YETI Holdings, Inc. |
Inter Parfums, Inc. |
Post Holdings |
|
Once this peer group was
established, FW Cook used multiple data sources to assess Boston Beer’s executive compensation plan going forward, including,
but not limited to, the compensation paid to the CEO and other named executive officers of the peer group companies, as derived
from the most recent proxy statements filed by the peer group companies and third-party surveys. The information gained from the
FW Cook Assessment helped the Compensation Committee better understand market practices and provided perspective for the Committee’s
determinations regarding 2021 Executive Officer compensation packages. However, while competitive market practices are considered,
the Committee continues to believe that individual and Company performance, the impact of an Executive Officer’s role and
function within the Company, and the Executive Officer’s contribution to the Company’s growth are similarly important
drivers of total compensation decisions.
Additional Compensation Policies and Practices
Executive Compensation Recovery Policy
In December 2006, the Compensation
Committee adopted an executive compensation recovery policy that applies to Executive Officers and the Corporate Controller. Under
this policy, the Company may recover incentive income that was based on achievement of quantitative performance targets, if an
Executive Officer or the Corporate Controller engaged in intentional misconduct that resulted in an increase in his or her incentive
income. Incentive income includes income related to annual bonuses and LTE Awards. The Company has not been required to seek compensation
recovery under this policy since its adoption.
Policies Prohibiting Hedging and Pledging
Boston Beer Stock
Our Insider Trading Policy
prohibits the Company’s Directors, Executive Officers and certain other coworkers who are designated as Company “Insiders”
from hedging or pledging Boston Beer Stock. As of the mailing of this Proxy Statement, there were approximately 180 Boston Beer
coworkers identified as Insiders because they regularly have or may have access to material non-public information about the Company.
Under this policy, the Company’s Directors, Executive Officers, and designated Insiders are prohibited from engaging in any
investment to reduce the risk of adverse price movements in Boston Beer stock and from offering Boston Beer stock to a lender as
collateral for a loan. Trading of Boston Beer stock by Company Directors, Executive Officers, and Insiders is restricted under
this policy to defined window periods following our quarterly earnings releases (except pursuant to an approved Rule 10b5-1 Plan).
All Directors, Executive Officers, and Insiders are also prohibited by the Insider Trading Policy from engaging in certain trading
practices involving Boston Beer stock which would suggest speculation in our securities, including short-term trading, short sales,
transactions involving put or call options, and purchases on margin. For all other coworkers, such practices are strongly discouraged
but not prohibited, subject to prior notice to the Company.
Additionally, in February
2013, the Board adopted a separate and complementary policy that bans hedging or pledging of Boston Beer stock by all Directors,
Executive Officers, and Company Insiders. This policy is also incorporated into our Corporate Governance Guidelines and Nominating/Governance
Committee Charter. On an annual basis, all Company Directors and Executive Officers are required to certify compliance with this
policy, which specifically prohibits such persons from: (1) purchasing or selling financial instruments, such as prepaid variable
forward contracts, equity swaps, collars, or exchange funds that are designed to hedge or offset any decrease in the market value
of Boston Beer stock; (2) engaging in short sales of Boston Beer stock; or (3) holding Boston Beer stock in a margin account
or entering into any transaction involving the pledge or other use of Boston Beer stock as collateral to secure indebtedness or
other obligations. All other coworkers are discouraged but not prohibited by this policy from entering into hedging transactions
and engaging in short sales related to Boston Beer stock. The Company knows of no violations of this policy since its adoption.
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Stock Ownership and Retention Guidelines
To foster a culture of ownership
and further align the long-term interests of the Directors with those of stockholders, in 2013, the Board of Directors, upon the
recommendation of both the Compensation Committee and the Nominating/Governance Committee, adopted guidelines setting target stock
ownership of six times annual cash salary for the Chairman and CEO and six times annual cash compensation for the non-employee
Directors, and retention of a portion of the net shares received upon exercise of certain stock option awards for a period of time.
The following requirements
apply to all LTE Awards to the Chairman granted after February 7, 2013: (i) retention of 75% of net shares for six months after
exercise or vesting, and (ii) retention of 50% of net shares for one year after exercise or vesting.
The CEO and the non-employee
Directors have an indefinite period to achieve the target ownership, but for all LTE Awards granted after February 7, 2013, they
must retain 100% of Net Shares until the target has been achieved, and if not achieved within five years, they must retain 75%
of Net Shares on any LTE Awards granted prior to February 7, 2013. After their respective targets have been achieved, the same
retention requirements that apply to the Chairman apply to them for all new LTE Awards granted after February 7, 2013. For the
purposes of these guidelines, “Net Shares” means shares acquired upon the exercise of an option or the vesting of restricted
stock, after the payment any applicable exercise price or taxes.
Ownership requirements lapse
on the first to occur of: (i) the first anniversary of voluntary termination of employment or resignation from the Board; (ii)
the first anniversary of involuntary termination of employment or resignation or removal from the Board for cause; (iii) involuntary
termination of employment or resignation from the Board other than for cause; (iv) death; and (v) for individuals other than Mr.
Koch, a Change in Control.
The Compensation Committee
reviewed the progress made on the equity ownership guidelines at its meeting on December 9, 2021 and determined that five
Directors had achieved their respective share ownership targets, while four Directors had yet to achieve their respective share
ownership targets.
Tax Deductibility under Section 162(m)
In evaluating compensation
programs applicable to our Named Executive Officers (including the Company’s annual and long-term incentive plans), the Compensation
Committee considers the potential impact on the Company of Section 162(m) of the Internal Revenue Code, which places a limit of
$1 million per year on the amount of compensation paid to certain of our executive officers that is deductible by the Company for
federal income tax purposes. The Tax Cuts and Jobs Act of 2017 eliminated the performance-based exception to the $1 million deduction
limit under Section 162(m). As a result, since the Company’s 2019 fiscal year, compensation paid to our NEOs in excess of
$1 million is generally nondeductible, whether or not it is performance-based. The Compensation Committee will continue to maintain
maximum flexibility in the design of the Company’s compensation programs and continues to reserve the discretion to exceed
the limitation on deductibility under Section 162(m) to ensure that our NEOs are compensated in a manner that we believe to be
consistent with our best interests and those of our stockholders.
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Fiscal Year 2021 Named Executive
Officer Compensation
Compensation of David A. Burwick,
President & Chief Executive Officer
On January 23, 2018, the Company entered
into an offer letter (the “Burwick Offer Letter”) for Mr. Burwick to join the Company as President & Chief Executive
Officer, which offer was contingent upon subsequent approval by the Board of Directors and the Compensation Committee. His compensation
in 2021 included a base salary, two annual equity grants awarded pursuant to the Company’s long-term equity program, and two special
equity grants awarded for the purposes of retaining Mr. Burwick, to provide leadership stability, and to align his total compensation
with the market compared to similarly sized companies. The mix of his total compensation for 2021 is set forth below:
President & CEO David A.
Burwick
2021 Total Compensation Mix
Annual Compensation | |
|
Base Salary Received | |
$ | 826,278 |
Performance Bonus | |
$ | 0 |
March 1, 2021 Annual Stock Option Award | |
$ | 2,000,369 |
March 1, 2021 Annual Restricted Stock Unit Award | |
$ | 2,000,841 |
Other Compensation | |
$ | 12,898 |
Annual Compensation Subtotal | |
$ | 4,840,386 |
Special Equity Awards | |
| |
March 1, 2021 Special Stock Option Award | |
$ | 5,000,011 |
March 1, 2021 Special Restricted Stock Unit Award | |
$ | 5,000,559 |
Special Equity Award Subtotal | |
$ | 10,000,570 |
2021 TOTAL COMPENSATION | |
$ | 14,840,956 |
• |
Base Salary: Mr. Burwick’s
annual base salary of $835,459 was approved by the Compensation Committee and the Board of Directors in February 2021, representing
a 5% increase of his 2020 base salary of $795,675. The merit increase was effective on March 21, 2021, the same effective
date as other coworkers. |
• |
Performance Bonus: The Company’s
bonus scale is described in more detail in this CD&A under the heading “Cash Incentive Bonuses.” As noted
in that section, the Company achieved 22% depletions growth under Mr. Burwick’s guidance in Fiscal Year 2021, which
was below the Company’s projected growth targets for the year. The Compensation Committee reviewed Fiscal Year 2021
Company performance against the bonus scale and determined that the Company achieved 4% on the scale, which would have made
Mr. Burwick eligible for a 4% bonus. However, he opted not to be considered for a bonus award for Fiscal Year 2021, but instead
asked the Compensation Committee to take any such funds that he would have been eligible for in the bonus pool and allot those
funds to other Company coworkers. |
• |
Performance-Based Stock Option
Award: On March 1, 2021, the Company granted Mr. Burwick a performance-based stock option award for a total of 4,446 shares,
valued at $2,000,369 on the grant date. As described in more detail under the heading “Stock Option Awards” the
option shares have an exercise price of $1,028.71, are contingent upon net revenue growth in Fiscal Year 2022 over Fiscal
Year 2020, have a three-year vesting schedule from March 2023 to March 2025 should the performance criteria be achieved, and
are contingent on continued employment on the applicable vesting dates. The stock option award is identical in nature to the
stock option awards granted to the other NEOs on March 1, 2020. |
• |
Restricted Stock Units: On
March 1, 2021, the Company granted Mr. Burwick an award of 1,945 RSUs valued at $2,000,841 on the grant date. As described
in more detail in this CD&A under the heading “Restricted Stock Units”, the RSUs vest over a four-year period
and are contingent upon continued employment on the applicable vesting dates. The RSUs are identical in nature to the annual
RSUs granted to the other NEOs on March 1, 2021. |
• |
Special One-Time Equity Awards: In 2019, the Compensation
Committee retained FW Cook, an independent executive compensation consulting firm, to review the total compensation of our
Executive Officers compared to executive officers at other similarly sized companies. FW Cook’s analysis determined
that Mr. Burwick’s total target compensation was below the 25th percentile for total target compensation
for chief executive officers at similarly sized companies. The Compensation Committee and the Company’s Chairman and
Founder agreed that based on the Company’s growth rates during Mr. Burwick’s tenure, he should be compensated
between the median and the 75th percentile of the market compared to similarly sized companies. Based on that analysis,
the Committee determined that there was an annual gap of total compensation of approximately $3.6 million, or |
|
THE BOSTON BEER COMPANY, INC. |
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35 |
|
|
approximately $18 million over five
years. Rather than significantly increasing Mr. Burwick’s base salary and performance bonus targets, the Compensation Committee
opted to close the gap through moderate cash increases over time and through two special one-time equity awards valued at approximately
$10 million in the aggregate. Accordingly, the Committee approved the Burwick Option and the Burwick RSU for Mr. Burwick in addition to
his annual grants. The Committee believes there are several advantages to this strategy, including: (1) aligning CEO compensation with
total shareholder return; (2) providing strong retention incentives; and (3) leveraging the simple-to-understand structure of the company’s
existing equity vehicles. The special awards were disclosed in a Form 8-K filed with the SEC on February 12, 2021.
|
• |
Burwick Option: The Burwick Option was granted on March 1, 2021, for a total of 10,935 shares, valued at $5,000,011 on the grant date. The Burwick Option has an exercise price of $1,028.71 and will vest 25% on March 1, 2024, 25% on March 1, 2025, and 50% on March 1, 2026, contingent on continued employment on the applicable vesting dates and subject to accelerated vesting upon the occurrence of certain specified events. |
|
• |
Burwick RSU: The Burwick RSU was granted on March 1, 2021 for a total of 4,861 restricted share units, valued at $5,000,559 on the grant date. The Shares will vest 25% on March 1, 2024, 25% on March 1, 2025, and 50% on March 1, 2026, contingent on continued employment on the applicable vesting dates and subject to accelerated vesting upon the occurrence of certain specified events. |
• |
Other Compensation: “Other Compensation” includes $11,600 in matching contributions to the Company’s 401(k) plan and $1,298 in Company contributions to annual group life insurance, accidental death and dismemberment insurance, and short-term and long-term disability. Mr. Burwick was eligible for the same level and offering of those benefits as other Company coworkers. |
Each of the categories of Mr. Burwick’s
compensation mix were approved by the Compensation Committee and the full Board of Directors and remain consistent with the Burwick Offer
Letter. His compensation structure in 2021 was also consistent with the compensation structure of our other Named Executive Officers,
except for the two special equity awards. Following the grant of the special awards, the Compensation Committee also believes that Mr.
Burwick’s compensation package is structured in a way that provides him with appropriate incentives and rewards for superior performance
and increasing stockholder value.
Mr. Burwick’s compensation was
a topic of discussion with stockholders following our 2021 non-binding Say-on-Pay resolution, which received a favorable vote of 98.7%
of the votes cast. Our stockholder outreach and engagement efforts prior to and following that result are discussed in detail under the
heading “Stockholder Engagement” above.
The Summary Compensation Table included
in this Proxy Statement sets forth all compensation received by Mr. Burwick for Fiscal Year 2021. There is no Company-sponsored retirement
program for Mr. Burwick other than the Company’s 401(k) plan, and he receives no benefits or perquisites from Boston Beer other
than the benefits generally available to our coworkers. Mr. Burwick does not have a severance or change in control arrangement, other
than the Change in Control provisions in his LTE Awards, which are described in detail under the heading “Employment Contracts,
Termination of Employment, and Change in Control Agreements.”
Compensation of Named Executive
Officers Other than the CEO
As described in more detail under the
heading “Components of Executive Compensation and Determination of Compensation Mix”, the primary components of the compensation
of our Named Executive Officers in 2021, other than Mr. Burwick, were as follows.
Base Salary: The following table
shows the 2021 base salary, the corresponding percentage increase above the 2020 base salary level, and the actual salary earned in 2021
of our other Named Executive Officers.
Name | |
Title | |
Base Salary for 2021 | | |
Increase from 2020 Base Salary | | |
Actual Salary Earned in 2021 |
Frank H. Smalla | |
Treasurer and CFO | |
$ | 579,272 | | |
| 3.0 | % | |
$ | 575,378 |
John C. Geist | |
Chief Sales Officer | |
$ | 579,272 | | |
| 3.0 | % | |
$ | 575,378 |
Quincy B. Troupe | |
Senior Vice President, Supply Chain | |
$ | 515,000 | | |
| 3.0 | % | |
$ | 511,538 |
Lesya Lysyj | |
Chief Marketing Officer | |
$ | 503,928 | | |
| 3.0 | % | |
$ | 500,540 |
In February 2021, the Compensation Committee
considered recommendations made by the CEO for salary adjustments and concluded that the recommended base salary for each of our NEOS,
as adjusted, was within the appropriate range for their experience and job responsibilities. The merit increases were effective on March
21, 2021, the same effective date as other coworkers.
Bonus: For Fiscal Year 2021,
the overall cash incentive target bonus potential of our other Named Executive Officers was: (1) 75% of base salary for Mr. Smalla;
(2) 75% of base salary for Mr. Geist; and (3) 60% of base salary from Mr. Troupe and Ms. Lysyj.
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Achievement of these bonuses for 2021
was based on Company performance against the Company Goals. As described in the “Cash Incentive Bonuses” section, in February
2022 the Compensation Committee determined that the Company achieved 4% on the Bonus Scale, based on partially achieving depletions growth
targets while not achieving EBIT or resource efficiency targets. While the Committee would have been entitled to award 2021 bonuses commensurate
with 4% achievement on the Bonus Scale our Named Executive Officers, each of Mr. Burwick, Mr. Smalla, Mr. Geist, Mr. Troupe, and Ms. Lysyj
opted not to be considered to receive 2021 bonuses, but instead asked the Compensation Committee to allot any such funds in the bonus
pool to other Company coworkers. As a result, the Committee approved total bonus payments to our other NEOs as follows:
Name | |
Title | |
2021 Bonus, Paid in March 2022 | |
Frank H. Smalla | |
Treasurer and CFO | |
$ | 0 | |
John C. Geist | |
Chief Sales Officer | |
$ | 0 | |
Quincy B. Troupe | |
Senior Vice President, Supply Chain | |
$ | 0 | |
Lesya Lysyj | |
Chief Marketing Officer | |
$ | 0 | |
Equity Awards: In March 2021,
the Company granted annual performance-based stock option awards and RSUs to each of our NEOs, which awards had been approved by the Compensation
Committee and the Board of Directors in February 2021. The number of shares awarded and the value of the awards of the grant date for
each of these awards are shown in the below chart.
Name |
|
Title |
|
Stock Option Award |
|
RSUs |
Frank H. Smalla |
|
Treasurer and CFO |
|
625 option shares |
|
274 shares |
|
|
|
|
$281,203 |
|
$281,867 |
John C. Geist |
|
Chief Sales Officer |
|
625 option shares |
|
274 shares |
|
|
|
|
$281,203 |
|
$281,867 |
Quincy B. Troupe |
|
Senior Vice President, Supply Chain |
|
556 option shares |
|
244 shares |
|
|
|
|
$250,159 |
|
$251,005 |
Lesya Lysyj |
|
Chief Marketing Officer |
|
544 option shares |
|
238 shares |
|
|
|
|
$244,759 |
|
$244,833 |
All of the awards were issued on March
1, 2021. As described in more detail under the heading “Stock Option Awards,” the option shares have an exercise price of
$1,028.71 and are contingent upon net revenue growth in Fiscal Year 2022 over Fiscal Year 2020. As described in more detail under the
heading “Restricted Stock Units,” the RSUs will vest 25% per year over a four-year period, contingent on continued employment
on the applicable vesting dates.
Compensation Committee Report
The Compensation Committee has reviewed
and discussed with management the foregoing Compensation Discussion and Analysis. Based on that review and those discussions, the Committee
recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement
for the Annual Meeting of Stockholders to be held on May 18, 2022 and incorporated by reference in the Company’s Annual Report on
Form 10-K for Fiscal Year 2021.
Michael Spillane, Chair
Michael M. Lynton
Julio N. Nemeth
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee
is, or during Fiscal Year 2021 was, an officer or employee of Boston Beer or any of its subsidiaries, and no Compensation Committee member
has any interlocking relationship with the Company which is required to be reported under applicable rules and regulations of the SEC.
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THE BOSTON BEER COMPANY, INC. |
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|
|
Executive Compensation
Summary Compensation Table
The following table summarizes the compensation
of our 2021 Named Executive Officers for Fiscal Year 2021, Fiscal Year 2020, and Fiscal Year 2019.
Name and Principal Position | |
Fiscal Year | |
Salary | (1) | |
Bonus | (1)(2) | |
Restricted
Stock Awards | (3) | |
Option
Awards | (3) | |
Non-Equity
Incentive Plan Compensation | (1) | |
All Other
Compensation | (1)(4) | |
Total | |
David A. Burwick | |
2021 | |
$ | 826,278 | | |
$ | 0 | | |
$ | 7,001,400 | (5) | |
$ | 7,000,380 | (5)(6) | |
$ | 0 | | |
$ | 12,898 | | |
$ | 14,840,957 | |
President & CEO | |
2020 | |
$ | 790,327 | | |
$ | 0 | | |
$ | 999,650 | | |
$ | 999,897 | (7) | |
$ | 1,975,817 | | |
$ | 12,698 | | |
$ | 4,778,389 | |
| |
2019 | |
$ | 767,308 | | |
$ | 0 | | |
$ | 999,879 | | |
$ | 999,307 | (8) | |
$ | 1,434,865 | | |
$ | 10,193 | | |
$ | 4,211,552 | |
Frank H. Smalla | |
2021 | |
$ | 575,378 | | |
$ | 0 | | |
$ | 281,867 | | |
$ | 281,203 | (6) | |
$ | 0 | | |
$ | 13,898 | | |
$ | 1,152,347 | |
Treasurer & CFO | |
2020 | |
$ | 556,215 | | |
$ | 0 | | |
$ | 3,267,401 | (5) | |
$ | 267,863 | (7) | |
$ | 1,042,904 | | |
$ | 13,698 | | |
$ | 5,148,082 | |
| |
2019 | |
$ | 532,000 | | |
$ | 50,000 | | |
$ | 259,737 | | |
$ | 259,899 | (8) | |
$ | 621,904 | | |
$ | 11,193 | | |
$ | 1,734,734 | |
John C. Geist | |
2021 | |
$ | 575,378 | | |
$ | 0 | | |
$ | 281,867 | | |
$ | 281,203 | (6) | |
$ | 0 | | |
$ | 20,735 | | |
$ | 1,159,183 | |
Chief Sales Officer | |
2020 | |
$ | 556,215 | | |
$ | 0 | | |
$ | 1,267,360 | (5) | |
$ | 267,863 | (7) | |
$ | 834,323 | | |
$ | 21,382 | | |
$ | 2,947,143 | |
| |
2019 | |
$ | 532,000 | | |
$ | 50,000 | | |
$ | 259,737 | | |
$ | 259,899 | (8) | |
$ | 621,904 | | |
$ | 17,798 | | |
$ | 1,741,339 | |
Quincy B. Troupe | |
2021 | |
$ | 511,538 | | |
$ | 0 | | |
$ | 251,005 | | |
$ | 250,159 | (6) | |
$ | 0 | | |
$ | 26,104 | | |
$ | 1,038,807 | |
Senior Vice President, Supply Chain | |
2020 | |
$ | 449,617 | | |
$ | 0 | | |
$ | 1,699,965 | (8) | |
$ | 200,435 | (7) | |
$ | 562,022 | | |
$ | 14,658 | | |
$ | 2,926,697 | |
| |
2019 | |
$ | 397,977 | | |
$ | 0 | | |
$ | 194,412 | | |
$ | 194,370 | (8) | |
$ | 372,108 | | |
$ | 11,198 | | |
$ | 1,170,066 | |
Lesya Lysyj | |
2021 | |
$ | 500,540 | | |
$ | 0 | | |
$ | 244,833 | | |
$ | 244,759 | (6) | |
$ | 0 | | |
$ | 19,268 | | |
$ | 1,009,401 | |
Chief Marketing Officer | |
2020 | |
$ | 485,962 | | |
$ | 0 | | |
$ | 237,306 | | |
$ | 237,420 | (7) | |
| $
607, 452 | | |
$ | 12,698 | | |
$ | 1,580,838 | |
| |
2019 | |
$ | 319,712 | | |
$ | 0 | | |
$ | 1,499,958 | (8) | |
$ | 1,499,971 | (8) | |
$ | 452,125 | | |
$ | 10,193 | | |
$ | 3,781,958 | |
(1) |
Included in this column are amounts earned, although
not necessarily received, during the corresponding fiscal year. |
|
|
(2) |
The Compensation Committee, on occasion, awards Executive Officers
additional discretionary bonus payments outside of the scope of the Executive Officer’s incentive bonus goal plan in recognition
of exceptional performance, in connection with hiring, or for other reasons. |
|
|
(3) |
Reflects the dollar amount of the aggregate grant date fair value
of awards granted during each fiscal year as computed in accordance with Accounting Standards Codification 718, Compensation-Stock
Compensation (“ASC 718”). The methods and assumptions used in valuing the stock option and restricted stock awards in
accordance with ASC 718 are described in the Company’s audited financial statements for Fiscal Year 2021 included in the Company’s
Annual Report on Form 10-K filed with the SEC on February 22, 2022. |
|
|
(4) |
Includes annual group life insurance premium, Company matching contributions
under the Company’s 401(k) plan paid in the respective year, car allowances as applicable, Company health savings contributions
under the Company’s medical plan paid in the respective year, accrued but unused paid time off paid to former employees, fitness
reimbursements, and Relocation Assistance if applicable. For Fiscal Year 2021, Mr. Burwick, Mr. Smalla, Mr. Geist, Ms. Lysyj,
and Mr. Troupe each received 401(k) plan matching contributions in the amount of $11,600. |
|
|
(5) |
Grant contains long-term service-based vesting conditions; as such,
the value reported above reflects the value of the award at the grant date and is consistent with the estimate of aggregate compensation
cost to be recognized over the service period determined as of the grant date under ASC 718, excluding the effect of estimated forfeitures. |
|
|
(6) |
Grant contains performance-based vesting conditions based on
depletions growth as fully described under the heading “Long-Term Equity Awards - Stock Option Awards” above;
the value reported above reflects the value of the award at the grant date and is consistent with the estimate of
aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC 718,
excluding the effect of estimated forfeitures. The Compensation Committee will determine if the performance criteria have
been met prior to March 1, 2023. |
|
|
(7) |
Grant contains performance-based vesting conditions based on
depletions growth as fully described under the heading “Long-Term Equity Awards - Stock Option Awards” above;
the value reported above reflects the value of the award at the grant date and is consistent with the estimate of
aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC 718,
excluding the effect of estimated forfeitures. In February 2022, the Compensation Committee determined that the
performance criteria had been achieved. |
|
|
(8) |
Grant contains performance-based vesting conditions based on
depletions growth as fully described under the heading “Long-Term Equity Awards - Stock Option Awards” above;
the value reported above reflects the value of the award at the grant date and is consistent with the estimate of
aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC 718,
excluding the effect of estimated forfeitures. In February 2021, the Compensation Committee determined that the
performance criteria had been achieved. |
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THE BOSTON BEER COMPANY, INC. |
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Proxy Statement |
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38 |
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We have not paid or provided any perquisites
to any of our Executive Officers, either individually or in the aggregate, in excess of $10,000. Investment Shares of the Company’s
Class A Common Stock purchased by Executive Officers at a discount under the ISP are not included in the Summary Compensation Table. The
Chairman and the CEO are not eligible for the ISP. Executive Officers other than the Chairman and the CEO receive the same opportunity
under the ISP as other ISP Eligible Employees. On December 25, 2021, Mr. Smalla and Mr. Troupe held unvested Investment Shares.
Grants of Plan-Based Awards in Fiscal
Year 2021
The following table describes the potential
range of annual cash incentive awards and potential payouts under equity incentive awards for Fiscal Year 2021 performance, the actual
stock option awards granted during Fiscal Year 2021, the actual RSUs granted during Fiscal Year 2021, and the grant date fair value of
the equity awards.
| |
| |
| |
Estimated Future
Payouts
Under Non-Equity Incentive Plan
Awards(1) | | |
Estimated Future Payouts Under Equity Incentive
Plan Awards | | |
All Other Stock Awards:
Number of | |
All Other Option Awards: Number of Securities | |
Exercise or Base Price
of Option | |
Closing Price on Date of | | |
Grant Date Fair Value
of Stock and Option | |
Name/Type of Award | |
Grant
Date | |
Approval
Date | |
Target
($) | | |
Maximum
($) | | |
Target
(sh) | |
Maximum
(sh) | | |
Shares
of Stock | |
Underlying
Options | |
Awards
($/sh) | |
Grant
($/sh) | | |
Awards
($)(2) | |
David A. Burwick | |
| |
| |
| | | |
| | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Annual Incentive | |
| |
| |
$ | 835,459 | | |
$ | 2,088,648 | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Performance Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| 4,446 | (4) |
| 4,446 | (4) | |
| | |
| |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 2,000,369 | |
Service Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| | |
10,935 | |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 5,000,011 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 1,945 | |
| |
| | |
| | | |
$ | 2,000,841 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 4,861 | |
| |
| | |
| | | |
$ | 5,000,559 | |
Frank H. Smalla | |
| |
| |
| | | |
| | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Annual Incentive | |
| |
| |
$ | 434,454 | | |
$ | 1,086,135 | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Performance Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| 625 | (4) |
| 625 | (4) | |
| | |
| |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 281,203 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 274 | |
| |
| | |
| | | |
$ | 281,867 | |
John C. Geist | |
| |
| |
| | | |
| | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Annual Incentive | |
| |
| |
$ | 434,454 | | |
$ | 1,086,135 | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Performance Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| 625 | (4) |
| 625 | (4) | |
| | |
| |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 281,203 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 274 | |
| |
| | |
| | | |
$ | 281,867 | |
Lesya Lysyj | |
| |
| |
| | | |
| | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Annual Incentive | |
| |
| |
$ | 302,357 | | |
$ | 755,891 | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Performance Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| 544 | (4) |
| 544 | (4) | |
| | |
| |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 244,759 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 238 | |
| |
| | |
| | | |
$ | 244,833 | |
Quincy B. Troupe | |
| |
| |
| | | |
| | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Annual Incentive | |
| |
| |
$ | 259,560 | | |
$ | 648,900 | | |
| | |
| | | |
| | |
| |
| | |
| | | |
| | |
Performance Option | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| 556 | (4) |
| 556 | (4) | |
| | |
| |
$ | 1,028.71 | (3) |
$ | 1,028.71 | | |
$ | 250,159 | |
RSU | |
03/01/2021 | |
2/9/2021 | (3) |
| | | |
| | | |
| | |
| | | |
| 244 | |
| |
| | |
| | | |
$ | 251,005 | |
(1) |
Bonus payouts are determined in accordance with a scale that provides for between 0% and 250%
payout. The target represents 100% payout for full achievement of the performance goals, whereas the maximum represents 250% payout
for achievement above the performance goals. Nevertheless, the Compensation Committee has the discretion to adjust the actual payout
upon evaluation of overall achievement. |
|
|
(2) |
Reflects the dollar amount of the aggregate grant date fair value of awards granted during the
fiscal year as computed in accordance with ASC 718. The method and assumptions used in valuing the equity awards in accordance with
ASC 718 are described in Notes B and P to the Company’s audited financial statements for Fiscal Year 2021, included in the
Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2022. |
|
|
(3) |
On February 9, 2021, upon the recommendation of the Compensation Committee, the Board of Directors
granted the above stock options effective as of March 1, 2021, with an exercise price equal to the closing price of the Company’s
stock on the last trading day immediately prior to the grant date. |
|
|
(4) |
The option vests at 33.3% per year starting on March 1, 2023, provided certain criteria are met.
The vesting of each option is contingent on the Company achieving certain performance criteria. If the compounded annual growth rate
of the Company’s net revenue in 2022 over 2020 is equal to or greater than 2%, but less than 3.5%, 50% of the number of shares
will be eligible to vest in accordance with the vesting schedule. If the compounded annual growth rate of the Company’s net
revenue in 2022 over 2020 is equal to or greater than 3.5%, 100% of the number of shares shall be eligible to vest in accordance
with the vesting schedule. |
|
THE BOSTON BEER COMPANY, INC. |
|
2022
Proxy Statement |
|
39 |
|
|
Outstanding Equity Awards
at 2021 Fiscal Year End
The following table sets forth
information regarding LTE Awards granted to our Named Executive Officers that were outstanding as of December 25, 2021.
| |
Option Awards | | Stock Awards |
Name | |
No.
of
Securities
Underlying Unexercised Options
Exercisable | | |
No. of Securities
Underlying
Unexercised Options
Unexercisable | | |
Equity Incentive
Plan Awards: Number of Securities
Underlying Unexercised Unearned Options | | |
Option
Exercise
Price ($) | | |
Option
Expiration
Date | | |
No.
of
Shares of
Stock That Have Not Vested | | |
Market Value
of Shares that Have Not Vested ($)(1) | |
David A. Burwick | |
| 2,481 | (2) | |
| — | | |
| — | | |
$ | 104.68 | | |
| 05/22/2022 | | |
| 6,542 | (8) | |
$ | 3,433,700 | |
| |
| 1,644 | (2) | |
| — | | |
| — | | |
$ | 151.49 | | |
| 05/28/2023 | | |
| 1,745 | (9) | |
$ | 915,898 | |
| |
| 1,116 | (2) | |
| — | | |
| — | | |
$ | 214.83 | | |
| 06/04/2024 | | |
| 1,600 | (10) | |
$ | 839,792 | |
| |
| 940 | (2) | |
| — | | |
| — | | |
$ | 262.25 | | |
| 05/27/2025 | | |
| 2,022 | (11) | |
$ | 1,061,287 | |
| |
| 1,560 | (2) | |
| — | | |
| — | | |
$ | 157.58 | | |
| 05/25/2026 | | |
| 1,945 | (12) | |
$ | 1,020,872 | |
| |
| 1,698 | (2) | |
| — | | |
| — | | |
$ | 140.05 | | |
| 05/18/2027 | | |
| 4,861 | (13) | |
$ | 2,551,393 | |
| |
| 6,639 | | |
| 3,320 | (3) | |
| — | | |
$ | 229.30 | | |
| 04/30/2028 | | |
| | | |
| | |
| |
| 2,450 | | |
| 4,902 | (4) | |
| — | | |
$ | 312.56 | | |
| 02/28/2029 | | |
| | | |
| | |
| |
| — | | |
| — | | |
| 7,029 | (5) | |
$ | 370.79 | | |
| 02/28/2030 | | |
| | | |
| | |
| |
| 4,446 | (6) | |
| — | | |
| 4,446 | (6) | |
$ | 1,028.71 | | |
| 02/28/2031 | | |
| | | |
| | |
| |
| — | | |
| 10,935 | (7) | |
| — | | |
$ | 1,028.71 | | |
| 02/28/2031 | | |
| | | |
| | |
Frank H. Smalla | |
| 8,967 | | |
| 17,936 | (14) | |
| — | | |
$ | 192.26 | | |
| 02/23/2026 | | |
| 524 | (16) | |
$ | 275,032 | |
| |
| 2,015 | | |
| 1,008 | (15) | |
| — | | |
$ | 191.10 | | |
| 12/31/2027 | | |
| 416 | (10) | |
$ | 218,346 | |
| |
| 637 | | |
| 1,274 | (4) | |
| — | | |
$ | 312.56 | | |
| 02/28/2029 | | |
| 542 | (11) | |
$ | 284,480 | |
| |
| — | | |
| — | | |
| 1,883 | (5) | |
$ | 370.79 | | |
| 02/28/2030 | | |
| 8,090 | (17) | |
$ | 4,246,198 | |
| |
| — | | |
| — | | |
| 625 | (6) | |
$ | 1,028.71 | | |
| 02/28/2031 | | |
| 274 | (12) | |
$ | 143,814 | |
John C. Geist | |
| — | | |
| 37,572 | (18) | |
| — | | |
$ | 201.91 | | |
| 01/01/2026 | | |
| 524 | (16) | |
$ | 275,032 | |
| |
| — | | |
| 1,008 | (15) | |
| — | | |
$ | 191.10 | | |
| 12/31/2027 | | |
| 416 | (10) | |
$ | 218,346 | |
| |
| — | | |
| 1,274 | (4) | |
| — | | |
$ | 312.56 | | |
| 02/28/2029 | | |
| 542 | (11) | |
$ | 284,480 | |
| |
| — | | |
| — | | |
| 1,883 | (5) | |
| 370.79 | | |
| 02/28/2030 | | |
| 2,696 | (19) | |
$ | 1,415,050 | |
| |
| — | | |
| — | | |
| 625 | (6) | |
$ | 1,028.71 | | |
| 02/28/2031 | | |
| 274 | (12) | |
$ | 143,814 | |
Quincy B. Troupe | |
| — | | |
| 8,968 | (14) | |
| — | | |
$ | 192.26 | | |
| 2/23/2026 | | |
| 419 | (16) | |
$ | 219,921 | |
| |
| 705 | | |
| 706 | (15) | |
| — | | |
| 191.10 | | |
| 12/31/2027 | | |
| 312 | (10) | |
$ | 163,759 | |
| |
| 238 | | |
| 954 | (4) | |
| — | | |
| 312.56 | | |
| 02/28/2029 | | |
| 405 | (11) | |
$ | 212,572 | |
| |
| — | | |
| — | | |
| 1,409 | (5) | |
| 370.79 | | |
| 02/28/2030 | | |
| 1,842 | (20) | |
$ | 966,811 | |
| |
| | | |
| | | |
| 556 | (6) | |
| 1,028.71 | | |
| 02/28/2031 | | |
| 244 | (12) | |
$ | 128,068 | |
Lesya Lysyj | |
| — | | |
| 11,827 | (21) | |
| — | | |
$ | 304.56 | | |
| 04/28/2029 | | |
| 2,463 | (22) | |
$ | 1,292,755 | |
| |
| — | | |
| — | | |
| 1,669 | (5) | |
$ | 370.79 | | |
| 02/28/2030 | | |
| 480 | (11) | |
$ | 251,938 | |
| |
| — | | |
| — | | |
| 544 | (6) | |
$ | 1,028.71 | | |
| 02/28/2031 | | |
| 238 | (12) | |
$ | 124,919 | |
(1) |
Market value of shares that have not vested
is calculated using a stock price of $524.87, which is the closing price of the Company’s stock on the last trading
day of Fiscal Year 2021. |
(2) |
Stock option awards granted under the Director Option
Plan, prior to Mr. Burwick’s appointment as President and CEO. |
(3) |
Stock option award granted on April 30, 2018. Contingent
on certain performance criteria being met and continued employment on the applicable vesting date, one-third of the shares
vested on March 1, 2020, January 1, 2021, and January 1, 2022. In February 2020, the Compensation Committee determined that
the performance criteria had been met. |
(4) |
Stock option award granted on March 1, 2019. Contingent
on certain performance criteria being met and continued employment on the applicable vesting date, one-third of the shares
vested or will vest on March 1 in each of the years 2021 to 2023. In February 2021, the Compensation Committee determined
that the performance criteria had been met. |
|
|
www.bostonbeer.com |
|
THE BOSTON BEER COMPANY, INC. |
|
2022
Proxy Statement |
|
40 |
|
|
(5) |
Stock option award granted on March 1, 2020.
Contingent on certain performance criteria being met and continued employment on the applicable vesting date, one-third of
the shares vested or will vest on March 1 in each of the years 2022 to 2024. In February 2022, the Compensation Committee
determined that the performance criteria had been met. |
(6) |
Stock option award granted on March 1, 2021. Contingent
on certain performance criteria being met and continued employment on the applicable vesting date, one-third of the shares
will vest on March 1 in each of the years 2023 to 2025. |
(7) |
Stock option granted on March 1, 2021. Contingent on
Mr. Burwick’s continued employment by the Company on the applicable vesting date, 25% of the shares will vest on March
1, 2024, 25% of the shares will vest on March 1, 2025, and 50% of the shares will vest on March 1, 2026. |
(8) |
RSA granted on April 30, 2018. Contingent on Mr. Burwick’s
continued employment by the Company on the applicable vesting date, 50% of the shares vested on April 30, 2020, 25% of the
shares vested on April 30, 2021, and 25% of the shares will vest on April 30, 2022. |
(9) |
RSA granted on April 30, 2018. Contingent on Mr. Burwick’s
continued employment by the Company on the applicable vesting date, 20% of the shares vested or will vest on January 1 in
the years 2019 to 2023. |
(10) |
RSU granted on March 1, 2019. Contingent on continued
employment by the Company on the applicable vesting date, 25% of the shares vested or will vest on March 1 in the years 2020
to 2023. |
(11) |
RSU granted on March 1, 2020. Contingent on continued
employment by the Company on the applicable vesting date, 25% of the shares vested or will vest on March 1 in the years 2021
to 2024. |
(12) |
RSU granted on March 1, 2021. Contingent on continued
employment by the Company on the applicable vesting date, 25% of the shares vested or will vest on March 1 in the years 2022
to 2025. |
(13) |
RSU granted on March 1, 2021. Contingent on Mr. Burwick’s
continued employment by the Company on the applicable vesting date, 25% of the shares will vest on March 1, 2024, 25% of the
shares will vest on March 1, 2025, and 50% of the shares will vest on March 1, 2026. |
(14) |
Stock option award granted on February 23, 2016. Contingent
on continued employment by the Company on the applicable vesting date, 20% of the shares vested or will vest on February 23
in the years 2019 to 2023. |
(15) |
Stock option award granted on January 1, 2018. Contingent
on certain performance criteria being met and continued employment on the applicable vesting date, one-third of the shares
vested on March 1 in each of the years 2020 to 2022. In February 2020, the Compensation Committee determined that the performance
criteria had been met. |
(16) |
RSA granted on January 1, 2018. Contingent on continued
employment by the Company on the applicable vesting date, 20% of the shares vested or will vest on January 1 in the years
2019 to 2023. |
(17) |
RSU granted on March 1, 2020. Contingent on continued
employment by the Company on the applicable vesting date, 33% of the shares will vest on March 1 in the years 2024 to 2026. |
(18) |
Stock option award granted on January 1, 2016. Contingent
on continued employment by the Company on the applicable vesting date, 25% of the shares vested or will vest on January 1
in the years 2021 to 2024. |
(19) |
RSU granted on March 1, 2020. Contingent on continued
employment by the Company on the vesting date, 100% of the shares will vest on March 1, 2025. |
(20) |
RSU granted on July 28, 2020. Contingent on continued
employment by the Company on the vesting date, 100% of the shares will vest on March 1, 2023. |
(21) |
Stock option award granted on April 29, 2019. Contingent
on Ms. Lysyj’s continued employment on the applicable vesting date, 50% of the shares will vest on April 29, 2022, 25%
of the shares will vest on April 29, 2023, and 25% of the shares will vest on April 29, 2024. |
(22) |
RSU granted on April 29, 2019. Contingent on Ms. Lysyj’s
continued employment on the applicable vesting date, 25% of the shares vested or will vest on April 29 in each of the years
2020 to 2023. |
Option Exercises and Stock
Vested in Fiscal Year 2021
The following table sets forth
information regarding options exercised by our Named Executive Officers in Fiscal Year 2021, RSAs and/or RSUs previously granted
to our Named Executive Officers that vested during Fiscal Year 2021, and information regarding the value realized on such exercises
and vestings.
| |
Option Awards | | |
RSAs & RSUs |
Name | |
No. of Shares Acquired on Exercise (#) | | |
Value Realized on Exercise | | |
No. of Shares Vested (#) | | |
Value Realized on Vesting | |
David A. Burwick | |
| 207 | (1) | |
$ | 198,938 | | |
| 20,153 | | |
$ | 23,933,191 | |
Frank H. Smalla | |
| — | | |
| — | | |
| 688 | | |
$ | 691,089 | |
John C. Geist | |
| 14,169 | | |
$ | 10,776,067 | | |
| 679 | | |
$ | 684,965 | |
Quincy B. Troupe | |
| 5,427 | | |
$ | 4,173,975 | | |
| 530 | | |
$ | 531,185 | |
Lesya Lysyj | |
| — | | |
| — | | |
| 1,391 | | |
$ | 1,654,387 | |
(1) |
Stock option awards were granted pursuant
to our Director Option Plan, prior to Mr. Burwick being appointed as our President and CEO. |
|
|
|
THE BOSTON BEER COMPANY, INC. |
|
2022
Proxy Statement |
|
41 |
|
|
Employment Contracts, Termination
of Employment, and Change in Control Agreements
Stockholder Rights Agreement
A Stockholder Rights Agreement
between Boston Beer and our initial stockholders provides that so long as Mr. Koch remains an employee of Boston Beer: (1) he will
devote such time and effort as a full-time, forty (40) hours-per-week occupation, as may be reasonably necessary for the proper
performance of his duties and to satisfy the business needs of the Company; (2) Boston Beer will provide Mr. Koch with benefits
no less favorable than those formerly provided to him by the Boston Beer Company Limited Partnership; and (3) Boston Beer will
purchase and maintain in effect term life insurance on the life of Mr. Koch.
Non-Compete Agreements
Except for coworkers covered
by a collective bargaining agreement (“CBA”), all full-time coworkers at Boston Beer, including each of our Named Executive
Officers, are required to enter into a non-competition agreement with Boston Beer that prohibits them from accepting employment
with a competitor for a specified time after leaving the Company. Nevertheless, all coworkers at Boston Beer not covered by a CBA
are employed “at-will.”
Change in Control Provisions
in LTE Awards
Our LTE Awards do not discriminate
in scope or terms of operation for Executive Officers or other salaried coworkers, with one exception noted below. As of the end
of Fiscal Year 2021, all outstanding LTE Awards granted under the EEIP on or before December 31, 2015, including those granted
to our Named Executive Officers, vest or become immediately exercisable in full in the event of a Change in Control. All outstanding
LTE Awards granted between January 1, 2016 and December 25, 2021, including those granted to our Named Executive Officers, become
immediately exercisable in full in the event that: (1) there is a Change in Control; and (2) it results in the termination of the
employment of the equity holder without cause or good reason within 12 months of the Change in Control.
For the purposes of our LTE Awards,
the term “Change in Control” means if Chairman C. James Koch and/or members of his family cease to control a majority
of the Company’s Class B Shares, except for the special awards granted to Mr. Burwick in 2021, where the term “Change
in Control” means if Mr. Koch ceases to be Chairman of the Company.
Potential Payments Upon Termination
or Change in Control
As of December 25, 2021, we did
not have employment agreements, severance arrangements, life insurance agreements, or change in control plans with any of our currently
serving Named Executive Officers that would provide severance benefits in the event of the termination of their employment or a
Change in Control. However, the EEIP provides participants, including our Named Executive Officers, with certain rights in the
event of the termination of their employment, including by reason of death or disability or upon a Change in Control of Boston
Beer. This section describes the rights of our Named Executive Officers in the hypothetical event that such contingencies occurred
on December 25, 2021. On that date, the market price of Boston Beer Class A Common Stock was $524.87.
For the purposes of the Company’s
equity grants, the term “Change in Control” means if Mr. Koch and/or members of his family cease to control a majority
of the Company’s issued and outstanding Class B Common Stock, except for the two special awards granted to Mr. Burwick in
2021, where the term “Change in Control” means if Mr. Koch ceases to be Chairman of the Company. The term “Qualified
Termination” means if the Change in Control results in the termination of the employment of the participant without cause
or good reason within 12 months of the Change in Control. “Cause” means: (i) engaging in knowing and intentional illegal
conduct that was or is materially injurious to the Company or its affiliates; (ii) violating a federal or state law or regulation
applicable to the Company’s business, which violation was or is reasonably likely to be injurious to the Company; (iii) being
convicted of, or entering a plea of nolo contendere to, a felony or committing any act of moral turpitude, dishonesty, or fraud
against the Company, or (iv) the misappropriation of material property belonging to the Company or its affiliates. “Good
Reason” means, without the participant’s written consent: (i) a reduction in base salary; or (ii) a relocation of principal
place of
www.bostonbeer.com |
|
THE BOSTON BEER COMPANY, INC. |
|
2022
Proxy Statement |
|
42 |
|
|
work to a location more than
50 miles away from the workplace prior to the relocation; or (iii) the significant reduction of duties or responsibilities when
compared to duties or responsibilities in effect immediately prior to the Change in Control.
Payments or benefits under other
plans and arrangements that are generally provided on a non-discriminatory basis to all similarly situated employees of the Company
upon the termination of their employment are not described, including: (a) accrued base salary; (b) annual incentive earned with
respect to completed performance periods; (c) distribution of vested account balances under the Company’s 401(k) plan; and
(d) life insurance benefits generally available to all fulltime coworkers.
David A. Burwick
In the hypothetical event of
Mr. Burwick’s death, disability, or Qualified Termination on December 25, 2021, he (or his estate in the event of death)
would have had:
• |
3,320 option shares immediately vest pursuant
to his April 30, 2018 stock option award, exercisable at a price of $229.30. In the hypothetical event that he exercised and
sold those shares at the market price on that date, he would have received gross income of $981,292. |
• |
4,902 option shares immediately vest pursuant to his March
1, 2019 stock option award, exercisable at a price of $312.56. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $1,040,744. |
• |
7,029 option shares immediately vest pursuant to his March
1, 2020 stock option award, exercisable at a price of $370.79. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $1,083,028. |
• |
4,446 option shares immediately vest pursuant to his March
1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would not have received any gross income due to the exercise price being higher
than the market price. |
• |
10,935 option shares immediately vest pursuant to his special
March 1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that he exercised and sold
those shares at the market price on that date, he would not have received any gross income due to the exercise price being
higher than the market price. |
• |
18,715 restricted shares (RSAs or RSUs) immediately vest
pursuant to the terms of those awards. In the hypothetical event that he sold those shares at the market price on that date,
he would have received gross income of $9,822,942. |
In aggregate, Mr. Burwick would
have received gross income of $12,928,006 upon occurrence of the hypothetical events described above.
Frank H. Smalla
In the hypothetical event of
Mr. Smalla’s death, disability, or Qualified Termination on December 25, 2021, he (or his estate in the event of death) would
have had:
• |
17,936 option shares immediately vest pursuant
to his February 23, 2016 stock option award, exercisable at a price of $192.26. In the hypothetical event that he exercised
and sold those shares at the market price on that date, he would have received gross income of $5,965,693. |
• |
1,008 option shares immediately vest pursuant to his January
1, 2018 stock option award, exercisable at a price of $191.10. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $336,440. |
• |
1,274 option shares immediately vest pursuant to his March
1, 2019 stock option award, exercisable at a price of $312.56. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $270,483. |
• |
1,883 option shares immediately vest pursuant to his March
1, 2020 stock option award, exercisable at a price of $370.79. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $290,133. |
• |
625 option shares immediately vest pursuant to his March
1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would not have received any gross income due to the exercise price being higher
than the market price. |
• |
9,846 restricted shares (RSAs or RSUs) immediately vest
pursuant to the terms of those awards. In the hypothetical event that he sold those shares at the market price on that date,
he would have received gross income of $5,167,870. |
In aggregate, Mr. Smalla would
have received gross income of $12,030,619 upon occurrence of the hypothetical events described above.
|
THE BOSTON BEER COMPANY, INC. |
|
2022
Proxy Statement |
|
43 |
|
|
John C. Geist
In the hypothetical event of
Mr. Geist’s death, disability, or Qualified Termination on December 25, 2021, he (or his estate in the event of death) would
have had:
• |
37,752 option shares immediately vest pursuant
to his January 1, 2016 stock option award, exercisable at a price of $201.91. In the hypothetical event that he exercised
and sold those shares at the market price on that date, he would have received gross income of $12,134,253. |
• |
1,008 option shares immediately vest pursuant to his January
1, 2018 stock option award, exercisable at a price of $191.10. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $336,440. |
• |
1,274 option shares immediately vest pursuant to his March
1, 2019 stock option award, exercisable at a price of $312.56. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $270,483. |
• |
1,883 option shares immediately vest pursuant to his March
1, 2020 stock option award, exercisable at a price of $370.79. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $290,133. |
• |
625 option shares immediately vest pursuant to his March
1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would not have received any gross income due to the exercise price being higher
than the market price. |
• |
4,452 restricted shares (RSAs or RSUs) immediately vest
pursuant to the terms of those awards. In the hypothetical event that he sold those shares at the market price on that date,
he would have received gross income of $2,336,721. |
In aggregate, Mr. Geist would
have received gross income of $15,368,030 upon occurrence of the hypothetical events described above.
Quincy B. Troupe
In the hypothetical event of
Mr. Troupe’s death, disability, or Qualified Termination on December 25, 2021, he (or his estate in the event of death) would
have had:
• |
8,968 option shares immediately vest pursuant
to his February 23, 2016 stock option award, exercisable at a price of $192.26. In the hypothetical event that he exercised
and sold those shares at the market price on that date, he would have received gross income of $2,982,846. |
• |
706 option shares immediately vest pursuant to his January
1, 2018 stock option award, exercisable at a price of $191.10. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $235,642. |
• |
954 option shares immediately vest pursuant to his March
1, 2019 stock option award, exercisable at a price of $312.56. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $202,544. |
• |
1,409 option shares immediately vest pursuant to his March
1, 2020 stock option award, exercisable at a price of $370.79. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would have received gross income of $217,099. |
• |
556 option shares immediately vest pursuant to his March
1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that he exercised and sold those
shares at the market price on that date, he would not have received any gross income due to the exercise price being higher
than the market price. |
• |
3,222 restricted shares (RSAs or RSUs) immediately vest
pursuant to the terms of those awards. In the hypothetical event that he sold those shares at the market price on that date,
he would have received gross income of $1,691,131. |
In aggregate, Mr. Troupe would
have received gross income of $5,329,262 upon occurrence of the hypothetical events described above.
Lesya Lysyj
In the hypothetical event of
Ms. Lysyj’s death, disability, or Qualified Termination on December 25, 2021, she (or her estate in the event of death) would
have had:
• |
11,827 option shares immediately vest pursuant to her April 28, 2019 stock option award, exercisable at a price of $304.56. In the hypothetical event that she exercised and sold those shares at the market price on that date, she would have received gross income of $2,605,606. |
• |
1,669 option shares immediately vest pursuant to her March 1, 2020 stock option award, exercisable at a price of $370.79. In the hypothetical event that she exercised and sold those shares at the market price on that date, she would have received gross income of $257,160. |
• |
544 option shares immediately vest pursuant to her March 1, 2021 stock option award, exercisable at a price of $1,028.71. In the hypothetical event that she exercised and sold those shares at the market price on that date, she would not have received any gross income due to the exercise price being higher than the market price. |
• |
3,181 RSUs immediately vest pursuant to the terms of those awards. In the hypothetical event that she sold those shares at the market price on that date, she would have received gross income of $1,669,611. |
In aggregate, Ms. Lysyj would
have received gross income of $4,532,377 upon occurrence of the hypothetical events described above.
www.bostonbeer.com |
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THE BOSTON BEER COMPANY, INC. |
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Proxy Statement |
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Pay Ratio
Disclosure
The SEC requires companies to
disclose the total compensation paid to their median employee, as well as the ratio of the annual total compensation of their CEO
to the annual total compensation of the median employee. The ratio presented below is a reasonable estimate calculated in a manner
consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934.
As outlined in detail in the
Summary Compensation Table and elsewhere in this Proxy Statement, in 2021 Mr. Burwick earned annual total compensation of $14,840,956.
During that same period, our median-compensated coworker’s annual total compensation was $74,745. The breakdown of the annual
total compensation mix of the CEO and the Company’s median employee, which we refer to as our median-compensated coworker,
is outlined below.
Position | |
Salary | | |
Performance Bonus | | |
Equity Awards | | |
Other Comp | | |
Total |
CEO | |
$ | 826,278 | | |
$ | 0 | | |
$ | 14,001,780 | | |
$ | 12,898 | | |
$ | 14,840,956 |
Median-Compensated Coworker | |
$ | 68,959 | | |
$ | 2,250 | | |
$ | 0 | | |
$ | 3,536 | | |
$ | 74,745 |
For the purposes of determining
the 2021 annual total compensation of the CEO and the median-compensated coworker, “Other Comp” includes group life
insurance premium contributions by the Company, Company matching contributions under the Company’s 401(k) plan, company contributions
to health savings accounts, wellness plan reimbursements, car allowances (if applicable), and reimbursement of relocation expenses
(if applicable).
In determining the median-compensated
coworker, a list was prepared of all coworkers of the Company as of December 15, 2019, excluding the CEO and coworkers on leaves
of absence. The list was ranked by total compensation, and the median-compensated coworker was selected from that ranking. For
Fiscal Year 2021 and as permitted by SEC rules, we utilized the same “median-compensated coworker” established based
on the December 2019 ranking. We do not believe that any changes to our coworker population or coworker compensation during Fiscal
Year 2021 would result in a significant change to our pay ratio.
As a result, we estimate that
Mr. Burwick’s 2021 annual total compensation was approximately 199 times that of our median-compensated coworker.
We understand that the CEO pay
ratio is intended to provide greater transparency to annual CEO pay and how it compares to the pay of our median-compensated coworker.
As such, we are providing a supplemental ratio that compares Mr. Burwick’s regular annual pay, excluding the two special
LTE Awards granted to Mr. Burwick in 2021, as described in the CD&A under the heading “Special LTE Awards to Mr. Burwick,”
to the pay of our median-compensated coworker. We believe that this supplemental ratio reflects a more representative comparison.
The resulting supplemental CEO pay ratio estimate is approximately 65 to 1.
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Proxy Statement |
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Stock Ownership
of Board, Management, and Principal Stockholders
The following table sets forth
certain information regarding beneficial ownership of our Class A Common Stock and Class B Common Stock as of the Record Date,
by:
• |
Our Directors as of that date, all of whom
are nominees for reelection; |
• |
Our 2021 Named Executive Officers; |
• |
All Directors and Executive Officers as a group; and |
• |
Each person (or group of affiliated persons) known by
us to be a beneficial owner of more than 5% of our outstanding Class A Common Stock or Class B Common Stock. |
The information provided in the
table is based on our records, information filed with the SEC, and information provided to us, except as otherwise noted. Beneficial
ownership is determined under the rules of the SEC; the
information set forth below is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules, beneficial
ownership includes any shares as to which an individual has sole or shared voting power or investment power and any shares that
the individual has the right or option to acquire under certain circumstances. Unless otherwise indicated, each person named below
held sole voting and investment power over the shares listed. All shares listed below are Class A Shares, except for Class B Shares,
all of which are held by Mr. Koch. Ownership percentages shown below are percentages of all outstanding Class A Shares, except
in the case of the percentage ownership of Mr. Koch, which reflects his percentage ownership of all outstanding Class A Shares
and Class B Shares.
| |
Shares Beneficially Owned |
Name of Beneficial Owner | |
Number | | |
Percent |
Directors
and Named Executive Officers: | |
| | |
| |
C.
James Koch(1) | |
2,275,972 | | |
18.5 | % |
Samuel
A. Calagione, III(2) | |
365,035 | | |
3.6 | % |
Cynthia
A. Fisher(3) | |
204,611 | | |
2.0 | % |
David
A. Burwick(4) | |
82,928 | | |
* | |
Frank
H. Smalla(5) | |
38,874 | | |
* | |
Jean-Michel
Valette(6) | |
17,518 | | |
* | |
John
C. Geist(7) | |
13,548 | | |
* | |
Michael
Spillane(8) | |
7,438 | | |
* | |
Quincy
B. Troupe(9) | |
6,747 | | |
* | |
Lesya
Lysyj(10) | |
5,786 | | |
* | |
Meghan
V. Joyce(11) | |
2,211 | | |
* | |
Julio
N. Nemeth(12) | |
1,558 | | |
* | |
Michael
M. Lynton(13) | |
532 | | |
* | |
All
Directors and Executive Officers as a group (17 people) | |
2,863,770 | | |
23.3 | % |
Owners
of 5% or More of the Company’s Outstanding Shares: | |
| | |
| |
T.
Rowe Price Associates, Inc.(14) 100 E. Pratt Street Baltimore,
MD 21202 | |
1,324,015 | | |
12.9 | % |
The
Vanguard Group(15) 100 Vanguard Blvd., Malvern, PA 19355 | |
859,096 | | |
8.4 | % |
BlackRock,
Inc.(16) 55 East 52nd Street New
York, NY 10055 | |
798,400 | | |
7.8 | % |
Durable
Capital Partners LP(17) 5425 Wisconsin Avenue, Suite 802 Chevy
Chase, Maryland 20815 | |
580,187 | | |
5.8 | % |
* Represents
holdings of less than one percent (1%).
www.bostonbeer.com |
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|
(1) |
Mr. Koch’s shares include 16,027 directly-held
Class A Shares; 131 unvested shares of restricted stock; 2,068,000 directly-held Class B Shares, constituting all of the outstanding
shares of Class B Common Stock; options to acquire 10,921 Class A Shares, exercisable currently or within sixty (60) days;
23,486 Class A Shares held as custodian for the benefit of his children; 116,627 Class A Shares held by as the sole member
of a family foundation; and 5,000 Class A Shares held as trustee in a trust of which he is the sole beneficiary. His shares
also include 35,780 Class A Shares reported as beneficially owned by his wife Ms. Fisher, consisting of 2,532 Class A Shares
held as trustee of irrevocable trusts for the benefit of their children, and 33,248 Class A Shares held in a collection of
generation skipping trusts, as to which Ms. Fisher has sole voting and investment power and as to which Mr. Koch disclaims
beneficial ownership. |
(2) |
Mr. Calagione’s shares include 14,040 directly
held Class A Shares; 27,165 Class A Shares held in a trust for the benefit of his son; 27,165 Class A Shares held in trust
for the benefit of his daughter; 99,430 Class A Shares held in a dynasty trust for the benefit of his wife and children; 102,284
Class A Shares held in a family trust for the benefit of his wife and children; and 94,951 Class A Shares held in a limited
partnership for which Mr. Calagione is a partner. |
(3) |
Ms. Fisher’s shares include 400 directly held
Class A Shares; options to acquire 8,181 Class A Shares exercisable currently or within sixty (60) days. Her shares also include
2,532 Class A Shares held as trustee of irrevocable trusts for the benefit of her children; 33,248 Class A Shares held by
as trustee of a collection of generation-skipping trusts; and 20,537 Class A Shares held in trust by a limited liability company
of which she is the manager and to which she disclaims beneficial ownership. Her shares also include 23,486 Class A Shares
reported as beneficially owned by her husband, Mr. Koch, as custodian for the benefit of their children, for which Mr. Koch
has sole voting and investment power and as to which Ms. Fisher disclaims beneficial ownership. Her shares also include 116,627
Class A Shares reported as beneficially owned by Mr. Koch as sole member of a family foundation, as to which Ms. Fisher disclaims
beneficial ownership. |
(4) |
Mr. Burwick’s shares include 24,937 directly held
Class A Shares, options to acquire 26,435 Class A Shares exercisable currently or within sixty (60) days, 21,099 unvested
shares of restricted stock, and 10,457 Class A Shares held in a Spousal Lifetime Access Trust for the benefit of his spouse,
as to which Mr. Burwick disclaims beneficial ownership and has no voting or investment power. |
(5) |
Mr. Smalla’s shares include options to acquire
22,859 Class A Shares exercisable currently or within sixty (60) days and 10,056 unvested shares of restricted stock. |
(6) |
Mr. Valette’s shares include options to acquire
3,560 Class A Shares exercisable currently or within sixty (60) days. |
(7) |
Mr. Geist’s shares include options to acquire
8,796 Class A Shares exercisable currently or within sixty (60) days and 4,490 unvested shares of restricted stock. |
(8) |
Mr. Spillane’s shares consist of options to acquire
7,438 Class A Shares exercisable currently or within sixty (60) days. |
(9) |
Mr. Troupe’s shares include options to acquire
359 Class A Shares exercisable currently or within sixty (60) days and 2,765 unvested shares of restricted stock. |
(10) |
Ms. Lysyj’s shares include 4,193 unvested shares
of restricted stock. |
(11) |
Ms. Joyce’s shares consist of options to acquire
2,448 Class A Shares exercisable currently or within sixty (60) days. |
(12) |
Mr. Nemeth’s shares consist of options to acquire
1,795 Class A Shares exercisable currently or within sixty (60) days. |
(13) |
Mr. Lynton’s shares consist of options to acquire
769 Class A Shares exercisable currently or within sixty (60) days. |
(14) |
Information is based on a Schedule 13G/A filed with
the SEC on February 14, 2022 by T. Rowe Price Associates, Inc., which reported sole voting power with respect to 437,917 shares
and sole dispositive power with respect to 1,324,015 shares. |
(15) |
Information is based on a Schedule 13G/A filed with
the SEC on February 9, 2022 by The Vanguard Group, which reported sole voting power with respect to 0 shares, shared voting
power with respect to 5,525 shares, sole dispositive power with respect to 845,852 shares, and shared dispositive power with
respect to 13,244 shares. |
(16) |
Information is based on a Schedule 13G/A filed with
the SEC on February 1, 2022 by BlackRock, Inc., which reported sole voting power with respect to 751,820 shares and sole dispositive
power with respect to 798,400 shares. |
(17) |
Information is based on a Schedule 13G/A filed with
the SEC on February 12, 2021 by Durable Capital Partners LP, Durable Capital Associates LLC, and Henry Ellenbogen, which reported
sole voting power with respect to 580,187 shares, shared voting power with respect to 0 shares, sole dispositive power with
respect to 580,187 shares, and shared dispositive power with respect to 0 shares. |
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Environmental,
Social, and Governance
We are committed to
strong corporate governance, corporate responsibility, and the accountability of our Board and our ELT to our stockholders.
This section provides a summary of the Board’s and management’s oversight of our strategies regarding our
culture; our people; diversity, equity, and inclusion; social responsibility; sustainability; our response to the COVID-19
pandemic; and our current approach and future aspirations regarding our public reporting on Environmental, Social, and
Governance (“ESG”) initiatives. While senior management is responsible for the day-to-day execution of ESG
initiatives, it provides regular reports and updates to the Board or its committees, who have oversight responsibility for
these topics. The full Board, receiving recommendations from the Compensation Committee, is responsible for oversight of the
Company’s culture and people initiatives, including diversity, equity, and inclusion. The Nominating/Governance
Committee oversees the Company’s social responsibility and sustainability initiatives. The Audit Committee is
responsible for oversight of the Company’s response to the COVID-19 pandemic.
Culture
In 1984, our Chairman C. James “Jim”
Koch discovered his great-great grandfather’s recipe for Louis Koch Lager in his father’s attic. Looking to follow
his family’s passion for brewing, Jim brewed the recipe in his kitchen with the hopes of challenging the status quo in the
American beer industry. Shortly thereafter he founded Boston Beer and began walking bar-to-bar with a briefcase full of beer that
he called Samuel Adams Boston Lager, in recognition of one of our nation’s great founding fathers, a revolutionary man of
independent mind and spirit. Boston Lager soon became a catalyst of the American craft beer revolution, making its public debut
in Boston on Patriot’s Day in April 1985. Since that time, Jim has carried on that entrepreneurial spirit to try to build
a company where:
● |
People feel safe, challenged, and unafraid of the right kind of failure or learning from their mistakes |
● |
People do what’s right for the Company instead of what’s right for their careers and believe that they and their coworkers will prosper by doing so |
● |
Disagreements are framed in ways that can be resolved by facts, analysis, logic, and expertise |
● |
Decisions are made based on principles of rational inquiry instead of organizational position or force of personality |
● |
Leadership is accountable and collaborative |
● |
Communication is honest, open, and direct, people can say what they really think, and no one is retaliated against for telling the truth, and |
● |
We can move with radical speed and agility on crucial, time-sensitive projects by improving processes and removing waste from those processes. |
We are continuously focused on developing an inclusive
and respectful work environment where all coworkers at every level will feel empowered to honestly “discuss the undiscussables”
with other coworkers at any level of the Company, all the way up to the Chairman and the CEO, without fear of retribution. Jim
teaches this philosophy during orientation to all new coworkers, and many company meetings, including all our national company
meetings, have time set aside to discuss the undiscussables.
The Board discusses company culture with management
on a regular basis, including how we can best scale this culture across our growing organization so that all coworkers feel included.
People & Culture is a regular agenda item on the Board calendar, and culture is intertwined in almost every Board discussion
about the Company’s operations.
People
As a Company, we are
always seeking to attract, develop, engage, motivate, and reward a diverse group of highly talented coworkers by providing
competitive compensation, developmental opportunities, an inclusive and respectful work environment, and an exciting culture.
The Board and the ELT believe that implementing and executing successful strategies in the areas of talent acquisition,
development and training, succession planning, and coworker engagement are vital to the Company’s continued success.
The ELT discusses these topics on a regular basis and is responsible for the day-to-day execution of these strategies. The
Board’s involvement in these areas is ongoing, providing regular input to management.
In recent years we refreshed our people strategy,
articulating three strategic pillars that are designed to support business growth and our future aspirations. These pillars are:
(1) workforce, including the future capabilities we need for continued success; (2) experience, including attracting, engaging,
and retaining this workforce in the future workplace; and (3) culture, including extending our culture such that all coworkers
feel included and valued.
www.bostonbeer.com |
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Talent Acquisition
In 2021 we faced unprecedented challenges regarding
industry workforce availability and competition for talent. Our Talent Acquisition team continued to work diligently to seek, attract,
and hire talent over the course of the year.
As we have worked to
raise the bar and improve our coworker and leadership base, we have implemented recruitment initiatives such as process and
technological enhancements, refreshment of our employer brand, a continually evolving competitive compensation strategy, and
continuing to build on an inclusive and respectful work environment. In 2021, we hired and/or promoted a total of 850 new
coworkers, up from 623 new coworkers in 2020. We were able to achieve this while expanding our recruiting efforts to focus on
a broader and more diverse set of applicants, yielding a 3% uptick in diverse hiring. To further support our diversity hiring
strategy, we added dedicated resources to focus on sourcing diverse and early-in-career talent. Our efforts in this area are
also outlined in detail under the heading “Diversity, Equity, and Inclusion” below. We have also continued to
concentrate on methods to ensure adequate focus on the key skills needed to support our business growth and evolution,
specifically with respect to the ongoing transformation of our supply chain.
Leadership is one of our key core competencies.
Our team is working to translate how we define those capabilities into a well-built assessment process for the hiring of leadership
roles. In 2021 we also continued to refresh and showcase our employer “brand” by enhancing our presence on various
social media platforms where job seekers frequent, including LinkedIn, Instagram, Indeed, and Glassdoor. These efforts link back
to the recognition that our candidates may also be our consumers, leading to the development of insightful reporting mechanisms
that will provide data analytics in this space.
Development
and Training
One of the most important elements of our people
strategy is to foster a culture of ongoing training, learning, and education. We make this investment to enhance employee engagement,
reduce employee turnover, and to better enable our coworkers to be able to achieve our ambitious goals. Some examples of trainings
we provide to coworkers include New Coworker Orientation, Respectful and Effective Communications, Leading the Boston Beer Company
Way, Selling Skills, Negotiations, Building Brands, Group Communication Skills, and Strategic Selling. Additionally, all coworkers
receive beer and cider education training during New Coworker Orientation during their first six months. Then, after having been
with the Company for one year, coworkers are invited to participate in further beer and cider education courses where they can
train to be certified as industry experts in those areas. We believe that we have the most beer industry experts, called “Certified
Cicerones,” in the beer industry.
Our culture of
learning begins on day one at New Coworker Orientation, where new coworkers spend a week learning about the Company, our
culture, the industry, and the other integral facets of our business. It also extends through dedicated programming at our
National Company Meeting. This year’s National Company Meeting included a dedicated Development Day which featured a
keynote speech on leading through change, as well as targeted sessions on working and leading through the challenges of a
hybrid work environment. We also introduced several programs to enhance leadership development in 2021, including New Leader
Onboarding, Giving Effective Feedback, Navigating from Peer to Supervisor, Making Impactful Presentations, and a six-course
series on leadership development by Harvard Business School.
In October 2020, the Company rolled out a formal
mentoring and leadership program called Mentoring and Learning Together, or “MALT”, to connect dozens of senior and
junior coworkers across a range of backgrounds with the purpose of diversifying perspectives, building networks, developing capabilities,
growing competencies, and cultivating leadership. During 2021, we had approximately 240 mentors and mentees participate in the
MALT Program.
We also continued our investment in leadership
coaching in 2021 via our virtual coaching platform. As coworkers approach key inflection points in their careers, the Leadership
and Development team provides twelve weeks of targeted professional development coaching with a dedicated coach. These engagements
begin with an initial 360-degree evaluation to pinpoint areas of strength and opportunity, as well as the development of an action
plan to address key issues.
Sales training has always been a critical element
of development at Boston Beer. The Sales Training Team is actively engaged in our current onboarding process for new coworkers,
works closely with sales managers to provide guidance and coaching to support assimilation to our leadership approaches and methodologies,
and executes regular training sessions to ensure managers are in positions to effectively coach and develop their teams.
Succession Planning
The Board is primarily
responsible for succession planning for the CEO, but also participates in succession planning discussions for other Executive
Officer positions. The Compensation Committee oversees the processes and discussions regarding succession planning. The CEO
and Chief People Officer also provide reports to the full Board on succession planning of other Executive Officers and key
senior managers. The Board understands the potential costs and risks of bringing in an outside CEO or
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executive officer in today’s environment,
and that businesses are often – but not always -- more successful in promoting internal candidates. Additionally, we have
believed in the power of growing our internal talent since the Company was founded. Accordingly, the Board and management make
efforts to identify potential successors for those positions long in advance of any potential positional vacancies, perform skills
gap analyses for those internal candidates, and provide training and exposure on those gap areas to those candidates to develop
better potential successors.
Investing in the growth and development of our
coworkers allows us to fill many of our roles internally although we recognize the value of bringing in external talent when specific
needs cannot be met. These needs include but are not limited to growing the diversity of our teams, focusing on building critical
skills within emerging functional areas, and rapidly scaling teams to support business growth.
As part of the Company’s succession planning
strategy, in 2018 the Company formed an Extended Leadership Team consisting of the ELT and approximately 60 senior managers, primarily
consisting of the direct reports of the ELT (the “XLT”). The XLT meets monthly, and the interactions are a key leadership
development opportunity, allowing the XLT to provide input on the Company’s overall strategies, organizational priorities,
participate in key management decisions, and build cross-functional relationships.
We will continue to focus on ensuring that succession
plans are in place for executive and other critical roles, and to create plans to fill any gaps where successors are not identified.
We will continue to improve the data that we collect and review on internal talent and continue to create programs and experiences
intended to meaningfully build the critical capabilities and competencies across all areas of the organization.
Coworker Engagement
The Company continued to run internal engagement
surveys of coworkers, including comprehensive Company-wide surveys, manager 360 surveys, exit surveys, and ad-hoc topical surveys
for targeted audiences. In 2021, we saw 80% participation from our coworkers in our annual engagement survey, which reflected an
increase from 72% in 2020. Our coworkers’ commitment to the Company remains high, and the survey resulted in positive responses
to questions related to pride in Boston Beer, embodiment of Company values, and confidence in the future. Additionally, coworkers
overwhelmingly cited leadership’s response to COVID-19 and care for coworkers as a differentiator during a difficult second
year of the pandemic. There were also high scores in wellbeing and diversity, two new areas of focus for 2021.
We have also continued dedicated efforts to improve
internal and cross-functional communications. In 2021, the team expanded with a dedicated internal communications resource focused
on coworkers who work at our brewery locations. The year also brought the launch of Brew Hub, a company-wide intranet to serve
as the primary channel for Company news and updates. We also expanded virtual town-hall meetings to a monthly cadence and continued
regular emails from the CEO to the entire Company.
In 2021, we developed a new focus group program
to give our coworkers a voice in helping to evolve key areas of the business and Boston Beer’s culture. We worked with a
diverse and ever-changing group of coworkers to brainstorm opportunities for change within Boston Beer and identify solutions that
were presented to leadership, business partners and other critical stakeholders across the Company. The focus groups took place
monthly and covered topics such as future of work, performance development systems, and career development.
In 2021, the Company expanded the Coworker Affinity
Groups, otherwise referred to as Coworker Networks, which were established in 2019 to provide a community to connect with coworkers
on shared affinities and educate others who want to learn more. Coworker Networks have since evolved to help inform Company and
consumer decisions, create development opportunities for their members, and facilitate external networking connections. In addition
to the five established groups in the areas of LGBTQIA+, working parents, veterans, drug and alcohol support, and sustainability,
we added two new resource groups (now seven total) focused on women in beer and our black, African American, Asian, Hispanic, and
multiracial coworkers.
Safety
“Make the breweries the safest place our
coworkers can be outside of their homes.” That was the expectation set by our chairman Jim Koch at the outset of the pandemic
in 2020. This statement now serves as the backdrop to the daily expectations that drive our safety programs. At the Boston Beer
Company, safety is one of our key values.
Our experience in 2021
identified opportunities for improvement. While our Total Incident Rate remained less than industry average, and our Days
Away, Restricted or Transferred (DART) rate was even lower, we still recorded 29 coworker injuries across our Supply Chain
and Retail operations over the course of the year. These injuries evolved out of issues related to forklift operations;
slips, trips, and falls; and lacerations from working with glass and knives. Consequently, our 2022 efforts are specifically
focused on ergonomics, powered industrial truck safety, and personal protective equipment.
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In addition to these specific focus areas, we
are reinforcing the value of self-directed problem solving. In 2022 we will launch our own behavioral observation program called,
Good Catch!, by empowering coworkers to identify and self-respond to unsafe conditions, whether in the moment or by escalating
larger, systemic issues to a supervisor. Our hope is that this program enables engagement and reinforces the value of safety to
create a sustainably safe work environment.
We have established a set of objectives for 2022,
with the goal of a 20% reduction in recordable injuries. In furtherance of that goal, we have identified a series of key targets
for our coworkers:
● |
100% completion of all assigned Environment, Health, & Safety training; |
● |
100% completion of monthly department-driven safety inspections; |
● |
90% close-out of safety-driven action items within 30 days; and |
● |
90% or better on-time reporting of safety incidents. |
Diversity, Equity,
and Inclusion
As an equal opportunity employer, the Company
is committed to creating a diverse and fair-minded organization that recognizes and values differences - inclusive of race, color,
sexual orientation, gender identity, religion, national origin, age, veteran status, and mental/physical disability. We make these
efforts to reinforce a workplace that supports and uplifts coworkers to feel accepted, equal, and involved, and to increase diverse
representation across our organization, which is critical to continued success. Prior to 2021, the Company took numerous steps
in furtherance of this goal:
● |
Diversity, Equity, and
Inclusion, or DE&I, was the sole focus of our annual “Action Learning Project” in 2019, where a
cross-functional group of high-potential employees is formed annually to tackle an issue of vital importance to the Company. The
Action Learning Project Group met every week for over ten months, identifying potential solutions to improve diversity across the
Company. The group presented its findings and proposed solutions to the Executive Leadership Team and a leadership group consisting
of the Company’s key senior managers in late 2019. |
● |
We created a Coworker Resource Group platform in 2019 designed to provide a community to connect with coworkers on shared affinities and educate others who want to learn. As of 2021, we currently have seven coworker resource groups focused in the areas of LGBTQIA+, working families, veterans, drug and alcohol support, sustainability, women’s support, and multicultural representation. |
● |
Since 2019, DE&I has been an area of discussion at each of our National Company Meetings. |
● |
In early 2020, the Action Learning Project evolved into the creation of a Diversity & Inclusion Committee. The goal of the Committee is to continue to advance efforts of fostering open dialogue about diversity, equity, and inclusion to ensure sustained awareness and growth. |
● |
In late 2020, we appointed a coworker to the newly created full-time position of Diversity, Equity & Inclusion Leader to spearhead our DE&I efforts. The position is a member of our Extended Leadership Team. |
● |
In 2020 we formed a multi-cultural task force, comprised of a cross-functional group of coworkers, to analyze and support the evolving makeup and needs of our consumer base. Since that time, we have leveraged our brands as external platforms to amplify these values and support social causes. |
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We established long-term relationships in 2020 with the NAACP, Civic Alliance, and GLAAD to further our knowledge and support of issues facing black, brown, and LGBTQIA+ communities. |
In 2021, we launched the next phase of our DE&I
strategy focused on continuing to guide an open-minded and informed culture, maintaining the authentic intersections of our brand
identities within cultural conversations, and working with our partners to create industry change. The multi-year strategy was
presented to the full Board of Directors to ensure visibility, support, and participation. Our strategy allows for clear and consistent
top-down direction on the impact our DE&I efforts have on our people strategy and business aspirations, while also enabling
our coworkers to create bottom-up initiatives that support the overall strategic intent. Our strategy will come to life in the
following three areas: (1) making sustainable coworker lifecycle improvements by expanding capabilities to attract, retain, and
develop diverse talent that mirrors our consumer base; (2) strengthening and growing allyship and an inclusive culture by leveraging
inclusive leadership practices, coworker network engagements, and external partnerships; and (3) providing economic impact by maintaining
and fostering new partnerships with businesses owned by underrepresented groups. Some of the steps we took in 2021 to achieve that
goal included:
● |
We included several new DE&I focused questions within our yearly coworker engagement survey to better understand coworker sentiment on DE&I issues. |
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We undertook an extensive pay equity analysis with an independent external vendor and committed to closing any uncovered gaps. |
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We increased DE&I visibility, communication, and education through quarterly reviews with leadership; a new company-wide DE&I newsletter; a focus month observance platform; and a new listening and learning bi-monthly series called Courageous Conversations. Some of the topics discussed during Courageous Conversations included racism, sexism/sexual harassment within the beer industry, the American dream, our culture, Afghanistan withdrawal, and healthier habits around stress and triggers. |
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We established a supplier diversity task force to research and develop an operational plan resulting in the commitment to create a new position focused on supplier diversity, to be filled in 2022. |
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We began development of a multi-pronged DE&I learning platform, which included several issue-specific trainings such as de-escalation and LGBTQ+ policies and representation, while also enhancing our current training program on bias, harassment, and leadership. |
● |
We launched a series of workshops with ELT and XLT focused on trust, inclusion, and psychological safety. |
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The Talent Acquisition Team focused its recruiting efforts to a broader and more diverse set of applicants, yielding a 3% uptick in diverse hiring in 2021. |
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We participated in the Human Rights Campaign Equality Index alongside 1,271 organizations, receiving a score of 70% out of 100%. |
EEO-1 Data
Boston Beer is an equal opportunity employer.
As part of our commitment to improve our DE&I efforts, we recognize we must be transparent about our own population, including
sharing key data from our EEO-1 reports filed with the Equal Employment Opportunity Commission. In addition to collecting data
from our coworkers on an ongoing basis, we annually poll our Directors and Officers to allow them to voluntarily self-identify
their demographic characteristics.
As of December 31, 2020, 2 of the 9 members of
the Board of Directors were female and 1 of 9 self-identified as part of an underrepresented minority group; 3 of 11 Executive
Officers were female and 1 of 11 self-identified as part of an underrepresented minority group.
Across the Company’s broader professional
population, approximately 33.6% of our total workforce identified as female, 29.9% of our mid-level coworkers and managers identified
as female, and 25% of our senior-level coworkers identified as female. For the purposes of these statistics, we define “senior
level coworkers” to mean executives officers, and “mid-level coworkers” to mean “First/Mid-Level Officials
and Manager” as that term is defined by the U.S. Equal Opportunity Commission. For Boston Beer, that includes all people
managers below the executive level.
![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsamx55x1.jpg) |
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of
our population
identified as female |
of
our Mid Level Coworkers
identified as female |
of
our Senior Level Coworkers
identified as female |
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In 2020, approximately
19.3% of our total workforce self-identified as part of an underrepresented minority group, 6.9% of our mid-level coworkers
and managers self-identified as part of an underrepresented minority group, and 12.5% of our senior-level coworkers
self-identified as part of an underrepresented minority group.
![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsamx55x4.jpg) |
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of
our population identified
as part of an underrepresented
minority group |
of
our Mid Level
Coworkers identified as part
of an underrepresented
minority group |
of
our Senior Level
Coworkers identified as part
of an underrepresented
minority group |
www.bostonbeer.com |
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As of December 31, 2021, 2 of the 9 members of
the Board of Directors were female and 1 of 9 self-identified as part of an underrepresented minority group; 3 of 11 Executive
Officers were female and 1 of 11 self-identified as part of an underrepresented minority group. Across the Company’s broader
professional population, approximately 34.6% of our total workforce
self-identified as female; 37.7% of new hires in 2021 self-identified as female, 17.1% of our total workforce self-identified as
part of an underrepresented minority group, and 25.6% of new hires in 2021 self-identified as part of an underrepresented minority
group.
![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsamx56x1.jpg) |
![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsamx56x2.jpg) |
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of
our 2021 population
identified as female |
of
our 2021 new hires
identified as female |
of
our 2021 population
identified as part of an
underrepresented
minority group |
of
our 2021 new hires is
part of an underrepresented
minority group |
We recognize that there is still significant progress
needed to be made within DE&I. Looking ahead to 2022, we aspire to build off our early learnings and momentum with additional
DE&I focused initiatives.
● |
We intend to continue participation in external benchmarking studies to further shape our thinking and build credibility with our coworkers, consumers, and partners. |
● |
We will look to build a deeper comprehension of the importance of understanding the makeup of our workforce via analytics, data review, and reporting. |
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We plan to implement the tenets of our DE&I strategy across all areas of learning and development on a companywide basis to support the holistic skillsets we aspire in our leaders. |
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We will continue to hone our recruiting strategy with a continued focus on building and maintaining relationships with diversity organizations, increasing awareness around bias and inclusivity in the workplace and recruiting processes, and keeping non-discriminatory and inclusive job descriptions with aspirations towards achieving annual increases in diverse job applicants and hires. |
Social Responsibility
Social responsibility is a critical component
of our internal and external culture and is an annual agenda item on the calendar of the Nominating/Governance Committee. In 2021,
our Social Impact Team enjoyed its first full year as a dedicated team within the company with a dedicated Social Impact Leader.
The team was created in 2020 to bring our existing efforts under a single umbrella with a cohesive strategy, strong leadership,
and broad support from senior management. Some of the highlights of our social impact efforts are outlined below, aligned with
priorities around philanthropy, volunteering, community partnerships, and responsible marketing.
One of our core
philanthropic initiatives, Samuel Adams Brewing the American Dream, helps food, beverage, and brewing entrepreneurs launch
and sustain their small businesses. The goal of the program is to help strengthen small businesses, create local jobs, and
build vibrant communities. In partnership with Accion/Opportunity Fund, the nation’s largest non-profit micro-lender,
the program also provides access to business capital. Since the inception of the Samuel Adams Brewing the American Dream
program in 2008, the Company and partners like Accion/Opportunity Fund have worked together to loan more than $74 million to
nearly 3,500 small business owners who have subsequently repaid these loans at a rate of more than 95%. The loan repayments
received are reinvested into the program. Boston Beer coworkers, together with local business partners and community
organizations, have provided coaching and mentoring to more than 13,000 business owners across the country. We estimate that
these efforts have helped to create or maintain more than 9,000 local jobs.
Dogfish Head’s Beer & Benevolence program
creatively collaborates with nonprofit organizations to foster community, nourish artistic advancement, and cultivate environmental
stewardship. The efforts, focused in the mid-Atlantic region that the Dogfish Head brand calls home, invests about $500,000 annually
into the local community in the form of direct grants, product donations, fundraising and events. In 2021, the Beer & Benevolence
program partnered with nearly 100 organizations to make an impact across the coastal Delaware region.
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We also piloted a
volunteer program called Boston Beer Volunteers! in 2021. The goal of the program is to provide opportunities for our
coworkers to engage with the communities where we operate, allowing us to extend our efforts on key issues like
sustainability and diversity. Boston Beer Volunteers! leverages a digital platform to present coworkers with opportunities to
volunteer in their local communities, participate in virtual volunteering, and sign up for our Benevolence Days. Benevolence
Days are on-the-clock single day community service projects organized by the Boston Beer Social Impact Team. During a
Benevolence Day, coworkers roll up their sleeves and make direct impact in our communities. In addition, Benevolence Days
allow cross-team connections as coworkers work alongside people they don’t necessarily work with on a daily basis. In
2021, the Company hosted Benevolence Days in Boston, Ohio, Delaware, and Pennsylvania.
Socially Responsible
Advertising and Product Offerings
One of our core values is the responsible marketing
and advertising of our products. As a member of the Brewers Association and the Beer Institute, we have pledged to maintain high
standards and act as responsible corporate citizens. This includes promoting responsible consumption in our marketing materials
and ensuring that our marketing materials do not target minors or portray, encourage, or condone underage drinking, drunk driving,
irresponsible consumption of alcohol, people lacking control of their behavior as a result of drinking alcohol, illegal activity
in connection with the consumption of alcohol, sexually explicit activity as a result of drinking alcohol, nudity, or littering
with alcohol containers or packaging.
We also believe that
one way to help mitigate the potentially harmful risks of drinking is to provide our drinkers with non-alcoholic and
low-alcohol beer options. To that end, in the spring of 2021, we launched Samuel Adams Just the Haze, a hazy, juicy,
full-flavored non-alcoholic IPA, and Dogfish Head Lemon Quest, a refreshing non-alcoholic brewed with real lemon puree,
blueberry juice, acai berries, monk fruit, sea salt – both on a nationwide basis. We anticipate that non-alcoholic beer
offerings will be a growing segment of the beer category for years to come and we intend to be an innovation leader within
that sub-category.
In December 2021, we announced the upcoming release
of Kernza Pils in collaboration with Patagonia Provisions. Kernza Pils is brewed with Kernza, organic barley, and organic Contessa
hops. Developed by The Land Institute in Salina, Kansas, Kernza is a perennial grain that is ideally suited for organic and regenerative
agriculture – its long roots and perennial growth allow it to thrive without pesticides and use less water than conventional
wheat, while helping to reduce erosion and remove more carbon from the atmosphere. With new viable perennial crops like Kernza,
farmers can help regenerate topsoil and remove nitrogen, preventing its loss to groundwater at deeper soil profiles. It’s
good for the planet and the farmer. The more nationally available products are created, the greater the demand for regenerative
perennial crops like Kernza. The hope is that more farmers take steps to transition their land from conventional to regenerative
and organic.
Environmental Initiatives
Our environmental impact is an important area
of focus as an organization, particularly as we embark upon our new, holistic focus on sustainability. In 2021, we continued movement
on the path that we had laid out in 2020, which focused heavily on waste management practices at our breweries: diverting spent
grains, yeast, diatomaceous earth, used carbon, and other brewing byproducts from landfill while simultaneously supporting local
agricultural feed requirements and composting efforts. We continue to send waste-to-energy at our largest brewery in Pennsylvania.
We discovered a passion among out taproom coworkers to address the influx of single-use plastic drinkware that became a reality
as we navigated the COVID-19 pandemic, but resulted in heightened attention to the topic of waste management.
We are committed to report sound metrics and set
meaningful and reasonable waste reduction goals in the future. In 2021, we performed an assessment of gaps and risks in this area,
which proved to be a valuable tool. A robust, concerted effort will need to be deployed across our sites to get an accurate picture
of the depth and breadth of our existing waste stream tonnage, and also to ascertain how we can improve our existing efforts at
waste reduction, reuse, and recycling.
In 2022, we intend to focus on data collection
and benchmarking. As we push forward with these efforts, we recognize the complexities of collecting accurate, consistent, and
defensible data on waste management and diversion are vast and challenging. This will require significant cross functional collaboration
across a broad set of coworkers, departments, locations, and business partners.
www.bostonbeer.com |
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COVID-19 Response
We continued to manage the
COVID-19 pandemic in 2021 as well could have been expected given the ebb and flow of the virus, the introduction of new variants,
and the -evolving guidance from public health officials and the federal government. Over the course of the year, we adjusted our
way of working such that coworkers had choices – hybrid work, business critical travel options; virtual learning and meetings
– all geared toward reducing stress and enabling the most efficient use of time and resources in the face of an unpredictable
situation.
One of our earliest actions
in 2021 was to educate and advocate for vaccination. Out of respect for the diversity of opinions amongst our coworkers, we opted
not to mandate vaccination, but rather do everything we could to provide credible and legitimate information that could inform
their decision to get the vaccine. We believe this effort was successful – more than 83% of our coworkers were vaccinated
in 2021. This effort served the organization well as we entered the Delta variant phase of the pandemic and even better during
the Omicron phase, resulting in fewer coworkers who were ill and even fewer who missed work because of exposure or illness.
One of the critical learnings
of the Delta phase was that the risk experienced by unvaccinated coworkers was greater and less controllable. To that end, we developed
both a voluntary and mandatory testing program that allowed coworkers to order and receive a saliva PCR test to their home. This
testing effort enabled early visibility to asymptomatic carriers that minimized exposure and risk to others. Additionally, it was
a mechanism for all coworkers to secure tests in advance of the holidays, minimizing risk to friends and families. This program
was provided at no cost to our coworkers.
Throughout the year, there
were decisions that required the organization to flex and adapt, most notably within the hospitality sector of our business. Local
mandates around vaccination status and masks required changes to operating protocols in New York, Los Angeles, and Boston –
changes that impacted both coworkers and guests. We were able to stay 100% functional and open for all but a few weeks in select
locations toward the end of the year. Most importantly, we were able to keep our hospitality coworkers fully employed.
Our breweries in Pennsylvania,
Ohio, Delaware, and Massachusetts remained open and produced product throughout the year. Due to early implementation of aggressive
safety protocols, the majority of our coworkers remained safe, healthy, and ready to work. Up until the Omicron phase, the impact
of the virus was relatively mild, both in case counts and severity of illness. By the time Omicron hit in December, a substantial
number of our vaccinated coworkers had been boosted, which minimized the overall impact to our operations.
Throughout the year,
forward-thinking and decisive action by our ELT was critical to ensuring our locations achieved or goal of remaining the
“safest place a coworker could be outside of their home.” To do so, we continued our work with a board-certified
emergency room physician to develop and implement protocols that we believe met or exceeded recommendations from government
agencies and remain in place today:
● |
We continued with a conservative mask policy for all segments of our business and maintained a supply that allowed us to provide surgical, KN95, and N95 masks at no charge to all coworkers. Throughout 2021, the use of a medical-grade mask was a requirement to work at any Boston Beer facility. |
● |
We facilitated on-site vaccination clinics at our production breweries for coworkers, temporary workers, contractors, and family members. More than 475 people took advantage of this offering. |
● |
We continued to adjust to changing CDC guidelines related to quarantine and isolation, opting to take the most conservative approach to case management. In some instances, this meant extending quarantine beyond CDC and state guidelines to ensure the safety of others. We utilized of contact mapping processes in an effort to provide protection for our coworkers and their families. |
● |
We continued with daily, aggressive cleaning practices using both our own production operators and third-party cleaners to try to ensure that our operating locations were clean at all times. This ongoing effort touched not only common spaces like break rooms, meeting rooms, and hallways, but also equipment centers and operating equipment. |
● |
We kept our coworkers up to date on changing protocols, the evolving conditions of the virus, transmission risks, protective measures, and how to get help. We continued with location-based communications like posters, banners, visual communications, and virtual meetings. A dedicated email address was established and promoted to coordinate timely response to coworker concerns and to support case management. |
● |
In 2021, we modified out pandemic pay program to allow for paid time off for those coworkers who were vaccinated but required to quarantine or isolate. |
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As we reported in last years’ Proxy Statement, in 2020 we sought to support our community by launching the Samuel Adams Restaurant Strong Fund, which raised funds to support bar and restaurant workers who are experiencing hardships in the wake of COVID-19. As of the end of 2021, the Fund had raised more than $15 million. |
In 2022, we recognize that
the situation will continue to evolve, and accordingly we will need to flex and adapt to change. Ultimately, we will seek to put
safety at the forefront of our efforts, follow the science, properly inform our coworkers, and respect reasonable differences of
opinion as it relates to the pandemic.
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Sustainability
The Board holds conversations with management
about growing the Company in sustainable and environmentally responsible manners, because we believe doing so will create long-term
value. While the ELT is responsible for the management of our sustainability initiatives, the Nominating/Governance Committee oversees
and provides guidance on those initiatives.
We feel that we made pivotal progress in this
area in 2021, as we committed to harnessing corporate sustainability as a strategic asset that will contribute to our organizational
competitiveness over the long term. We made a compelling case to increase our focus the area of sustainability, beginning the transition
from a set of informal sustainability practices to a more concerted, strategic, and holistic approach. As an initial step of that
process, in late 2020 the management team approved the addition of a new position of Senior Sustainability Manager, which position
was ultimately filled in the third quarter of 2021. The Senior Sustainability Manager immediately commences a collaborative effort
towards developing our overall sustainability goals and vision.
In the fourth quarter of 2021 we reached a critical
milestone in that journey by adopting our corporate sustainability philosophy, which is intended to guide our progress and ensure
close alignment between sustainability and organizational strategic planning. The philosophy includes the following three tenets:
● |
We see Corporate Sustainability as holistic, lying at the interface of environmental management, social responsibility, and economic improvement; |
● |
We aim to reduce waste and maximize our investments across environmental, social, and economic pillars; and |
● |
We see an opportunity to improve people’s lives and the world around us as we add value to our business. |
With this philosophy at the top of mind and strongly
advocated by senior management, our next priority has been to ensure the systematic embedding of sustainability across all levels
and areas of the business, to ensure a cohesive, cross-functional approach going forward. With the establishment of these drivers,
we are prepared to change our historical approach to sustainability. This previous approach was primarily focused on a wide variety
of tactical environmental efforts voluntarily initiated by individual sites. These efforts were outlined in last year’s Proxy
Statement under the heading “Environment and Sustainability.” While these efforts have continued, our new improved
approach will focus on cross-functionality and cohesiveness through larger programs across the organization, rather through “bolt-on”
tactical improvements. We will also focus on capturing and maintaining critical, measurable sustainability data that will help
establish our environmental footprint as an organization for the purposes of strategic planning for improvement.
We also took several
steps in 2021 to further our commitment to embed sustainability in all levels of the organization. We established a
companywide network group on sustainability that captured the interest and participation of over 200 coworkers, representing
all company location and departments. The group is focused on providing a space for the development and incubation of
grassroots initiatives and voluntary participation by a robust sector of our company that is passionate about environmental
stewardship and sustainability in general. In 2021 we also formed an Executive Sustainability Committee (“ESC”)
comprised of a select group of members of our ELT and XLT. To ensure a close link between our operational and commercial
interests, the ESC will play an integral role in ensuring that sustainability penetrates all levels of the organization. It
will also assist in guaranteeing that our sustainability vision and strategy remains linked to our mission, vision, and
values, while providing a conduit to the full ELT. As we progress in our sustainability journey and begin to innovate ways to
make progress on program goals and sustainability targets, it will be imperative for our organizational leaders to be aware
of, approve of, and provide a level of executive support for the operationally significant initiatives that will be required
to make progress related to our vision.
As noted above under the heading “Stockholder
Engagement”, we also had numerous meetings with our institutional investors in 2021, essentially all of which included conversations
about the Company’s approach to sustainability. The Chair of our Nominating/Governance Committee, our Chief People Officer,
the Senior Sustainability Manager, and our Corporate Secretary generally participated in those meetings, where we gained important
insights into our investors’ approach towards sustainability and the importance they place on the subject matter. These discussions
also played a significant role in forming our approach towards our building out our strategy around future ESG disclosures, which
strategy is outlined in more detail under the heading “Future Aspirations for Standalone ESG Reporting” below.
Looking ahead to 2022, we aspire to continue the
momentum we made in 2021 towards our strategic sustainability goals. Our aspirational goals for 2022 are outlined below.
● |
We will look to establish our level of ambition at this early stage of our sustainability journey through concerted benchmarking and discussions with the ESC. |
● |
As discussed in more detail below, we are working with a third party to conduct a Materiality Assessment to capture input from internal and external stakeholders that allows us to focus on the issues that our most significant to our business. |
● |
We hope to identify a framework and strategy for our ESG reporting efforts. |
● |
We plan to further energize and engage of our coworkers with the official launch of a sustainability strategy and roadmap. |
● |
We hope to launch an onboarding a data management software platform to capture auditable, defensible data pertaining to our prioritized environmental metrics, which will likely include water consumption, energy consumption, and greenhouse gas emissions. |
● |
We will look to develop the underpinnings of a publicly disclosable climate statement that will establish our belief that climate change is real and pave the way for development of our own unique climate strategy. |
● |
We plan to embark upon a project to develop public facing ESG reporting, as noted below. |
www.bostonbeer.com |
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Future Aspirations
for Standalone ESG Reporting
During outreach meetings over the course of 2021,
our institutional investors set forth their expectations regarding public company reporting on ESG matters. They generally expressed
interest in more quantifiable disclosure in the future on topics such as water usage, diversity, energy usage, emissions, recycling,
coworker engagement, supplier measurement, and social impact initiatives. Investors suggested that such disclosures may be best
suited to be shared on the Company’s investor relations website or in a regularly updated standalone report. We also understand
and appreciate that the SEC has proposed rules that may require publicly traded companies to provide more information in the future
on how their operations affect the climate and carbon emissions.
To that end, we launched a project in the summer
of 2021 to aspire towards that goal in the short-term future. As a first step towards that goal, we decided to commence a “Materiality
Assessment” to determine which of our ESG initiatives are most critical to our Board, ELT, coworker base, potential job applicants,
stockholders, suppliers, and our community in general. We launched a Request for Proposals to select a vendor for the Materiality
Assessment in August 2021. We selected a vendor in December 2021 and kicked off the Materiality Assessment project in January 2022.
We anticipate that the project will continue through the spring of 2022, at which point we will determine the most critical ESG
areas to track and report on as a starting point. We aspire to commence such reporting in the short-term future. We also firmly
understand that this will be an iterative process that will likely constantly evolve over time.
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Audit
Information
Deloitte served as our independent registered
public accounting firm and audited our consolidated financial statements for Fiscal Year 2021 and Fiscal Year 2020.
Fees Paid to
Independent Registered Public Accounting Firm
The Audit
Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent
registered public accounting firm. The Audit Committee pre-approved all such audit and non-audit services provided by
Deloitte during 2021 and 2020. The aggregate fees billed to the Company by Deloitte for Fiscal Year 2021 and Fiscal Year 2020
were as follows:
| |
2021 | | |
2020 |
Audit Fees | |
$ | 1,171,634 | | |
$ | 905,000 |
Audit-Related Fees(1) | |
$ | 57,207 | | |
$ | 86,661 |
Tax Fees(2) | |
$ | 70,000 | | |
$ | 129,000 |
TOTAL | |
$ | 1,298,841 | | |
$ | 1,120,661 |
(1) |
Audit-related fees in 2021 and 2020 represent
fees paid to Deloitte for work related to the Company’s 401(k) and pension plans. |
(2) |
Tax fees in 2021 and 2020 represent fees paid to
Deloitte for federal and state tax return compliance assistance. |
Representatives of Deloitte are expected to be
present at the 2022 Annual Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to
be available to respond to questions.
Audit Committee
Report1
The Audit Committee, which is comprised of three
independent Directors, oversees Boston Beer’s financial reporting process on behalf of the Board. In that regard, the Audit
Committee has reviewed and discussed our audited consolidated financial statements with our management and Deloitte. The Audit
Committee has also discussed with Deloitte the matters required to be discussed pursuant to applicable standards of the Public
Company Accounting Oversight Board (“PCAOB”). The Audit Committee has received and reviewed the written disclosures
and the letter from Deloitte required by the applicable requirements of the PCAOB regarding Deloitte’s communications with
the Audit Committee concerning independence and has discussed with Deloitte their independence.
In addition, the Audit
Committee met with senior management periodically during 2021 and reviewed key initiatives and programs aimed at
strengthening the effectiveness of our internal and financial and operating control effectiveness. The full scope of the
Committee’s responsibilities is outlined under the heading “Audit Committee” above. As part of its
processes, the Audit Committee has continued to monitor the scope and steps taken to implement recommended improvements in
internal procedures and controls. The Audit Committee regularly meets privately with representatives of Deloitte, our
Director of Internal Audit, and other members of our management, each of whom has unrestricted access to the Audit
Committee.
Based on the review and discussions referred to
above, the Audit Committee recommended to the Board that the audited financial statements should be included in our Annual Report
on Form 10-K for Fiscal Year 2021 filed with the SEC.
|
Jean-Michel Valette (Chair)
Meghan V. Joyce
Julio N. Nemeth |
1 | The material in this report is not “soliciting material,” is not deemed
filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of
any general incorporation language in any such filing. |
www.bostonbeer.com |
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Voting
Matters for 2022 Annual Meeting
Item
1: |
Election
of Class A Directors by Class A Stockholders |
The Board of
Directors, upon the recommendation of the Nominating/Governance Committee, has nominated Meghan V. Joyce, Michael Spillane,
and Jean-Michel Valette for election to the Board as Class A Directors for a one-year term. All three are incumbent Class A
Directors. Provided a quorum is present and it is an uncontested election, these Directors are elected by a plurality of
votes cast by the Class A Stockholders at the Annual Meeting.
The Board of Directors
recommends that the Class A Stockholders vote “FOR” all nominees for Class A Director.
Item
2: |
Advisory
Vote on Executive Compensation by Class A Stockholders |
At Boston Beer’s 2017
Annual Meeting of Stockholders, a non-binding advisory vote was taken on the frequency of future advisory votes regarding Named
Executive Officer compensation. Consistent with the recommendation of the Board of Directors, a majority of Class A Shares cast
on the matter were in favor of holding such an advisory vote on an annual basis. After consideration of the 2017 voting results,
and based upon its prior recommendation, the Board determined that we would conduct future advisory votes regarding compensation
awarded to its Named Executive Officers on an annual basis. While the Class A Stockholders have only limited voting rights, consistent
with the intent of the Dodd-Frank Act and SEC rules, the Board is providing Class A Stockholders with the opportunity to cast a
non-binding advisory vote to approve the compensation of Boston Beer’s Named Executive Officers, as disclosed in this Proxy
Statement pursuant to the compensation disclosure rules of the SEC.
The compensation of
our NEOs is disclosed in the CD&A, the compensation tables, and the related disclosures contained in this Proxy
Statement. As described in the CD&A, Boston Beer has adopted an executive compensation philosophy designed to deliver
competitive total compensation upon the achievement of financial and/or strategic performance objectives that will attract,
motivate, and retain leaders who will drive the creation of stockholder value. In order to implement that philosophy, the
Compensation Committee has established a disciplined process for the adoption of executive compensation programs and
individual Executive Officer pay actions. Boston Beer believes that its compensation policies and decisions are focused on
pay-for-performance principles, are strongly aligned with the long-term interests of our stockholders, and provide an
appropriate balance between risks and incentives. Stockholders are urged to read the CD&A, which discusses in greater
detail how Boston Beer’s compensation policies and procedures implement its executive compensation philosophy. The
Board of Directors asks the stockholders to indicate their support for the NEO compensation program, as described in this
Proxy Statement, by approval of the following resolution:
“RESOLVED, that the compensation policies and procedures
followed by Boston Beer and the Compensation Committee of Boston Beer’s Board of Directors and the level and mix of
compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to the compensation disclosure rules
of the SEC, including the CD&A, compensation tables, and narrative discussion resulting from such policies and
procedures, are hereby determined to be appropriate for Boston Beer and are accordingly approved.”
The vote on this
Item 2 is advisory, and therefore not binding on the Company, the Compensation Committee, or the Board. The vote will not be
construed to create or imply any change to the fiduciary duties of the Company or the Board, or to create or imply any
additional fiduciary duties for the Company or the Board. However, the Board and the Compensation Committee value input
from stockholders and will consider the outcome of the vote when making future executive compensation decisions.
The affirmative vote of a
majority of the shares present or represented and entitled to vote either in person or by proxy is required to approve this Item
2.
The Board of Directors
recommends a vote “FOR” the adoption of the foregoing resolution approving Boston Beer’s executive compensation
policies and procedures and the compensation paid to its Named Executive Officers for Fiscal Year 2021, as disclosed in the CD&A,
the compensation tables, and related narratives in this Proxy Statement.
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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59 |
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Item
3: |
Election
of Class B Directors by the Class B Stockholder |
The Nominating/Governance Committee recommends
that David A. Burwick, Samuel A. Calagione, III, Cynthia A. Fisher, C. James Koch, Michael M. Lynton, and Julio N. Nemeth be elected
at the Annual Meeting as Class B Directors for a one-year term. All six are incumbent Class B Directors.
The Board of Directors
recommends that the Class B Stockholder vote “FOR” all such nominees for Class B Director.
Item
4: |
Ratification
of Appointment of Independent Registered Public Accounting Firm by the Class B Stockholder |
Deloitte has been selected by the Audit Committee
to serve as our independent registered public accounting firm for Fiscal Year 2022.
Although our By-Laws do not require stockholder
ratification or other approval of the retention of our independent registered public accounting firm, as a matter of good corporate
governance, the Board is requesting that the Class B Stockholder ratify the selection of Deloitte as our independent registered
accounting firm for Fiscal Year 2022.
Under Boston Beer’s By-Laws, voting rights
regarding matters other than a limited number of specific issues solely rest with the Class B Stockholder(s). Accordingly, an affirmative
vote of the sole Class B Stockholder is required to approve this Item 4.
The Board of Directors
recommends that the Class B Stockholder vote “FOR” the ratification of the appointment by the Audit Committee of Deloitte
as our independent registered public accounting firm for Fiscal Year 2022.
www.bostonbeer.com |
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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Frequently
Asked Questions
This Proxy Statement is provided in connection
with the solicitation of proxies by the Board of Directors of Boston Beer for use at the 2022 Annual Meeting of Stockholders and
any adjournments thereof.
1. |
When and where
is the Annual Meeting and who may attend? |
The Annual Meeting
will be held on Wednesday, May 18, 2022, at 3:00 p.m. ET at the Samuel Adams Boston Taproom, located at 60 State Street in
Boston, Massachusetts. Please note that this is a different location than prior years! Check-in prior to the formal portion
of the meeting will take place in the lobby area of the Taproom, which will be open at approximately 2:00 p.m. ET.
Stockholders who are entitled to vote are permitted to attend the meeting. Use of public transportation is strongly
encouraged due to parking limitations. The closest subway stops are Government Center and State. For the commuter rail, the
Taproom is also approximately a half-mile walk through downtown Boston from both South Station and North Station. While we
anticipate being able to accommodate all attendees based on historical attendance statistics, we also encourage you to arrive
early due to capacity restrictions at the Taproom. Please note that the City of Boston may require proof of vaccination for
admittance to the Taproom.
2. |
Who is eligible to vote? |
You are eligible to
vote if you held shares of Class A or Class B Common Stock as of the close of business on the Record Date, March 21, 2022.
Each outstanding Class A Share and Class B Share entitles the stockholder to one (1) vote on each matter properly brought
before the respective Class. On the Record Date, we had outstanding and entitled to vote 10,243,941 Class A Shares and
2,068,000 Class B Shares.
3. |
What is the difference between a “Registered Stockholder”
and a “Beneficial Owner”? |
If your shares are
registered in your name on the books and records of Computershare, our registrar and transfer agent, you are a
“Registered Stockholder” (also sometimes referred to as a Stockholder of Record). If you are a Registered
Stockholder, we sent the Notice directly to you. If your shares are held by your broker or bank on your behalf, you are
considered a “Beneficial Owner.” If this is the case, the Notice and instructions on how to vote your shares have
been sent to you by your broker, bank, or other holder of record.
4. |
I am eligible to vote and want to attend the Annual
Meeting. What do I need to bring? Do I need to contact Boston Beer in advance of the Annual Meeting? |
If you are a
Stockholder of Record, please bring your Admission Ticket, the Notice, or other evidence of ownership, if you voted by mail,
or the Notice and photo identification, if you voted by phone or internet. If you are a Beneficial Owner, you must present
proof of ownership of Boston Beer shares as of March 21, 2022, such as the Notice you received from your broker or a
brokerage account statement, and photo identification. In either case, you do not need to contact us in advance to inform us
that you will be attending.
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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61 |
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5. |
I am a Registered Stockholder. How do I cast my vote? |
By Internet or
Telephone Prior to the Meeting: You may vote your shares via the internet or by telephone by following the instructions
provided in the Notice. To vote by the internet, go to www.envisionreports/sam and follow the steps outlined on the
secured website. To vote by telephone, call toll free at 1-800-652-8683. Internet and telephone voting for Stockholders of
Record will be available 24 hours a day and will close at 11:59 p.m. ET on May 17, 2022.
By Mail Prior to the Meeting: If you received
printed copies of the Proxy Materials, you may vote by completing, signing, and dating the Proxy Card and returning it in the prepaid
envelope.
In Person at the Annual Meeting: You may
vote in person at the Annual Meeting. If you voted via proxy before the meeting, you must revoke it in order to vote in person.
If you need to revoke your proxy, please consult with a Boston Beer representative upon admission to the Annual Meeting.
6. |
I am a Beneficial Owner. How do I cast my vote? |
As the Beneficial
Owner, you have the right to direct your broker, bank, or other holder of record on how to vote your shares by mail using the
voting instruction card included in the mailing. You will receive instructions from your broker, bank, or other holder of
record regarding how to provide direction on the voting of your shares. If you are a Beneficial Owner and wish to vote
your shares in person at the Annual Meeting, you must bring a Legal Proxy provided by your bank, broker, or other holder of
record.
7. |
Why did I receive a Notice of Internet Availability
of Proxy Materials instead of printed Proxy Materials? |
As permitted by the rules of the SEC and as a
way to reduce our printing and mailing costs, we make the Proxy Materials available to our stockholders on the internet. Unless
you previously asked to receive a paper copy of the Proxy Materials, we mailed you a Notice containing instructions on how to access
the Proxy Materials online, as well as how you may submit your proxy over the internet or by telephone. If you would like a paper
copy of our Proxy Materials, please follow the instructions contained in the Notice.
8. |
What is a “proxy” and what is a “proxy
statement”? |
A “proxy” is the legal designation
of another person to vote the shares you own. That other person is called your proxy. If you designate someone as your proxy in
a written document, that document is also called a proxy or a proxy card. A “proxy statement” is a document that SEC
regulations require us to give you when we ask you to designate individuals to vote on your behalf.
9. |
As a Class A Stockholder, what are my voting choices
for each of the proposals to be voted on at the Annual Meeting? |
Item 1: Election of Three Class A Director
Nominees
Voting Choices
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● |
Vote in favor of all nominees; |
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Vote for specific nominees and withhold a favorable vote for specific nominees; or |
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Withhold a favorable vote for all nominees. |
The Board recommends
a favorable vote FOR ALL nominees.
Item 2: Non-binding advisory Say-on-Pay vote
to approve Boston Beer’s NEO Compensation
Voting Choices
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● |
Vote for the proposal; |
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● |
Vote against the proposal; or |
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● |
Abstain from voting for the proposal. |
The Board recommends a vote FOR the proposal.
www.bostonbeer.com |
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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62 |
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10. |
How many shares must be present, in person or by proxy,
to hold the Annual Meeting? |
The holders of a majority of the issued and outstanding
shares of each class of Common Stock are required to be present in person or to be represented by proxy at the Annual Meeting in
order to constitute a “quorum” to vote on the matters coming before their respective Class.
11. |
How will “withhold” votes and
abstentions be counted for matters to be voted on by the Class A Stockholders? |
Abstentions and “withhold” votes will
be counted as present in determining whether the quorum requirement is satisfied.
As our Class A Director nominees are running unopposed
this year and are elected by a plurality of votes cast by the Class A Stockholders, each nominee technically only needs one vote
to be elected. However, our Class A Stockholders have the option to express dissatisfaction with one or more candidates by indicating
that they wish to “withhold” favorable votes with respect to certain or all Class A Director nominees. A substantial
number of “withhold” votes will not prevent a nominee from getting elected, but could potentially influence decisions
by the Board concerning future nominations.
Abstentions on the advisory vote of Class A Stockholders
regarding the compensation of our Named Executive Officers will have the same effect as negative votes.
12. |
I am a Class A Stockholder. What if I do not specify
a choice for a matter when returning a proxy card? |
If you are a
Stockholder of Record and you sign and return the proxy card without indicating your instructions, your shares will be voted
as recommended by the Board on each of the agenda items for which you are entitled to vote and have not clearly indicated
your vote. For example, your shares will be voted in favor of each of the Class A Director nominees and in favor of the
proposal to approve, on an advisory basis, the Company’s 2021 NEO compensation. In addition, if other matters come
before the meeting, your proxy will have discretion to vote on these matters in accordance with their best judgment. If you
are a Beneficial Owner and do not provide voting instructions on the form provided by your bank, broker, or other nominee
holding your shares of Class A Common Stock, your shares may not be voted with respect to “non-routine” matters
such as the election of directors and the proposal to approve, on an advisory basis, the Company’s 2021 NEO
compensation.
13. |
What does it mean if I receive more than one Notice? |
If you receive multiple Notices, it means that
you hold your shares in different ways (for example, some shares held by you directly, some beneficially or in a trust, in custodial
accounts, or by joint tenancy) or in multiple accounts. Each Notice you receive should be voted separately by internet, telephone,
or mail.
14. |
May stockholders ask questions at the Annual Meeting? |
Yes. There will be a question-and-answer period
after the formal portion of the meeting has concluded. In order to provide an opportunity for everyone who wishes to ask a question,
stockholders may be limited in the number of questions they may ask. Stockholders should direct questions to the Chairman and confine
questions to matters that relate to Company business.
15. |
When will Boston Beer announce the voting results? |
We will announce the preliminary voting results
at the Annual Meeting. We will report the final results in a Form 8-K filed with the SEC within four business days after the meeting.
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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63 |
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16. |
I lost my Notice or Proxy Materials. How am I able
to vote? |
You will need the
control number found on the bottom of your Notice to be able to vote your shares. If you are a Stockholder of Record and you
have not received your Notice or Proxy Materials by April 29, 2022 or have lost or misplaced your Notice or Proxy Materials,
please contact Computershare at 888-877-2890 or www.computershare.com to get your control number. If you are a Beneficial
Owner, please contact your bank, broker, or other holder of record.
17. |
Can I revoke or change my proxy? |
You may revoke or
change your proxy at any time before it is exercised by: (1) delivering a signed proxy card to Boston Beer with a date later
than your previously delivered proxy; (2) voting in person at the Annual Meeting after revoking your proxy; (3) granting
a subsequent proxy through the internet or telephone; or (4) sending a written revocation to our Corporate Secretary, Michael
G. Andrews. Your most current proxy is the one that will be counted.
18. |
Who incurs the expenses of the proxy solicitation? |
All proxy soliciting
expenses incurred in connection with the Company’s solicitation of proxies for the Annual Meeting will be borne by the
Company. Our officers and employees may solicit proxies by mail, telephone, fax, or personal contact, without being
additionally compensated. In addition, Boston Beer has retained Morrow Sodali, a professional proxy solicitation firm, to
assist in the solicitation of proxies for a fee of $7,500, plus reimbursement of reasonable out-of-pocket expenses.
19. |
How can I contact Boston Beer? |
Our mailing address is: The Boston Beer Company,
Attn: Investor Relations, One Design Center Place, Suite 850, Boston, Massachusetts 02210. Our main telephone number is (617) 368-5000.
Our investor relations website is www.bostonbeer.com. Investor relations questions may be directed to (617) 368-5152.
www.bostonbeer.com |
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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64 |
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Other
Information
2021 Annual Report
A copy of the 2021 Annual Report on Form 10-K
as required to be filed with the SEC, excluding exhibits, is incorporated by reference, and will be mailed to stockholders without
charge upon written request to: Investor Relations, The Boston Beer Company, Inc., One Design Center Place, Suite 850, Boston,
Massachusetts 02210.
Stockholder Proposals
for 2023 Annual Meeting
Stockholders interested in submitting a proposal
intended for inclusion in the Proxy Materials for the Annual Meeting of Stockholders to be held in 2023 may do so by following
the procedures set forth in Rule 14a-8 of the Securities Exchange Act of 1934, as amended. To be eligible for inclusion, stockholder
proposals must be received at the Company’s principal executive offices in Boston, Massachusetts on or before December 2,
2022.
If a stockholder wishes to present a proposal
at the 2023 Annual Meeting of Stockholders but not have it included in the Company’s Proxy Materials for that meeting, the
proposal must be received by the Company no later than March 3, 2023, and it must relate to subject matter which could not be excluded
from a proxy statement under any rule promulgated by the SEC.
By order of the Board of Directors,
![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsamx68x1.jpg)
Michael G. Andrews
Associate General Counsel
& Corporate Secretary
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THE BOSTON BEER COMPANY, INC. |
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2022
Proxy Statement |
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65 |
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![](https://content.edgar-online.com/edgar_conv_img/2022/04/07/0001308179-22-000206_lsam_proxy1.jpg)
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